Use of Energy Performance Contracting by Municipalities in

South Africa A tool to enhance implementation of energy efficiency in

municipal buildings

SACN Programme: Sustainable Cities Document Type: SACN Report Document Status: Final Date: June 2016

Joburg Metro Building, 16th floor, 158 Loveday Street, Braamfontein 2017

Tel: +27 (0)11-407-6471 | Fax: +27 (0)11-403-5230 | email: info@sacities.net | www.sacities.net

II

CONTENTS

Table of Figures iii

Table of Tables iii

Acronyms 1

Acknowledgements 1

1. Introduction 2

1.1 Home Page 2

2. What are EPCs? 3

2.1 Background to EPCs 3

2.2 Types of EPCs 3

2.3 When should an EPC be used? 3

2.4 EPC Decision Steps 4

Step 1 - Electricity Baseline 4

Step 2 - Assess Availability of Capital 4

Step 3 - Assess Availability of Debt 5

Step 4 - Assess Technical Capacity 5

2.5 Guaranteed vs Savings Schemes 5

2.5.1 Guaranteed Savings Schemes 5

2.5.2 Shared Savings Schemes 5

2.5.3 Cape Town EPC Procurement Experience 6

2.6 EPCs and the MFMA 1

2.7 Tips for using EPCs 0

2.8 Energy Performance Certificates 1

2.8.1 SANS 1544 1

3. How do I Implement an EPC? 2

3.1 How do I conduct M&V? 2

3.1.1 SANS 50010 3

3.1.2 M&V Procurement 4

3.2 How do I establish a baseline? 4

III

3.2.1 Baseline Establishment Options 5

3.3 How do I implement an Energy Management System? 5

3.3.1 Technical Considerations for an Energy Management System 7

3.4 How do I select an ESCO? 11

3.4.1 Benefits of independent accreditation: 11

3.4.2 Measurement and Verification body 11

4. Resources 12

5. About the EPC online portal 12

6. Annexure: List of Templates, Tools & Information 13

Table of Figures Figure 1:Click on the above for more information on EPCs ..........................................................................3

Figure 2: Energy Performance Contract Tree ...............................................................................................4

Figure 3: Image of an Energy Performance Certificate issued in terms of SANA 1544 ...............................1 Figure 4: South African National Standard certificate .................................................................. 3

Figure 5: Energy Management System .......................................................................................... 6

Table of Tables Table 1: Summary of the key differences between Gauranteed Savings and Shared Savings

Schemes ........................................................................................................................................... 1

Table 2: MFMA Steps and requirements (Procurement of Energy Efficiency Measures in

Municipal Buildings by Shared Savings EPC: DFIC 2016 ........................................................... 1

Table 3:Baseline Establishment table .............................................................................................. 5

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Acronyms DANIDA Danish International Development Agency

DPW Department of Public Works

EEDSM Energy Efficiency Demand Side Management Programme

EPC Energy Performance Contract

ESCOs Energy Services Companies

HVAC Heating Ventilation and Air-conditioning Systems

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

IDC Industrial Development Corporation

MFMA Municipal Finance Management Act 56 of 2003

SACN South African Cities Network

SALGA South African Local Government Association

Acknowledgements This report prepared by Urban Earth, was commissioned by the South African Cities Network (SACN) with support from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and South African Local Government Association (SALGA). We would like to express our appreciation to Ms Sumaya Mahomed of City of Cape Town, Ms Mbali Govuzela and Ms Susanna Godehart of eThekwini Municipality for their time and insights into using Energy Performance Contracting within municipalities.

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1. Introduction

This report provides a summary of the information that is available on the project website

http://www.energycontractsupport.org/. The report and website are deliverables from the project “The

use of energy performance contracting by municipalities in South Africa to enhance implementation

of energy efficiency in municipal buildings”.

1.1 Home Page

Energy Performance Contracts Welcome to the Energy Performance Contract (EPC) online portal (website). The aim of this website is to provide government officials with resources to implement EPCs in South Africa.

This website has been developed by the South African Cities Network (SACN) with support

from Deutsche Gesellschaft für Internationale (GIZ) and the South African Local Government Association (SALGA)

The website is a work in progress and is constantly updated as new information becomes available.

Find out how Energy

Performance Contracts (EPC) work

Find out how to implement

Energy Performance Contracts and the options available to

establish a usage baseline for energy contracts

Find examples of energy related tenders and resources to help

with Energy Performance Contracts

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2. What are EPCs?

EPCs are a particular type of contract used in energy retrofit projects. EPCs are different from standard contracts in that they link the payments to the contractors with savings achieved through the implementation of the EPC. The cost of investment into the energy efficiency project is paid back through the generated saving. Watch the presentation below for an overview of EPCs. “The key advantage of Energy Performance Contracts is that they allow municipalities to move from pilot scale implementation of energy efficiency to large scale, municipal wide implementation”

2.1 Background to EPCs

EPCs emerged in the 1990s as one of the tools to deliver energy savings. Specifically, they are contracts that link the payments to the contractors of the EPCs with savings achieved through the implementation of the energy savings measures included in the EPC. The cost of investment into the energy efficiency project is paid back through the generated savings. This is different from a conventional energy efficiency contract where the contractor is only required to guarantee the equipment they install but is not required to guarantee that the energy efficiency savings will be achieved through the installation of the equipment. In an EPC, an external organisation, referred to as an Energy Service Company (ESCO), implements an energy efficiency project and the client uses the income generated from the energy savings to repay the investment and associated project costs. An EPC therefore transfers the technical risks from the client to the ESCO as the ESCO is required to provide an energy efficiency performance guarantee. The savings achieved from an EPC should offset the cost of financing, installing, maintenance and monitoring & evaluation of the energy efficiency interventions. The future savings should therefore be greater than the sum of these combined costs.

2.2 Types of EPCs

There are many types of EPCs that vary from complete ownership and management by the ESCO (Turnkey solutions) to varying degrees of ownership by the customer and ESCO. In a complete turnkey solution, the ESCO provides the financing for the technology exchange, implements and owns the technology for a period of time and then transfers the technology to the client at a time in the future. In the Guaranteed Savings model, the client provides the financing for the intervention, but the ESCO guarantees energy savings over a period of time. If these savings are not met, then the ESCO pays penalties to the client. While with the Shared Savings model, the ESCO can provide all or some of the financing and the cost of savings are shared between the ESCO and the client. The main benefit of using EPCs is that the risk of achieving savings is transferred from the customer to the ESCO and the number of facilities that can be retrofitted is greatly increased.

FIGURE 1: CLICK ON THE ABOVE FOR MORE INFORMATION ON EPCS

2.3 When should an EPC be used?

The flow chart below can be used to help identify if an EPC should be used by a municipality and whether Guaranteed Savings or Shares Savings Schemes should be followed.

