BOOSTING LOW CARBON INNOVATIVE BUILDING REHABILITATION IN EUROPEAN
REGIONS
Vilnius, January 17th, 2018
ESCOs: key partners to achieve an energy transition
(Spanish ESCO market)
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Growth of world economy requires an increase of energy consumption. In the next two decades this consumption is
foreseen to increase 30%
Energy Efficiency is the main driving force for decoupling economic growth and energy consumption
� Between 1995 and 2015 the global GDP growth was 73% and
the energy consumption 50%. This consumption would have
been 14% higher without energy efficiency measurements
implemented
� Energy Efficiency investments in 2015 increased in $221.000
millions (6% more than in 2014), 2/3 higher than in power
generation (IEA 2016)
� Energy Services Market has become a reality of $24.000
millions of business volume world wide
1. ESCO Model
2. ESCO Market in Spain
3. Anese Contribution
1. ESCO Model
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Energy ServiceEuropean Directive of Energy Efficiency 2012/27/UE. Art. 2 Definitions
• the physical benefit, utility or good derived from the combination of an energy with an energy-efficient technology or with action,
• which may include the operations, maintenance and control necessary to deliver the service,
• which is delivered on the basis of a contract and
• which, under normal conditions, has been shown to achieve a verifiable and measurable or estimable improvement in energy efficiency or primary energy savings
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� Companies providing energy efficiency improvement services ...
� facing some risk in doing so,
� and basing the payment of their services provided in obtaining energy savings
What are the Energy Service Companies, ESCOs ?
Definition of ESE or ESCO, according to Directive 2006/32 / EC and article 19 of RD 6/2010:
A natural or legal person who provides energy services or improves energy efficiency in a user's premises and faces some degree of economic risk in doing so.The payment for the services provided will be based (either wholly or in part) on the achievement of improvements in energy efficiency and compliance with other agreed performance requirements.
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ESCO Model: energy saving guarantees
Costs
and
savings[
€]
a0 a1 an an+1/ � / Years
ESCO
Contract
INICIAL
COST FOR
CUSTOMER
Final
Cost for
Customer
INVESTMENTS
Energy
Costs Costes
energéticosEnergy
Costs
Investment
payment
ESCO fee
Savings for
Customer
Energy
Costs
Savings
for Customer
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ESCOs: Value proposition
Energy
Services
Savings
Guarantee
TecnologyFinancing
• The ESCO
identifies,
designs and
implements the
Energy
Efficiency
Measurements
• The ESCO guarantees the energy
savings of the project
•The ESCO
provides the
financing of the
investment
PMO Skills Financing Skills
Technical Skills
Legal Skills
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FIRST ADDED VALUE: ESCOs use mature technologies that provide energy efficiency
Condensing boilers and micro-cogeneration
Heat-pumps and chillers with heat-recovering
Photovoltaic and thermal solar systems
Efficient electric motorsVariable Speed Drives Solar films
in windows
Roof and facade isolation
Daylighting,Low-consumption and LED lights
Presence detection and efficient lighting control systems in parking lots
Charging stations for PHEV & EV
Building Energy Management Systems (BEMS)
Outdoor LED lighting
Energy Savings
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SECOND ADDED VALUE: ESCOs incorporate financing to the project, based on savings
Client
ESCO
Project financing
out of balanceTechnologies
and Energy
Services
Management fee
12
3
Guaranteed savings
4
The client doesn´t use his
financing resources
Economic Savings
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THIRD ADDED VALUE: The technical and financial proposal is presented on a contract where the savings are guaranteed
CONTRATO DE AHORROS GARANTIZADOS
CONTRATO DE AHORROS COMPARTIDOS
1. Energy Performance Contract (EPC): savings in kWh
2. Energy Supply Contract (ESC): savings in €/kWh supplied
2. ESCO Market in Spain
link Observatorio
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Size and location of ESCOs. Anese 2015 survey (74/56 enterprises)
Revenues (mill. €)
Size by no. workers
Madrid 38%
Cataluña 15%
Andalucía 10%
85% of ESCOs are SMEs
21% have revenues over 10 mill€
Most of them are in Madrid
29% operate across Spain
34,5% work abroad (78% of them are SME)
Small Medium Large
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ESCOs achieve energy savings and provide qualified employment during 8 years
ESCO achievements in Spanish market
Energy Savings
Types of contracts (No. ESCOs)Implemented technologies
Average amount of an ESCO contract
Average duration of an ESCO contract: 7,6 years
Guaranteed savings (EPC)
Shared savings (EPC)
Mixed savings (EPC)
Energy supply contract (ESC)
Emission Savings
Economic Savings
Integrated energy contract (5P)
Own contract
ESCO profile – as per survey
Industrial applications
Building envelope
Lighting
Motors
Control systems
HVAC systems
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ESCOs contribution to national targets
ESCOs provide 20,000 direct employment with high qualification
Contribute with a 0.11% to the GDP (1.170 M€revenues)
35,9% of 2015 annual target of the National Planfor Energy Efficiency 2014-2020 has beenachieved by ESCO projects
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Public tenders for energy services
272
278
159
Average Budget (Mill €) 2014 2015 2016
Street Lighting 3,4 1,5 1,3
HVAC 1,6 0,5 1,0
Others 1,8 2,7 1,4
Number of tenders
Public issues had big impact in the number of tenders in 2016
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Market Segment ESCOs%
