ELENA EOL Project A Successful Run over the Hurdles

Alenka Loose, Marko Umberger

COVENANT OF MAYORS INVESTMENT FORUMEE FINANCE MARKET PLACE

Financing Energy Efficiency in Public Assets

21 February 2018, Brussels, Belgium

alenka.loose@ljubljana.si; umberger.marko@gmail.com

Sustainable Energy Action Plan, 2011

Goals 2020: 25% RES, 20% EE, -30% GHG

Main reason for EOL activities in Ljubljana

1. COL was selected to be EGC 2016 due to the fastest sustainable development among candidate cities;

2. To reach our strategic goals (incl. SEAP) huge investments have been and will be further prepared and realised;

3. We have used all possible financing options besides city budget, through:

• technical assistance ELENA (EIB) for energy retrofit of COL‘s public buildings – PPP EPC approach.

INVESTMENTS IN THE SUSTAINABLE ENERGY ISSUES IN COL

With the help of TA ELENA (aprox. 1 mioEUR), investments of aprox. 50 mio EUR inenergy retrofit of public buildings andinfrastructure were realised withih the EOLproject.

EOL PROJECT

represents

THE BIGGEST ON-GOING INVESTMENT PROJECT FOR ENERGY RETROFIT IN

SLOVENIA

WHAT IS THE EOL PROJECT?

January 1, 2013 - December 31, 2016.

The EOL investments are still on-going and we are planning to continue with more investments in EE and RES.

DURATION OF THE PROJECT

At the beginning of the EOL project, we:

- were enthusiastic as we obtained TA ELENA;- have established the EOL team;

- started with the;• preparation of all necessary documents to

start the PPP EPC procedures;• non EPC investments in energy infrastructure

and refurbishments of objects.

THE FIRST YEAR

We faced the facts of:- non-availabilty of legal bases for PPP EPC in

Slovenia; - only few ESCOs present in Slovenia;- no experiences of local and state administration

with EPC approach;- a new way of work within city administration; - lack or incomplete data on energy use for

majority of objects;- resistance to change/innovation in public

procurement approach;- non-availability of high quality construction

companies.

WHY RUN OVER THE HURDLES?

OVERCOMING THE HURDLES

Despite the complexity of the project andchallenges that caused considerable delays, theEOL project played significant role in theprocess of adopting all legal basis, including thepublication of PPP EPC guidelines (December 24,2014) by the Slovenian Government, that madePPP EPC approach feasible.

In the time period before the legal issues regardingPPP EPC were solved, the investments were realisedthrough:• City of Ljubljana budget (COL) for the city owned

buildings,• Public company Energetika Ljubljana (PC

Energetika) for investments in district heatinginfrastructure,

• Public company Snaga for investment in PV plant,• for some investments Cohesion funds and national

co-funding were acquired.

THE BIGGEST INVESTMENT PROJECT FOR ENERGY RETROFIT IN SLOVENIA

PRESENTATION OF ALREADY COMPLETED STEPS

PPP EPC PROCEDURE

ACTIVITY – PPP EPC 1 until the end of project (December 31, 2016)

DATES/TIME SLOTS

Preparation activitiesFirst call for promoters – publishedDeadline for submission

October 14, 2014November 20, 2014

Guidelines on PPP EPC published December 24, 2014Second (upgraded) call for promoters -published (40 buildings added) Deadline for submission

December 24, 2014

February 25, 2015Decree on PPP EPC, City of Ljubljana -procedure

Draft Decree presented at the City Council

Decree adopted by the City Council

Published in Official Gazette RS (OG RS)

July 6, 2015

September 28, 2015

October 6, 2015

PPP EPC 1Public tender PPP EPC EOL –publishedSubmission deadlineExtended deadline

December 18, 2015March 10, 2016April 7, 2016

Two offers arrived within the deadlinePublic opening of the two offers received within the deadline:1. Consortium Petrol d.d. and

GGE d.o.o.2. Istrabenz plini d.o.o.

April 11, 2016

The first phase: Recognition of qualificationActivities within the period until the deadline to receive initial bids (on-site inspections of the buildings, additional explanations to the bidders, eventual changes of the tender documentation)

January – April 7, 2016

Period of hibernation (finality of decision on recognition of qualification)

May 30 - June 10, 2016

PPP EPC 1

The second phase: Competitive dialogue (CD)

*The reports are available in Office for Public Procurement, City of Ljubljana

CD 1 – 16 with the bidder Petrol d.d. and GGE d.o.o. consortium:- discussing the Initial bid (for all four groups of buildings)

June 20, 2016 –December 15, 2016

CD 1 – 6 with the bidder Istrabenzplini d.o.o.:- discussing initial bid (given for the second group of buildings only)

July 4, 2016 – December 22, 2016The bidder has resigned

PPP EPC 1

From 106 to 48 objects

During the competetive dialogue the 106 objects weredivided in three groups:

A – deep energy retrofitB – partial energy retrofitC – not suitable for EPC

OBJECTS INCLUDED IN RETROFIT ACTIVITIES

A B ΣKindergartens 9 1 10Primary schools 10 10 20Sports objects 2 2 4Health Centres 2 4 6Culture objects - 3 3Objects City Admin. 2 3 5

