Why & How

"Step up to energy efficiency"

To reduce CO2 emission and foster energy efficiency is a real challenge in the Mediterranean Area. This is the reason why the 9 STEPPING partners implemented a testing project promoting the use of the Energy Performance Contract (EPC) for the energy refurbishment of public buildings. Local Authorities face constraints, such as the lack of economic and financial resources: the EPC can be a good solution as it is mainly based on Private Financing. This means that Energy Savings Companies provide the needed capital in order to assure the investment and are paid on the basis of the achieved level of energy savings. Besides, Local Authorities lack of skills and knowledge to manage this kind of interventions. They, thus, need technical, administrative and legal support: this is what the project offered them. The partnership directly involved municipalities and ESCos and persuaded them to be part of the pilot activities. During three years, from November 2016 to October 2019, STEPPING managed to engage 74 Local Authorities, (in Italy, France, Greece, Malta, Portugal, Slovenia and Spain), with 170 public buildings needing to be renovated. Municipalities of neighboring territories were bundled together to create economies of scale and prepare joint EPC Investment Plans that would guarantee the achievement of relevant energy and CO2 emission savings. The implementation of such Investment Plans would trigger about 18,7M€ of investment. Moreover, during the project lifetime, 20 municipalities and 94 buildings were involved in the launch of 4 EPC tenders and new ones are likely to be prepared in the future. In the meantime Local Authorities staff and professionals, such as engineers and architects, were trained on EPC mechanisms. Moreover, with the drafting of Policies Recommendations and EPC Guidelines STEPPING will contribute to the exploitation of STEPPING approach and results even after the project end, as they can be adapted and widely replicated in other European Regions.

STEPPING partner’s QUOTES:

Availability of subsidies turns public authorities reluctant to EPC

“In Greece reluctance by the public sector to retrofit public buildings through an EPC is common. This is mainly due to the fact that ESIF funds are available and turning to subsidies is an easier task for public authorities. At the same time, there is no provision to counter that trend by mixing the two instruments, thus the EPC remains an undeveloped option. The criteria considered for selecting the pilot public authorities include: existence of PoI/CoM commitment and (i) SEAP in place; participation in EU funded projects; demonstrated interest in energy upgrading of buildings.” (AEGEA, Greece)

Lack of skilled personnel to handle EPC

“Public Authorities involved in the pilot project claimed to have the sufficient investment capacity (mainly thanks to ERDF funds available) for undertaking energy retrofits to buildings and to be interested in using tender schemes that guarantee the achievement of energy targets. The challenges from the public authorities’ point of view are linked to the lack of skilled human resources that can handle the process of EPC validation and contracting. In addition, due to the low energy consumption of the studied buildings, it can be challenging to draw up an investment plan with real cost-effective measures.” (MIEMA, Malta)

High number of small public authorities require early facilitation

“In Spain there are around 8,500 municipalities, most of them small-sized and not capable of accessing resources for lunching an EPC tender. In order to speed up the process in buildings of public authorities, it is important to create a working team that could act as an EPC facilitator supporting the public authorities in the whole EPC tender process. Therefore, it is critical to provide both the tender document plus the procedure that covers from the early launch to the roll-out of the EPC project.” (Diputacion de Huelva, Spain)

Buildings with secured financing selected

“Buildings having already received regional funding (ERDF) for the improvement of energy efficiency or for seismic aspects upgrade were prioritized.” (AESS, Emilia Romagna, Italy)

Successful data collection shows motivation

“The selection of buildings for inclusion in the STEPPING project was based on the consumption ratio (data collected by the shared energy consulting service), pre-audit visits to check on pre-selected buildings to see if they were suitable for refurbishment and the possibility of implementing the necessary measures (e.g. constructive aspects, limitations of physical space, possible problems in the structure, etc.). Gathering all this information was also an opportunity to test the motivation of public authorities.” (Auvergne-Rhône- Alpes Energie Environnement, France)

Energy manager existence is valuable for the building selection

“For the renovation of public buildings through EPC, it is important to choose the appropriate priority buildings. This phase of the project proved to be quite challenging, because it takes a lot of effort and meetings, to persuade public authorities to cooperate, to sign a mutual agreement and to gather all the necessary data needed for the definition of priority buildings. In this phase it is very useful to have a reliable and responsive energy manager, who can provide a lot of necessary data and recommendations. This makes the process easier and less time consuming.” (BSC, Business Support Centre, L.t.d., Kranj, Slovenia)

Early-bird broad dissemination activities of the EPC project

“The first presentation of the Investment Plan took place in the Workshop “Energy Efficiency as a Tool for Sustainable Development”. At the event, attended by more than 60 participants (among public authorities, inter-municipal communities, companies (SME, ESCO’s) and several reference entities at local and national level), the main topics of discussion were related to the implementation of EPCs, Joint Actions for Energy Efficiency in public infrastructures, the important issue of the concession of the low voltage network - opportunities, challenges and actions integrated between public authorities, sustainable and intelligent inter-urban development, electrical mobility and network of nature routes.” (AREANATejo, Portugal)

