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Preface ........................................................................ 2Introduction ................................................. ............... 3Municipality of Heerlen ..................................................... 5Municipality of Ogre ......................................................... 7Visit to Ogre .................................................................... �0Municipality of Pécsvárad .................................................... ��Prefecture of Pieria ..... ...................................................... �4Conclusions and achievements .............................................. �7Definitions and terms ......................................................... 18Project partners ............................................................... �9

Imprint:

Climate AllianceKlima-Bündnis / Alianza del Clima e.V.European SecretariatGalvanistr. 28D - 60486 Frankfurt am Main

Tel. +49-69-7�7�39-0Fax +49-69-717139-93europe@climatealliance.orgwww.climatealliance.org

Edited by: Angela Hanisch

Photos:Gundega Dege and other project partners,or under GNU Free Documentation License

English proofread:Denise Dewey

Copyright November 2009

The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained herein.

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The Intergovernmental Panel on Climate Change (IPCC) believes the world needs to cut greenhouse gas emissions by between 50 and 85 percent compared to the present day values in order to limit global warming to between 2°C and 2.4°C above pre-industrial levels. The G8 has taken the most optimistic possible interpretation of this, concluding that we need to cut emissions by 50 percent by 2050. However, on a business-as-usual basis, global emissions are set to increase from just over 50,000 gigatonnes today to more than 80,000 gigatonnes in 2050. Thus we need efficient action and measures in all sectors including energy production and consumption, transport and industry, agriculture and forestry, and housing.

The European Union recently took an unprecedented step. In 2007, the European Council agreed on an integrated climate and energy policy, backed up by a detailed action plan. Its targets can easily be kept in mind: 20 percent less energy consumption, 20 percent less greenhouse gas emissions and 20 percent renewable energies to cover

the overall energy consumption and all by 2020. This makes the EU unique the world over for its binding, regional targets for energy and climate policy.

Energy efficiency opens up countless opportunities to reduce energy consumption in ways that actually makes us richer as individuals and more competitive industrially. The European Union is one of the world leaders in seeking to harness these energy savings, and many other countries are beginning to copy the legislation on labelling, eco-design and buildings. However, we have only now begun to make the necessary investments in energy efficiency; a great deal more still needs to be done. If all buildings are to be heated and cooled without producing carbon dioxide, for example, almost every single one of all existing buildings in the European Union will need to undergo extensive refurbishment in the space of just 40 years, and all new buildings will need to be passive houses.

Preface

With the support of the Intelligent Energy Europe Programme, the ECOLISH project shapes basic principles in the energetic refurbishment of residential buildings. Saving energy prevents climate change, reduces pollution and — last but not least — reduces occupants‘ energy bills. To meet our absolute and most basic obligations towards our children and grandchildren, we must have better housing requiring far less energy for heating, cooling, hot water and electricity. We shall use our energy wisely, and this care will teach us and our children to use the earth‘s other scarce resources wisely.

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Global warming is one of the biggest challenges the world faces today. Unless we act quickly to change the way we generate and use energy, the damage could be irreversible. The European Union has determined key targets, which it hopes will set Europe on the right track — towards a sustainable future.

The building sector is responsible for 40 percent of energy consumption and 36 percent of greenhouse gas emissions in the EU. With the ambitious European targets to be achieved by 2020, 5 percent of CO2 emissions could be prevented, half a million new jobs created and several milliards euros spent on heating and electricity saved — and that just in the next 10 years.

The EU has decided that public buildings and private buildings in Europe must be built as passive or even as plus-energy houses from 2018 and 2021 respectively. Some cities and municipalities have already reached similar decisions and erected their schools and administrative buildings in a passive house standard for instance. Furthermore, the first (public) housing associations opted for energy-saving building activities. Although this is a step in the right direction, it is not enough!

The greatest CO2 reduction potential can be exploited through the energetic refurbishment of buildings. Thus, we must not only build new energy-saving houses, but also refurbish the existing building stock to an energy-saving standard. The ECOLISH project presents a range of options to redevelop existing residential buildings in private ownership.

Beside global warming and climate protection, fuel poverty is a serious issue. A fuel-poor household is one in which occupants cannot afford to keep their home adequately warm for reasonable costs. One speaks of fuel poverty when a household must spend more than �0 percent of its income on total fuel use to heat the home to an adequate level of warmth. Unemployment and high energy prices are the two main reasons for energy poverty. In addition, those with a low income tend to live in simple houses with less insulation, which consequently also require more energy to heat. So people with a low income live in inferior housing stock and have to pay more for their energy bill. It’s a vicious circle that we have to break.

