“Improving Energy Efficiency in Buildings” UNDP-GEF ... ARM_… · SNiP Building Norms and...

Ministry of Nature Protection of RA

Ministry of Urban Development of RA

INCEPTION REPORT

“Improving Energy Efficiency in Buildings” UNDP-GEF 00059937

Full Size Project

Prepared for UNDP-GEF

Yerevan, Armenia

February 2011

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CONTENT

ACRONYMS......................................................................................................................................................... 2

I. BASIC PROJECT INFORMATION ........................................................................................................ 3

II. PROJECT INCEPTION UPDATE ........................................................................................................... 3

II.1 INTRODUCTION..................................................................................................................................... 3 II.2 PROJECT OVERVIEW............................................................................................................................. 4 II.3 PROJECT ACTIVITIES CARRIED OUT OVER THE INCEPTION PHASE ....................................................... 5 II.4 INCEPTION WORKSHOP......................................................................................................................... 6

II.4.1 Discussions Related to 2010-2011 Work Plan................................................................................ 7 II.4.2 UNDP-GEF Requirements Update................................................................................................. 7

II.5 CHANGES IN CIRCUMSTANCES THAT MAY AFFECT PROJECT IMPLEMENTATION.................................. 7 II.6 CIRCUMSTANCES THAT POSE A RISK TO SUCCESSFUL PROJECT IMPLEMENTATION............................ 12

III. CONCLUSIONS OF THE IW ............................................................................................................ 13

III.1 RECOMMENDATIONS TO THE PROJECT TEAM ..................................................................................... 13 III.2 REVISION OF THE LOGICAL FRAMEWORK MATRIX AS AGREED AT IW............................................... 14

IV. SCHEDULE FOR REVIEWS, REPORTS AND EVALUATIONS ................................................ 18

V. LIST OF ANNEXES................................................................................................................................. 19

ANNEX A: AGENDA OF THE INCEPTION WORKSHOP....................................................................................... 20

ANNEX B: LIST OF PARTICIPANTS OF THE INCEPTION WORKSHOP ................................................................. 21

ANNEX C: PRESENTATIONS FROM INCEPTION AND EXPERT WORKSHOPS ...................................................... 24

ANNEX D: MINUTES OF THE INCEPTION WORKSHOP ...................................................................................... 25

ANNEX E: IAWG ESTABLISHMENT ORDINANCE, TOR AND LIST OF NOMINATED MEMBERS ........................... 28

ANNEX F: ANNUAL WORK PLAN FOR 2010-2011........................................................................................... 31

ANNEX G: REVISED STAKEHOLDER MAP AND PROJECT IMPLEMENTATION ORGANIGRAM ............................ 35

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ACRONYMS AWP Annual Work Plan ProDoc Project Document CEO Chief Executive Officer CEN European Commission for Standardization CIS Commonwealth of Independent States EPBD EU Directive on Energy Performance in Buildings ESIB Energy Saving Initiative in Buildings EU funded regional project EU European Union FSP Full-Sized Project GEF Global Environment Facility GDP Gross Domestic Product GHG Greenhouse gases GoA Government of Armenia GOST National standard IBDA Integrated building design approach MNP Ministry of Nature Protection of RA MUD Ministry of Urban Development of RA MENR Ministry of Energy and Natural Resources ME Ministry of Economy YSUAC Yerevan State University for Architecture and Construction R2E2 Renewable Energy and Energy Efficiency Fund of Armenia AUA American University of Armenia BUA Builders Union of Armenia ArUA Architects Union of Armenia MSN Intergovernmental construction norm M&E Monitoring and Evaluation NGO Non-governmental Organization IAWG Inter Agency Working Group PM Project Management PMT Project Management Team PPG Project Preparation Grant QA/QC Quality control/Quality assurance procedures RE Renewable Energy EE Energy Efficiency RoA Republic of Armenia SNiP Building Norms and Rules (building codes) IW Inception Workshop TL Task Leader tCO2e Tons of CO2 equivalent ToR Terms of Reference UNDP United Nations Development Programme UNDP CO United Nations Development Programme Country Office UNFCCC UN Framework Convention on Climate Change USAID United States Agency for International Development USD the U.S. Dollar

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I. Basic Project Information Programme or project number and title: PIMS 4245 “Improving Energy Efficiency in Buildings”

UNDP-GEF/00059937 Designated institutions (Executing Agencies): Ministry of Nature Protection of the Republic of Armenia (MNP) Ministry of Urban Development of the Republic of Armenia (MUD) Implementing agency: UNDP Project starting date Originally planned: April 2010 (as approved in FSP proposal) Actual: July 2010 Project completion date Originally planned: July, 2015 (approved 5 years duration) Total budget (US$): GEF: 1 045 000;

UNDP: 150 000; GoA: 2 200 000 (including 200,000 in kind).

Original: the same ProDoc signature date: June 30, 2010 Date of the Inception workshop: November 17, 2010 II. Project Inception Update II.1 Introduction The project inception phase, lasting 4 months, marks the launch of the implementation of the UNDP-GEF project “Improving Energy Efficiency in Buildings”. Thus far, the following has been achieved: Local Project Advisory Committee (LPAC) was held on 18th May 2010. Based on the result of discussions and positive feedback from the stakeholders, considering the importance of the project outcomes for the national policy making process, recognizing its timeliness and consistency with national and global development goals, LPAC recommended FSP document for further approval by GEF Implementing Agency and National Implementing Partner. On 30th of June, 2010 the UNDP Armenia and Ministry of Nature Protection (MNP) signed the ProDoc and AWP.

• Establishment of project management structure:

In line with the project document the project will be implemented under the UNDP Climate Change Programme which will ensure smooth start of the project using the well established facilities and administrative resources of the Unit. Project Task Leader has been hired based

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on a competitive selection process to lead, supervise, and monitor project implementation process and work under direct supervision of the UNDP Climate Change Programme Coordinator. According to the ProDoc Project Steering Committee (PSC) was established and comprise of 11 members nominated by the corresponding agencies: MNP, Ministry of Urban Development (MUD), UNDP, UNIDO Ministry of Economy (ME), Ministry of Energy and Natural Resources (MENR), Armenia Renewable Resources and Energy Efficiency Fund (R2E2), Yerevan State University for Architecture and Construction (YSUAC), Builders Union of Armenia (BUA). Ad hoc Inter Agency Working Group (IAWG) is established by the order of the Minister of Urban Development, comprising from nominees from the: MUD, MNP, MENR, ME, BUA, YSUAC, R2E2, “Glendel Hills” CJSC (pilot area builder) chaired by the Deputy Minister of Urban Development, and the Project expert is serving as a secretary. The IAWG establishment ordinance, modus operandi and list of members are provided in Annex E.

• Initial engagement with partners and stakeholders:

During the inception phase intensive negotiations were conducted with MUD and MNP as the national responsible partners of the Project as well as consultations were conducted with YSUAC, BUA, MENR, AUA, Architects Union of Armenia (ArUA), R2E2 and private sector.

• Project inception workshop:

The project inception workshop (IW) was held on November 17, 2010 in Yerevan, Armenia. 58 participants included representatives of: PSC, UNDP CO, relevant governmental agencies, scientific and educational establishments, private sector, professional unions, sector specific NGOs and other interested parties. During IW was discussed and approved the project strategy based on the ProDoc.

II.2 Project Overview

The goal of the proposed project is to reverse the existing trends and reduce consumption of electrical and thermal energy and associated GHG emissions in new and restored, primarily residential buildings in Armenia. It will do this by creating enabling regulatory environment, skills and capacity among industry professionals to introduce the principles of integrated building design in Armenian construction practices from the stage of building design through construction to maintenance of the buildings. The support to be provided by the project will combine development of a new regulation (EE building codes and certification scheme) with the training of professionals, demonstration of integrated building design and stimulating manufacturing of new EE materials and equipment.

The project will be implemented under the UNDP-led GEF Global Framework for Promoting Low Carbon Buildings (LGGE) with a primarily focus on two thematic approaches promoted by the Global Framework: a) promotion and increased uptake of high quality building codes and standards; and b) developing and promoting energy efficient building technologies, building materials and construction practices. The coordination offered by the global program will help Armenia to learn from experiences and best practices from countries with similar EE building projects. The project approach of institutionalizing improved energy efficiency in buildings through building codes, construction materials certification, training, and demonstration directly contributes to the pursuit of Millennium Goal Number 7: Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources. The project approach also builds on one of the key areas of the UNDP Armenia Country Programme: to

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“strengthen synergies of environmental, governance and socio-economic issues to ensure integrated solutions.” Keeping in mind that 88% of buildings in the total non-commercial building stock of Armenia is in the residential sector (Fig 3), this project is directed towards enhancing energy efficiency in residential buildings. However, it is important to note that activities supporting a new, energy-efficient building code will cover not only construction and capital renovation of residential but also non-residential buildings, thus leading to wider replicability.

