Energy Performance Contracting The Example of Berlin and

Energy Performance Contracting – The Example of Berlin and EU-wide Experiences Michael Geissler CEO Berliner Energieagentur Gmb. H 26 November 2013

EPC – The Example of Berlin and EU-wide Experiences Contents Ø Berlin Energy Agency (BEA) Ø Energy Saving Partnership Berlin © Berliner Energieagentur Gmb. H Ø EU-wide Experiences with EPC Ø Lessons Learned and Outlook

EPC – The Example of Berlin and EU-wide Experiences © Berliner Energieagentur Gmb. H Berlin Energy Agency (BEA)

EPC – The Example of Berlin and EU-wide Experiences Berlin Energy Agency (BEA) – Facts and Figures Established Ø in 1992 as Public Private Partnership Shareholders Ø Federal State of Berlin Ø Vattenfall Europe Ø GASAG Ø Kf. W Banking Group Equity 2. 5 million € Annual total turnover 12. 9 million € Energy Services Ø Contracting Ø Consulting Ø International Know-How Transfer Based in Französische Straße 23 10117 Berlin Phone: (030) 29 33 30 - 0 e-mail: office@berliner-e-agentur. de Internet: www. berliner-e-agentur. de Company earnings (EBIT) 905 k € Know-how 53 members of staff © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences © Berliner Energieagentur Gmb. H Energy Saving Partnership Berlin

EPC – The Example of Berlin and EU-wide Experiences Energy Saving Partnership Berlin – BEA as Facilitator of EPC Assignment Client (State, hospital, etc. ) Consultancy Berlin Energy Agency (BEA) Project Manager Energy Saving Guarantee Contract Technical-economic requirements, Negotiations Energy Saving Partner ESCO © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Energy Saving Partnership Berlin – Main Clients Schools, Universities Cultural centres Administrative buildings Sports facilities © Berliner Energieagentur Gmb. H Prisons Hospitals

