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Dear Ladies and Gentlemen,

We are pleased to present to you the 5th and final newsletter of the EU project "European Energy Service Initiative towards the EU 2020 energy saving targets" (EESI 2020).

In this final edition, you will learn about the results of the EESI 2020 project. The aggregated project experiences have been published in a public report. An important result of EESI 2020 is the development of a systematic guide for facilitators which is presented. Furthermore, an EU Position Paper lines out recommendations derived from the EESI 2020 experiences.

Additionally, you will receive insights in the EU-project "Streetlight-EPC" aiming to increase demand and supply of street lighting refurbishment by means of EPC. Finally, we will provide an outlook to the new Horizon 2020 project "guarantEE" which will develop EPC solutions for new client groups in a team of 14 European partners, covering large parts of Europe in a mix of advanced and emerging ESCO markets.

We wish you an instructive and enjoyable reading of this newsletter.

Your EESI 2020 Team

_EESI 2020 Final Report

The project "European Energy Service Initiative towards the EU 2020 energy saving targets" (EESI 2020), which was implemented between 2013 and 2016 by a consortium of European energy agencies or experts with support of the European Commission's Intelligent Energy Europe Programme, has been addressing ways to improve the impact of Energy Performance Contracting (EPC) in 9 European regions.

To improve the sustainability and the scaling up of the business model, EPC schemes on the regional level were supported by creating task forces, by including EPC in regional energy plans and by assisting pilot projects. In nine metropolitan regions, a total of 27 EPC pilot projects have been realised within EESI 2020, with cumulative investments in energy efficiency of more than 26 M€, leading to average energy cost savings more than 30%, reducing CO2 emissions by 16.000 tons per year.

Additionally EESI 2020 promoted the role of EPC facilitators through dedicated capacity building measures: Facilitation materials in 9 languages have been elaborated, including a project database with over 50 best practices (see also the article below), a detailed facilitator guideline and training modules. Furthermore, some 800 energy stakeholders have participated in EPC facilitator trainings within the project, broadening the available expertise to spark further growth in the EPC markets.

With the European Energy Service Award, successful projects, promoters and providers of energy services – many of them in the context of EPC – received public recognition within high-level awarding events in Brussels 2014 and 2015.

In the evaluation of the project activities and especially the pilot projects, barriers preventing the stronger uptake of EPC have been identified: High complexity of EPC, trust in the ESCO services, but also a cultural barrier persisting between public building owners and private ESCOs. Furthermore, EPC is currently focussed too much on public buildings, while for private building owners adapted business models still need to be developed.

The Eurostat Guidance Note on EPC published in 2015, which restricts off-balance accounting of EPC projects, is seen clearly counter-productive for EPC especially in less mature markets, as the bureaucratic burden for starting projects is being increased by the ruling.

However, the EESI 2020 project also identified and further developed success factors for EPC. Through qualified EPC facilitation, many of the non-technical barriers can be tackled successfully. An experienced neutral facilitator can support EPC clients in identifying new EPC projects, provide his expertise in the complex procurement process and help bridging the cultural divide between the public and the private side. This will ultimately lead to increased experience, smother management, lower transaction costs and thus a stronger market development on the demand side.

Read or download the full report here or order printed copies by writing to boening@berliner-e-agentur.de.

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_EPC-Facilitator’s Guideline

An important result of EESI 2020 is the development of a systematic guide for facilitators. It provides in a modular structure all necessary steps of project facilitation

Although Energy Performance Contracting (EPC) is an established energy service model since many years, the significance of experienced facilitators for the success of EPC projects has long been underestimated.

By supporting a project’s initial set-up, by assessing, its feasibility, and by communicating the concept towards decision makers, the facilitator is crucial for putting the train on track. Many EPC projects which never reached the phase of implementation, have failed in this initial phase due to a lack of knowledge about and arguments in favour of EPC. Furthermore, facilitators guide their client through the procurement of the EPC-project, which requires sound knowledge of the process, the right handling of the tools, such as contract, baseline and tender documents, and the organisational requirements of EPC.

An important result of EESI 2020 was the development of a systematic guide for facilitators addressing the facilitator’s responsibilities in the course of an EPC-project. It supports all types of interested parties in undertaking developing steps towards EPC-projects, no matter if they are energy auditors, energy managers within public bodies or companies, who are aiming on initiating an EPC-project or prospective EPC-facilitators, who intend to serve with the whole procurement process of an EPC-project.

With its modular structure, the guideline allows facilitators to support the client in the whole life cycle of the project or only in selected phases:

STEP 1 How to identify potential EPC project opportunities

STEP 2 How to Present EPC Projects to Customers

STEP 3 Added Value of EPC compared to In-House Solutions

STEP 4 Procurement of EPC: Tendering and Awarding of Contract

STEP 5 The EPC Contract

STEP 6 Financing of EPC-projects

Within the EESI 2020 project, the consortium partners trained in more than 30 training events a total of almost 800 consultants facilitators on the application of the EPC facilitator guideline. The newly trained facilitators can now start supporting additional clients and become multipliers for EPC in Europe.

Video – What is Energy Performance Contracting? (Codema)

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_EU Level Position Paper on EPC

Condensing the core experiences within EESI 2020, a concise position paper has been elaborated and published, which is addressed at EU level stakeholders and multipliers in the context of energy services.

Energy performance contracts aim to increase confidence among building owners and investors that the energy-saving measures in which they invest will, in practice and with guarantee, deliver the expected energy and cost savings over the lifetime of the contract. 

Drawing on the experience of practitioners across 9 European regions the EESI 2020 project produced identified main barriers to the Energy Performance Contracting (EPC) market in Europe.