In pursuit of the objective, the project will deliver the following outcomes:

1. New EE Building Codes and/or Standards designed and enforced 2. Quality control, testing and certification of EE materials and equipment established 3. Outreach, training and education implemented/conducted 4. Integrated building design approach demonstrated on a selected multi apartment building 5. Project monitored and evaluated

II.3 Project Activities Carried Out Over the Inception Phase The following activities were carried out and summarised in the 2010 Annual Standard Progress Report and presented during the Outcome Board meeting on 10th of December, 2010:

ToR for the Project Task Leader was developed. The position was announced by UNDP Armenia in June 2010. The Project Task Leader was selected on competitive basis in August 2010 and the corresponding Service Contract with UNDP Armenia was signed with the start date of September 1st, 2010.

Multi-year AWP (2010-2015) was developed and adopted by MNP and UNDP, as well as

detailed work plan for 2010-2011 was prepared.

Project Steering Committee was established with co-chairmanship of the Minister of Nature Protection, Minister of Urban Development and UNDP Resident Representative, the project document (Armenian version), project workplan and PSC ToR was shared with PSC members.

Inter Agency Work Group was established by the ordinance of the Minister of Urban

Development (Annex E) to support the project especially for guiding the activities under Components 1 and 3.

Project team was established: 3 National and 2 International Experts were selected and

contracted. 2 local companies were contracted for providing professional services under Project 1st and 4th outcomes.

o International Expert on Energy Efficient Building Codes o International Expert on Energy Efficient Building Design o National Expert on Building Codes o National Expert on Architecture and Design o National Expert on Architecture and Design (Construction Supervision) o Local Company providing professional services on elaboration/revision of energy

efficient building codes/standards The main objective of the task is to enhance elaboration/amendment of energy efficient building codes and standards in Armenia based on best international practices in energy efficient building codes and standards and on local circumstances, together with in collaboration with international and local experts.

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o Local Company providing professional services on performing design works of energy saving residential demonstration building

The main objective of the task is to elaborate/amend the design of the selected building – applying integrated building design approach to harmonize the design with the relevant international energy efficiency standards. The building’s energy performance indicators must be estimated and the building’s construction documentation must be amended.

Preparation for and organization of the Inception Workshop was done.

Monitoring and reporting documentation was developed in accordance with the UNDP Project Results and Resources Framework requirements: quarterly progress report for third and fourth quarter of 2010 was prepared and submitted to GEF and MNP; Annual Standard Progress Report was developed, submitted and presented at the UNDP Outcome Board on December 10, 2010.

The project Task Leader attended a regional “Energy Efficiency Forum” in the framework of Sixth Ministerial Conference on Environment and Development in Asia and the Pacific organized jointly by the Government of Kazakhstan, United Nations Economic Commission for Europe (UNECE), United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), United Nations Environment Programme (UNEP), and United Nations Development Programme (UNDP) in Astana, Kazakhstan. A presentation on the Project objectives and planned activities was delivered during the workshop and the contacts with the similar projects in the region were established.

Cooperation opportunities with GEF-WB (IBRD) “Armenia Energy Efficiency Project” were

discussed to avoid duplication of activities.

Cooperation opportunities between the UNDP-GEF Project YSUAC, AUA, BUA and ArUA were discussed. Cooperation is planned around the awareness raising and training components of the Project.

The project brief and Fact Sheet are prepared and translated into national language for

dissemination purposes. Project web-page was developed and integrated in the website of the Climate Change Information Center of Armenia (http://www.nature-ic.am). The information on the Project was posted on the web page of the project (http://www.nature-ic.am/en/PR_EBB_PD).

The meeting with UNDP Operations Manager, and Procurement Officer, EG Portfolio Analyst, AWP coordinator and TL was organized following the request of the Project. The goal of the meeting was to discuss the organization of procurement procedure to cover the incremental cost under the Project Component 4 (demonstration of IBDA).

II.4 Inception Workshop The Inception Workshop (IW) took place on November 17, 2010 in Yerevan, Armenia. Participants included the Project Steering Committee members, project main counterparts, and representatives of other potential partners from Government sector, NGOs, international organisations as well as the private sector. The purpose of the IW was to present and review jointly with stakeholders the overall project objectives, strategy (outcomes and outputs), and project annual work plan. In addition, the agenda also included presentation of the requirements of UNDP-GEF on reporting, monitoring and evaluation of the project. Participants reviewed the logical framework, including the identified progress indicators, risk management and annual work plan (August 2010 – July 2011) as presented.

IW participants also confirmed their understanding of the importance of the project and expressed their willingness to support the project activities.

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The agenda for the IW is included in the Annex A. The list of participants is included in Annex B. Presentations at the IW are in Annex C (forwarded as separate electronic files). At the conclusion of the workshop, which can be considered as a major stakeholder meeting which stated that the project is acceptable as formulated, no additional clarifications or modifications are needed. The following remarks, comments and suggestions were recorded, which have to be taken into consideration during the project implementation as much as possible:

• It is important to avoid duplication, repeat the work and activities planned under other donor

assistance projects, as well as to ensure timely communication on project plans and outputs with counterparts;

• Involve corresponding specialists and/or private sector representatives in IAWG meetings when needed;

• Step-by-step elaboration and introduction of new building codes should be performed to ensure smooth implementation and enforcement. Due to Internetional Expert recommendations integrated approach (integration of heating, ventilation and air conditioning norms into thermal protection code) is premature to apply in current conditions;

• Consider urgency of providing support to the local EE materials producers: assisting them via product testing, certification and market penetration;

• Proper planning and implementation of the pilot project activities should be done to ensure the replicability;

• Importance of conducting trainings on EE building design and IBDA is mentioned;

The minutes of the IW are included in the Annex D and shared with stakeholders. II.4.1 Discussions Related to 2010-2011 Work Plan The annual work plan (2010-2011) of the project was presented during the IW and no substantial comments/remarks are received. The 2010-2011 work plan is included in the Annex F. II.4.2 UNDP-GEF Requirements Update During the IW the participants were updated on the GEF requirements and regulations regarding the project implementation, including: monitoring and evaluation requirements (adaptive management, progress monitoring, progress reporting, evaluation, budget), risk management (environmental, financial, operational, organisational, regulatory, political, etc.), UNDP-GEF project implementation responsibilities; monitoring and evaluation responsibilities; changes allowed in the project, etc. It has also been mentioned that the Project will be implemented under the UNDP-led GEF Global Framework for Promoting Low Carbon Buildings with a primarily focus on two thematic approaches promoted by the Global Framework: a) promotion and increased uptake of high quality building codes and standards; and b) developing and promoting energy efficient building technologies, building materials and construction practices. The coordination offered by the global program will help Armenia to learn from experiences and best practices from countries with similar EE building projects. II.5 Changes in Circumstances that May Affect Project Implementation Baseline 65% of Armenia's population of 3.23 million inhabitants lives in urban areas. There are over 400,000 apartments with a total area of more than 25 million m2 in multi-apartment buildings. The largest

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portion of the urban housing stock is between 30 and 60 years old, and it typically has poor thermal characteristics and is poorly sealed. Without exception, all old buildings require some type of repairs, and 11% of the buildings are in urgent need of reconstruction. Buildings represent the largest energy end-use sector, accounting for 35.5% of electricity and 25.3% of gas consumption in Armenia (a major portion of both is consumed to cover the heating load, due to the absence/collapse of the centralized district heating system and switching to the individual heating options),1 and this sector offers the single largest and most cost-effective opportunity to improve energy efficiency: 40% of the national energy saving potential is in the buildings, an equivalent of 402,000 toe or 944,000 tCO2e of GHG emission reductions annually.2 The buildings sector is also the second fastest growing sector (after transport) in terms of energy use and GHG emissions: in 2002-2005 consumption of natural gas in residential and public buildings grew by 206% and 85% respectively. There is a stated government commitment to implement the Program for restoration of the areas that suffered from the disastrous 1988 earthquake. In November 2008, the Prime Minister declared the full reconstruction of the earthquake zone was among the government’s priorities and pledged 77 billion Drams (approximately USD 250 million) for finalizing the construction of new housing for the 75,000 people still living in temporary dwellings. The state-supported program will construct over 460,000 m2 of residential stock during the 2009-2013 in the northern regions of Armenia. Till 2011 under the state program 126,000 m2 of housing was constructed in the earthquake zone. The basis for long-term energy policy in Armenia is the Strategy for Development of the Energy Sector within the Context of the Economic Development of the Republic of Armenia (2005), which defines ways of creating a safe, efficient and sustainable energy sector in Armenia. The National Program for Energy Saving and Renewable Energy (2007) provides an assessment of the energy saving potential in power supply, heat supply and gas supply systems; in industrial production, in the transportation, residential, and public sectors; and it also assesses the potential of renewable energy and measures for achieving potential energy savings. The National Security Strategy (2007) also prioritizes national energy security issues and defines main directions in energy sector development. Energy efficiency is regulated by two main laws: the Law of the Republic of Armenia on Energy (2001) and the Law on Energy Saving and Renewable Energy (2004). The laws define the main principles of state policy in the energy sector: The most important law related to residential construction is the Law on Urban Development. It establishes the main provisions regarding urban development and it regulates the relationships between the various entities in the field. The main responsible body for implementation of the policy in the construction sector is the Ministry of Urban Development of RA. The two primary institutions relevant to the residential energy efficiency sector are: • The Ministry of Urban Development (MUD), which oversees the implementation of the Law on

Urban Development. The MUD is also the main governmental body in charge of implementation of all state-funded construction programs. Nearly all of this construction is related to the Program for restoration of the areas that suffered from the disastrous earthquake in 1988.