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FIGURE 2: ENERGY PERFORMANCE CONTRACT TREE

2.4 EPC Decision Steps

Step 1 - Electricity Baseline In order to implement an EPC, it is necessary to have reliable, accurate and detailed energy consumption baseline information in place. This can be achieved by including the baseline as requirement of the Monitoring and Verification (M&V) team. This requirement is explained in more detail in the section “How do I establish a baseline?”, but in summary you can require the M&V team to comply with SANS 50010 and this will ensure that adequate metering takes place. Alternatively, a baseline can be established by installing metering equipment in the buildings that you are intending to implement the EPC through. The baseline should ideally include hourly consumption data for at least 2 months but preferably 12 months. This will take into account seasonal fluctuations in energy consumption (e.g. in summer there may be increased costs due to higher use of air-conditioning). More information on establishing a baseline can be found here.

Step 2 - Assess Availability of Capital Once your baseline is in place, you should be able to determine the number of buildings and facilities you would like to include in the EPC. In order to clearly assess the potential capital requirements, it is necessary to conduct a preliminary audit of the identified buildings and facilities. The main purpose of this audit is to determine the number of potential retrofits that will be required. In some municipalities, asset registers are available for each building which can list all the potential fittings (e.g. lights, air-conditioners, water heaters, etc...). In the event that asset registers do not exist, then walk through audits where these fittings are counted need to be conducted. It is then necessary to calculate the potential cost of the retrofit per fitting, per facility and for the entire program. Once the capital costs are known it will be necessary to secure funding in the municipal Medium Term Expenditure and Revenue Framework (MTERF). This will typically be done over a 3year period. If it is not possible to secure funding through the municipal MTREF or other grant funding sources, then it is necessary to consider funding the intervention through debt financing.

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Step 3 - Assess Availability of Debt It is important to assess whether your municipality can access debt financing, as this will most likely reduce the overall cost of the EPC. This is because municipalities can typically leverage debt financing at preferential rates or rates that are more competitive than the private sector. Loans can be secured through institutions such as the Development Bank of Southern Africa or even commercial banks. Typically, loans will require very detailed business plans with clearly defined pay-back periods. More details on funding options have been included in the section “How do I finance an EPC?”

Step 4 - Assess Technical Capacity If it is possible to secure financing, it is important to assess the level of capacity available to implement an energy efficiency program that includes a bulk of the buildings managed by the municipality? EPCs can assist with capacity constraints by providing expertise through the implementing ESCO. ESCOs typically have a very detailed understanding of technology options and can provide technical insights not necessarily considered by municipal officials. It is important to note though that there will always be a need for in-house technical capacity within the municipality to ensure that the Energy Efficiency contracts are implemented correctly. In the event that a municipality has access to capital financing and there is sufficient internal capacity, it is unlikely that there is a benefit to EPCs. There will be additional costs associated with EPCs that would be better used on building internal capacity. However, in the event that there is a lack of capacity or a lack of capital financing, the municipality should consider an EPC.

2.5 Guaranteed vs Savings Schemes

EPCs are contracts that allow municipalities to implement a wide range of energy efficiency interventions through innovative financing mechanisms. EPCs have the potential to move municipalities from pilot scale implementation (e.g. through the EEDSM program) to large scale implementation throughout all municipal building and facilities. EPCs can be implemented through guaranteed savings schemes or shared savings schemes. The guaranteed savings scheme entails the client paying the ESCO for the energy efficiency interventions when the installation is done but also requires a financial guarantee from the service provider against the achievement of the projected savings. Should the savings not be achieved, the client uses the guarantee to reimburse the difference between actual savings and projected savings. In a shared savings scheme, the ESCO raises the investment capital required and the cost savings are split between the client and the service provider. There is no predefined percentage split for any shared savings scheme and the percentage split is determined by the client and ESCO involved.

2.5.1 Guaranteed Savings Schemes

In a guaranteed savings scheme, the municipality provides the upfront investment for the energy efficiency interventions and the ESCO is required to financially guarantee that the energy savings projected for the intervention will be achieved. In other words, if the agreed savings are not achieved, the ESCO is required to reimburse the municipality the difference between the actual savings and agreed savings. For the guaranteed savings scheme, municipalities are therefore responsible for raising the finance for the interventions either from internal sources, donor funding or debt. The ESCO, on the other hand, is responsible for the entire performance risk.

2.5.2 Shared Savings Schemes

Under a shared savings scheme the ESCO finances the energy efficiency interventions and is paid back by the client out of the energy efficiency savings. Thus, when a shared savings scheme has

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been identified as an attractive option for the municipality to implement energy efficiency in their buildings, municipalities benefit from energy cost savings without using municipal finances to implement the project. Since energy efficiency interventions can be costly, ESCOs will typically secure credit to finance the energy efficiency interventions. As a result, in a shared savings scheme the ESCO will bear both the performance and credit risk. Under a shared savings scheme, the client benefits from the energy cost savings at the outset of the performance obligation period as the ESCO is paid a portion of the savings according to a contracted and pre-arranged percentage and the client retains a portion of the savings. There is no standard percentage split because it is dependent on the project cost and contract length. The main advantage of a shared savings scheme for a South African municipality is that the

municipality does not have to raise the funds to finance the energy efficiency interventions as that is

the responsibility of the ESCO. Since funds for energy efficiency initiatives are limited, the use of

shared savings schemes can extend the total number of energy efficiency interventions that a

municipality can implement. This of particular benefit in cases where the energy efficiency measures

are expensive to implement.

2.5.3 Cape Town EPC Procurement Experience The City of Cape Town has conducted a number of EPCs. The lessons from these projects have been captured in this case study. The section below is an excerpt from this case study, which summarises the procurement process that the city has follow in implementing these projects.

a) Introduction

The City of Cape Town first initiated energy performance contracting in 2009 with the issuing of an EPC tender for four municipal buildings to be retrofitted for full energy efficiency. This first performance contract was funded through the Danish International Development Agency’s (DANIDA) Urban Environmental Management Programme (UEMP). In 2011, the City of Cape Town issued a second EPC tender for a further fourteen municipal buildings, which was funded by the National Department of Energy’s EEDSM programme. This performance contract was limited to lights, occupancy sensors and smart meters. In 2013, a third tender was issued for a further twelve building complexes, also funded through the EEDSM. These twelve buildings will receive full energy efficiency retrofits once the tender award process is complete. Over the four years that the City of Cape Town has been engaging with energy performance contracting, it has refined its approach considerably. This Case Study explores the most recent (2013) model being used by the City in this regard. To ensure that the municipality complies with the financial controls laid out in the Municipal Financial Management Act (No 56 of 2003) (MFMA) the process of procuring a service provider for an EPC is conducted in two stages. These are described in the following sections.

b) Stage One: Contracting a service provider and completing detailed audits

Stage one of the tender process involves securing a service provider to undertake detailed audits of

each of the buildings for which energy efficiency measures are to be implemented in terms of the

contract. The service provider is paid to undertake these detailed audits. The purpose of the first

stage is to identify, through the audits, a suite of energy efficiency interventions that can be

implemented in the various buildings along with the pay-back periods for these interventions.

