Good practice impact evaluation:

tender on Energy efficiency in public

administration (ECO.AP)

22/06/2017

Rui Fragoso

Head of Buildings Department

ADENE – Portuguese Energy Agency

rui.fragoso@adene.pt

Second meeting of the project “ODYSSEE-MURE,

a decision support tool for energy efficiency policy

evaluation”

SUBJECT 1 – MAIN OBJECTIVES

SUBJECT 2 – LEGAL FRAMEWORK

SUBJECT 3 – ENERGY PERFORMANCE CONTRACTS

SUBJECT 4 – EXAMPLES

SUBJECT 5 – OTHER ISSUES

AGENDA

The 2020 EU targets represents real objectives to be achieved. Additionally thePortuguese Government established new targets that go beyond the initialobjectives revealing the nation ambition on climate change prevention.

UE-27 targets

20% of reduction in

energy consumption

20% of RES in final

energy consumption

20% of GHG reduction

Targets for Portugal

31% of RES in gross final energy

consumption(1)

10% of RES in transport sector(1)

20% of reduction in primary

energy consumption(2)

Government targets

Idem

Idem

25% of reduction in primary energy

consumption(2)(3)

30% of reduction in the central government

setor(3)

2020

(1) Meta vinculativa da UE; (2) Redução sobre o consumo de energia primária em 2020 em relação ao Baseline 2007 do modelo PRIMES da Comissão; (3) Meta do Governo de Portugal

NATIONAL ENERGY TARGETSPortugal established ambitious targets

31% RES in gross final

energy consumption

10% RES in transport

sector

25% Reduction in primary

energy consumption

19,520,8

21,923

24,4 24,2 24,7 25 25,727

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0,21,3

2,2 2,33,6

5,3

0,4 0,4 0,7

3,4

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

31%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

10%

30MTEP

25%

22,5MTEP

26%

Source: Directorate-General for Energy and Geology

Cenario BAU Primes 2007 (Mtep) Primary Energy consumtion without non energetic uses

Contribute to achieve the goals established in NEEAP to reduce energyconsumption in Public Administration Sector in 30% until 2020.

Existence of an Energy Manager in all Central Government Bodies;

Development of the Barometer Eco.AP in order to evaluate the energyefficiency of the Central Government Sector

Development of Energy Performance Contracts in thebuildings/equipments with higher energy consumption (or inefficiency);

ECO.AP PROGRAM Main Objectives

Promote the efficient use of energy inCentral Government;

Promote the development of the ESCOmarket in Portugal, both on the publicand private sector;

AGENDA

SUBJECT 1 – MAIN OBJECTIVES

SUBJECT 2 – LEGAL FRAMEWORK

SUBJECT 3 – ENERGY PERFORMANCE CONTRACTS

SUBJECT 4 – EXAMPLES

SUBJECT 5 – OTHER ISSUES

• Creates the ECO.AP programRCM n.º 2/2011, from January 12th

• Develop the legal framework for energy performance contracts in the public sector, in coordination with the remaining procedures for public contracting

DL n.º 29/2011, from January 28th

• Creates a ESCO pre-qualification systemNormative Order nº 15/2012, from July 3rd

• Established that all EPC in the Central Government must coordinated by the Energy Ministry

RCM n.º 67/2012, from August 9th

• Publish the tender specification model to be used by the public sector in tender for energy performance contracts development (EED obligation)

Ordinance n.º 60/2013, from February 5th

• Clarifies the application of Eco.AP to the regional local public administrationDL n.º 68/2015, from April 30th

ECO.AP PROGRAM Legal framework

Driver LevelsTechnical

RequirementsFinancial

Requirements

Complexityof buildings/ Equipments

Level 1 ≤ 3 GWheq

• 2 Energy Expert(EPBD)

• 1 Energy Auditor

• Turnover ≥ 200 k€• Financial

Autonomy ≥ 15%

Level 2> 3 GWheq

• 2 Energy Expert(EPBD)

• 1 Energy Auditor• 1 CMVP• 2 Engineer

(SGCIE)

• Turnover ≥ 1 M€• Financial

Autonomy ≥ 15%

ECO.AP PROGRAM ESCO Pre Qualification system

Tender Specifications and Tender Program

adaptation

ESCOs Tendering Invitation

Walkthrough

Audit

Preliminary Proposals

Selection of 2 ESCOs

Energy Audit

Final Proposals

NegotiationFinal Selection and Contract Celebration

ECO.AP PROGRAM Tender procedure

AGENDA

SUBJECT 1 – MAIN OBJECTIVES

SUBJECT 2 – LEGAL FRAMEWORK

SUBJECT 3 – ENERGY PERFORMANCE CONTRACTS

SUBJECT 4 – EXAMPLES

SUBJECT 5 – OTHER ISSUES

INVESTMENT SAVINGS

10

0%

0%

10

0 -

X

X

ESCO PUBLIC ESCO PUBLIC

ENERGY PERFORMANCE CONTRACTSBusiness model

FaturaEnergética

Economias(Público)