• The Ministry of Energy and Natural Resources (MENR) is the main responsible authority for energy policy development and implementation (including energy efficiency).

At the level of building codes, existing building codes (norms) can be divided in the following three groups: codes developed in the Soviet period (SNiPs); building codes developed during the 1990-2000 period by Armenian experts; and Intergovernmental construction norms (MSNs) developed by Intergovernmental Normative-Technical Commission on Standards and Certification in the Building

1 Ministry of Energy, Calculation Center (2006 report). 2 National Programme on Energy Saving and Renewable Energy of Republic of Armenia (2007).

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Sector of the CIS. The latter were voted for, but not yet adopted by Armenia, including MSN 2.04-02-2004 “Thermal Insulation of the Buildings.” Barriers analysis The energy efficiency study conducted by World Bank in Armenia (completed in 2008) identified a number of legal and regulatory barriers to energy efficiency investments, including absence of EE standards, public procurement inflexibility, inadequate gas tariff structure, lack of regulatory incentives for energy efficiency in utilities. The building construction is carried out by existing building codes. The current building codes were not designed with energy efficiency in mind. For example, the code pertaining to the thermal resistance of building envelope elements bears non-binding recommendations. Most designers use a Soviet-era code (SNiP) dating from 1979, which sets the minimal thermal resistance requirements (R values) for the building envelope elements in accordance with sanitary norms. The building codes “Thermal physics of the building envelope” (1995) were adapted based on the corresponding Russian codes, and they do not provide IBDA, building energy performance limitations and building energy passport form. Changes By the Decision of the Government of RA, 6 May, 2010 was approved the concept of the system of the urban development normative documents, which actually outlines the strategy of development of the system of urban development normative documents during 2010-2020 and summarizes the issues, goals and main principles of the technical regulation in building sector. The mentioned concept paper was developed based on provisions of EU-RA collaboration convention and is taking into account Armenia’s commitments in the field of overcoming technical barriers of trade. The program (1st phase 2012-2014) under the mentioned concept was adopted by Government 30 January 2011. The list of certain EU standards and schedule of their adoption are listed in the Annex of the Programm. The National Energy Efficiency Action Plan (NEEAP) adopted by the Government Decision #43 on November 4, 2010, outlines priorities and time schedule for improvement of the EE normativeս, including ones in urban development sector. Both mentioned strategic documents are in line with the Project activities to be conducted under Components 1 and 3, and will create the breeding ground for their implementation. Moreover the NEEAP is actually recalling the exact formulations of the 1st and 3rd components of the UNDP-GEF Project and mentioning the MUD as the responsible governmental authority for the implementation of the activities, setting the priorities and deadlines. Below are quoted tables of activities planned under NEEAP: No Title of the EEI

measure Description of measure Responsibility Funding

source Duration Priority

II.1 National Building Code considering energy performance of buildings

Adoption of a EE Building code considering energy performance of buildings (compatible with international best practices, such as the European Energy Performance Building Directive) with regular revisions of the building code (e.g. all 3 years). The new code will consider the total building energy performance (including heating, hot water, air conditioning and ventilation) and set specific targets concerning the maximum energy demand of building. Construction permits are to be issued taking into consideration that all requirements according to the new building code are applied.

Ministry of Energy, Ministry of Economy, Ministry of Urban Development

UNDP-GEF

2010-2012

High

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II.2 Standards and calculation methodology to assess energy performance in buildings

Elaborate and adopt national calculation methodology to determine building energy consumption based on standardized use and establish minimal requirements for thermal properties of a building, heating and air—conditioning systems, application of renewable energy sources and relevant design aspects of buildings (e.g. inclusion of passive solar elements).

Ministry of Energy, Ministry of Economy, Ministry of Urban Development

UNDP-GEF

2010-2012

High

II.3 Institutional capacity-building for implementing and enforcing new standards

Develop responsibilities and clear procedures within the responsible Ministry of Urban Development to address the enforcement of the new building energy efficiency codes and standards. Train staff to ensure compliance with the new code throughout design, construction and maintenance phases, through capacity building in energy audits: define procedures and methodology for issuance of building energy passports and the types of buildings for which the passports will become compulsory.

Ministry of Urban Development

UNDP-GEF

2010-2012

High

II.4 Establishing quality assurance/quality control (QA/QC) standards that will support the certification of key building materials for energy performance

Establish a mandatory testing system for the conformity of construction materials with building energy performance according to national standards. Establish performance requirements for materials produced locally or imported, which will allow builders and designers to make better informed decisions about the performance if the construction materials used in new buildings. Introduce a voluntary certification and labelling scheme for construction materials (e.g. windows, insulation, boilers, etc.) to provide incentives for high-quality materials to enter the Armenian market. Furthermore, national norms for QA/QC shall be established in manufacturing facilities and assistance for supplies to comply with energy-efficiency related national standards.

Ministry of Urban Development, Ministry of Economy

UNDP-GEF

2010-2012

High

II.5 Set up road-test procedures for building certification and methodology for assessment of energy performance for pilot buildings

Set up road-test procedures for building certification and methodology for assessment of energy performance for pilot buildings (e.g. schools, residential buildings) to be constructed following integrated building design approach. Use experiences and outcomes from relevant projects, such as UNDP/GEF “Improving Energy Efficiency of Municipal Heating and Hot Water Supply” (UNDP/GEF/00035799)


UNDP-GEF

2010-2012

High

Currently there are some minor changes/amendments proposed by MUD to this program which are under discussion now with MENR. During the inception phase the project Task Leader participated in the Seminar on “Energy performance certification of buildings and Energy labeling of appliances” in the framework of the INOGATE project “Energy Saving Initiative in the Building Sector in Eastern Europe and Central Asia” (ESIB), 18-19 January 2011, Kiev, Ukraine. During the event opportunities for the cooperation between “Improving Energy Efficiency in Buildings” UNDP-GEF project and ESIB Project on certain components were discussed with ESIB Project coordinator Mr. Jean-Jacques Dautet and ESIB project expert Petr Holub, taking into account that regional ESIB project activities are in line with ones of this Project. In particular ESIB project has technical assistance components within itself. 2 more meetings with ESIB project experts were held during their mission in Armenia. Draft inter-project cooperation matrix (presented in Annex I) was elaborated, discussed and preliminary agreed as a result of these meetings. A meeting with participation of MENR, MUD, R2E2, ESIB project and UNDP-GEF project was held on February 18, 2011. Meeting was aimed at avoiding the duplication of activities between the WB and UNDP projects and the regional ESIB project, synchronisation of the activities and schedules and ensuring the good communication between them.

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Other changes/accomplishments done during the inception phase are presented by components below: Component 1: Design and enforcement of new EE Building Codes and Standards - Current situation and outlook

The legal analysis carried out by project experts showed that building code adopted in 1995 were not registered by the Ministry of Justice of RA, and it thus was not enforced. There is contradiction between “Law on Urban Development” and “Law on Standardization” (in other words there is contradiction between status of provisions of SNiPs and Technical Regulations/standards).

- Accomplishments during inception period During inception phase the IAWG was formed and 2 meetings of IAWG were successfully held with participation of the International Expert to discuss the draft report of the subcontracted company on the baseline for the Component 1 of the Project (ToR of the IAWG is enclosed in Annex E). The Project subcontractor company finalized the analytical report on the status of the EE codes in Armenia and suggestions on possible ways of development:

• Adopt the Russian intergovernmental building code (MSN) “Thermal protection of buildings”, which Armenia voted for back in 2004

• Draft the technical regulation instead of the existing code to comply with EU directives • Based on existing code, best practices and EPBD requirements develop the new EE

building code All these options were presented to the IAWG members for their review and/or comments.

- Recommendations for next steps

After the comments will be received and systemized the ToR for the local subcontractor company will be adjusted accordingly and the work under this component will be organized.

Component 2: Quality control, testing and certification of EE materials and equipment

- Current situation and outlook Тhis Component will focus on establishing quality assurance/quality control (QA/QC) standards and will support the certification of key building materials for energy performance. The Project will assist in the process of adopting EU compliant QA/QC standards for the EE related materials.

- Accomplishments during inception period

The database for the insulation materials, doors and windows was updated to reflect the newly introduced materials and recent prices.

- Recommendations for next steps Introduction of a certification scheme for the insulation materials is planned to be developed during 2011. Component 3: Outreach, training and education

- Current situation and outlook Currently there is no IBDA course in the construction university (YSUAC) neither there are any trainings and courses provided for practicing professionals at the Builder’s Union or Architect’s Union. No awareness raising campaigns targeting the EE in Buildings issue have been deployed.

- Accomplishments during inception period

The Project International Expert on Architecture during the in-country mission had several working meetings with Builder’s Union, Architect’s union, YSAUC, AUA etc., during which the current state of the curricula for students and trainings for professionals were identified.

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The draft curricula developed and provided to architectural university (YSUAC) for comments and feedback of Working Group. The seminar on IBDA was organized at YSUAC with participation of deputy rector, department chairs, lecturers and students.