To initiate Stage One, the City of Cape Town issues a tender calling for “Provision of a service

provider for detailed audits and energy efficiency interventions at council building complexes”. The

tender requests bidders to quote on the following key items:

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1. The cost of detailed energy audits of the identified buildings.

2. The mark-up percentage the bidder would impose on cost of materials, labour and disposal

for the implementation of the selected energy efficiency interventions. Since bidders would

need to complete a detailed audit of each of the buildings in order to identify and accurately

cost all the possible energy efficiency interventions, the bidders are not asked in Stage One

to provide a full cost estimate for energy efficiency interventions.

3. Extra-over normal fees and disbursements, including items like the procurement of an

occupational health and safety professional, printing and copying, travel expenses,

behaviour change and capacity building programme and accessing Eskom’s Integrated

Demand-side Management Funding.

4. Evaluation of the cost effectiveness of the intervention taking into account both the costs of

implementing the intervention and the ongoing maintenance costs of the intervention.

Once responses have been received from interested bidders, a detailed review of all the responsive

bids is completed by a Bid Evaluation Committee (BEC) convened specifically for the tender. The

recommendation of the BEC is then referred to the central Bid Adjudication Committee (BAC) of the

City of Cape Town. Once the BAC has made a final decision, the preferred bidder / service provider

is appointed.

On receiving a formal appointment, the winning service provider proceeds to undertake detailed

energy audits of each of the buildings identified in the tender to establish a baseline for energy use

and to identifying energy efficiency interventions that can be implemented. Using the results of the

audit as a basis, the service provider then proposes a suite of energy efficiency interventions for

each of the buildings. The following details must be provided for each proposed intervention:

1. The cost of the intervention. This includes the cost of materials, labour, disposal of materials

and service provider mark-up.

2. The amount of energy in kWh that will be saved through implementing the intervention.

3. The pay-back period of the intervention.

4. A Stage Two: Implementation of interventions and performance guarantee.

c) Stage Two of the process involves the implementation of the energy efficiency

interventions and the ongoing evaluation of the success of the interventions.

Stage Two is initiated with the selection of a preferred suite of interventions by the City of Cape

Town. Using the results of the detailed building audits, relevant municipal staff select a sub-set of

interventions that are deemed most cost effective for each building. The service provider then

implements the selected interventions in the various buildings concerned and is paid for the

implementation of these interventions.

Once the interventions are in place and the service provider has been paid for the completed

interventions, the performance guarantee period starts. The service provider is required to manage

and maintain the installations and to guarantee performance for the entire pay-back period of the

interventions. For example, if it is anticipated that it will take 5 years for the City of Cape Town to

recoup the costs of the interventions through energy savings, the guarantee period will be 5 years.

For ease of management the guarantee is managed in twelve month cycles.

The first twelve month cycle is initiated within fourteen days of completing the installation of the

interventions. At this point the service provider is required to lodge a performance guarantee with the

City of Cape Town in the form of a bank guaranteed cheque. The performance guarantee must be

for the amount of money that the service provider predicted the interventions would save the

municipality over a twelve month period.

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During the performance guarantee period the energy usage of the buildings is monitored and

compared against historical energy usage prior to the implementation of the interventions. This

information is used to determine the total energy savings that can be attributed to the interventions

completed by the service provider.

There are three possible scenarios for the release of the guarantee:

1. The energy saving installations outperform expectations and twelve months of savings are

achieved earlier than expected. In this scenario the municipality will release the service

provider from its performance guarantee as soon as the savings are achieved (i.e. prior to

the completion of twelve months). The service provider then provides the municipality with a

new performance guarantee cheque for another twelve month period. Releasing the

guarantee before the twelve month period is complete and immediately starting the next

twelve month contract shortens the length of time the service provider is expected to

guarantee performance. Since the earlier release of the guarantee is beneficial to the service

provider, this provides an incentive for the service provider to exceed performance targets.

2. The service provider meets expectations and the total savings for the twelve month period

are achieved in the expected time frame. In this scenario, the performance guarantee is

released at the end of the twelve month period and the service provider will then issue the

municipality with a new performance guarantee cheque for the next twelve months.

3. The service provider does not meet savings expectations with in the twelve month period. In

this scenario the service provider is required to pay the municipality the amount for any

savings not achieved. Once this payment has been made the municipality releases the

performance guarantee and the service provider issues a new performance guarantee for

the next twelve month period.

Once the specified pay-back period for the combined interventions completed in a building has been

reached, the cycle of issuing twelve month guarantees ends and the contract is complete.

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TABLE 1: SUMMARY OF THE KEY DIFFERENCES BETWEEN GUARANTEED SAVINGS AND SHARED SAVINGS SCHEMES

Conventional energy efficiency contracts

Guaranteed savings contract Shared savings contract Less than three years

Shared savings contract More than three years

Contract Standard contract Contract that allows for two stages: an auditing stage and an intervention stage.

Standard Contract Additional requirement to adhere to Section 33 of the Municipal Financial Management Act.

Finance Financed by the municipality through existing funds, donor funding or debt.

Financed by the municipality through existing funds, donor funding or debt.

Financed by the ESCO through existing funds or debt.

Financed by the ESCO through existing funds or debt.

Cost Cost of installation Maintenance costs are likely to be accounted separately Monitoring & verification may not be implemented and so no cost incurred Cost of debt if debt incurred

Cost of installation Cost of maintenance Cost of monitoring & verification Cost of performance guarantee Cost of debt if debt incurred

Cost of installation Cost of maintenance Cost of monitoring & verification Cost of financing by the ESCO

Cost of installation Cost of maintenance Cost of monitoring & verification Cost of financing by the ESCO

Likely achievement of savings

Monitoring & verification not always included so savings may not be monitored. ESCOs provide warranties on the equipment but not the energy savings performance so savings not guaranteed.

Savings guaranteed. If savings not achieved the municipality is paid the difference by the ESCO.

If savings not achieved the ESCO loses money as only paid out of the savings. Consequently, the ESCO is incentivised to deliver the savings.

If savings not achieved the ESCO loses money as only paid out of the savings. Consequently, the ESCO is incentivised to deliver the savings.

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Maintenance Implemented systems need to be maintained by the municipality.

Implemented systems need to be maintained by ESCO. Potential for confusion between the maintenance responsibilities of the ESCO and municipality exists.

Implemented systems need to be maintained by ESCO. Potential for confusion between the maintenance responsibilities of the ESCO and municipality exists.