There are still inhibiting factors for EPC on the regulatory level, the most urgent one being the Eurostat guidance note on EPC, which mostly rules out off-balance financing options in EPC.

A central message is that a large part of the non-technical barriers to EPC can successfully be overcome through professional guidance from qualified Project Facilitators who understand the complexity of the EPC model and who can develop good communications and build trust among the parties to the contract.

From the experiences of the partners in the EESI 2020 project the following main recommendations are now presented:

  1. Create new ways to work within and around the recent Eurostat ruling which determines that the capital expenditure undertaken by an energy services company “shall be recorded on the government balance sheet”
  2. Recognise the role of Project Facilitators in the realisation of specific EPC projects, and train more Project Facilitators at regional level
  3. Encourage programmes aimed at improving national frameworks for EPC and financially supporting the EPC clients, as for example the National Energy Services Framework in Ireland and the BAFA programme in Germany

Read or download the complete position paper here or order printed copies by writing to edel.giltenane@codema.ie.  

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_Largest EPC Best Practice Database

In the context of EESI 2020, the largest European Best Practice Database for successful EPC projects has been elaborated. The database is equipped with a comfortable search engine, allowing to identify projects by choosing combinations of 12 different criteria.

The projects presented come from various sources. Several examples are from earlier EU projects, such as the Transparense project. Several winners of the European Energy Service Award are also included. Finally, almost all of the 27 new pilot projects which have been initiated in EESI 2020 are to be found in the database.

This EPC database is targeted both at facilitators (consultants, energy agencies etc.) and final customers (i. e. predominantly decision makers and officials of public administrations/city governments). It provides a single point of access to high quality EPC reference, guidance and marketing information.

With more than 50 projects from 14 European countries, the database is a valuable data source which will be further maintained and enlarged in the context of the new Horizon 2020 project "guarantEE" (see other article).

Examples of best practices:

Link to Best Practice Database: http://eesi2020.eu/bestpractice/

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_Streetlight-EPC – Energy Saving Potential for Municipalities

Old street lighting systems can account for 30-50% of municipalities’ total electricity consumption. Yet, current technology offers 30-70% energy saving potential. The EU-project "Streetlight-EPC" creates demand and supply of street lighting refurbishment by means of EPC projects.

These savings potentials have been recognised and incorporated into European policy: EU Regulation 245/2009 sets phasing out requirements for nearly 80 % of all currently used lamps types between 2012 and 2017. This means that these lamp types will no longer be available on the market for purchase.

Energy Performance Contracting (EPC) offers municipalities an innovative, but still under-used solution towards energy efficient street lighting, without having to pay upfront and with energy savings guarantees. This constitutes a good “learning and testing ground” for EPC due to its lower technical and economic complexity compared to building-related EPC. Furthermore, the recent market introduction of LED technology offers high energy and cost savings with comparatively short pay-back times.

The European project "Streetlight-EPC" is setting up regional EPC facilitation services ("helpdesks") which are providing one-to-one support to both municipalities and SMEs as potential ESCOs in 9 European regions. The project partners aim to implement 36 EPC street lighting projects. This will help create knowledge and trust in both LED technologies and the EPC model.

You can find more information on Streetlight-EPC project on: www.streetlight-epc.eu

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_guarantEE – bringing EPC to new clients

EPC is a proven model for modernizing mostly public buildings by ESCOs with guaranteed energy and cost savings. Nevertheless, a broad roll-out of EPC is being prevented mainly because of two unresolved issues: the split incentives dilemma and the lack of adequately flexible contract models. The "guarantEE" project, which is funded under the Horizon 2020 programme, will address prevailing barriers to EPC in a team of 14 experienced partners, covering large parts of Europe in a mix of advanced and emerging ESCO markets.

Starting in April 2016, the guarantEE project, which is being co-ordinated by the Berlin Energy Agency, will develop innovative business and financing models aiming to overcome the split incentives dilemma in performance based ESCO projects. This will be done by looking for ways to adequately share costs and benefits between user, building owner and ESCO in a triple-win approach, thus opening up new project opportunities. Furthermore, EPC contract variants will be elaborated and tested, addressing the need for enhanced flexibility (e.g. exit clauses, simplified M&V). The target groups are public and – especially in advanced EPC markets – private sector clients.

The developed models will be applied in pilot projects involving private and public building owners. Furthermore. guarantEE will support market development by providing standards, an online EPC pre-check, best practices (continuation of the EESI 2020 database), EPC information and project facilitation services. Broad dissemination activities, including the European Energy Service Award, will maximise the project visibility. The project website is scheduled to go online in May 2016.

The guarantEE project aims to unlock additional EPC project opportunities, contribute to standardisation, and provide political advice and steps towards a common energy service market in Europe.

You may register already now for the guarantEE newsletter service by wring an eMail to boening@berliner-e-agentur.de.

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_Short films about EPC

What is Energy Performance Contracting? How does it work? And could it work for me? The partners in the EESI 2020 project (Germany, Austria, Czech Republic, Belgium, Bulgaria, Croatia, Spain (Catalonia), Norway and Ireland) created 5-min. films in 9 languages to explain the idea of Energy Performance Contracting to potential clients.

You will find all short films on: http://eesi2020.eu/videos-2/

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_Miscellaneous


The Website of the European Energy Service Initiative 2020 is online: you will find information about the project partners, links and much more here:
www.eesi2020.eu.


Please follow us also on twitter:
https://twitter.com/EESI2020

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_Contact

Laurenz Hermann

Berliner Energieagentur

Französische Str. 23

10117 Berlin


Tel.: +49 30 293330 69

Mail: hermann@berliner-e-agentur.de

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