- Recommendations for next steps

Upon receipt of the comments the draft curricula will be developed for students, as well as for practicing professionals. The corresponding information materials to be used in the awareness raising campaigns (“hot line” information sheet, FAQ&A, Internet site) will be developed during 2011. The training manual for professionals ensuring energy efficiency of buildings, particularly, designers, auditors and quality control specialists will be elaborated.

Component 4: Demonstrating Integrated Building Design

- Current situation and outlook The buildings of the type selected for demonstrating the integrated building design are being built very rapidly in the “Mush-2” district of Gyumri city. Thus was decided to meet with the interested parities and discuss the timeframes.

- Accomplishments during inception period Minister of Urban Development invited the working meeting on 29 October, 2010, with participation of the UNDP EG Analyst, Project management, representatives of Builder and Design companies, Project TL and National Coordinator. During the meeting pilot building type and site selection was finalised. It was decided to go on with building type “4A” and the implementation site was changed from “Mush-2” in Gyumri city to Akhuryan city because in Gyumri city construction of all “4A” type buildings was already launched. So the pilot building re-designs and expertise can be timely performed. Besides was discussed opportunity of integrating the RE (Solar water collectors) source to the buildings of “Mush-2” district of Gyumri city. The follow up visit to Gyumri city “Mush-2” district construction site was organized to evaluate the business as usual scenario of construction practices.

- Recommendations for next steps Finalize the design/re-design of the demo building, prepare and present to the stakeholders the results of the cost effectiveness analysis for the demo building design compared to the baseline design.

II.6 Circumstances that Pose a Risk to Successful Project Implementation The following project related risk categories have been identified at the inception workshop: Risk Category Level Status Description Manager response Institutional Medium Prospective Code enforcement will

not improve sufficiently in response to project activity on training and certification in due time.

Project team would support the provision of additional incentives (real estate advertizing through energy passports/labels) to the builders/developers to ensure proper enforcement.

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Institutional and Organizational

Medium Prospective The state construction planned in demo area might be delayed/reduced or canceled.

As the project has established good information exchange with number of private developers as well, in case the risk occurs the project will ensure enough flexibility to implement the demo component in private funded building(s) construction.

Organizational Medium Prospective The scheme of covering the incremental cost under the demo component might be unclear and control might be loose.

The meeting in UNDP CO Operations was organized. The organization of procurement procedure to cover the incremental cost under the Project Component 4 (demonstration of IBDA) was discussed. Further discussions will be held with representatives of the construction company to apply appropriate procurement policy.

Institutional and Technical

Low Prospective Technology and design principles demonstrated in pilot project will not be widely replicated in other state and/or private funded construction projects.

Project team has engaged key governmental agencies, including the MUD, as well as YSUAC, Architects and Builders Unions of Armenia to disseminate results, and promote replication in other buildings.

III. Conclusions of the IW

III.1 Recommendations to the Project Team Based on the project inception review carried out at the Inception Workshop (Chap. II. above) the recommendations to the Project Team were the following:

The Inception Report should be prepared to be submitted by end of the December, 2010 and must follow the GEF template provided to the project team by the RTA and submitted to the UNDP CO;

The 2010-2015 multi-year AWP shall be revised and the AWP for 2011 can be subject of revision based on the pilot building construction schedule and calculations of incremental cost prepared by the design sub-contracted company.

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III.2 Revision of the Logical Framework Matrix as Agreed at IW The table below gives a comparison between indicators, baseline and targets included in the Project Document and those defined during and after the IW. For the revised Logical Framework Matrix see Annex E.

Indicator Baseline value Target Value Project Strategy

In ProDoc Inception Workshop In ProDoc Inception Workshop In ProDoc Inception Workshop

Average thermal energy consumption for space heating in new residential buildings in Armenia

no change recommended at this time

160 kWh/m2 year no change recommended at this time

96 kWh/m2 year no change recommended at this time

Global Development Objective: Reduce GHG emissions and energy consumption in the Armenian residential building sector

Zero reductions below business as usual (BAU) scenario.


Cumulative CO2 emission reductions from new residential buildings to be built during project lifetime (2010-2015) against the baseline


Approx. 60 ktCO2eq reduced compared to the BAU scenario


Codes for residential buildings are limited in energy performance to minimal hygienic norms.


Existence and substance of legally binding codes that mandate an improved level of energy performance in four climate zones of Armenia


By end of project, new codes adopted, setting mandatory energy performance targets comparable with MSN/EU standards


Outcome 1: Design and enforcement of new EE Building Codes and Standards Under this Component, new building codes will be designed emphasizing energy performance requirements for all types of buildings,

Lack of methodology for assessing energy performance in buildings; lack of protocol for energy audits and performance certification and labeling


Standards and methodology for assessing energy performance in buildings


By the project midterm, audit protocols are in place By the project mid-term, guidelines for energy passport are drafted and approved


15

By the end of the project, audits are carried out in at least 50% of new buildings and buildings undergoing capital reconstruction By the end of the project, energy passports provided for at least 50% of new buildings and buildings undergoing capital reconstruction.

and code enforcement mechanisms will be strengthened.

Statistics on enforcement do not exist EE requirements not included


Capacity of the MUD inspectorate and independent technical supervision bodies to implement and check compliance with energy efficiency codes Integration of EE requirements into state-funded construction and procurement activities


By project mid-term, code enforcement program in place. By end of project, revision process for codes carried out or underway. By end of project, code enforcement program reaches 50% of new and reconstructed buildings. By end of project, EE requirements factored into all state-funded construction and procurement activities


16

Due to the negligible demand for the corresponding services, the laboratories have no incentives to obtain the modern equipment, thus no testing and certification of EE materials is done in country.


Demand for local testing laboratory(ies) testing/certification services


By end of project, at least one laboratory can perform testing and certification of domestic and imported construction materials such as insulation, windows, doors, and heating systems


Outcome 2: Quality control, testing and certification of EE materials and equipment The reliability of building energy performance is closely linked to the quality of the materials and equipment that are used. Therefore, this Component will focus on establishing quality assurance/quality control (QA/QC) standards and will support the certification of key building materials for energy performance.

5-10% no change recommended at this time

Increase in share of domestically produced EE materials in the construction market


By end of project, domestically-produced EE materials comprise at least 10-20% of the market.


IBDA concepts are not used in the country at present


Use of Integrated Building Design Approach (IBDA) concepts in new building constructions


By end of project, all graduating architecture and civil engineering students with an emphasis on residential buildings are aware of IBDA concepts.


Outcome 3: Outreach, training and education This Component provides training to two distinct groups: (1) architects and engineers (both mid-career professionals and students), who

IBDA concepts are not used in the country at present


Use of Integrated Building Design Approach (IBDA) concepts in new


By project mid-term, key experts at design institutes and in academia are using


17

building constructions IBDA concepts. By end of project, at least 4-5 % of buildings constructed annually apply IBDA

need training in the integrated building design approach; and (2) real estate professionals, who need training in understanding energy performance and its impact on the value of a building, particularly in terms of lower lifetime operating costs and increased comfort.

Energy passports and labels are not used


Rate of application of the energy passport and label system by real estate developers


By project mid-term, a majority of real estate professionals are aware of the potential benefits of energy-efficient buildings and understand the energy passport and label. By end of project, at least 10% of new residential building stock is marketed with energy passports and labels


Output 4: Demonstrating integrated building design In this Component, the energy and cost-saving potential of the integrated building design approach (IBDA) will be demonstrated in a new, multi-apartment residential building to be built in the 1st Zone, the coldest of Armenia’s climatic zones.

The standard building design used in housing developments may not comply with current building codes regarding thermal performance


Thermal performance of the demonstration building


By project mid-term, the building design is completed and approved by the developer and MUD. By end of project, demonstration building showing at least 30% better thermal performance that the improved code and 60% better than the existing code


18

IV. Schedule for Reviews, Reports and Evaluations 1. Inception Report February 2011 2. Annual Project Review (APR) and Project

Implementation Report (PIR) (on annual basis) 1st on July 2011

3. TPR and TPR Report Each year, upon receipt of APR 4. Mid Term External Evaluation by November 2012 5. Terminal Report July 2015 6. Final External Evaluation and Project Review Feb 2015 In addition to above mentioned, quarterly, mid-year annual progress, financial reports and workplans should be prepared as per UNDP and national executing agency/partner requirements. Date report prepared: 28 February, 2011 Aram Gabrielyan, Head of Environmental Protection Department, Project National Coordinator, Ministry of Nature Protection of Armenia Diana Harutyunyan, Climate Change Related Annual Work Plans Coordinator, UNDP Armenia Vahram Jalalyan, Task Leader, UNDP-GEF/00059937 Project, UNDP Armenia

19

V. List of Annexes

A. Agenda of the Inception Workshop B. List of participants of the Inception Workshop C. Presentations from Inception Workshop (sent electronically) D. Minutes of the Inception Workshop E. IAWG Establishment ordinance, ToR and list of nominated members F. Annual work plan for 2010-2011 G. Revised Stakeholder Map and Project Implementation Organigram H. CO2 Emission Savings Calculation I. Principal Cooperation Matrix between UNDP-GEF and ESIB-EU Projects

