EPC too good to be true? Liv R. Lindseth NEE February 2018

Transcription

1 EPC too good to be true? Liv R. Lindseth NEE February 2018

2 EPC in Europe guarantee fosters the use of EPC in the public and private sector across Europe Developing innovative EPC solutions for rented facilities Making EPC more flexible to better serve private sector Providing Register of qualified EPC-facilitators Setting Criteria to qualify as EPC-facilitators and online self declaration form EPC Pre-Check for potential clients European EPC market reports Best Practice Database 2

3 More information/documents EPC promotion in Europe ( European Market Study Register of qualified EPC-Fasilitators Online Pre-Check for building owners Triple-win-approach for rented facilities European Best Practise database EPC in the Nordic Countries urn:nbn:se:norden:org:diva-4309 EPC Customer Handbook (EESI2020) Facilitators Guideline ( Baseline Calculation, Tender documents Contract documents, Different business models EPC Code of conduct ( Other EU projects on EPC National standard documents on EPC Energy authorities EPC websites (e.g.

4 A typical Nordic EPC project Municipality, pools of municipalities, counties Pools of buildings schools, city hall, nursing homes, etc. Many EE measures in short time - holistic approach % guaranteed energy savings Investments between 0,5-20 MEUR Maintenance lag Open tender procedure Duration 5 18 years 100 % financed by client Secures investments Profitable ES measures covers costs of maintenance measures Kongsberg: Invested 45 MNOK/11y Reduced maintenance budget by 23 MNOK

5 Size of Investments vary

6 Characteristics Denmark Measures include comprehensive renovation Official EPC guideline/official National Standard Financial support scheme Good lending conditions gov. supported interest rates Municipalities exempted from budget limitations Municipal initiative and commitment main driver o Climate Agenda + Maintenance lag Success stories (Middelfart saved more) Recent stagnation (except hospitals) official website established (Energistyrelsen) ( DK Project Characteristics Size m2 Number of buildings (av.74) Savings % Length years Investments 6-20 MEUR

7 Characteristics Sweden Long experience looked upon as pioneer Market crash in 2009 (financing scheme removed) Financial support schemes on and off KLIMP (-2008), OFFROT ( ) Financial support for EE improvement measures( ) Currently no EE support schemes Uncertainty about Public Procurement Act Lack continuity in national strategies Complex implementation process New positive developments/projects use standard EPC model (e.g. Dalarna) SE Project Characteristics Size m2 Number of buildings Savings 18 % Length 5-6 years Investments 1-5 MEUR

8 Characteristics Finland Public and private sectors equally active Previously more projects in private sector Monthly fee projects (private) Financial support scheme in place Financial grant in % of investment - not EPC specific Favourable financing conditions Young emerging market in 2015 now more developed Guideline on energy service procurements in the public sector (2016) Recent projects serve as success stories Motiva active promoter Annual ESCO event on 12. June 2018 FI Project Characteristics Size Number of buildings 1-15 Savings MWh annually Length 2-5 years - recently 5-10 Investments 0,5-4 MEUR

9 Characteristics Norway Municipal cooperation Measures include measures with long payback time Official Standard for EPC (NS6430) in 2014 Financial support schemes EE grant program Municipal bank, green interest rates Market boom in 2015 Young market few bad experiences so far (2015) NO Project Characteristics Size m2 Number of buildings (av. 20) Savings % Length 7-18 years Investments 3-6 MEUR

10 Recent developments Current market crisis emerged (late 2016 early 2017) Strict competition between ESCOs Guarantee between % to win bids Many project in same project phase Due to market boom in 2015/2016 Demanding with many phase 2 projects High guarantees hard to uphold in phase 3 Deviations from NS6430 Hard to foresee consequences No longer ensures profitable for both parties Few new projects in 2017 Few experienced ESCOs make bids New ESCOs and facilitators have entered the market The Norwegian energy agency, Enova, takes an active role Enova grant program now EPC specific - EPC first priority A clause of no mayor deviations from NS6430 Promotion/training of new EPC facilitators Participation and support for guarantee-project activities

11 EPC Facilitator - role and tasks Facilitate project development phase O Mediator, promote client - supplier cooperation Know-how to support/guide client through all phases of an EPC project Knows: Model documents: tenders, contracts, official standards ESCOs and the market Pitfalls and success factors Technical potentials and measures Economical issues and solutions Process (time line, milestones) Baseline calculations

12 Main market drivers - comparison Different in all 4 countries Denmark the municipalities, climate plans Sweden ESCOs, business perspective Finland national authorities, Motiva and new active ESCOs Norway only one active EPC facilitator in the past, now national energy agency Enova active

13 Comparison Gov. financial schemes DK/NO/FI financial scheme(s) in place SV on and off none at present time Variation in complexity of C&V routines Sweden more complex implementation process Difficulties with procurement process/laws Sweden and Finland experienced lawsuits/disputes in the past Both have healthy markets today Documented high savings in all countries! Increasing in all countries

14 Comparison Model documents, guidelines, official standards Seems crucial for success NO/DK official standard for EPC, contract models SV guidelines not well known or utilized (2015) FI new guidelines (2016) in use Good business culture - a common success factor

15 Current EPC market status DK - was strong and stable, but have since slowed up NO - market boost in 2015 followed by crises in 2017 SV - stagnation positive signs seen FI - marked is growing - new projects emerging Denmark and Norway is slowing up in public sector Sweden stagnation, but positive signs Finland - healthy and growing 16

16 Possible pitfalls Difficulties with procurement process/laws Sweden and Finland experienced lawsuits/disputes Has recovered! From cooperation to strained client/provider relationship Low or no profitability for EPC-suppliers Healthy business relationships = profitability for all parties Additional demands (e.g. co2 sensor) Deviation from official standards Exceptions Too few EPC-facilitators One-sided, not mediators Too high savings guaranteed Tuff competition Premises altered - guarantee fail

17 Findings and success factors Financial support schemes main success factor Removes uncertainties due to the complexity of the model Gov. quality stamp Own financing by public building owners Better lending conditions than ESCOs Green interest rates, municipal banks Little/no financing by ESCOs in public sector Might be a hurdle if aim is to expand to private sector Some positive examples of Monthly Fee financing/leasing in private sector Model documents, guidelines, official standards Seems crucial for success also leading element for financing EPC as design and build contract ( totalentreprise ) Governmental strategies important driver Enova plan to launch financial package deal Term for funding- no deviations from national standard Promotion/training of new EPC facilitators

18 Hans-Petter Heimholt, EE coordinator, Skien municipality

19 Thank you for listening! Contact: Liv Lindseth