Renovation of public buildings through energy performance contracting in Italy

Dario Di Santo, FIRE

St Julians, Malta22 November 2018

www.fire-italia.org

The Italian Federation for the Rational useof Energy is a no-profit association foundedin 1987 that promotes energy efficiency,supporting energy manager, ESCOs and othercompanies dealing with energy.

Besides the activities directed to its members,FIRE operates under an imp l emen t i ngagreement with the Ministry of EconomicDevelopment to manage the Italian energymanager network since 1992.

In order to promote energy efficiency FIREcooperates and deals with public authorities,

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energy technology and serviceconsultants, medium and large

companies, consumers,

universities and associations to promote best practices and improve the legislation.

FIRE manages SECEM - an accredited body - tocertify the Energy management expertsaccording to the standard UNI CEI11339.

FIRE: the association for energy efficiency

FIRE: the association for energy efficiency

Some members of FIRE:A2A S.p.A., ABBVIE s.r.l., ACTV S.p.A., Aeroporto Valerio Catullo S.p.A., Agenzia per l'Energiae lo Sviluppo Sostenibile, AICE scarl, Alpiq Intec S.p.A., AMIA S.p.A., AMIAT S.p.A., AscopiaveS.p.A., Atlas Copco S.p.A., Avvenia s.r.l., Axpo Italia S.p.A., Azienda provinciale per i servizisanitari TN, Banca Mediolanum S.p.A., Banca Popolare di Sondrio, Beghelli S.p.A., BercoS.p.A., Bit Energia s.r.l., Bosch Energy and Building Solutions Italy s.r.l., Brembo S.p.A., CabotItaliana S.p.A., Carbotermo S.p.A., Carraro S.p.A., Carrefour Italia S.p.A., Centria s.r.l., ComauS.p.A., Compagnia Generale Trattori S.p.A., Consul System S.p.A., CPL Concordia soc. coop.,Credito Emiliano S.p.A., CTI Energia e Ambiente, DBA Progetti S.p.A., DNV GL BusinessAssurance Italia s.r.l., Edilvì S.p.A., Edison Energy Solutions S.p.A., Egidio Galbani s.r.l.,Electrade S.p.A., Elettra - Sincrotrone Trieste S.p.A., Elettrostudio Energia S.p.A., Enarkèassociati, Enel Energia S.p.A., Energika s.r.l., Energon Esco s.r.l., Energy Saving s.r.l., EnergyTeam S.p.A., Engie Servizi S.p.A., ENI S.p.A., Estra Clima s.r.l., Fedabo S.p.A., Fenice S.p.A.,Ferrari S.p.A., Ferrero Industriale Italia s.r.l., Ferriere Nord S.p.A., Fiera Milano S.p.A., FincibecS.p.A., Finco, Finstral AG S.p.A., FIPER, Fondazione Policlinico Università A. Gemelli, GewissS.p.A., Gruppo Società Gas Rimini S.p.A., Hera S.p.A., Hitachi Drives and Automation s.r.l.,Holcim S.p.A., IDM Südtirol, Ilsa S.p.A., Industrie Cotto Possagno S.p.A., Intesa SanpaoloS.p.A., Iplom S.p.A., IRBM Science Park S.p.A., IREN S.p.A., ISAB s.r.l., Italcementi S.p.A.,Italgas Reti S.p.A., Italgraniti Group S.p.A., Kairos s.r.l., Lidl Italia s.r.l., Loclain s.r.l.,Manutencoop Facility Management S.p.A., Marche Multiservizi S.p.A., Mater-Biopolymer s.r.l.,Mediamarket S.p.A., MM S.p.A., Montello S.p.A., NBI S.p.A., Pasta Zara S.p.A., Politecnico diTorino - Dip. di Energetica, Polynt S.p.A., Publiacqua S.p.A., Raffineria di Milazzo S.C. p. A.,RAI - Radiotelevisione Italiana S.p.A., Restiani S.p.A., Rete Ferroviaria Italiana S.p.A.,Roquette Italia S.p.A., Samandel S.p.A., San Marco Bioenergie S.p.A., Sandoz IndustrialProducts S.p.A., Schneider Electric S.p.A., SDA Express Courier S.p.A., Seaside s.r.l., SienaAmbiente S.p.A., Siram S.p.A., Solvay Energy Services s.r.l., Studio Botta, Tecno s.r.l., ThalesAlenia Space Italia S.p.A., Tholos s.r.l., Trenitalia S.p.A., Trenord s.r.l., Trentino Trasporti S.p.A.,Turboden s.r.l., Università di Genova - DITEN, Università Campus Biomedico, UniversitàCattolica del Sacro Cuore, Wind Tre S.p.A., Yanmar R&D Europe s.r.l., Yousave S.p.A.