20

ANNEX A Agenda of the Inception Workshop

Ministry of Nature Protection of RA Ministry of Urban Development of RA

Ministry of Nature Protection of RA and Ministry of Urban Development of RA

“Improving Energy Efficiency in Buildings” UNDP-GEF/00059937 Full-sized Project

INCEPTION SEMINAR

“Picasso” hall of “Congress” hotel November 17, 2010, at 10 am

Agenda

9:30-10:00 Registration

10:00-10:20 Welcoming Remarks Ministry of Nature Protection of the RA Ministry of Urban Development of the RA UN RC, UNDP RR in Armenia

10:20-10:35 Energy saving potential in buildings and its realization issues in the frames of the initiative undertaken by United Nations Development Programme and Global Environment Facility

Diana Harutyunyan Climate Change related AWPs Coordinator, UNDP Armenia

10:35-10:50 Main components of the project and draft work plan for the first year of implementation

Vahram Jalalyan Task Leader of “Improving Energy Efficiency in Buildings” UNDP-GEF/00059937 Project

10:50-11:30 International best practice in developing new energy efficient building codes and proposed approach to building code localization in the RA

Mark Chao International Consultant of “Improving Energy Efficiency in Buildings” UNDP-GEF/00059937 Project

11:30-11:50 Project’s Monitoring and Logframe Presentation

Diana Harutyunyan

Climate Change related AWPs Coordinator, UNDP Armenia

11:50-12:20 Discussion

12:20 Coffee

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ANNEX B List of Participants of the Inception Workshop


Ministry of Nature Protection of RA and Ministry of Urban Development of RA

«Improving Energy Efficiency in Buildings» UNDP-GEF/00059937 Full-sized Project

INCEPTION SEMINAR

«Picasso» hall of «Congress» hotel November 17, 2010, at 10 am

List of Participants

Project Steering Committee Members

1. Avag Hakobyan Deputy Minister of Urban Development of RA

2. Samvel Srapyan Head of Housing Stock Management and Communal Policy Division of Housing Provision, Housing Stock Management and Communal Policy Department at the Ministry of Urban Development

3. Hrach Tsughunyan Head of Energy Saving and Technical Normatives Division of Development Department at the Ministry of Energy and Natural Resources

4. Aram Gabrielyan Head of Environmental Protection Department at the Ministry of Nature Protection, UNFCCC National Coordinator

5. Hayk Yesayan Implementation and Monitoring Coordinator at Armenia Renewable Resources and Energy Efficiency Fund

6. Gurgen Minasyan Director of Builders’ Union of Armenia

Inter Agency Working Group Members

7. Martiros Tsarukyan Chief Specialist of Environmental Protection Department at the Ministry of Nature Protection

8. Hovhannes Abrahamyan «Glendale Hills» CJSC Deputy Director for Construction

9. Arsen Karapetyan Project Expert on Localization of Building Codes and Standards

Ministries and State Authorities

10. Simon Papyan First Deputy Minister of Nature Protection, National Director for UNDP Environmental Governance Projects

11. Artashes Bakhshyan Deputy Minister of Territorial Administration

12. Alexander Movsisyan Advisor to the RA Minister of Urban Development

13. Samvel Derdzyan Chief Expert of Urban Development Division at the RA Ministry of Urban Development

14. Meri Khachikyan Leading Expert of Housing Stock Management Division at the RA Ministry of Urban Development

22

15. Anahit Hovhannisyan Leading Expert of Housing Stock Management Division at the RA Ministry of Urban Development

16. Gagik Tadevosyan Chief Expert of Housing Stock Management Division at the RA Ministry of Urban Development

17. Naira Sargsyan Urban Development Policy Department at the RA Ministry of Urban Development

18. Erik Grigoryan

Head of International Projects Management Division of Economy Department at the Ministry of Nature Protection

19. Tamara Babayan Director of Armenia Renewable Resources and Energy Efficiency Fund

20. Tigran Sekoyan Armenia Renewable Resources and Energy Efficiency Fund

21. Levon Kosyan Head of Scientific Policy Department at the RA Ministry of Urban Development

22. Ovsanna Karapetyan Head of Technical Norms and Standards Division of Scientific Policy Department at the RA Ministry of Urban Development

23. Margarita Vardanyan Chief Specialist at Technical Norms and Standards Division of Scientific Policy Department at the RA Ministry of Urban Development

24. Levon Vardanyan Head of Development Department at the Ministry of Energy and Natural Resources

25. Gagik Khachatryan Head of Communal Economy Department at Yerevan city Municipality

26. Andranik Kasaryan Head of Architecture and Urban Development Department at Yerevan city Municipality

27. Hovhannes Nunyan Deputy Director of «Maintenance and Operation of Administrative Buildings» State CJSC of Yerevan city Municipality

28. Razmik Arsenyan «Scientific Research Institute of Energy» State CSJC, Expert

International Organizations

29. Ani Balabanyan Finance Specialist for Infrastructures and Energy at WB Armenia

30. Tigran Parvanyan Head of Energy Efficiency Research Project at IFC Armenia

31. James Macbeth Director of GTZ office in Armenia

32. Zara Chatinyan Local Coordinator of KfW Bank

Design institutions, NGOs, Energy Service Rendering Organizations, Educational Institutions

33. Zohrab Melikyan Professor of Yerevan State University of Architecture and Construction

34. Gevorg Nazaryan «National Institute of Standards» CJSC, Head of Staff

35. Grigor Azizyan «ArmProject», Director

36. Gagik Galstyan «Builders’ Union of Armenia», President

37. Suren Ohanyan «YerevanProject», Director

23

38. Ruben Rubinyan «YerevanProject», Deputy Director

39. Hamlet Hakobyan «EcoPerlite» LLC, Director

40. Mikael Amamchyan «M & MAVR» company President and General Director, Member of Academy of Engineering, Doctor of Technical Sciences

41. Georgi Janyan Independent Expert

42. Arthur Lalayan «ArEnergy» LLC, Chief Expert

43. Valeri Apiyan «Contact A» LLC

44. Ruben Ter-Grigoryan «National Association of Condominium Owners» NGO President

45. Kamo Khachatryan «Millennium Communities Development Foundation» NGO, President

46. Sergey Avagyan

«Armenian State Non-Departmental Expert Commission for Construction Designs» CJSC, Chief Engineer

47. Anahit Hakobyan «HGSN» («HayGyughShinNakhagits») LLC, Chief Specialist for Energy Issues

48. Hakobyan Head of Judicial-Chemical Department National Bureau of Expertises SNCO of the RA National Academy of Sciences

UNDP-GEF Project

49. Diana Harutyunyan UNDP CC program Coordinator

50. Mikhail Vermishev Expert on GHG mitigation policy

51. Suren Gyurjinyan Expert of the Project

52. Svetlana Galoyan Expert on Institutional Issues

53. Vahram Jalalyan Project Task Leader

54. Mark Chao International Expert on Energy Efficient Building Codes of the Project

55. Levon Ghalumyan «Architon» LLC Director

56. Alexander Vardanyan «ShinCertificate» LLC Director

57. Alen Amirkhanyan Expert of the Project

58. Apres Nazaryan Expert of the Project

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ANNEX C Presentations from Inception and Expert Workshops

(forwarded electronically as separate file)

25

ANNEX D Minutes of the Inception Workshop


Ministry of Nature Protection of RA and Ministry of Urban Development of RA “Improving Energy Efficiency in Buildings”

UNDP-GEF/00059937 Full-sized Project INCEPTION SEMINAR

“Picasso” hall of “Congress” hotel November 17, 2010, at 10 am

PARTICIPANTS: The seminar was attended by 58 participants (list of participants attached)

OBJECTIVE: Start-up the Project implementation with participation of stakeholder parties according to GEF requirements, present operation procedures of the Project Steering Committee and Inter-Agency Working Group, discuss the Project implementation approaches by component and clarify key points of cooperation.

The seminar proceeded according to the agenda.

I. Presentations

Welcoming remarks were delivered by S.Papyan, First Deputy Minister of Nature Protection of the RA, and Mr. A.Hakobyan, Deputy Minister of Urban Development of the RA. Mr. Papyan gave high importance to the project and noted that energy efficiency in relation to UNFCCC implementation is one of critical environmental issues. Mr.Hakobyan noted that energy efficiency is considered as one of strategic factors of the country’s energy security and referred to EE issues and their solutions developed in EU. Both co-chairs stated their commitments to support the project.

Then Ms. D.Harutyunyan presented EE projects of UNDP-GEF in Eastern Europe and CIS, made cross-country comparisons, referred to project rationale formulation within GEF goals, and to the example of “Improving Energy Efficiency in Buildings” project.

Mr. V.Jalalyan addressed the major components of the project and presented draft work plan for the first year of the project implementation. He also presented establishment of coordination mechanism and activities envisaged and implemented in 2010.

Mr. M.Chao, the project’s International Consultant, presented goals and advantages of EE building codes, USA and EU best practices in the sector, and new EE norms of CIS and RF. He addressed performance approach to building codes in detail and proposed his developed step-by-step approach to establishment of new EE building codes in Armenia.