EPC – The Example of Berlin and EU-wide Experiences Energy Saving Partnership Berlin – A Role Model for EPC Total number of Pools: 26 more than 1, 400 buildings Guaranteed savings in total: Annual plus to the public household: € 11. 9 million (26%) € 2. 7 million Total CO 2 reduction (1996 -2012) : approx. 600, 000 t Total net Investment: € 53 million © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Energy Saving Partnership Berlin – General Project Scheme Public Authority/ Building owner Gen remuneration ESCO eral m saving guarantee ainte nanc e y Facilities/sites g Ener remuneration natural gas district heat electricity oil ice v r e gs n i v a s Co-ordination Supply Technical issues Utilities Gas, electricity and/or fuel supply companies © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – Wenckebach Hospital Berlin Ø Building: public-owned hospital with 438 beds Ø Baseline: 808, 359 €/a Ø Guaranteed savings: 39. 6% = 320, 000 €/a Ø Invest: 2. 44 m € Ø CO 2 reduction: 1, 789 t/a Ø Duration of contract: 12 years (start in 2011) Ø Measures: modernisation of heat distribution, cooling and ventilation system, installation of CHP unit, webbased energy management system, user trainings Ø Special feature: insulation of top storey ceilings © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – Deutsche Oper Berlin (German Opera house) Ø Building: building complex with playhouse, studios, administration etc. (approx. 60, 000 sqm GFA) Ø Baseline 2005/06: 651 K€/a Ø Guaranteed savings: 35. 8% = 233, 155 €/a Ø Invest (hardware): 1. 48 m € Ø CO 2 reduction: 1, 085 t/a Ø Contract duration: 12 years Ø Obligatory measures: refurbishment of VAC installations, optimization of cooling plant, hot water generation and CBCS Ø Special features: contribution of 1 m € to construction costs by DOB, resulting in increase of budget relief from 14, 992 €/a to 126, 021 €/a © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – Berliner Bäder-Betriebe (public swimming pools) Ø Pool 12: 11 buildings/swimming pools Ø Baseline: 4. 9 m €/a (incl. water costs) Ø Guaranteed savings: 33. 5% = 1. 6 Mio. €/a Ø Invest: 7. 9 m € Ø CO 2 reduction: 4, 938 t/a Ø Duration of contract: 10 years (start in 2001) Ø Measures: water saving technology, optimizing filter flushes, separating water circulations, modernisation of hot water generation renovation of air conditioning and lighting © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – Berliner Immobilienmanagement Gmb. H (1) Pool: 18 office buildings (about 300, 000 sqm GFA) Energy costs before EPC 2. 755 m € Savings 1 st contract 25 % Savings 2 nd contract 21 % 1996 Start of 1 st contract • Renewal of heating pumps and heating circuit • Use of electronic regulation and building automation systems for heating and ventilation 2008 End of 1 st contract = Start of 2 nd contract • Use of highly efficient heating pumps • Hydraulic compensation of heating system • Use of CHP 2018 End of 2 nd contract Time [years] © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – Berliner Immobilienmanagement Gmb. H (2) Ø Re-tender after expiration of first ESP contracts (Pools 1 + 2) Ø Pool 24: 18 office buildings (approx. 300, 000 m² GFA) Ø Baseline 2007: 2. 07 million €/a Ø Guaranteed savings: 21% = 433, 757 €/a Ø Invest: approx. 2. 4 million € Ø CO 2 reduction: 2, 208 t/a Ø Duration: 10 years Ø Measures (selected): boiler replacement, CHP-unit, optimizing of ventilation systems, renewal of CBCS special feature: obligation of maintenance of all old systems © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Energy Saving Partnership Berlin – Proven Project Schedule Project preparation and development Ø Involvement of decision-makers: information and training workshops for public authorities concerned Ø Research of building data (energy cost baseline, user requirements) and framework conditions (e. g. ESCO market) Ø Pre-selection of buildings → on-site visits and energy audits Ø Adaptation of EPC model contract to national legislation Competitive Tendering § (Pre-tender) ESCO workshop for potential bidders on project (tender documents, model contract, assessment criteria) § Call for tender with pre-selected ESCOs § Evaluation of offers (cost-benefit analysis and evaluation of technical concept), pre-selection of best offers § 2 rounds of negotiations and determination of best offer Project implementation → Technical and procedural advice throughout the process © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Energy Saving Partnership Berlin – Experiences and Results ü guaranteed energy savings achieved in most contracts, high savings up to 35 % feasible ü 26 contracts operated by 15 different ESCOs, around 100 subcontractors (regional SMEs) involved in implementation and maintenance ü good quality of saving measures because of expertise of ESCOs, rising experience and improvement of cost-effectiveness ü additional improvement of maintenance situation by central coordination through ESCO ü no legal proceedings or need to use bank guarantees so far ü re-tendering after end of contract leads to new investments and additional savings → Success thanks to reliable legal framework, standardized procedures and contracts together with professional process management © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Additional Challenges for EPC Experiences with EPC projects have shown the need for a focus on Ø integration of building refurbishment measures involving the building envelope Ø energy management systems as low-cost investment measure Ø use of Renewable Energy Sources © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Additional Types of EPC Ø EPC plus § § § Integration of (comprehensive) building refurbishment measures Shared financing instruments First EPC with (small) share of construction measures Ø EPC light § Operation and energy management of buildings with saving guarantee Ø Green EPC § § § Focus on renewable energy technologies Specific tender objectives and link to subsidy programs Primary energy consumption as guaranteed element © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice EPC light – Building pool in Berlin district Pankow Ø Buildings: youth facility, 12 schools, 1 art centre, Ø Baseline 2009: € 883, 000 €/a Ø Guaranteed savings: 10. 2% = € 90, 037/a 1 1 office building Ø Share/payment to ESCO: 5. 00% = € 44, 118/a „Tesla“ secondary school Ø CO 2 reduction: 3, 973 t/a Ø Contract duration: 2 years Ø Service of the ESCO: active optimization of heating and ventilation by building control systems; analysis of consumption, monitoring of meters; control of the invoices of supply companies; energy reporting every 6 months, weak-point analysis © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences © Berliner Energieagentur Gmb. H EU-wide Experiences with EPC