A fairly new solution to fuel poverty is energy performance contracting (EPC). A third party invests in energy saving measures in private homes. The money saved is used to pay off the investment and at the end of the maturity the occupants owns the measures. The energy bill is lowered from the first moment.

Introduction

In the ECOLISH project, we investigated the critical factors for EPC in social housing and applied them to four pilot locations over Europe.

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residential building stock is characterised by high (often extremely high) energy use due to the poor energy efficiency of heat installations and to insufficient or even a lack of thermal insulation. The poor thermal and physical qualities of these buildings also impact the quality of life. In many locations in the EU, fuel poverty exacerbates this problem and can lead to intolerable situations with regard to the quality of life and health.

Energy Performance Contracting is a potential solution for this problem, especially now that the energy market in Europe has been liberalised. Within the scope of this project, a Europe-

wide pilot scheme for Energy Performance Contracting has been organised, elaborated and evaluated.

Pilot schemes have been set up at 4 European locations in Greece, Hungary, Latvia and the Netherlands, whereby each location represents a specific situation in terms of building type, ownership and climate. For each location, a tailor-made energy performance contract and financing scheme has been elaborated, including energy and building technical boundary conditions, as well as legal, financial and social aspects. As an overall result, general guidelines and conditions will be provided on how to undertake energy performance contracting, including a template for a contract.

The ECOLISH project

With about 9,500 petajoules, energy use in residential buildings constitutes the largest share of total energy use in Europe, meaning that energy saving and CO2 reduction in this sector will provide a major contribution to the overall European targets. Although the potential is high and a wide variety of technologies available, promotion of energy efficiency in the existing residential building stock faces a number of barriers, especially in social housing and housing stock owned by those with a low income. This group has to deal with financial limitations and barriers. At the same time, this section of the European

HEERLEN

PIERIA

PÉCSVÁRAD

OGRE

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The municipality of Heerlen is the second largest city in the province of Limburg in the very southeast of the Netherlands. It’s not far to Belgium and Germany. Heerlen remained largely agrarian until coal mining began in the late �9th and early 20th century. The golden years of coal mining ended in the late 1950s; the last coal mines were closed by �975. The district of Vrieheide is situated in the northeast of Heerlen.

The district‘s �,045 houses cover an area of some �5 hectares. In �960, a cluster of 837 single family dwellings were built, which today require energy-efficient renovation. The houses waste a great deal of energy and have a poor indoor climate. Without a plan of action on how to proceed, part of the building stock in Vrieheide shall soon reach the end of its lifetime.

In Vrieheide, most of the residents have a low income and more than average is unemployed. However, 75 percent own their home; the remaining 25 percent is owned by a property investment company. The latter has no interest in investing in energy efficiency measures, as their policy is to sell the dwellings when occupants move.

Neighbourhood-aimed approach

The municipality of Heerlen feels responsible for the inhabitants of Vrieheide and therefore wants to discuss the necessary refurbishments and upcoming changes in the district with the people living there. The municipality has named it a “neighbourhood-aimed approach”. Beside the inhabitants, participants in this approach include representatives of the involved municipal departments and politicians, researchers and urban planners, and all relevant district institutions. The neighbourhood-aimed approach mainly stands for modification of a passive, supply-based attitude to an active, interrogative attitude. Participants should be involved early, from the planning stage.

Municipality of Heerlen

the Netherlands, 90,100 inhabitants

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Condition of buildings

Six terraced houses in the neighbourhood Vrieheide were selected for the pilot scheme. The houses have three floors, flat roofs and steel foundations. The ground floor has a surface area of about 30 square metres, the first and second floors are more spacious, covering 50 square metres. They are owned by the occupants.

In the eighties, the end walls were renovated with 50 millimetres insulation and plaster. Today it is very fragile and requires a lot of maintenance. Thermal bridges are still present. The ground floor walls are made of non-insulated hollow concrete blocks. The first and the second floors‘ front façades feature aluminium window frames with single glazing and 20 millimetres-thick plastic panels. At the back, the houses have balconies at both upper levels and single-glazed wooden window frames, which are often in a bad condition.

Each house is equipped with radiators and a boiler. In two houses, gas-fired combined boilers for heating and hot water are used. In the other houses, they use geysers for hot water.

All houses are naturally ventilated; although this is not adequate in winter time. Mould and moisture around the window frames and on the ceilings of kitchens and bathrooms are a major problem. Another complaint is the lack of thermal comfort, particularly near the aluminium window frames.