Our members represent both the supply and thedemand side of energy efficiency services and solutions.

Around 400 members, almost equally divided between

organisations and professional.

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FIRE: the association for energy efficiency

Besides being involved in many Europeanprojects, listed next, FIRE implement surveysand market studies on energy related topics,information and dissemination campaigns,and advanced training.Some of FIRE clients over the years: Ministryof Environment, ENEA, GSE, RSE, largeorganizations (such as Centria, ENEL, Ferroviedello Stato, FIAT, Finmeccanica, Galbani, H3G,Poste Italiane, Telecom Italia, Unioncamere),universities, associations, energy agenciesand exhibition organizers.

www.fire-italia.org

On-going and just completed EU projects:

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www.secem.eu

SECEM

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SECEM, European System for Certification inEnergy Management, is a certification bodycreated by the FIRE.SECEM was the first body to offer third-party certification for Energy Management Experts(EMEs) according to UNI CEI 11339 and isaccredited according to the ISO/IEC 17024standard.In Italy two standards were developed in orderto promote the qualification of energy efficiencyoperators: UNI CEI 11339 for EMEs was issued in2009, UNI CEI 11352 for ESCOs was publishedin 2010. A new standard for energy auditor ispresently under preparation.Both the mentioned standards are recognizedfrom the national legislation within the energyaud i t o b l i g a t i o n s fo r l a rge c o m p a n i e sintroduced by the EED directive and the white certificate scheme.

Some basic aspects on EPC in Italy

Some basic aspects related to EPC and the main

stakeholders inItaly

EPC: First EPC contracts appeared in thelast 90ties in the public sector, mainly onpublic lighting. Since then their use hasbeen extended to heating and cooling

lighting and, morefacilities, internal recently, building renovation. However,their use remains limited.

ESCOs: Since 2010 in Italy ex is t atechnical standard for the certification ofESCOs. An improved version was issuedin 2014, requiring the implementation ofat least one EPC as minimum requirementfor the certification. Presently there are940 certified ESCOs.

Public administration: One of the mainbarriers for EPC remains the lack ofresou rces and know-how of manymedium and small authorities. Interestingexamples from hospitals and ELENAprojects.

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Some basic aspects on EPC in Italy

Some basic aspects related to EPC and the main

stakeholders inItaly

Incentives: The main Italian schemes aredesigned to be compatible with EPC andthe possibility to finance both ESCOs orthe end-users. This is true for Contotermico, Ecobonus (tax deductions) and white certificates.

Measurement and verification (M&V):FIRE made available the IPMVP protocol inItalian and is promoting its use also for EPC the public sector.

Tenders: Presently it is possible to usedifferent approaches for EPCs: servicecontracts, concessions, other forms ofPPPs.

Facilitators: Apart from theproject attempt to create a

guarantEE facilitator

network, some agencies have beenoperating with success in such role (e.g.AESS, IRE Liguria, etc.).

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Some data about ESCOs and EPC

Turnover, EBITDA, profits bln € (2013)

Source: ENEA 2015, CESEF 2015.Average registered capital

ESCOs' revenues per sectorSource: FIRE on ENEA's data

0,1%

23,2%

Civil sector

Industry

Agricolture

76,7%

Most ESCO have beencreated in the last tenyears and have a lowregistered capital andlow capitalisation.

EE turnover <1 bln €

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Some data about ESCOs and EPC

Source: FIRE on CESEF data.

Source: FIRE.

ESCOs activities cover manysectors and provide a widerange of solution.

