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Dear Ladies and Gentlemen,

We are pleased to present to you the 4th newsletter of the EU project "European Energy Service Initiative towards the EU 2020 energy saving targets (EESI 2020).

In this edition, you will learn about the European Energy Service Award 2015, which took place in a high-level event in Brussels on 9th November 2015. Furthermore, you will receive insights in the consequences of Eurostat’s guidance note regarding EPC. Besides that, you will learn about events and activities from the Bulgarian and the Catalonian EPC markets as well as the results of a survey, conducted in 2015 on the European EPC markets.

We wish you an instructive and enjoyable reading of this issue of the EESI 2020 newsletter.

Your EESI 2020 Team

_European Energy Service Award 2015 honours outstanding projects, companies and multipliers in Europe

 

Since more than 10 years the European Energy Service Award (EESA) honours distinguished projects, enterprises and stakeholders active on the European energy service markets. More than 100 people were attending the awarding ceremony on the 9th November in Brussels. The EESA is organised by the Berlin Energy Agency (BEA) in cooperation with the European Commission, the event was hosted by the European Investment Bank (EIB). Five prizes in the categories "Best Energy Service Project", "Best European Energy Service Provider" and "Best European Energy Service Promoter" have been awarded.

In his welcome address, Dr. Werner Hoyer, President of the European Investment Bank (EIB) stressed the need for a change in energy efficiency financing: “Public funds alone are insufficient, and it is clear that the vast majority of climate related financing will have to come from the private sector. What is needed is intelligent financing by bringing private investors on board.”

Marie C. Donnelly, Director in the Directorate General for Energy at the European Commission and member of EESA jury, underlined the need to activate private capital to achieve the energy efficiency targets of the European Union. Claude Turmes, Member of the European Parliament emphasised the importance of concrete action: "The European Union has set up the legal framework. Now it is up to the member states, to reduce energy consumption of its public and private buildings by implementing renovation roadmaps or models like EPC.”

The three prize winners in the category "Best Energy Service Project" are:

The collaborative RE:FIT Project, initiated by six West London council energy teams that work together under the name West London Alliance (WLA): The project is divided into several phases. In each of them, a variety of buildings of different councils are combined in a pool and EPC measures are implemented by using only one procurement process for all of them together. After having finished successfully phase 1, WLA will now continually roll out the project in order to deliver a steady stream of savings year on year thereafter.

Download Poster WLA (english)

A lighting EPC that was implemented in several Postbank office buildings throughout Germany: By doing a customary quick check of all energy media, SPIE Energy Solutions GmbH identified a high potential in the lighting systems. By doing an in-depth analysis of the existing luminaires and by implementing various measures to minimise the power consumption, Postbank reached between 35 and 70 % of electricity savings at each site. CO2 emissions were reduced in total by more than 1,100 tons per year.

Download Poster Postbank (english)

EPC Project in Schools in the City of Sosnowiec in the Silesian region, Poland: Due to the implementation of a remote room temperature control system, the modernisation of heating systems and substations as well as the modernization of lighting in 87 schools, the Community of Sosnowiec in cooperation with Siemens Poland achieved annual electricity savings of 20.6 percent, heat savings of 30.8 percent and a reduction of CO2 emissions of 5,000 tons.

Download Poster Sosnowiec (english)

Category “Best European Energy Service Provider”:

Norwegian energy service provider Norsk Enøk og Energie AS (NEE) successfully realised various EPC projects, among others for the community of Kongsberg: As energy performance contractor, NEE installed 14 ground to water heat pumps and implemented 300 smaller measures in more than 70 % of all municipal buildings. Within the contract period of ten years, NEE guarantees energy savings of 5.7 GWh per year corresponding to energy cost savings of 500,000 € per year.

Download Poster Kongsberg (english)

Category “Best European Energy Service Promoter":

Catalan Energy Institute (ICAEN): The institute developed new tendering and project models based on guaranteed energy savings. Since 2011, investments of 38 mio. € in public lighting in several municipalities and almost 7 mio. € in energy efficiency measures in ten public buildings/building pools were implemented. CO2 savings of 22,000 tons per year are being achieved.

Download Poster ICAEN (english)

EESA 2015 winners, speakers and the jury

More information on the award winners and the EESA:

http://eesi2020.eu/news-eventseuropean-energy-service-award/

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_Eurostat on Energy Performance Contracting 

A guidance note on EPC published by Eurostat poses major challenges for the further development of the European EPC markets. The document, which is being seen critically by many energy efficiency suppliers and clients, could pose a serious barrier for EPC in the public sector.

In August 2015, Eurostat published the guidance note "The Impact of Energy Performance Contracts on Government Accounts". The document defines as to whom the gross fixed capital formation (meaning the investments in energy saving technologies) have to be attributed to: the public building owner (EPC client) or the ESCO (EPC supplier).

In a nutshell, Eurostat comes to the conclusion that all capital expenditure ("capex") within EPCs should be treated, by default, as government expenditure. The only exception would be if a project fulfils the criteria of a public private partnership (PPP), which can be classified off-government balance sheets. However, EPC projects hardly ever fulfil the PPP criterion that the project has to "cover a capital expenditure in the already existing assets […] equal at least 50 % of the asset's value", so this does not help EPC.

