berliner energieagentur gmbh wp 2 training session epc project development models berlin, 2006-02-08...

Berliner Energieagentur GmbH

WP 2 training session

EPC project development models

Berlin, 2006-02-08

Dipl.Ing. Vollrad Kuhn, Berliner Energieagentur GmbH



Two different project development models:

• Single-stage procedure (e.g. Energy Saving Guarantee Contract from the Hesse guidelines, guidelines was elaborated from BE/legal experts for Hesse Environmental Ministry, published 2003)

• Two-stage procedure (e.g. Success Guarantee Contract from the dena guidelines, published from German Energy Agency dena for the Federal Ministry of Transport, Building and Urban Affairs 2003)



Main differences between both models

Single-stage model:

• Bidder as potential contractor has to provide an energy saving guarantee already after performance of the energy rough analysis (including the 1st validation of building data, determination of energy and cost saving potential, concret energy efficiency measures)

• no separate project planning contract, no separate remunaration of the bidders planning costs for rough and fine analysis

• 2nd validation of building data / fine analysis is part of the preparation phase of project implementation phase



Main differences between both models

two-stage model:• Bidder as potential contractor has to provide also an energy saving guarantee

after performance of the energy rough analysis (including the 1st validation of building data, determination of energy and cost saving potential, calculation of planning costs for fine analysis), but selected Contractor must verify the saving potential and specify his rough analysis results before the project implementation

• Stage 1: Contractor has obligation for fine analysis (detailed 2nd validation of potential energy and cost savings) on basis of separate project planning contract for fine analysis prior to conclusion of EPC contract (or planning contract is part of the whole EPC contract), he can adjust the building data sheets, saving measures

• separate remuneration of the contractors planning costs for fine analysis (if there is a confirmation with rough analysis, but decision against start of the stage 2 by client)

• Stage 2: implementation of energy eficiency measures/performances and success guarantee by the Contractor (if confirmation of rough analysis or seperate decision of the client)



Course of the negotiation procedure

Phase I: request for submission of a tender and sending of the bidding documentstwo-stage model: requirements for fine analysis are content of the documents

Phase II: negotiation of the tenders (1 – 2 negotiation rounds), negotiation closing

Phase III: review, evaluation and award or cancellation of the negotiation procedure

After award decision, contract conclusion start of project implementation by the Contractor

Two-stage model: Contractor has to start with stage 1 (fine analysis), if the results confirm rough analysis, client can choose from two alternatives

• Order to start with stage 2, fine analysis costs are content of calculated basic remuneration for the EPC services

• Decision against implementation of stage 2 (due to fair reasons by the client), remuneration of contractors fine analysis costs by the client


Tasks of project development and implementation I

Frame establishing description / communication of the project Checking the data situation

Building selection / definition of targets Energy costs for electricity, heat etc. Using data (operating hours, numbers of pupils etc.) Description of the sites/buildings

Integration of• decision maker / professional departments• approval authorities

step 0:

step 1:

Fixing of• Energy cost-baseline• System request

Project preparation and -development


Call for tender Announcement with giving kind of project

development model, award procedure Call for expression of interest / prequalification Dispatch of request

Rough analysis / laying of offer Site-visits at the buildings Validation of data Determination of saving guarantee (and planning

costs fine analysis)

Presentation of• model contract (single- ore two-stage model)• assessment criterias

step 2:

step 3:

Offer with• saving guarantee• catalogue with measurements, investment costs• (planning costs and duration of fine analysis)

Tasks of project development and implementation IIcompetition


Checking the offer / negotiations Condensing the competition step by step Negotiations with max. 3 best bidders Offer comparison with exactly assessment

criterias and with own direction

Contract signature Approval by the authorities Proof of the economy

Benefit amount-analysis integrated• technical-economical analysis• ecological assessment

step 4:

step 5:

Contract includes• rights and responsibilities• cooperation principles• (stage 1: project planning contract, stage 2:

performances and success guarantee)

Tasks of project development and implementation III

competition


Tasks of project development and implementation IVEnergy saving-guarantee-contract / Project implementation (single-stage

model)Preparation phase

Detailled planning and realisation of the saving measures

inspection End of construction measurements by Contractor Inspection by building owner