Refurbishment by Essent

Essent Energy Services, will act as energy service company (ESCO) and has prepared three packages of measures including financing schemes for the pilot scheme location in Heerlen. The basic package covers insulation of the roof and the end walls. The supplementary package also includes insulation of the façades and highly efficient windows at the back of the houses. The comprehensive package additionally provides insulation and new windows at the front of the houses.

View of the dwellings before and after proposed renovation

The comprehensive package has been recommended for the pilot scheme location in Heerlen. Funding for the renovation work may be provided by the national government. The interest rate for investments with regard to energy-saving measures is 3.5 percent.

Following renovation, energy management of the blocks will be performed by Essent Energy Services. This will ensure a reduction in energy use. For the next 15 years, residents must pay the same amount for their energy costs as they paid in the past. However, after this time, bills will be much cheaper and the investments made on refurbishments paid off. Residents are free to choose their own energy supplier.

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Municipality of Ogre

Latvia, 26,300 inhabitants

The municipality of Ogre is situated in central Latvia, 36 kilometres east of the capital, Riga. In 1861, when the Riga-Daugavpils railway was opened, Ogre began to develop into a health resort. Following annexation by the Soviet Union and the Second World War, Ogre was transformed into an industrial centre with a rapidly-growing population and the need for multi-occupant housing.

The pilot scheme area in the municipality of Ogre includes �0 residential buildings with a total of 238 flats. The blocks were erected in two different styles. Some of the buildings were built between the early �970‘s and early �990‘s with bricks and panelling; they range from 3 to 5 storeys in height. They have central heating, and the toilets and bathrooms are separate. These types of blocks are the best from Soviet times and are in

quite good condition. They experience less problems with the heating and have large rooms and balconies. They do not have lifts however.

The first blocks in the second style were built in the early �960‘s and consist of white bricks. The buildings in the pilot scheme area are three storeys high and have central heating. These flats are much smaller however and

the toilets and bathrooms are combined. They have intersection rooms and no balconies.

The flats have passed into the property of the occupants. Most people still live in their own flats; only a few have been rented out to other people.

Condition of buildings

All buildings are supplied with electricity, hot water and heating by the municipal agency Malkalne. The key disadvantage for the residents is that they cannot regulate either the heating time or the temperature.

The situation of the existing insulation of walls, roofs and the basement‘s ceilings can be considered to be extremely poor. Most windows still have wooden frames; only a few people have replaced these with plastic frames and even fewer with aluminium frames.

Most occupants cook with gas; less than �0 percent use an electric cooker.

Most flats only have natural ventilation. In the bathrooms, which do not have windows, about 90 percent of the flats at least have a ventilation shaft for aeration. In just one flat is there a portable air conditioning unit.

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It is necessary to upgrade the flats‘ building envelopes, as the buildings‘ thermal performance does not comply with the Latvian building code at present. Additionally, an upgrade to the heating system and specifically to the use of thermostats in each dwelling would lead to significant energy savings.

The residents

Most residents live alone or with a partner. Only a little over 20 percent live together with one or more children.

Just one third of the occupants have a higher educational qualification; the remainder are mainly skilled in vocational fields. The majority residents who do not have a regular paid work are already retired. Incomes are dramatically low. The average income per person lies between 140 and 280 euros. As a result, residents spend between 30 and 50 percent of their net income on heating and electricity; some even pay more than 50 percent. About 40 percent spend more then 40 percent of their income on energy costs. It comes as no surprise therefore that 80 percent of the inhabitants are not satisfied with their heating expenses.

Communication

Employees of the municipality of Ogre and the municipal agency Malkalne, the public utilities services provider, informed residents about the ECOLISH project. For communication purposes, they differentiated between two target groups: one group was formed of all inhabitants of the 10 blocks of flats, a total of 520 people living in 238 flats. The other group was composed of one representative from each building, the so-called ‘house oldies’. ‘House oldies’ act as managers of the single blocks and can be regarded as intermediates between the residents and Malkalne.

During the project period, an adequate number of meetings with both target groups took place. Most gatherings served as information and discussion fora. Representatives from the municipality as well as from Malkalne were always present; at some meetings, a representative from the project partner, Riga Technical University, also attended.

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ESCO in Latvia

In Latvia, energy performance contracting is unknown and only few ESCOs exist. At the last phase of the ECOLISH project one company (Sun Energy Baltic) was contacted. After improvement of the economic circumstances in Latvia, the development of EPC for the pilot location in Ogre will resume.