Public
Local councils – street lighting 44%
Local councils – schools 39%
Local councils – sport centers 37%
Public administration - Buildings 35%
Public administration - Hospitals 21%
Public administration - Universities 16%
Private
Industry 65%
Residential 44%
Hotels 42%
Retail 39%
Recreational and entertainment 37%
Market segmentation
There is no clear specialization by sector or industry
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Types of contracts and measurement and verification protocols
M&V
Average time to sign a contract (months)
Most ESCOs use:- EPC contract in the private sector- A specific one (5Ps) in the public sector
Half of them use IMPVP for M&V protocol
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Size and revenue level, technology and Social Corporate Responsibility are key to increase the success rate
Success rate
Key factors Success rate
Big size 31,17%
Revenues > 10 Mill€ 37,17%
Technology: industrial applic. 40,60%
SCR report 34,53%
1,355 Mill €
0,236 Mill €0,349 Mill €
Average amount of an ESCO contract
Success rate
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Barriers
1º Distrust on the ESCO model (ESCO credibility)
2º Lack of financing
3º Contracts too complicated
4º Outsourcing of energy management is not perceived as a benefit
5º Lack of knowledge of the ESCO model
6º Lack of information of financial an technical details of EPC model
7º Lack of governmental support
8º Lack of fiscal aids
9º Lack of compiled good practices
10º Lack of benchmark companies
There is a change in the ESCO market: few years ago, financing was the first barrier, nowadays confidence is the first one
Barriers
4. Anese Contribution
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Key areas of ANESE
ESCO
Energy
Saving
Contracts
TecnologyFinancing
CO2
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ESCO certified classification
IPMVP®
LEED
Measurement
and
verification
protocol
Energy
Manager
Sustainable
buildings
ESCO
certification
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ANESE has established a classification defined in 2014 and lunched in February 2015 that:
� It is addressed to ALL ESCOs that wish to be classified
� Provides clarity in the market
� Distinguishes specialized and professional companies
� Indicates the business horizon
Certified Classification of ESCOs: trust is the key point to improve the ESCO model
Specialities:
• Lighting
• Engines
• HVAC Systems
• Regulation and control
• Isolation
• Industrial applications
16 certified companies
22 in-progress
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Energy services integrate technology, financing and professional services for a wide period of time, this incorporates a complexity in the common public tenders
Lawyers
ESCOs
Politicians
Secretaries of Secretaries of the
municipality
¿Others?
PRECEDURE
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GUIDE TO DEFINE THE TECHNICAL CLAUSES IN A ENERGY PERFORMANCE CONTRACT TENDER
Based in our experience, we have written a set of clauses to improve the public tenders, covering:
8. Billing, price revision and penalties
9. Measurement and Verification protocol
10. Certification of the ESCO
11. Ownership of the equipment and systems
12. Exclusions
13. Cancellation of the service. Resolution of the contract
14. Settlement
1. Type of contract
2. Object of the contract
3. Benefits and SLAs
4. Savings guarantee
5. Time of execution
6. Preventive and corrective maintenance
7. Financing
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GT Tecnología• ESCO model
• Methodology• Contracts• Energy audits• Financing and insurance• Measurement and verification• ESCO classification
• 22 technologies• Description• Energy saving• Regulation• Advice of use• Sectors of application
• Good practices•Success stories (projects)•Energy Saving Measures carried out•Technologies used•Savings achieved•Investment
Technology guide (download www.anese.es)
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ANESE Financing Program
Specialized Private Equity
Funds
Projects Clients
ESCOs members of ANESEESCOs members of ANESE
Matching project needs and investment funds requirements, by• Project assessment and screening
(using ICP criteria)• Project aggregation in portfolios• Procedure formalization
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Private equityfirm
Minimuminvestment by
portfolio
Minimuminvestment by
project
Repaymentperiod (years)
Project type Contractownership
SUSIPartners
2 M€ - 5..10 Greenfieldor
Brownfield
ESCO
SI Capital 1 M€ 0,5 M€ 5..25 Greenfieldor
Brownfield
SPV, Others
SUMA Capital 2 M€ 0,5 M€ ≤ 10 Greenfieldor
Brownfield
SPV
Basic requirements (and procedure)
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Some references• 10 Public Street Lighting contracts with more than 10,000 points. (10-12 years)• 3 Hotels• 2 Shopping Malls• 2 Private Office Buildings• 8 Residential Buildings•16 Municipality Buildings
The ESCO Company
� Energy Services Company (ESCO) based in Seville, established in 2010
� It covers the complete cycle of energy services: design, supply, installation, maintenance, guarantee and financing
� 100% private property, 100% Andalusian equity
� Fully independent of energy marketers, equipment manufacturers and distributors or comprehensive maintenance companies
� Betting on technology and innovative own solutions
� “Collaborating Entity” of “Andalucía es más” program
� Since 2015 most project financing are made through a SPV shared with SUMA Capital
www.cactus2e.com [email protected]
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Add an ESCO to your team as expert in energy management
www.anese.es+34 91 737 38 [email protected]
Energy Savings
Emissions Savings
Economic Savings
Francisco Cá[email protected]
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