Choice of measures should relate to the local market capacity

“In the French experience, the choice of measures must also relate to the local market skills and its capacity to meet such a demand. For example, in case there is need to proceed with roof insulation and replacement of a boiler, one needs to understand that the concerned enterprises are different and have to organize a gathering to give a common offer with shared saving guarantee. This takes time and effort…If one simply goes straight to the market, then it will be only big enterprises who will be able to give an offer.” (Auvergne- Rhône-Alpes Energie Environnement, France)

Global refurbishments vs. energy supply dominant services

“In case of an EPC service with a short pay-back measures, energy supply is the most important part of the contract (70-90%). In that case, only big energy suppliers can be interested, and their interest starts at minimum €1 or 2M contract;

In case of global refurbishment, O&M and energy supply represent less than 20% of the budget. In that case, SMEs are more concerned because they are not able to make good supply offers and, in this case, energy supply is less important, investment is high and risky and usually public authorities have to participate to reduce the risk.” (Auvergne-Rhône-Alpes Energie Environnement, France)

Public authority as the project owner & guarantees with contactor

“Because the project was partnership contract, the client (public authority) was responsible for energy savings whereas the contractor was responsible for the quality of the construction materials and works. The share of savings between public authorities was defined in extended energy audits and has been included in contracts, so that every public authority is responsible for its own savings. The Contractor is responsible for possible errors in the construction of the facility under contract, which concern its solidity, ten (10) years, and for the quality of the works carried out, five (5) years from the acceptance and delivery of the facility from the date of use. For installed equipment, the manufacturer’s warranty is valid at least one (1) year from the date of acceptance and delivery of the facility. For the installed roof cover, the manufacturer’s guarantee shall be valid for at least five (5) years from the completion of a successful quality inspection and acceptance of the facility by the client. The warranty periods start to run from the date of the final of contractual works and when all the possible errors and missing works have been corrected. A new warranty period starts on the day of acceptance for the replaced parts and works during the warranty period.

The warranty is based on normal conditions of use and adequate and professional maintenance. Measurement and Verification Plan was made in accordance with IPMVP protocol where two documents on building level were made (IPMVP plans). In those documents data like temperature deficit, number of users, indoor physical parameters were analysed and standard values for those parameters were also defined.” (BSC, Bussines Support Centre, L.t.d., Kranj, Slovenia)

Joined procurement procedure between public authorities

“Several meetings took place between the technical assistance service and the public authorities in order to define the tender documents, most of them were by mail or online. A face to face meeting took place on the 25th of February in Ghemme. Afterwards the documents have been prepared and delivered to the public authorities with the note n. 00030793/2019 on the 29/03/2019. For the joint procurement procedure, public authorities were asked to sign a Memorandum of Understanding (MOU) in order to approve the investment plan from a formal point of view and appoint a contracting authority. An MoU was approved by Ghemme and by Borgomanero. After that, the respective heads of public works departments approved the tender documents. Finally, all the tender documents have been delivered to the Contracting Authority appointed (Centrale Unica di Committenza Unione tra Baraggia e Bramaterra). The tender procedure was launched in late summer 2019. Additional calls are planned to be launched with similar scheme and approach” (REGPIE, ENVIPARK, Italy)

Testimony 8.3: EPC procurement is a balancing procedure

“Running an EPC procurement is a balancing act between high-level technical solutions and guaranteed results that should be to a certain degree proposed by the bidders and compliance with public procurement policies that include non-discrimination rules and prohibit post-tender changes. Therefore, requirements are expected to be described, procured and materialized, avoiding discriminatory technical standards and other references which would favour or exclude specific providers, products or services, while at the same time making the investment opportunity attractive.” (AEGEA, Greece)

 

STAKEHOLDERs QUOTES:

 “STEPPING MED project for us was an extraordinary opportunity since it offered a valuable scheme on bundled EPC we successfully tested on 7 Municipalities and that we mean to scale up also for other Municipalities in further territories” Claudio Maltoni, Director FMI (Forlì Mobilità Integrata) srl

“Thanks to the STEPPING project, the urban community of Porte de l’Isère (25 municipalities) is experimenting the pooling of energy performance contract for 5 municipalities. The goal: to enable them to access technical and financial engineering to which they could not pretend alone. The local public society SPL SARA will be mandated by the 5 municipalities to launch the EPC tenders and will develop an offer for the renovation of public buildings of all 25 municipalities of our territory.” Sebastien DELMAS: Sustainable building Director CAPI

“There is a clear need for energy managers in the final customers, professionals who are integrated into the technical, financial and contracting that comes with the EPC.” ANESE (Spanish ESCOs National Association).

“In principle the concept of the EPC and ESCo proposed by the Stepping project is making sense when there is an economy of scale with regards to the investments needed for the energy retrofit projects. In Malta EPC did not kick off yet because our energy bills are one of the lowest among the EU countries, so the energy savings are not justifying the market uptake. However we have an obligation from the Energy Directive to implement the ESCo market, but we are bound to the demand. When the market will be mature enough to bring up the demand, policies and enforcement will also come to define the framework for EPC.” Simon Scicluna, Engineer at Foundation for Tomorrow's Schools

“STEPPING project has brought significant benefits to INRIM allowing us to approach the energy efficiency problem related to our buildings in the most effective way. We took advantage of the skills and the technical and legal support given by the project, being able to arrive to the launch of an EPC tender which will lead to consistent energy savings starting from 2020.” Claudio Rolfo, Technical Services Responsible –National Institute of Metrology Research