Economic crisis

The data referred to in this article was collected before the economic crisis reached Latvia, a country that has been hit extremely hard. Today, the financial situation of the people living in the pilot scheme area is far worse. Many people lost their jobs and both salaries and pensions for retired people were reduced even further.

It is psychologically very difficult for the people, as they don‘t feel safe and fear for their future. They are not very enthusiastic about new proposals and new commitments at such a difficult time, hence retrofitting of the housing blocks in Ogre is no longer a priority.

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Visit to Ogre

In April 2009, a group of Vrieheide residents visited the people involved in the ECOLISH pilot scheme in Ogre. At the start of their visit, the residents of Ogre were hesitant and did not know what they should do. It was obvious that they felt uncomfortable. After a while, however, a feeling of unity began to develop between the residents of Ogre and Heerlen, and they explained the plans for Vrieheide and Ogre to each other. The occupants of Ogre told how they had made themselves an inventory of the housing blocks and also of the individual apartments. It lists the problems that the residents would like to see solved.

In Vrieheide, the “’t Heitje” building is the central meeting point for the neighbourhood. The residents‘ association was established there and acts on behalf of the municipality on specific problems and developments. The informal association also has social benefits and creates a sense of unity. The occupants of the pilot scheme location in Ogre meet in the basement of one of the residential buildings and discuss their plans and ideas there. They do not have a formal organisation, but their informal contacts are extremely important.

A shared problem in both Heerlen and Ogre are a number of residents who do not care about their living situation at all. They are not open to making improvements to the residential buildings and obstruct the success of the plans for change. This is highly frustrating for those wishing to invest in their buildings. But it is the task of the group leaders to convince those less interested, which proves a fairly stressful task in practice.

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The relatively small municipality of Pécsvárad is situated in the south of Hungary, close to the border with Croatia and about 180 kilometres from Budapest. It is composed of �9 villages. Just a stone‘s throw from Pécsvárad is the city of Pécs, which has a total of �57,000 inhabitants and is the administrative and economical centre of Baranya county.

The blocks selected for the ECOLISH pilot were built between �960 and �970. The �2� dwellings are housed in �0 buildings. The smallest flats are 65 square metres in size, the largest �05 square metres. The three to four-storey buildings are made of brick and have non-insulated roofs.

All flats are privately owned and an average of 2.2 people reside in each. Most of the residents are childless adults under the age of 65 years. Just 9 percent are older and a further �6 percent live with children under the age of �2.

Major barrier to refurbishment are the lack of financial means as well as the non-existence of an owner meeting organisation.

Municipality of Pécsvárad

Hungary, 4.040 inhabitants

Condition of the buildings

Since the houses in Pécsvárad are more than 30 years old and have been built to the standard of that time, they are characterised by high energy use due to the poor energy efficiency of heating installations, insufficient thermal insulation, and low thermal comfort and indoor air quality.

The majority of flats are equipped with radiators and self-contained gas boilers for heating purposes, although some have electric boilers and even less have wood boilers. However, some residents have to use gas furnaces for heating. Each dwelling has individual heating. The residents complain about the lack of thermal comfort.

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Electrical heaters are used in about 90 percent of the flats for domestic hot water. Only a few flats feature gas-fired combined appliances for hot water and heating.

Most apartments feature double-glazed wooden window frames; in just a few homes have these been replaced with better-isolated plastic window frames.

Most flats only have natural ventilation; in very few are small fans used and in just one dwelling is a small air conditioning unit used.

The residents have several complaints about the indoor climate. Moisture and mildew often form around the window frames and sometimes on the ceilings and in the kitchens and bathrooms. Another source of moisture problems is rainwater infiltrating the façades and insufficient drying, mostly on the western side of the blocks. Households spend an average of 20 percent of their monthly income on energy.

Communication

In order to refurbish the apartments and blocks, the occupants of the selected of

block had to be informed about the ECOLISH project in general and about concrete measures on site. During the project duration, residents were informed of the current and the potential future energy consumption, return time of investments and financing options at a series of meetings.

For communication purposes, two direct target groups and one indirect target group were identified. The first group comprises all of the

239 residents; the second just one representative from each block. The indirect target group comprises all Pécsvárad inhabitants. They should be provided with official information about the pilot scheme and the measures implemented in order to generate interest amongst them for adoption of the achievements in their own situation. Representatives from the municipality, the housing co-operative, the University of Pécs and, later in the process, a potential ESCO have been speakers at the meetings.