Implemented systems need to be maintained by ESCO. Potential for confusion between the maintenance responsibilities of the ESCO and municipality exists. This confusion can be exacerbated for very lengthy contracts.

Technical Expertise required by municipality

Municipality requires the technical capacity to identify appropriate energy efficiency interventions and to maintain interventions.

Municipality requires the technical capacity to oversee work of the contractor. Training of municipal staff to take over maintenance at contract end can be incorporated in contract.

Municipality requires the technical capacity to oversee work of the contractor. Training of municipal staff to take over maintenance at contract end can be incorporated in contract.

Municipality requires the technical capacity to oversee work of the contractor. Training of municipal staff to take over maintenance at contract end can be incorporated in contract.

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2.6 EPCs and the MFMA

EPCs like any municipal contract are governed by the Municipal Finance Management (MFMA) Act 56 of 2003

i. In general, EPCs can be contracted in the same way that a normal energy efficiency

contract would be contracted. However, since EPCs can often take place over more than three years, Section 33 of the MFMA which governs contracting beyond a three year period is of particular relevance. Section 33 of the MFMA which governs contracting beyond a three year period is of particular relevance. Section 33 of the MFMA stipulates a municipality can only engage in a contract that imposes financial obligations on the municipality beyond a three year period if:

A draft of the contract is publicly advertised for comment 60 days prior to the municipal council meeting where the contract will be considered for approval.

The municipal council has considered the financial implications of the contract and any comments received on the proposed contract.

The municipal council has adopted a resolution on the financial benefits of the contract and authorising the municipal manager to sign the contract on behalf of the municipality.

Shared savings EPCs often have a contract length of more than three years. Since the ESCO is paid from the savings accrued from the interventions implemented in a shared savings scheme the contract period of a shared savings scheme must exceed the length of the payback period of the interventions implemented. While in some cases the payback period for interventions is less than three years, in a large number of cases the payback period is more than three years. As a result, for those shared savings schemes with a contract period of more than three years Section 33 of the MFMA applies. Guaranteed savings EPCs entail the municipality paying the ESCO for the energy efficiency interventions upfront. As a result, the financial obligations on the municipality are generally confined to a three year period. The service provider, on the other hand, is often required to provide a guarantee to the municipality beyond a three year period if the payback period of the intervention exceeds three years. However, since the guarantee is a financial obligation imposed on the service provider and not the municipality, Section 33 does not apply. The Draft Report "Procurement of Energy Efficiency Measures in Municipal Buildings by Shared Savings EPC" (DFIC 2016)

iiprovides a comprehensive analysis of the steps required by

municipalities to adhere to the MFMA. These steps are summarised in the table below.

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TABLE 2: MFMA STEPS AND REQUIREMENTS (PROCUREMENT OF ENERGY EFFICIENCY MEASURES IN MUNICIPAL BUILDINGS BY SHARED SAVINGS EPC, DFIC 2016)

MFMA Requirements Measure Time Frame

Consultation and participation process with stakeholder and solicitation of their views and recommendations.

Contact and invite for comments on the drafts for procurement process and EPC model contract, the National Treasury and the relevant provincial treasury and the national department responsible for local government.

Prior to public consultation and participation process with community and other interested persons, e.g. 90 days before council meeting to approve EPC.

Public consultation and participation process with community and other interested persons to inform about the contract and all projected financial obligations over the full term of the contract and its impact on future tariffs and revenue.

The Municipal Manager has to: Inform the local community about EPC in the local newspaper and invite to comment on this; Publish EPC contract and; Publish an information statement that informs about the projected financial obligation over the full term of the contract and its impact on future tariffs and revenue.

At least 60 days before council meeting to approve EPC.

Documentation of the process to enable municipal council for approval of EPC.

Compile all comments and recommendations in a section 33 report, including: EPC shared savings contract; information statement; the municipality’s obligations in terms of the proposed contract; Certification of Compliance with Section 21 MSA; Register of public comments.

Prior to distribution of section 33 report to the council e.g. 10 days after receipt of all public comments.

The municipal council has taken into account: Financial obligations of the contract; comments, views, recommendations from treasury, community and other stakeholders.

Submission of section 33 report to municipal departments and Council: Distribution of the section 33 report to all relevant municipal departments; And to all council members with department comments.

Report to municipal departments: 20 days prior to council meeting; Report including department comments to council members: 10 days prior to council meeting.

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MFMA Requirements Measure Time Frame

The municipal council has adopted a resolution of approval. Approve EPC and adopt a resolution which: determines that the municipality will secure a significant capital investment or will derive a significant financial economic or financial benefit from the contract; approve the entire contract exactly as it is to be executed; and authorises the municipal manager to sign the contract on behalf of the municipality.

Municipal meeting at earliest 60 days after public notification and consultation process.

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2.7 Tips for using EPCs

EPCs are very different from conventional energy efficiency contracting and require additional management measures by municipalities to ensure that the expected results are achieved. Important tips for managing EPCs by municipalities are summarised below: Monitoring and verification: Since EPCs are designed to ensure that municipalities suffer no financial loss if the projected savings are not achieved municipalities must be able to verify the achieved energy savings. As a result, comprehensive monitoring and verification of the energy savings achieved by an EPC is required for a municipality to manage the EPC effectively. Ideally any facilities subject to EPCs should have comprehensive time of use monitoring systems installed to aid monitoring and verification. Since EPCs are sometimes confined to only a few interventions in a building with a vast number of energy users accurate monitoring and verification can be challenging and in many EPCs an independent Monitoring and Verification agency is procured to verify the savings achieved. It is important to require the M&V agency comply with the SANS 50010 to ensure accurate and verifiable savings take place. The cost of Monitoring and Verification should be taken into account when considering an EPC and in the case of shared savings EPC it should be factored into the total cost of the intervention. Internal technical capacity: Through an EPC, municipalities can acquire access to technical capacity that they don't have available in-house. Despite this it is important to note that there will always be a need for a certain amount of in-house technical capacity within the municipality to ensure that the EPCs are implemented correctly and in-line with the requirements of the municipality. Maintenance: Maintenance of the energy efficiency interventions installed as part of an EPC adds an additional level of complexity to EPCs and requires serious consideration prior to contracting EPCs. Generally, the ESCO is required to maintain their energy efficiency interventions for the entire duration of the EPC. The main reason for this is that if an intervention is not performing as expected and the ESCO is not responsible for maintenance it could claim that inadequate maintenance by the municipality is the cause. A municipality contracting an EPC for one of its facilities therefore needs to consider what its existing maintenance arrangements are for that facility and how to integrate maintenance by the ESCO into its existing system. In some cases, the ESCO may become responsible for maintenance of the entire facility, but in many cases the ESCO will only have undertaken interventions linked to a portion of energy uses of the building and another agency will be responsible for the remaining maintenance. A clear agreement on who is responsible for what maintenance will be required in these cases. In addition, since once the EPC contract is complete the other maintenance agency will be required to maintain the ESCOs interventions a process for hand over and training on how to maintain those interventions are required. The methodology for accommodating a change of use in the facility is also outlined in detail in the SANS 50010. This further motivates for the contract to be conducted within the requirements of the SANS 50010. Facility use stability: The use and users of a facility are some of the key determinants of the total energy use of a facility. If the number of users or the energy uses in a facility change this can increase or decrease the total energy use in a facility. As a result, a facility that is expected to experience considerable change in its users or energy uses over the course of an EPC is generally not a good candidate for an EPC. Facilities where the uses are expected to remain stable over a number of years are preferable. It should be noted that the longer the contract period of an EPC the higher the risk that an unexpected change of users or energy use could take place in the contract period. Aligning stores and EPCs: EPCs often involve a changeover from an old technology to a new technology. It is important that the stores system of the municipality is updated on these changes so that it stocks the correct replacement items for the new technology. For instance, in some cases new more efficient bulbs are put in place, if stores is not updated it possible that when the new bulbs fail they are replaced with an old less efficient bulb that is still in stock. Alternatively, when the change involves new fittings, if stores has not been updated regarding the changeover it will not have any bulbs in stock that are appropriate for the new fittings. In these cases, facility users may see a long turnaround time before basic items are fixed. In addition, stores could mistakenly acquire inefficient bulbs for the new fittings as it has not been supplied with the new specifications.