Concluding presentations, Ms. D.Harutyunyan shortly referred to the project managerial arrangements, monitoring and evaluation, and log-frame.

II. Questions and recommendations

The participants greeted inception of the project implementation and expressed their willingness to support the project activities.

The participants discussed technical features ensuring thermal resistance of building elements, wall thickness and application of thermal insulation materials. Then the participants referred to present process of application of building codes and norms and to legal issues of improving the terminology. Insulation materials’ quality and standardization issues were referred to. The participants discussed

26

goals and authorities of newly established Inter-Agency Working Group, and possibility to establish a group of professionals with authority of making decisions on codes and standards. Mr. S.Srapyan informed that stakeholder parties and interested professionals may be invited to the Group’s sessions. (R.Arsenyan, D.Harutyunyan, H.Hakobyan, M.Amamchyan, H.Tsughunyan, A.Gabrielyan, S.Srapyan, V.Jalalyan)

The participants inquired International Consultant on relatively short terms of changing building codes in USA and EU: 3 to 5 years. Mr.M.Chao replied that process of building codes’ development in USA and EU is complex and continuous with participation of many interested parties. Therefore, the process is sufficiently thorough and promotes application of new technologies. The process is based on markets changes, on application of new technologies, and on operation of many programs aimed at promotion of EE beyond the requirements of the codes, thus increasing stringency of codes. The participants agreed that EE should be considered a priority from economic, social, environmental viewpoints. (Z.Melikyan, R.Arsenyan, M.Chao)

Ms. T.Babayan inquired the project representatives on selection criteria of codes/standards to be localized and proposed to implement conceptually new, performance approach, based on EU, not on RF standards. A number of participants replied to the inquiry, emphasizing importance of ensuring the new norms’ applicability in the present economic and political context. In particular, Mr.Chao noted that choice of RF norms is historically substantiated: in the period of initial changes in RF, EE situation resembled that of RA (especially in terms of thermal protection of buildings). Referring to USA and EU codes, he mentioned that these were much more complicated and advanced, and proposed a step-by-step approach leading to an ultimate possibility to apply those in Armenia: first, to focus on implementation/enforcement of the existing codes and on monitoring the implementation; second, continuously update the existing codes; third, introduce performance approach on the basis of new normative requirements for Armenia; forth, supplement the codes with EE norms on heating and cooling, air conditioning; fifth, draft new, more stringent, but not mandatory norms. He also mentioned that integrated building codes encourage integrated building design. For instance, extremely good thermal protection means better walls and smaller heating (conditioning) system that is also much cheaper than large systems. After that Ms. D.Harutyunyan emphasized that ensuring EE norms’ implementation within operation of a building depends critically on the buildings’ management/ownership mode. (T.Babayan, A.Balabanyan, D.Harutyunyan, A.Movsisyan, S.Srapyan, H.Tsughunyan, H.Hakobyan)

Mr. A.Nazinyan noted that Social Housing Foundation of Armenia frequently encounters EE issues in its activities. He inquired if the project included evaluations of social impact of EE introduction, measures to ensure affordability of EE (and referred to high price of energy saving bulbs) and to account for market flexibility. He proposed to implement joint pilot projects that would generate certain solutions. Ms. T.Babayan replied that R2E2 project implementation experience showed that if EE was ensured by the project, households’ expenses declined. As for market developments, she informed that a small expo organized by R2E2 in the frames of Renewable Energy week showed that local producers and businesses are interested in the sector and involved in it.

The participants referred to legal status of SNiPs and were positive on their mandatory application and consistent execution of respective penalties. According to them, that low awareness in EE issues has an adverse effect on seismic features of buildings, construction material saving, social and other related issues. (H.Hakobyan, A.Movsisyan)

Mr. G.Janyan agreed with the earlier expressed opinion on the necessity of encouraging EE application, organizing its supervision, follow-up of EE issues within building design. Then he reminded that RF norms are comprised of parts: element-based approach (mandatory, defines thermal resistance by element) and performance-based approach (defines maximal permitted amount of energy consumption per sq.m) with the right to choose between them. The first is stringent and relatively easy to implement, while the second is more democratic from architecture point of view. The RA norms are closer to the first approach in terms of requirements and application, so they are more in need of being supplemented, not localized. Adopting the second approach as the main one should be set forth as the objective. He also reminded that norms improvement implies market research and noted that EU norms to enter into force in 2020 are not based on market, because they are expensive, and respective EE costs are not economically justified within operation period of the

27

building. He addressed the episode of relevant RA experience, when even “economically feasible” norms were not adopted.

Mr. M.Chao agreed that EU objectives are very ambitious and expensive due to being based not on economic, but rather on environmental approach. However, new codes contribute to market transformation, which in its turn results in lower prices. He recalled a recent EU publication on passive construction that showed gradual decrease in prices. The participants agreed that adoption of new norms will make EE affordable for all social strata.

Mr. A.Lalayan inquired if state program on energy efficiency is in line with other state programs implying growth in energy generation, such as new nuclear station program. The inquiry was induced by the assumption that production growth results in consumptions growth. Mr. H.Tsughunyan replied that the RA is the first among CIS countries that adopted Law on Energy Saving and respective National Action Plan that envisages decline in energy consumption by 20 to 30 per cent and states that 40 per cent of ES potential is in building sector. Besides, on this November 4, the RA Government adopted National Energy Efficiency Action Plan (NEEAP) with points 6, 7 and 8 of Table 2 addressing ES issues in buildings. The participants agreed that discussions are proceeding on a high pace. They also agreed that new nuclear station ensures change of technology generation and discussed opportunity to recover electrical transport. (R.Arsenyan, H.Tsughunyan, A.Movsisyan, M.Amamchyan)

Mr. H.Tsarukyan inquired which norms will be used in pilot building, if new norms are going to be advertised. On his opinion, it is feasible to advertise future, not mandatory norms, and not the existing and mandatory. Ms. D.Harutyunyan replied that most of the possible EE will be applied in the pilot building, and emphasized that the project’s objective is not to advertise, but to create and propose an exemplary option, to demonstrate that EE incremental costs are not high.

Mr. A.Movsisyan emphasized urgency of providing solution to the EE issue. He mentioned that sometimes adoption of new norms is impeded by absence of local production as it was in the case of insulation materials. He emphasized that the RA has opportunity to produce natural, bio-stable insulation materials and brought the example of Belarus, where insulation material production industry of a high exporting potential is sponsored by the state. He also referred to the necessity to set forth optimal parameters by norms and mentioned non-applicable requirement of building 80 cm wide walls to ensure seismic safety. He noted that new norms should be elaborated, but immediate adoption of performance approach is not realistic. He emphasized that wide application of EE will take place if lower utility charges in EE buildings will be evident for residents of neighborhood. He noted that highly qualified specialists are available in the RA who can be involved in the project’s activities.

The participants agreed that higher education institutions’ curricula improvement is a primary issue to be addressed to improve EE.

III. Seminar participants:

1. Largely agree with the project implementation approaches and expressed willingness to support the project.

2. Are positive on step-by-step elaboration and introduction of new building codes and agree that performance approach (integration of heating, ventilation and air conditioning norms into thermal protection code) is premature to apply in current conditions.

3. Stakeholder parties and interested professionals will be invited to the IAWG sessions/meetings.

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ANNEX E IAWG Establishment ordinance, ToR and list of nominated members

31

ANNEX F: Annual Work Plan for 2010-2011

ANNUAL WORKPLAN 2010 - 2011

“Improving Energy Efficiency in Buildings” UNDP-GEF project Award ID: 00059937, Project ID: 00075196

2010, months 2011, months Outcomes/Outputs/Activities 8 9 10 11 12 1 2 3 4 5 6 7

1: Design and enforcement of new EE Building Codes and Standards

1.1: New mandatory EE building code designed and introduced Activities: • Establish a national commission/expert group of local

experts to define the content of a new EE building code, implementation rules, and oversight and supervision.

X X X

• Prepare new building codes and standards, calculation methodologies, and implementation procedures, including a timetable for phasing in code requirements. Explore the feasibility of moving towards integrated building codes and standards.

X X X X X X X X X X

1.2: Standards and calculation methodology to assess energy performance in buildings

Activities: 1.2.1. Define new normative energy consumption in support of

the new codes. X X X X

1.2.2. Research and propose technical solutions needed to comply with the new thermal performance requirements defined for various elements of buildings.

X X X X X

1.2.3. Provide supporting information and recommendations on the characteristics of insulating and construction materials, their certification, and energy-saving construction technologies for existing and new buildings.

X X X

1.3: Institutional structures, staffing, capacities and accountability for agencies in charge of code enforcement

X X X X X X X

Activities: 1.3.1. Support the RA Ministry of Urban Development to

clarify and standardize institutional roles and responsibilities with respect to enforcement of new building energy efficiency codes during design, construction and commissioning stages.

X X X X X X X X X

1.3.2. Strengthen regulatory agencies overseeing technical certification and quality control in the construction sector via staff training.

X X

1.3.3. Design and introduce an energy performance certification scheme to support compliance checks of new and reconstructed buildings under the new code, including standardized procedures and methodologies for checking compliance with new codes (through an energy audit) and the issuance of the Energy Passport.