EPC – The Example of Berlin and EU-wide Experiences EU-wide Capacity Building in Energy Services Clearcontract – Clearinghouse for Energy Contracting in CEE • Project duration: 2003 -2004 • Model contracts and tender documents (LV, LT, PL, CZ, SLO, SK, BG, H) • Results: > 10 contracts signed • Project duration: 2005 -2007 • Model contracts and tender documents (A, D, F, FIN, GR, I, N, S) • Results: 17 new EPC projects kick-started Clearcontract – European Energy Service Initiative (EESI) • Project duration: 2009 -2012 • Improving EPC and energy efficiency standards (B, SE, NO, CZ, SK, SI, RO, A, F) • Results: assistance of 24 EPC pilot projects (incl. 6 advanced EPC), 57 trainings/workshops © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – clearcontract Municipality of Kranj, Slovenia Ø Pool: 14 buildings (office, schools, sport centres) Ø Baseline: € 350, 000/a Ø Guaranteed savings: 15% Ø Invest: € 340, 000 Ø CO 2 reduction: 60 t/a Ø Contract duration: 15 years (from 2001) Ø Measures: Replacement of boilers and thermostats, installation of new control centers, adjustment of heating system, renovation of heat distribution systems, fitting of thermostats to radiators © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – EUROCONTRACT Municipality of Nyköping, Sweden Ø Pool: 130 buildings, all public remises Ø Baseline: about € 4. 7 m/a Ø Guaranteed savings: 17% = € 800, 000/a 25% = € 1. 2 m/a Achieved savings: Ø Invest: € 5. 5 m Ø Contract duration: 6. 5 years (from 2003) Ø Measures: Renovation of heating systems, optimization and retrofit of HVAC system, building control, operation and maintenance system, targeted training for the operational staff Source: Schneider Electric © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – EESI (EPC plus) Ø Characteristics: 9 -storey buildings with single staircase (36 apartments), built in 1980 Ø Guaranteed savings: 56. 9% = 245. 9 MWh/a Ø CO 2 reduction: 64. 9 t/a Ø Measures: comprehensive renovation (general insulation of building, replacement of windows, renovation of heating and hot water system, reconstruction of roof, energy monitoring system) Ø Renovation of 7 buildings by the end of 2012 with consortium of financial partners and EU structural funding (23 by the end of 2014) Source: Ekodoma © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Best Practice – EESI (Green EPC) Ø Pool: 14 buildings, high schools Ø Baseline: about € 2. 4 m/a Ø Guaranteed savings: 35% = € 606, 000/a Ø Invest: € 36 m Ø CO 2 reduction: 2, 300 t/a Ø Contract duration: 20 years (PPP contract, start 2009) Ø Measures: 6 wood boilers, 1 heat pump, other new boilers, district heating connection, insulation of windows, photovoltaic plants (5, 000 m²) © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Lessons Learned – Criteria and Conditions of Success Ø Driving force: § Political decision makers and public authorities who take on responsibility © Berliner Energieagentur Gmb. H Ø Reliable legal framework: § Clear information that EPC is possible § Favourable public procurement rules, tender procedure and accounting treatment Ø Standardized procedures and contracts (while adaptable): § Time and cost-effectiveness for implementation → reliability § Competition and transparency Ø Promotion and capacity building § Information and assistance through independent EPC market facilitators

EPC – The Example of Berlin and EU-wide Experiences Market Development for Energy Services – Principality of Monaco Ø Objectives § Support the Principality of Monaco in introducing a suitable EPC model § Call for tenders for a pilot project with contract award Ø Role of BEA: Consultant § § § Develop and adapt the EPC model to Monaco Select public buildings Train administration officials Prepare tendering documents Support the call for tenders and the award of contract for a pilot project → establish a framework for EPC projects in Monaco Ø Result: § EPC contract (12 years) for 5 public buildings § Guarantee on 27% annual energy cost savings (35% in CO 2 emissions) § total project cost: € 2+ million © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences Outlook European Energy Service Initiative towards the EU 2020 energy saving targets (EESI 2020) Ø Objective: Europe-wide dissemination of EPC as contribution to EU 2020 targets Ø Target group: demand side = public institutions (as potential EPC clients) and project developers in 9 European cities/metropolitan regions – with EU project „Transparense“ focusing in parallel on supply side (ESCOs) Ø Consortium: BEA as coordinator; partners from Antwerp, Barcelona, Dublin, Graz, Oslo, Prague, Sofia, Zagreb Ø Contents: best-practice database, marketing tools for EPC project developers, implementation of at least 20 EPC projects, European Energy Service Awards Ø Duration: 36 months (4/2013 – 4/2016) © Berliner Energieagentur Gmb. H

EPC – The Example of Berlin and EU-wide Experiences For more information please visit: © Berliner Energieagentur Gmb. H www. berliner-e-agentur. de