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2.8 Energy Performance Certificates

Energy Performance Certificates (not to be confused with Energy Performance Contracts) are documents containing statistics about the energy consumption and efficiency of a building or facility. Energy Performance Certificates will enable facility owners or managers to assess and communicate the energy performance of particular facilities or buildings. Consequently, owners and managers will be able to identify energy efficiency interventions that will reduce energy consumption, energy costs and GHG emissions from buildings. Therefore, Energy Performance Certificates are considered as drivers of energy efficiency for buildings because they can provide information on the energy performance of buildings and they can be used as tools to track the energy efficiency of buildings overtime. Once the regulations are promulgated (estimated at mid-2016) Energy Performance Certificates will have to be displayed only in government buildings that have a floor area greater than 1000m

2. However, this regulation will be

extended to the commercial sector by 2020. Currently Energy Performance Certificates are recommended for buildings which already comply with SANS 10400 (The Application of the South African National Building Regulations).

It is anticipated that Energy Performance Certificates will be completed by external assessors. Upon completing the assessment of the building's energy consumption, the assessor will submit the Energy Performance Certificate application to the national Building Energy Performance Register (BEPR), which will be established and managed by the South African National Energy Development Institute (SANEDI). The BEPR can be utilised to support policy development by government and building. After submission to SANEDI for inclusion into the BEPR, the Energy Performance Certificates is issued. However, should there be alterations and improvements to the building, new Energy Performance Certificates with the updated energy information will be have to be issued. The cost of obtaining an Energy Performance Certificate is estimated to range between R10 000- R20 000 which will be valid for 5 years.

2.8.1 SANS 1544 SANS 1544 Energy Performance Certificates for Buildings was published in July 2015 as the country’s first national standard for energy performance in buildings, it is concerned with buildings that have been operating for at least 2 years and it specifies the requirements for producing Energy Performance Certificates. Currently, this standard is due to be implemented during the course of 2016 and will be mandatory for public buildings and recommended for private sector buildings. SANS 1544 specifies that inspection bodies analysing energy performance data and issuing Energy Performance Certificates for buildings have to be accredited with the South African National Accreditation System (SANAS). This is to ensure that inspection bodies adhere to the regulations and methods set out by SANS 1544 for the issuing of Energy Performance Certificates and that the Energy Performance Certificates issued are recognised. SANAS accreditation for inspection bodies involves an 18-month preparation period. SANS1544 outlines the requirements for producing EPCs for public buildings that:

have been in been in operation for at least 2 years; have not experienced key renovations in the past 2 years in operation;

FIGURE 3: IMAGE OF AN ENERGY PERFORMANCE

CERTIFICATE ISSUED IN TERMS OF SANA 1544

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have a net floor area of over 1000m2.

The implementation of SANS 1544 will assist municipalities with the monitoring of the energy efficiency of public buildings and assessing the potential for the implemented energy performance contracts. Energy Performance Certificates lay the ground work for baseline establishment required by Energy Performance Contracts. The standards for issuing Energy Performance Certificates for buildings are available for purchase from the SABS website

iii.

3. How do I Implement an EPC? Implementing an EPC requires a number of key steps. These are outlined below:

An internal energy management policy allows a municipality to clearly define the broad framework for energy management within its own infrastructure. The policy usually covers items such as policy measures (institutional responsibilities, monitoring, financing and performance indicators), procedures and policy review processes. They key advantage of a municipal energy policy is that it gives a department a policy mandate to implement a range of sustainable energy interventions, including EPCs. More information on internal municipal energy consumption and tools are available here: www.cityenergy.org.za. A template for developing an Energy Management Policy can be downloaded here.

An Energy Management System (EMS) should be implemented in order to clearly understand the energy consumption and baselines within different facilities. There are different approaches that can be used to set up an Energy Management System. It should be noted that it is not strictly necessary to implement an EMS in order to conduct an EPC. It is possible to require the M&V service provider to develop a baseline and measure savings from the EPC. More information on EMS baseline establishment and M&V systems can be viewed from the links below.

a1) See how to conduct M&V b1) See how to establish a baseline c1) See how to develop an Energy Management System

3.1 How do I conduct M&V?

Measurement and Verification (M&V) is the process for quantifying energy efficiency savings, by determining the quantity of energy consumed and developing a baseline or baseline adjustments. M&V methods are also used to measure and verify in a distinct manner, energy savings achieved from the implementation of an energy efficiency initiative designed to improve the energy use of a specific buildings or facility. The South African National Standard for Measurement and Verification of Energy Savings have been developed with the intention of provide a standard approach to measurement and verification of energy savings and energy efficiency (SANS 50010

iv). The SANS 50010 M&V standards will improve the

implementation of EPC contracts within public facilities because it provides specifications for determining the baseline and how M&V should be conducted and it ensures that the service provider conducting the M&V is part of an accredited body.