Fatura Energética

Before EPC In EPC After EPC

Energy costs

Payments (ESCO)

Savings(Public)

Energy costs

Savings(Public)

Energy costs

ENERGY PERFORMANCE CONTRACTSBusiness model

% guaranteed savings to the Public BodyContractual Savings

Non Contractual Savings

% shared between the ESCO and the Public Body

Total Energy Savings [kWh]

ENERGY PERFORMANCE CONTRACTSBusiness model

Savings going beyond the contractual savings are shared between ESCO and the Public body

AGENDA

SUBJECT 1 – MAIN OBJECTIVES

SUBJECT 2 – LEGAL FRAMEWORK

SUBJECT 3 – ENERGY PERFORMANCE CONTRACTS

SUBJECT 4 – EXAMPLES

SUBJECT 5 – OTHER ISSUES

[11th March 2016] 15

Lisbon Municipality: Traffic Lighting;

Peniche Municipality: Public Lighting;

Vouzela Municipality: Public Lighting;

Valongo Municipality: Public Lighting;

Paços de Ferreira Municipality: Public Lighting;

Vila Nova de Poiares Municipality: Public Lighting;

West Inter-municipal Community: Public Lighting;

Vila Nova de Gaia Municipality: Public Lighting;

Central Alentejo Inter-municipal Community: Public Lighting;

ENERGY PERFORMANCE CONTRACTSProjects developed / ongoing

16

GALP/VIVAPOWER MANVIA

Energy Savings 94,36 % 94,10 %

Municipality Contractual Savings

26,40 % 23,00 %

Contract Period 2 years 2,5 years

NPV 420 939,97 € 451 923,34 €

NPVmin 304 165,35 € 375 848, 36 €

Final Evaluation 69% 54%

ENERGY PERFORMANCE CONTRACTSLisbon municipality: Traffic lighting system

PROPOSALS

SUBMISSIO

N ORDER

ESCOS

PROPOSALS OVERVIEW

ENERGY

SAVINGS

CONTRACTUAL

SAVINGS

CONTRACT

PERIOD

1.ªCME – Construção e ManutençãoEletromecânica S.A.

70,40% 25,00% 9

2.ªEDP Comercial – Comercializaçãode Energia S.A.

70,00% 28,76% 12

3.ª Ferrovial Serviços S.A. 70,40% 35,27% 12

4.ªHEN, Engenharia e EficiênciaEnergética Lda.

70,40% 10,00% 12

ENERGY PERFORMANCE CONTRACTSVouzela Municipality: Public Lighting

Abrantes Hospital;

Covilhã Hospital;

Lisbon Subway;

Seixal Swimming pools.

ENERGY PERFORMANCE CONTRACTS… how about buildings?

AGENDA

SUBJECT 1 – MAIN OBJECTIVES

SUBJECT 2 – LEGAL FRAMEWORK

SUBJECT 3 – ENERGY PERFORMANCE CONTRACTS

SUBJECT 4 – EXAMPLES

SUBJECT 5 – OTHER ISSUES

1 – Knowledge:a) Buildings/equipment;b) Lack of expertise of the staff;c) EPC model;d) Low potential in same cases or

changes in buildings use pattern

2 – Investment capacity:a) Energy audits;b) EE investments;

ENERGY PERFORMANCE CONTRACTSChallenges

Location Lisbon Region (extended to West Region)

Beneficiary Agencia para Energia (ADENE)

CoM signatory No

Sector EE in buildings, street and traffic lighting

Total PDS cost EUR 721,273.00

Elena contribution EUR 649,145.70

Project development services (PDS)

financed by ELENA

The objective of the ELEnA assistance is to deploy thenecessary technical, financial and legal expertise that willallow developing the investment programme involvingESCOs and using EPC between the Portuguese publicadministration and private ESCOs.

ENERGY PERFORMANCE CONTRACTSTechnical Assistance to support EPC

ENERGY PERFORMANCE CONTRACTSConclusions

PRO

1. Possibility to solve financial problems in the public administration (PA);

2. The association between the ESCOs financial income and the effective energy savings achieved;

3. ESCO as the only responsible for the managing the contracted energy savings level;

CON

1. Guidance note from Eurostat concerning the impact of energy performance contracts on government accounts;

2. Low level of knowledge from the PA regarding this type of contracts;3. Time it takes to step up the process;