Together : 25 23 48

For the 48 selected objects

Invitation for final bid: 27.2.2017

Signature of the concession contracts: 6.4.2017

For all tasks the special expert groups werenominated by the Mayor of COL

4 GROUPS (A, B) OBJECTS

8 concession contracts – shares of reached E savings:

Private partner - Public partner COL 60 - 40 bonus savings90 - 10 regular savings

ACTIVITY – PPP EPC 2 DATES/TIME SLOTS

Call for promoters – publishedDeadline for submission of the offers

November 22, 2016

December 13, 2016Proposal of the Decree on Amending the Decree on PPP for Implementation of EPC with an Aim of Energy Retrofitting of Public Buildings owned by the City of Ljubljana adopted by the City Council

Decree on Amending the Decree published in OG RS

December 19, 2016

December 23, 2016

Public tender PPP EPC EOL2 publishedDecember 30, 2016

Competetive dialogue is on-going

PPP EPC 2

RETROFIT - HEALTH CENTRE POLJE

BEFORE

AFTER

RETROFIT - HEALTH CENTRE ŠIŠKA

RETROFIT – KINDERGARTEN NAJDIHOJCA, UNIT ČENČA

RETROFIT – PRIMARY SCHOOL NOVE JARŠE

BEFORE

AFTER

Within energy retrofit of the buildings, where possible, renewable energy sources are introduced :

1. geothermal HP (4) are istalled in HC, PS (2) andkindergarten;

2. solar collectors will be installed on the Central Cityswimming pool roof;

3. PV plant will be installed on parking of th PublicTransport company (14.000 sq. m).

INVESTMENTS IN THE SUSTAINABLE ENERGY ISSUES IN COL

ENERGY RETROFIT PROGRAMME OF PUBLIC BUILDINGS IN LJUBLJANA

PHASE 1

ESCO CONTRACT FOR ENERGY RETROFIT OF 48 PUBLIC BUILDINGS• schools;• kindergartens;• health centres;• sport halls;• city administrative buildings.

25 buildings deep energy retrofit,23 buildings partial energy retrofit

DEEP ENERGY RETROFIT VS DEEP RENOVATION OF BUILDINGS

• U wall ……… 0,28 W/m2K 0,15W/m2K• U roof ……….. 0,20 W/m2K 0,10 W/m2K • U window ……. 1,60 W/m2K 0, 70 W/m2K

RENEWABLE ENERGY SYSTEMS

• Geothermal heat pumps (power from 57 to 119 kW per system, open loop system, depth of the borehole 21 to 30 m);

• Solar collectors for hot water for sports objects;• Direct solar gains in S oriented schools.

Combination of building envelope refurbishment and renewableenergy systems show highest energy savings.

New generation of geothermal heat pumps is single mosteffective way of decreasing energy consumption (prior to thethermal insulation).

Next phase includes a PV plant on Public transport space(available area 14.000 m2).

ADVANTAGES OF ESCO MODEL FOR THE PUBLIC PARTNER

• Small financial contribution;• Fool scale thermal comfort according to the state and EU standards

(ambient temperature, humidity, air exchange);• All risks regarding renovation, maintenance, energy management

and energy savings taken by private partner;• Guaranteed energy savings;• No payment if realised savings are not according to the contract

savings;• Low maintenance costs.

DISADVANTAGES OF THE ESCO MODEL FOR PUBLIC PARTNER

• Deep renovation of buildings and concept of nearly zero energy houses are not feasible;

• Low financial share of savings (10 %).

LESSONS LEARNT

• Not many ESCO companies for deep energy retrofit;• Long pay back periods;• High pre contract expenses for private partner (pre calculations, projects,

site visits);• Difficult and time consuming checking of energy consumption baselines; • More effective use of cohesion funds;• Optimum mix of energy savings and investment costs (acceptable pay back

periods);• Difficult analysis of maintenance costs before and after renovation of

buildings;• ESCO model is more effective than usual practise of public procurement

approach;• Public partner must control energy retrofit costs before signing the contract;• Highest potential show non insulated houses, built before 1975.

INTRODUCTION OF RES – KINDERGARTEN PEDENJPED, UNIT ZALOG

P 57,6 kW

MORE RES – INCLUDED IN COL MASTER PLAN

14.000 – 21.000 m2 for PV available

Expected annual el. production up to 1000 MWh

• Are legal basis for PPP EPC available?• Do the practices regarding the budgetary issues

exist?• Are the necessary data on energy performance of the

objects available?• Are the ESCOs available? If not, check the market!

Check the compatibility of already planned projects with the goals of proposed project – internal cooperation!

• Are the concerned stakeholders and cityadministration employees aware of PPP EPC approach benefits?

• Do they recognise weaknesses?

QUESTIONS TO BE ANSWERED BEFORE APPLYING FOR TA

IF YOU DO NOT BELIEVE IN SUCCESS

ITWILL NOT HAPPEN

alenka.loose@ljubljana.si