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"The easiest way to ensure that effective and reliable M&V takes place in the

energy intervention is to require the M&V to comply with SANS 50010." FIGURE 4: SOUTH AFRICAN NATIONAL STANDARD CERTIFICATE

3.1.1 SANS 50010 The South African Bureau of Standards (SABS) accepted and published the M&V standards as a South African National Standard (SANS) in October 2011 and is available for purchase from the SABS website. The SABS developed SANS 50010 in accordance with the International Performance Measurement Verification Protocol (IPMVP) which defines the terms for the standard and suggests the best practice for quantifying energy efficiency results while increasing investment in energy and water efficiency, renewable energy projects and demand management (SANS 50010). SANS 50010 defines energy efficiency savings as the difference between the energy consumed when carrying out the activity throughout a specified reporting period and the quantity of energy consumed for the same activity under the same period and conditions had the energy efficiency measure not been implemented. The equation used to calculate energy savings considers any adjustments that can be done and will affect the baseline.

a. Aim of SANS 50010

The SANS 50010 provides a methodology for calculating energy savings from a particular intervention. The aims of the standard can therefore be summarised as:

To ensure that the actual savings reported/recorded are less than or equal to the achieved. To assist with the measurement and verification of the savings achieved from the implementation of

efficiency initiatives in a standardised and understandable manner; Reduce differences in the interpretation of energy savings.

b. SANS 50010 Energy Savings Components

The SANS Standard includes clear guidelines on the following components of determining your energy savings:

Calculation of the baseline Boundary for measurement Measurement period Basis for baseline adjustments Energy quantities Baseline conditions

Examples of issues to consider in M&V as outlined in the standard are provided below.

Boundaries:

According to SANS 50010 a boundary should be drawn around the entire facility or just a portion on it, depending on the scope of the intervention. The standard therefore outlines the methodology for developing a boundary for the following three scenarios:

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Retrofit isolation - Measurement boundary around the "the equipment in question". Whole facility - Measurement boundary around the entire facility.

Calibrated simulation - Measurement boundary is simulated using a particular program. This option is used when there are data collection problems.

Period

The SANS 50010 also states that the period used to determine the baseline should take into account "energy governing factors". These are all the variables and patterns within a particular process that effect the use of energy. When considering the period, the following should therefore be considered:

Include minimum and maximum energy use within the facility; Represent all the operating conditions within a normal cycle; Only include time periods which fixed and variable energy-governing factors are known in the facility; Correspond to the period before the implementation of the energy efficiency intervention to enable the

provision of a baseline that can be used the effect of the energy efficiency intervention implemented.

Baseline Adjustments

The building occupancy should be considered as a primary driver of energy in commercial buildings and it should be considered when determining the baseline and any adjustments. This is because the accuracy of the reported results needs to take into account potential change of use of the facility. It therefore may be necessary to make suitable adjustments to the baseline to accommodate for this change of use. Adjustments are made to ensure the accuracy and consistency when determining the savings achieved, also adjustments to the baseline could be made because the occupancy of government buildings changes.

3.1.2 M&V Procurement The scope of work outlined in the M&V tender usually lists the facilities that need to be assessed, the time frames and deliverables. The deliverables are usually the following:

1) The scope of the EMS; 2) The data used to construct the baseline; 3) Measurement points and equipment used; 4) The methodology used; 5) The equation(s) applied; and 6) Reported savings.

It is also important to list the SANS 50010 requirement in the scope of work or adjudication criteria. An example of the text that can be used for this requirement is provided below "It is a requirement that all M&V specialists adhere to the SANS 50010 requirements for M&V" An example of an M&V tender with this requirement can be downloaded here.

3.2 How do I establish a baseline?

The baseline is important for the EPC process because the savings achieved are monitored and reported based on the baseline reported. The SANS 50010 defines the baseline as: "energy use representing conditions before the implementation of the energy-savings measures under a set of known energy-governing factors or relationships applicable at the time of the baseline measurement period to the activity in question (or both)"

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The equation used to calculate energy savings is shown below and it considers any adjustments that can be done and will affect the baseline (Pretorius, 2011). EQUATION 1: EQUATION TO CALCULATE ENERGY SAVINGS

Energy saving = Baseline Period Energy Use – Reporting Period Energy Use +/- adjustments. From the equation it is clear that energy savings cannot be directly measured since savings indicate an absence of energy use and the impact of the energy efficiency intervention is thus quantified by comparing the baseline and the reporting period.

3.2.1 Baseline Establishment Options There are essentially two approaches to determining a baseline. These are to determine your own baseline by installing an EMS or to require the external M&V body to establish the baseline for you (here). These two approaches have advantages and disadvantages as outlined in the table below. In summary though, determining your own baseline with an installed energy management system is much more complicated, but allows for more functionality. Requiring the M&V body to establish the baseline is potentially more expensive in the long term, is more limited, but significantly easier to implement. More information on implementing your own energy management system can be found here. TABLE 3:BASELINE ESTABLISHMENT TABLE

Criteria Install Own Energy Management System

Outsource baseline through SANS 50010

Upfront Cost The initial upfront costs can be high for capital equipment

The initial upfront cost can be low as measuring equipment only required for specific loads and period

Long Term Costs Once the system is installed, the maintenance costs are low. Most significant costs are for data transfer

The long term costs can be high, due to new equipment requirements for every intervention

Ease of implementation

Potentially complicated tender Simple to integrate into M&V tender

Functionality Ability to expand the system to give a detailed and continuous statement of energy use in all facilities

Limited to specific intervention

3.3 How do I implement an Energy Management System?

An EMS as defined by the ISO 50001

vis a

“Set of interrelated or interacting elements of an organization to establish energy policy and objectives and to achieve those objectives.” The ISO 50001 provides a framework for an Energy Management System using the "Plan, Do, Check, Act Cycle". This cycle allows for continuous improvement of energy management processes within a particular facility or organisation.

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The ISO 50001 further lists elements of an EMS to allow a facility manager to: 1) develop a policy for more efficient use of energy 2) fix targets and objectives to meet the policy 3) use data to better understand and make decisions concerning energy use and consumption 4) measure the results 5) review the effectiveness of the policy and 6) continually improve energy management. An EMS is therefore usually defined through an Energy Management Policy. The policy will define targets, responsibilities, type of data needed and the process for policy review. An example of and Energy Management Policy can be downloaded here. The core component of the EMS is usually the technology used to collect information on electricity usage. This system consists of data collection components (such as meters, servers, communications networks) and data output components (such as graphs, user dashboards, alerts etc...). Municipalities can either develop their own technical energy management system in house or use existing energy management and metering systems currently in the market. The key advantage or developing an in-house tender is that the municipality can be vendor independent. This means that the municipality can install a system that does not require a long term agreement with a particular vendor or service provider in order to generate data. The advantage of using energy management systems that are already in the market is that they are easy to implement and require little technical capacity to manage. It should however be remembered that an in-house EMS system will require the municipality to have the skills and capacity to analyse the data and act on the results this analysis.

FIGURE 5: ENERGY MANAGEMENT SYSTEM

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3.3.1 Technical Considerations for an Energy Management System

a. Aims

The following list describes the aims of the EMS:

Auditable Energy Consumption Data (SANS50001 and SANS5010vi)

Ability to Identify Energy saving opportunities Ability to Identify Load Shifting opportunities Carbon and emissions reporting Ability to set and report on targets Ability to intervene at equipment in real-time to achieve energy and demand targets Billing verification, allocation and comparison Identify equipment malfunction or impending malfunction through the use of configurable on board

events, alarms and messaging To be vendor free and independent

b. Data Requirements from System

The EMS should include a range of different data inputs depending on the requirements of the intervention.