1.3.4. Test and verify a national standard for energy audits that can be used by all verification bodies in Armenia.

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1.3.5. In coordination with the WB-GEF project on public building renovations, provide relevant inputs into the development of recommendations for integration of provisions and requirements for EE in standard tendering procedures of state-funded construction and procurement programs.

X X

1.3.6. Introduce a system of systematic collection and analysis of information on energy saving measures and their costs and benefits to ensure proper oversight of new/proposed building sector regulations.

2: Quality control, testing and certification of EE materials and equipments

2.1: Standards for internal QA/QC developed and piloted Activities:

2.1.1. Establish an assessment system for the conformity of insulation materials, windows, doors and equipment with building energy performance according to national standards.

X X X

2.1.2. Develop a procedure for establishing energy characteristics and the requirements for heat transfer in buildings determined and corresponding technical regulation.

X X

2.1.3. Via a certification and labeling scheme, introduce a voluntary assessment of insulation materials, windows, doors, equipment and their energy performance in buildings.

X

2.1.4. Develop national norms for quality control/quality assurance procedures (QA/QC) inside manufacturing facilities and assistance for the suppliers of selected products to set up QA/QC and comply with energy efficiency-related national standards.

2.2: Testing laboratory for EE products and certification operating

Activities: 2.2.1. Assess the capacities of local accredited testing

laboratories and select the most advanced ones as project partners.

X X

2.2.2. Provide technical assistance for partner testing laboratories and certification bodies accredited in the field of testing and certification of construction materials, components, building envelopes and insulation materials.

X X

3: Outreach, training and education on integrated building design

3.1: Modules on EE buildings introduced to universities Activities:

3.1.1. Compile and customize a handbook on passive design and the integrated building design approaches for Armenian conditions.

X

3.1.2. Provide recommendations to post-secondary educational institutions for strengthening the curriculum offerings for

X X X

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future architects and engineers in IBDA and other aspects of energy efficiency in the buildings sector.

3.2: Training courses for architects and engineers on new codes and calculation methodologies

X X X X

Activities: 3.2.1. Elaborate training curriculum for professionals and

students on IBDA and compliance with new, energy efficient building codes.

X X X

3.2.2. Procure and adapt software to calculate the heat index and other thermal indicators.

X

3.2.3. Deliver training/courses to key experts on IBDA concepts and practices.

X X X

3.3: Outreach and awareness-raising campaign targeting investors and tenants implemented.

Activities: 3.3.1. Design and launch an advertising campaign building

on the results of the demonstration building to increase the awareness of tenants, investors and the public at large on economic and environmental benefits of integrated building design, EE materials, and products.

X

3.3.2. Train real estate brokers and developers on building energy performance indicators (energy audit, energy passport and label) to be used in their marketing strategies.

X

4: Piloting integrated building design

4.1: At least one building designed and constructed using an integrated building design approach

Activities: 4.1.1. Propose energy-efficient design, estimate energy

performance, and develop construction documents. X X X X X

4.1.2. Obtain necessary permits for construction and construct the building.

X X X X X

4.1.3. Collect all necessary documentation on the design and construction process and make recommendations to Ministry of Urban Development for implementing successful measures from the project across state-funded construction programs.

X X X

4.2: Energy saving and GHG reductions in pilot building monitored and reported

Activities: 4.2.1. Test and certify doors, windows, and insulating

materials used in construction.

4.2.2. Conduct energy audit according to the methodology approved in Component 1.

4.2.3. Provide energy passport for the building according to the methodology approved in Component 1.

4.2.4. Conduct energy audits for two “control” buildings in Gyumri to serve as the basis for estimates of energy savings.

34


4.2.5. Monitor energy performance and indoor comfort on an ongoing basis in the pilot building and the two control buildings; energy and financial savings and GHG emission reductions quantified for the pilot building.

5: Project Management

Activities: 5.1. Project Board meetings X X X

5.2. Establishment of Project Team X

5.3. Inception report X X X X

5.4. Prepare quarterly and annual progress reports X X X X X

5.5. Conduct regular field visits

5.6. Monitoring and evaluation

5.7. Mid-term and final evaluation

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ANNEX G: Revised Stakeholder Map and Project Implementation Organigram

Component 1: Design and Enforcement of New EE Building Codes and

Standards Short-term local and

international consultants

Component 2: Quality Control, Testing and Certification of EE Materials

and Equipment Short-term local and


Component 3: Outreach, Training, and

Education Short-term local and


Ministry of Nature Protection


Climate Change Programme Project Task Leader

(full time) Support Staff

Reporting line Cooperation

UNDP Armenia

PSC

Component 4: Piloting Integrated Building

Design Short-term local and


• Ministry of Urban Development • Inter Agency Working Group on

Energy Efficient Building Codes • Ministry of Nature Protection • Builders Union

• Ministry of Nature Protection • Ministry of Urban Development

Builders and Architects Unions of Armenia

• Yerevan State University of Architecture and Construction and other corresponding

• Ministry of Urban Development • Design Institutes • Building Companies

Multi-apartment building management bodies

• Ministry of Urban Development • Ministry of Economy • Certification Bodies • Armenia Renewable Resources

and Energy Efficiency Fund

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Annex H: CO2 Emission Savings Calculation

This Annex calculates the CO2 emission reductions3 associated with the implementation of the present GEF project based on the GEF Manual for Calculating GHG Benefits of GEF Projects: Energy Efficiency and Renewable Energy Projects. The annex sets out the methodology and explains key assumptions for calculation of the project direct and indirect CO2 emission reductions. During the inception phase the pilot building type was changed and calculations of GHG emissions in this annex reflect that minor changes. Project direct emission reductions The project will support investments into construction of one energy efficient building (a residential building in the Akhuryan city of Shirak marz, under the state supported restoration program) following IBDA principles. As a result of these activities, direct emission reductions totaling 1,266 tons of CO2eq will be achieved over 20 years of the building useful lifetime. The estimate is calculated based on the following formula and assumptions: CO2 direct = E * L * C; where

• C – CO2 emission factor, i.e. 0.303 tCO2eq/MWh (calculated based on IPCC default CO2 emission factor for natural gas and the electrical grid emission factor weighted average (Table H-1)).

• L – average useful lifetime of new building, 20 years; and • E – annual energy saving, i.e. the difference between baseline energy consumption for

heating per square meter in a typical residential building (160 kWh/m2/year) and the targeted level (65 kWh/m2/year) multiplied by the area of pilot building (2,200 m2).

Table H-1: CO2 emission factors for building heating energy mix

Energy Source

Emission factor, tCO2eq/MWh

Share in energy mix, %

Source

Natural gas 0.202 70% IPCC Electrical grid

0.457 30% EF from approved CDM projects

Note: due to very high level of gasification in Armenia, we took the approach and considered that most of heating energy is based on sources burning natural gas and it will constitute 70%, the rest 30% will use electrical energy for heating purposes. Keeping in mind the 85% of average efficiency for the gas fired heaters; the weighted average of the emission factor will be 0.303 tCO2eq/MWh Table H-2: Direct project emission reductions

Demo site area, m2

a

Baseline energy

use, MWh/m2/y

b

GEF alternative

energy use,

MWh/m2/y

c

Annual energy saving, MWh

d=a*(b-c)

CO2 emission

factor, tCO2eq/MWh

e

Annual direct

emission reductions,

tCO2eq/y

f=d*e

Total project direct

emission reductions,

tCO2eq

g=f*20

2,200 0.16 0.065 209 0.303 63.3 1266 Note: in the BAU the full compliance with the sanitary norms was assumed (SNiP II-3-1979) Direct post-project emission reductions The project does not include activities that would result in direct post-project greenhouse gas emission reductions. Indirect emission reductions (bottom-up) 3 The only greenhouse gas associated with energy services covered by the GEF project is carbon dioxide.

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Using the GEF bottom-up methodology, indirect emission reductions attributable to the project are estimated at 355 ktCO2eq calculated over 20 years of useful lifetime of the investments. The GEF bottom-up approach implies the replication of the project methodology and investments to other residential buildings in Armenia and is calculated per following formula:

CO2 indirect BU= CO2 direct*RF, where • CO2 direct – direct emission reductions calculated at the previous step • RF – replication factor

The direct CO2 emission reductions were estimated in the previous section at 1,266 tCO2eq. The replication factor was arrived at using the following assumption: it is planned to build around 460,000 m2 of similar housing by the state supported program, but replication will impact only about 20% (92,000m2 or 40 similar buildings) of the projected construction after GEF project completion using the methodology applied by this project in the demo buildings. For the rest of the country it is assumed that about 240 new buildings (10% of the projected construction in the residential segment) are going to be built over 10 years after GEF project completion using the methodology applied by this project in the demo buildings. The residential construction growth rate was assumed around 2-6% and is based on the projected GDP growth (Second National Communication on Climate Change to the UNFCCC); thus applying to the following formula:

CO2 indirect = 1266 * (40+240) = 354,48 tCO2eq. Indirect emission reductions (top-down) Using the GEF top-down methodology, indirect emission reductions attributable to the project have been estimated at around 1.35 MtCO2eq over 20 years of useful lifetime of the buildings. The GEF top-down assesses indirect GHG impacts by estimating the combined market potential for the proposed approach or technology within the 10 years after the project lifetime and is calculated per following formula:

CO2 indirect TD = P10 * CF, where • P10 = technical and economic potential for GHG savings with the respective

application within 10 years after the project; • CF = GEF causality factor.