Contractor is responsible for• Planning, financing and construction in

coordination with the building owner

step 6:

step 7:

Building owner get• property of the realised facilities


Tasks of project development and implementation IVEnergy saving-guarantee-contract / fine analysis (two-stage model)

Stage 1: fine analysis Detailed validation of energy and cost savings Verification of the rough analysis energy saving prognosis

Comparison of the results, final decison of the building owner Confirmation of rough analysis: order to start with stage 2 Confirmation of rough analysis: decision against start of stage 2

(due to fair reasons, e.g. changes in utilization) Nonconfirmation: cancellation of project (or other decision by the

building owner, if he is responsible for nonconform.)

Contractor is responsible for• Detailed calculation/estimation of economic

saving potential of the planned efficiency measures including the investment costs

step 6:

step 7:

Building owner get the ownership on the results• If confirmation and decison against stage 2:

remunaration of contractors planning costs


Tasks of project development and implementation V

Energy saving-guarantee-contract / Project implementation (stage 2 of the two-stage model)

Preparation phase Detailled planning and realisation of the saving measures (from fine analysis)

inspection End of construction measurements by Contractor Inspection by building owner

Contractor is responsible of• Planning, financing and construction in

coordination with the building owner

step 8:

step 9:

Building owner get• property of the realised facilities/plants


Tasks of project development and implementation V / VI

Energy saving-guarantee-contract (both models)

Main performance phase Begin of the energy management and

-controlling as well as Implementation of user motivation

Expiration of contractual time

Contractor guaranteed• consumption- and cost decrease• operating safety

step 8 (10):

step 9 (11):

Building owner get• Responsibilty of operation• Full advantage of saving



Comparison of advantages and disadvantages

General: both models models have advantages and disadvantages two-stage modelcurrent opinion of ESCOs is that there are lower risks• the model gives more opportunities for approximation regarding the project goals

and solution approaches between potential client and bidder • the planning costs for fine analysis are covered (remuneration in most cases)• Contractor can try to give objective reasons if the results of fine analysis not

confirm the rough analysis

Single-stage model• Bidder has to make an accurate validation of building energy data in the frame of

rough analysis, that means higher risks (due to uncertainties for calculation of energy saving measures and saving guarantee at this early stage of project development)

• most of the bidders take security premiums in their calculations



Comparison of advantages and disadvantages (I)

Single-stage procedure Two-stage procedure

application For single buildings and building pools, but rather for not too complex buildings

rather for complex buildings (e.g. large hospitals), estimation of energy saving potential is more difficult

Duration, complexity

Shorter, easier Longer, more complex

Advanta-ges for the client

Client get the promise of guarantees directly with the offer (final guarantees as result of contract negotiations)

Client get better and more accurate building energy data and planning data for energy efficiency measures (content of fine analysis)

Disadvan-tages for the ESCO

Bidder has to make an accurate validation of building energy data in the frame of the rough analysis with high risks (large uncertainties for calculation of energy saving measures, saving guarantee) and without remuneration for his rough analysis costs

Longer procedure, the ESCO can get the remuneration later



Comparison of advantages and disadvantages (II)

Single-stage procedure Two-stage procedure

Advanta-ges for the ESCO

Shorter procedure, the ESCO can get the remuneration faster after start of main phase of obligation to perform

Lower risks for the ESCO; Contractor has a contractual claim to implement the energy saving measures or to get a remuneration for fine analysis (if there is a confirmation with rough analysis)

Disadvan-tages for the client

security premiums in the calculations of bidders;

After Baseline adjustment in some cases (energy costs determined by the client have been changed) measures to compensate disadvantages to the contractor are necessary

Client get the final confir-mation for the guarantees (promised by bidder with offer) not until fine analysis results (if there is a confir-mation with rough analysis), he has to pay for the fine analysis (confirmation of rough analysis, but decision against EPC by the client)



Thank you for your attention!

berliner energieagentur gmbh wp 2 training session epc project development models berlin, 2006-02-08...

Documents

energy rough analysis

fine analysis costs

project implementation

confirmation of rough

rough analysis results

validation of potential

client stage

determination of energy