The list below offers some potential data sets that can be included in the EMS:

All data and data tables must be housed on the municipal server system to be provided. No remote hosted or cloud based systems will be considered.

All EMS data is owned by and proprietary to the Xx Municipality at all times in accordance with SANS 50001 / 50010.

Historical Data – Load Profile, Interval, per day per week, per month, per quarter, per ToU period, seasonal, bi-annual and annual. Available in both interval and accumulative forms.

Configurable demand calculation (sliding window, fixed interval). Operational data amps, volts (line and phase), neutral both average and demand interval. Voltage and Current Harmonic Data (TDH, per phase, line, total). Power Factor Costs per assigned Tariff and Tariff Tables. Temp/Humidity/Spatial. Metering and Sensor communications, IP and communication.

c. EMS Outputs

The EMS should provide different stakeholder with different types of data and information. Most EMS provide high level summary information in terms of energy usage as well as process level information. There are also options that include financial reporting and technical alarms. These different output options are summarised below. Graphical Reporting

Ability to define custom filter and query parameters. Ability to apply filters to either a single or multiple charts on any dashboard. Historical vs today consumption with real-time interval update. Load Profile: (Variable Time intervals) with sum, average, max, min over defined interval. Customisable online formatting for axes, lines, markers, grid, column /row totals sub totals, XY axis

banding and tooltip with fixed and variable pan, zoom and drill up/down capability. Customisable Marker, Point and Chart area and pane annotation with Zoom / Hide capability. Cut paste and export to IMAGE, PDF, EXCEL, csv and txt. GIS and map based data and information display plots. Selection of LAT, LONG as dimension or

measure should automatically map and desired dimension/measure data. Current interval, and historical Interval, daily, per day, weekly, week of month/year monthly, quarterly,

annual with drill up/down.

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Interval on interval, day on day, week on week, month on month, quarter on quarter, year on year by week of year, month of year, quarter.

Normal energy and demand data integrator reset intervals will be set at either 30 (Energy) or 15 min (volts amps etc) with recording periods of 30/15/10/5/1 periods

Ability to easily create dashboards. Data integrity check.

Data Analysis Capabilities

Basic stats (mean, median, max, min, standard deviation, correlation, and regression). ToU period energy usage. Trendlines and custom calculations via in house scripting. Benchmarking (against energy standards such as Green Building Council SA). Intra/inter-facility comparisons. Aggregation (sum, difference, running total, % difference, %of total, moving average, YTD Total, Year

over Year growth, YTD growth). GIS graphs with display of customisable Totals, markers (i.e. circle size for number representation

and quick view on dashboard. System-Specific Information Reporting

Energy usage today, yesterday, last week, last month, last year available as meter register variable. Basic harmonics for power factor correction THD for all voltages and currents. Power, Energy, Demand, currents voltages, currents, frequency, THD overall and monthly max/min

and current/last month available as meter registers. Demand forecasting (predictive demand available as meter registers). Equipment fault detection and diagnostics (event registers and alarms).

Financial Information Reporting

Bill allocation (dashboard and email functionality). Bill validation Energy cost drill down/up (Y,Q,M,D,H,M). Real-time cost tracking – target vs actual. Tariff Analysis and comparison. ToU Period costing and charges (Peak, Standard, Off peak, MD and NMD). A separate Database Table for all eThekwini Tariffs inclusive of all charges must be provided and

must allow for future update and entry via an input form menu. Annual budget versus current usage with drill down (Y,Q,M,D,H,M). Overall total and any desired group / set total.

Once the EMS is in place, a high level scoping study of all the available buildings and facilities should be conducted. The purpose of this scoping study is to list all the available buildings and facilities that that are under the control of the municipality. The scoping study should include information about the building use, size and an indication of the energy consumption within these buildings and facilities. This scoping study will be used to develop an initial short-list of the building that will be included in the program. This short-listing can be done by using criteria such:

1. High electricity consumption of facility or area 2. Old age of technology to be retrofitted 3. Willingness and buy-in from facility manager

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A template for this scoping study can be downloaded here (see annexure).

Once a shortlist of buildings is in place, it is necessary to conduct a walk-though audit in these buildings. The purpose of the walk-though audit is to get a better understanding of the technology and its usage within a particular building. The walk-though audit therefore aims to more accurately quantify the number of technologies that can be retrofitted through an EPC, in each building or facility. Depending on the number and complexity of buildings it may be necessary to contract a service provider to assist with this task. However, walk-through audits are usually conducted by municipal staff as it only requires a count of technologies and fittings. A detailed walkthrough audit can also form part of the requirements of the EPC contractor. However, it is recommended that this audit be conducted prior to the EPC being developed to ensure a clearer understanding of the scope of work is established. A template for conducting a Walk-though audit can be downloaded here (see annexure).

Once the walk-though audits have been completed in all applicable buildings, an EPC business plan can be developed. The purpose of the business plan is to outline the scope of the EPC intervention in terms of: targeted facilities; what the expected time frames are for the project; and what financing options are available. The business plan is important because it sets out the overall scope and objectives of the project, and helps to decide on which steps are critical in the EPC process. A tool has been developed to assist municipalities in assessing their overall energy efficiency potential as part of this business plan here. Points to consider when developing an EPC business plan can be viewed here and a structure for developing a EPC Business Plan can be downloaded here. Additionally, you can use these guidelines to assist with developing a business case (see annexure).

Once an EPC business plan has been developed, it is necessary to begin securing approval to embark on the EPC process. EPCs usually take longer than three years and therefore require a particular process to be followed. More information on this process is available here. The type of approval required depends on the type of EPC being implemented. If a shared savings model is being proposed, it may not be necessary to motivate for financing directly, however, motivation will be necessary in order to enter into a long-term contract. It may also be necessary to motivate for using the savings generated from the EPC to pay for the intervention. A template for motivating for a long-term EPC can be downloaded here (see annexure).

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Once the necessary approvals to embark on the EPC are in place, it is necessary to begin initiating the Measurement and Verification (M&V) process for the EPC. There are various options available to implement the M&V process. More details on initiating the M&V process are available here.

The EPC should define the project scope and outline roles and responsibilities of the ESCO and the facility owner. The contract also needs to clearly state the conditions for the guaranteed savings and the system for measurement and verification. A draft Shared Savings Contract from the eThekwini Municipality can be downloaded here. The US Department of Energy standard EPC can be downloaded here and the appendix here (see annexure).