So what are the consequences of Eurostat's note? Basically, it puts an end to the possibility, that EPC projects can be implemented off-balance. But what does off-balance mean and why is it important?

If the contracting rates that an EPC client pays to the ESCO during an EPC contract are classified as operating costs (also: “opex” for operational expenditures), these expenses do not appear on the client's balance sheet. The rates would be paid from similar budget positions as the costs for energy. This makes sense, as the costs and benefits of the project are then being balanced in the same area of the budget.

Eurostat now defines the contracting rates per se as capital costs. The investments will necessarily appear in the client's balance sheet. Although the ESCO usually pre-finances the investments in EPC, Eurostat prescribes that it must count onto the public client's investment budget, possibly increasing his debt level. Public debt levels, however, are limited through the Maastricht Treaty of 1992, and many local authorities will have great difficulties of getting permission from supervisory bodies to engage in EPC if it is interpreted as public debt.

As a consequence most local authorities will have much higher administrative burdens to engage in EPC, as the projects will have to be approved by the supervisory bodies. And highly indebted communities might not get permissions for EPC anymore at all. In spite of the fact that the projects will result in net savings for the client, thus contributing to budget relief. Not to mention the positive effects on energy efficiency and climate policies and targets, which can be harvested on top of the financial savings.

In a webinar organized by EESI 2020 together with Fedarene in November 2015, European EPC experts discussed with the responsible Eurostat representative the implications of the guidance note. While the discussions may have contributed to an improved mutual understanding, Eurostat could not offer any exceptions to help EPC in public buildings.

Meanwhile, EPC suppliers and facilitators from all over Europe are voicing concerns that the Eurostat note will have severe negative effects on the market development. The European associations EU.BAC and EFIEES and the Transparense project initiated a survey among market stakeholders to lobby for a correction of the guidance note. Participation in the survey is possible under this link. The European Commission is to be requested look into this issue again, so that the ambitious European energy efficiency targets are not thwarted by European accounting rules which aim to limit public debt but in fact block energy efficiency investments which could deliver not only energy and CO2 savings but also financial relief for public building owners involved.

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_Advanced Training in M&V in Barcelona in October 2015

Knowledge in Measure and Verification (M&V) is a basic requirement for facilitators and ESCOs to implement EPC projects. The correct evaluation of achieved savings is critical for the performance guarantee, both for the client and the ESCO company.

A full three-day advanced course on measurement and verification was held from 14th to 16th October by an M&V expert in the facilities of ICAEN. On the first day, the M&V methodology was introduced to the audience with the help of practical examples. On the second day, key aspects of M&V such as uncertainty, data gathering, reference adjustment, back-casting techniques and independent verification were discussed. On the final day, the course focused on statistical analysis: sampling, exploratory data analysis, confidence level, statistical inference, regression analysis and uncertainty calculation.

The main reason for ICAEN to organise this training course was the detected weakness regarding M&V in all awarded EPC projects. Even in those projects where more than one CMVP (certified measurement and verification professional) is involved, companies have many difficulties to evaluate the savings because they don’t have any experience in this field.

The main objective of this course was to transfer experience to ESCOs and facilitators through practical exercises on real examples. 25 participants took part in this course. Essential requirements for their attendance was a CMVP certificate as well as a PC with Excel program. The final feedback of the participants concerning the quality and price of the course (250 € for three days) was very good.

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_New results of EPC market survey 2015

New data have been added into an existing EPC Market Databases with comprehensive information about existing ESCOs and national EPC markets, EPC models, financing models and policy initiatives.

The newly conducted 2015 survey represents a follow-up to the survey carried out in 2013 aimed at obtaining information on the EPC market in the EU. Both surveys contained questions around the above mentioned four main areas. Thanks to the very similar survey design, comparisons between the years 2013 and 2015 can be made easily.

The data draws from a new 2015 Transparense survey distributed to European countries' most relevant energy services companies and EPC market facilitators. Altogether, 112 EPC providers and facilitators from 20 countries across Europe filled in the survey including the largest EPC providers. The survey had been made available online in order to make the distribution process as easy as possible.

A summary on the new data and the development since the last survey is being prepared and will be published soon.

The data collection can be found under the following link: http://www.transparense.eu/eu/epc-databases/data-collection

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_Achievements on the Bulgarian EPC market

In Sapareva Banya, a town in Western Bulgaria, an important street lighting EPC project was started with support of ELI. Furthermore, ELI will implement energy efficiency trainings in about 30 Bulgarian municipalities in 2016.

On 4th of December 2015, the European Labour Institute (ELI) from Sofia organized an info day in the municipality of Sapareva Banya where an EPC project for street lightening had been started with ELI’s assistance. In total, nearly 1,400 street lamps will be replaced by LED luminaires and savings of 70 % will be guaranteed. The payback period is seven years; the CO2 emission reduction will be around 330 tons per year.

Furthermore, ELI will start the energy efficiency trainings in 33 municipalities in the Northwest of Bulgaria, co-financed by the EU. Among other issues, the topic of EPC as well as the objectives and achievements of EESI2020 project will be addressed.

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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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