The market potential for energy savings and GHG emission reductions has been estimated based on the forecast of Armenian building stock dynamics and the following key assumptions. With the GEF support the current building codes and regulations will be enhanced resulting in a 40% reduction of average energy requirement for heating from the current level of 160 kWh/m2/year to 96 kWh/m2/year by 2012. The more stringent code requirements are expected to initially bring code compliance down to 30% full compliance, 40% minor non-compliance, 30% major non-compliance by 2012. However, the project-supported capacity building and technical assistance will contribute to subsequent improvements in compliance to 75% full compliance, 10% minor non-compliance, 15% major non-compliance by 2015. Application of an integrated building design approach in new buildings has been estimated to enable an average of 50% reduction in energy requirement for heating from the current 160 kWh/m2/year to 80 kWh/m2/year. Moderate penetration rates have been assumed for IBDA adoption by the different segments: residential sector - starting from 1% of annual construction in 2012, gradually increasing to 4% in 2015 and to 14% by 2025; non-residential sector - starting from 2% of annual construction in 2012, gradually increasing to 5% in 2015 and up to 15% by 2025. The annual energy consumption in the new Armenian building stock to be built in 2010-2025, with the business-as-usual compared with the GEF project scenario, is presented in the figure H1 below. The combined impacts of the project-supported interventions and ensuing replications within 10 years of GEF project influence period (2016-2025) are estimated to enable cumulative energy

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savings in the Armenian building sector to the tune of 7,441 GWh (calculated over 20 years of useful lifetime of the buildings constructed over the influence period), calculated as the sum of differences in projected annual energy use of new buildings in the BAU and GEF scenarios over 2016-2025 multiplied by 20 years, i.e. 372.069 GWh * 20 = 7,441 GWh. Fig. H1. Annual energy consumption from new buildings under BAU and GEF scenarios, 2010-2025

Thus, the resulting GEF alternative GHG emissions scenario shows considerable deviation below the baseline (see figures H2) and is estimated at around 1.35 million tons CO2eq of cumulative emission reductions (over 20 years of buildings lifetime), assuming CO2eq emission factor of 0.303 tCO2eq/MWh and GEF causality factor of 60%:

7,414,377 MWh * 0.303 tCO2eq/MWh * 0.6 = 1,352,842 tons CO2eq. For the GEF causality factor 3 (60% - the GEF contribution is substantial, but modest indirect emission reductions can be attributed to the baseline), the estimate incorporates exogenous improvements due to other possible stakeholder activities (e.g. the World Bank project focusing on institutional buildings), and some degree of improvements in energy efficiency in buildings which has already been taken into account when constructing the baseline for Armenian building stock and business-as-usual policy developments (e.g. annual 1% improvement in code requirements etc.).

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Fig. H2. Forecast annual GHG emission reductions from new buildings by GEF project components 2010-2025

Total emission reductions Direct Emission Reductions: the project investment in one demonstration building (residential building) during the project’s implementation phase will result in direct greenhouse gas emission reductions. As a result of these activities during the project implementation period of four years, direct greenhouse gas emission reductions totaling 1,266 tCO2eq will be achieved over 20 years of useful lifetime of the building. In the non-GEF case, these energy needs would be satisfied by heating energy generation capacity with an emission factor of 0.303 tCO2/MWh. The project does not foresee any activities that would result in direct post-project GHG emissions. Indirect Emissions Reductions: Using the GEF bottom-up methodology, indirect emission reductions attributable to the project have been estimated at 355 ktCO2eq over 20 years of useful lifetime of the buildings. Using the GEF top-down methodology, indirect emission reductions from new buildings constructions over the GEF influence period (2016-2025) attributable to the project are estimated at 1.35 MtCO2eq calculated over 20 years of useful lifetime of the buildings. The difference between top-down and bottom-up approaches can be explained by the fact that the bottom-up estimate includes only residential buildings, whereas the top-down estimates looks at the entire new building stock (to be built over 2016-2025) and inherently reflects impacts from better code compliance, material certification etc.

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Annex I:

Principal cooperation matrix Between “Armenia-Improving Energy Efficiency in Buildings” UNDP-GEF Project and

“Energy Saving Initiative in the Building Sector in the Eastern European and Central Asian Countries” (ESIB) Project

Considering the objectives of the “Energy Saving Initiative in the Building Sector in the Eastern European and Central Asian Countries” (ESIB) and “Armenia-Improving Energy Efficiency in Buildings” UNDP-GEF projects and to ensure synergy and avoid duplication of activities, as well as taking into consideration preliminary discussions between the projects managements is decided to elaborate mutually agreed list of activities. After finalization of the list of activities, projects will further plan the timelines for implementation of those activities and details of implementation.

Outcomes/Outputs/Activities

“Improving Energy Efficiency in Buildings” UNDP-GEF

Project ACTIONS

ESIB - EU Project

ACTIONS

Component 1: Design and enforcement of new EE Building Codes and Standards

Task 2: Assessing and assisting the progress on legislation and regulation Task 4: Capacity strengthening in energy auditing, buildings technology

1.1: Design and introduction of new mandatory EE building code 1.2: Standards and calculation methodology to assess energy performance in buildings 1.3: Institutional structures, staffing, capacities and accountability for agencies in charge of code enforcement

D18 Ad hoc technical support to relevant public authorities on EE related legislation development and enforcement D17 Organization of presentations and delivery of the findings and recommendations to high level state government officials and decision makers in each Partner Country D19 Liaising with and providing support to accreditation and certification bodies, where necessary

Possible cooperation area: Comparison of main features of legislation and regulation with EU best practices

Report on the existing EE related building codes and standards in Armenia and proposed future steps for introduction of new EE code (in line with EU directives)

Technical assistance with expert revision of the report on the existing EE related building code situation and provision of recommendations, based on the EU best practice available. Consultation on the codes enforcement practices in the EU new accession countries.

Ensure translation and adaption of essential energy efficiency related EU standards (ISO, EN)

Provision of the list (and technical texts) of the most essential energy efficiency related EU standards to be translated and adapted in Armenia and provision of the texts of standards (ENs and ISOs).

Drafting of the new EE building code and changes to legislation to support enforcement.

Potential input on (i)EU directives and norms on EE in building, (ii)national norms and best practices in EU countries. Possible on job training for specific key actors on selected topics (e.g. modification of the existing building code)

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Possible cooperation area: Building energy passport and energy audit procedure development/adaption Design and introduction of an energy performance certification scheme/Energy Passport, including standardized energy audit procedures and methodologies for checking compliance with new codes

Support to the building energy passport form and audit methodology development/adaption for Armenia in line with EU requirements

Organization of trainings for energy auditors on energy audit procedure and building energy passport development

Development of a specific training course on energy training for a concrete building to be renovated. This activity would include the following tasks: -Energy audit of the UNDP-GEF pilot building (design) baseline compared to the proposed project option(s), -Excel model for methodology: all input, calculations, technical data, prices, are visible, with total flexibility, -About 15 trainees in 5 groups with 1 day course, 1.5 days performing EA, 0.5 day correction and conclusion, -Input on trainees on available materials, technologies, -TA to monitoring of the building before and after, -TA to technical specifications, supervision, commission, -Final conclusion / monitoring, effect on legislation, -Public awareness on the Website. If possible organization of study tour(s)

Component 3: Outreach, training and education on integrated building design and EE in buildings

Task 1: Raising awareness and disseminating information on EE in buildings

3.1: Introduction of modules on EE buildings to universities 3.2: Training courses for architects and engineers on new codes and calculation methodologies 3.3: Implementation of the outreach and awareness-raising campaign targeting investors and tenants.

D28 Organization of events to promote the state-of-the-art technologies and design in the building sector, together with study tours and regional events for technology transfer facilitation D10 A country-specific review and analysis of EE potential in buildings D11 Organization of presentations and delivery of the results to high level state and local government officials and decision makers in each Partner Country. A presentation for each Partner Country in the early stages of the Project shall be considered. D12 Assessment of the state of EE awareness in Partner Countries. D15 Web-based tools to disseminate information online

Possible cooperation area: Organization of local and regional events aimed at awareness raising Organization of local professional trainings for practicing architects/builders Organization of the outreach and awareness-raising campaign targeting investors and tenants Organization of study tour(s) for the practicing architects/designers

- Use UNDP-GEF pilot project(s) as showcase(s) to convince decision-makers and public at large on the necessity and effectiveness of EE measures; - Eventually selection of messages and drafting of factsheets series (10-12 factsheets) explaining different stage of an EE construction/renovation (or, for professionals, IBDA application) to stakeholders, drawing attention on the meaning of actions and gains to be realized. - Dissemination within the frame of pilot projects, through ESIB web portal and within the Public awareness toolbox (ESIB deliverable).

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