Once the contract has been vetted by the municipal legal department a Tender for the EPC can be issued. The type of tender and procurement process that will be conducted will depend on the type or EPC being implemented. In general, there are 3 steps for the procurement, the independent M& V team, the full scale facility audit and the actual performance contract. For a guaranteed savings model the initial audit and implementation can be conducted through the same tender process (see the Cape Town procurement experience here). For a shared savings contact, it may be necessary to conduct a full scale audit prior to conducting the EPC tender. A number existing tender documents can be used as templates. These can be downloaded here (see annexure).

Once the EPC contract is in place it is will be necessary to implement the project and manage the ESCO/s. The contract entered into between the ESCO and the municipality (see step 8 above) is a key tool in the implementation to ensure that the aims of the EPC are achieved. The following steps (adapted from the Energy Performance Contracting: Guide for Federal Buildings) should be considered during the implementation of the EPC.

1. Clearly defined roles and responsibilities during the EPC 2. EPC Concept and design approval 3. Clarification on the use of subcontractors 4. Construction and implementation schedule 5. Reporting, measurement and verification, and maintenance during the contract period 6. Ongoing training 7. User awareness campaign

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3.4 How do I select an ESCO?

South Africa’s ESCO industry is still in its developing stages and it consists of a number of small players with only few larger dominant ESCOs (IDC 2012). SANEDI is mandated to develop the Energy economy in South Africa. SANEDI have therefore been identified as an independent accreditation organisation in the country to develop an ESCO register with a view to developing the ESCO market. The ESCO register will ultimately create credibility amongst potential financial institutions and end users that are most likely to secure the services of the ESCO and provide finances to the ESCO. The development of a publicly available ESCO register will promote the ESCO industry and it will increase the number of available accredited ESCOs in the country. An ESCO register will contain a list of ESCOs pertaining to technologies, qualifications and interested companies. ESKOM has an ESCO register for energy efficiency projects implemented under the ESKOM DSM scheme, however the SANEDI ESCO register will enable the accreditation of ESCOs through an open invitation and evaluation process. The ESCOs contained in the SANEDI register will have qualified in terms of technical capacity and knowledge, financial ability of the company to invest in projects and business risk factors such as the track record of the ESCO. An evaluation of the ESCOs references and projects will be carried out and as assessment of the business financials was conducted.

3.4.1 Benefits of independent accreditation: There are a number of benefits to using an independent accreditation system for ESCOs. These are summarised below.

Recognition and categorisation of all reputable ESCOs which would provide a recent assessment of the ESCO industry;

The provision of technical due diligence on projects conducted by ESCOs; Provide enhanced credibility and increased investor confidence; The provision of a rating that will assist overcoming the barrier of inadequate information pertaining to

performance contracting based on the ESCO. Improved awareness on ESCOs that could generate larger energy efficiency projects.

The ESCO register will help with the issuing Energy Performance Certificates and the compilation of Energy Performance Registers. The targeted release date for the SANEDI ESCO register is August 2016, and the register will be disseminated for public purpose after release. In order to register for accreditation, the ESCO has to register at a specified fee with the National Treasury via the central supplier database which can be used by government departments, state entities and municipalities to procure goods and services.

3.4.2 Measurement and Verification body An M&V body is defined as a legal entity that has been accredited by the SANAS with regards to the competence of its equipment, personnel and procedures. A M&V body could be made up of at least one person provided the requirements of all relevant clauses of SANS 17020 have been fulfilled. During the implementation of energy performance contracts, as the M&V body, the ESCO needs to be accredited with SANAS to ensure that it will comply with SANS 50010 regulations (SANS 50010).

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4. Resources This section of the website provides access to resources that can be used to develop and implement EPCs. Tenders already used by municipalities in South Africa have been uploaded as well templates to be used when conducting an EPC and various reports and guidelines are available. Click on a link below for more information on the various resources.

Download examples of

tenders used by other

municipalities conducting

EPCs

Download tools and templates

that can be used in different

phases on conducting an EPC

Download research reports and other

guidelines on conducting EPCs and

Energy Efficiency interventions

There are a wide range of energy related tenders that have already been issued by municipalities in South Africa. This page provides links to download these tender documents so that municipal officials can more easily develop and issue their own tenders. See Annexure for tools, templates and information list

5. About the EPC online portal This website forms part of a project commissioned by the SACN with support from SALGA and GIZ entitled “Development of guidelines to enhance the implementation of Energy Efficiency in municipal buildings through energy service companies (ESCOs)”. The purpose of this project is to build the capacity of municipalities in South Africa to use EPC as a tool to implement the roll-out of energy efficiency projects in the building sector.

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6. Annexure: List of Templates, Tools & Information

Tenders

Building Rooftop Solar PV Tenders eThekwini 2014 Solar Rooftop Engineering Design and Construction Tender Preparation.pdf

Energy Performance Contract Tenders

Detailed Audits and Energy Efficiency Interventions at Council Building Complexes – Cape Town 2014.pdf

Detailed Audits and Energy Efficiency Interventions at Council Buildings – Cape Town 2011.pdf Detailed Audits and Lighting Energy Efficiency Interventions at Council Facilities – Cape Town

2016.pdf Draft RFP Joburg Energy Performance Contracts 2008.doc Price Table Detailed Audits and Energy Efficiency Interventions at Council Building Complexes –

Cape Town 2014.pdf

M&V Tenders eThekwini Municipality M and V Tender Example 2012.pdf

Templates

Building Scoping Study Template June 2016.xlsx Draft Template EPC Shared Savings Contract eThekwini Mar 2015.docx Facility Walkthrough Sheet Template June 2016.xlsx Template EPC Business Plan Structure July 2016.docx Template Municipal Internal Energy Management Policy.docx Template Report to Council Motivating for EPC.docx

Tools

Clinton Climate Initiative Lighting Retrofit Cost Model.xlsx ESKOM_SOP_Toolkit_01 Jun_2012.xls SA Cities Municipal Tool to Calculate Energy Efficiency Potential.xls

Information

European PPP Expertise Centre 2012 Guidance on Energy Efficiency in Public Buildings GIZ 2015 - Draft Report eThekwini- Procurement of EE Measures.pdf National Treasury 2013 - ESCo contracting EE guidelines.pdf Polokwane_Municipalitys_Energy_Efficiency_Case_Study.pdf SACN 2014 - Modelling Energy Efficiency Potential in SACN Cities.pdf SALGA 2014 - Energy Performance Contracting - City of Cape Town Case Study.pdf SEA and GIZ 2012 - Baseline Energy Saving Potential and EE Programs in Public Buildings in SA.pdf

i Municipal Finance Management (MFMA) Act 56 of 2003 ii "Procurement of Energy Efficiency Measures in Municipal Buildings by Shared Savings EPC" (DFIC 2016) iii SABS website iv SANS 50010 v ISO 50001 vi SANS50001 and SANS5010