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Some data about ESCOs and EPC

Source: FIRE in GuarantEE market report 2016.

Source: FIRE.

used

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EPC is seldom presently.

supply contractsMost contracts are

withsome basic form ofguarantee, but no linkbetween ESCO’s feeand EE.

Some data about ESCOs and EPC

Source: FIRE on Transparense data.

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Some data about ESCOs and EPC

Source: FIRE in GuarantEE market report 2016.

Source: FIRE.

M&V and

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insufficientknow-how about EPCare the main barriersfor the growth of suchcontracts.

Service contract

Example of project implementedunder service contract andfinanced through conto termicoand structural funds.

Quality

Energy saving

Work development

and execution

Management

Enhancements related to buildings’ aesthetics and functionality

Improvements of building envelope and plants

Organisation of the ESCO during project implementation

Management performance over years

Expected results

Involved resources (number, skills, etc.), safety measures, interferences with

hospitals’ activities

Plant management: enhancements with respect to base

M&V: enhancements with respect to minimum requirements

Source: MARTE project, www.marteproject.eu.

Renovation of threehospitals and two localhealth units.

Targets Criteria Score

Items: aesthetics, materials, durability and maintenance requirements of works

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Service contract

Source: MARTE project, www.marteproject.eu.Structure of the EPC fee (base,

fee,tender threshold, awarded over and under performancebehaviour.

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Service contract

Source: MARTE project, www.marteproject.eu.

Building envelope. Heating system.

Building envelope. Heating system. CHP.

Building envelope. Heating system.

Windows. Roof insulation. Boiler. Lighting. Solar thermal.

Windows. Roof insulation. Boiler. Lighting. Solar thermal.

Energy saving (%) CAPEX (k€)

Cost reduction

(k€)

PBT(years)

Results

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ELENA PPP with concession of services.

Source: 3L project: less energy, less cost, less impact, Provincia di Padova.

Target Involved local authorities

Buildings/lighting points CAPEX Energy saving

Main data about the project, which involved manymunicipalities in Provincia di Padova. The actionwas financed by the EIB’s ELENA programme.Duration 15 years. Energy not included.

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Source: 3L project: less energy, less cost, less impact, Provincia di Padova.

ELENA PPP with concession of services.

CAPEX per building

Main data about the project, which involved manymunicipalities in Provincia di Padova. The action wasfinanced by the EIB’s ELENA programme, with a highleverage. Despite complexity good results delivered.Duration 15 years. Energy not included.

CAPEX per lighting point

Minimum target

Minimum target

Average saving

Average saving

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PPP with project financing through EEEF

Source: Deutsche Bank, FIRE’s webinar on EEEF, 2016.

of complex

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implementedPPP and

Example project under financed through anEEEF project bond.

Some lessons learnt

Complexity: Despite the impressive results delivered,PPP contracts are usually complex and not wellunderstood by many public officers. Compared toConsip (central purchasing body) procurements, PPP ismore complex and more data and longer times arerequired. Complexity is the main barrier to PPP use.

M&V: Municipalities often don’t know well their energyconsumption and don’t have (reliable) energy audits onwhich to build the tender process. Standard defineddegrees days are often inadequate due to climatechange. IPMVP is being requested, but it is sometimesdifficult to apply. Reliable maintenance costs are seldomavailable.

Market: It is still small, but developing. ESCOs arerequested to present more challenging proposals.

Results: Economic and financial plans are ofteninadequate. Effective results are usually much higherthan tender thresholds, meaning that there is space toimprove proposals and procedures.

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What can we do together?

FIRE can be a partner for many activities:carrying out surveys among energy managers, ESCO, EGE, companies with ISO 50001, etc .;implementation of market and sectoral studies; guides and analysis on incentive tools and policies; information campaigns and behavioral change; dissemination campaigns;energy audits and feasibility studies;training courses on energy management and its tools(ISO 50001, energy audits, EPC, IPMVP, LCCA,feasibility studies, etc.), policies and incentives,solutions for energy efficiency, cogeneration, etc;European projects (e.g. Horizon2020), international cooperation, and much more…

Get in touch!

segreteria@fire-italia.org

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Thank you!

For more informationaboutouractivities

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