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ESCO in Hungary

In Hungary, the energy performance contracting scheme is known and implemented fairly often. ESCO is connected with large manufacturers and uses only products or services (i.e. heat cost allocators, radiator valves) from their partner companies. To date, only one independent ESCO company operates in Hungary, but they are active in hospitals, schools and commercial buildings and not in the residential building market. ESCO companies involved in the other countries did not submit any offers for the Hungarian pilot scheme location.

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Prefecture of Pieria

Greece, 129,800 inhabitants

The prefecture of Pieria is located in northern Greece about 70 kilometres southwest of Thessaloniki. The municipality of Katerini with a population of 56,000 inhabitants is the capital of the prefecture.

As a pilot scheme for the ECOLISH project, a Katerini community comprising �50 apartments in �7 residential buildings and one building with five shops was considered. Some of the three-storey buildings in the area covering 24,000 square metres were built in �977, the others in 1981.

The selected neighbourhood is one of four communities in Katerini established for low income households. Despite this, all residents own their flat. Only the shops and communal areas are still owned by the Workers’ Housing Organisation (Organismos

Ergatikis Katikias), which also built the entire housing estate. All costs and expenses for any refurbishment work must therefore be borne by the residents. Only in special cases will the Workers’ Housing Organisation cover the costs.

Condition of buildings

Neither the building envelopes nor the roofs in the selected housing estate are insulated. The flats feature window frames made of various materials including wood, aluminium or (occasionally) plastic. Most of the windows are single-glazed; very few are double-glazed. All flats have balconies. The building envelopes are in a bad condition and many show cracks, moisture spots and thermal bridges. Energy consumption is high.

Some buildings have individual heating systems for each flat, others have central oil heating systems. During the heating period (normally from October until April), the central heating is set to 22°C and runs from 7:15 until 21:00. The residents cannot regulate the temperature or daily heating

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The Workers’ Housing Organisation targets low income active and retired workers who contribute to the Workers’ Housing Organisation via social insurance, meaning that the number of unemployed people in the pilot scheme settlement is low in comparison to other low income areas. However, more than 60 percent of residents earn less than the national average; it is possible that undeclared income complements the official revenue in several households however.

Overall, the residents are more or less satisfied with their quality of life and want to stay in their flats. The condition of the buildings and flats seems to be the only major problem. The people feel safe and are happy with external provisions such as street lighting and street conditions.

Communication

It was not easy for the Pieriki Anaptixiaki contact people to make contact with the residents and convince them to improve the flats and buildings. No regular owner meetings were set up to decide on shared occupant issues. Only in a few blocks have common managers been appointed for a building.

schedule. They do not have any heat cost allocators.

Most buildings are naturally ventilated; only some are equipped with additional mechanical ventilation. However, in both cases, the majority of the flats experience severe humidity problems. Moreover, in some flats, the moisture is the result of leaking or broken water or heating pipes.

Half of the hot water supply is provided by electricity and solar collectors. Electricity is also sometimes used for air conditioning or ventilation fans. Electric heaters are seldom used.

Residents

The average household in the pilot scheme settlement comprises 2.6 people. Although the amount of older and retired people is higher than the national standard, the number of children under the age of �4 is in line with national averages.

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the external walls and roofs will be painted with high solar reflectance paint to reduce solar warming in the summer.

The occupants will obtain their energy from Techem and pay the bills they receive from this company. They shall pay off the investments made by Techem with a fixed price and the costs of the energy purchased with a variable fee. Techem will monitor the heating and cooling costs and share these results with the occupants several times a year. The residents shall pay less rather than more for their energy needs.

Should occupants wish to decrease their energy demands beyond this, they must pay for the investments themselves. Profitable measures include the replacement of single-glazed windows with double glazing and the use of energy-saving light bulbs and energy-efficient ceiling fans.

Energy performance contracting as the proposed financing scheme is uncommon in Greece, but it offers occupants financial and procedural advantages over the traditional financing schemes.

The first step was a letter to all residents providing them with information about the ECOLISH project and the national and international organisations involved. The letter was handed out face-to-face, providing a first opportunity to talk to the occupants. It was also a chance to experience the residents‘ initial reactions.

The next step was organisation of a first meeting for the occupants with the help of three block managers. At least 20 people participated, but they were suspicious about the goals of the ECOLISH project. Why should anybody do something good for them?

Three blocks with building managers and central heating, as well as occupants with a positive attitude to the ECOLISH project were selected for concrete renovation measures.

Refurbishment by Techem

In the Greek pilot scheme location, energy performance contracting is proposed between Techem Greece as the energy service company (ESCO) and the occupants of the selected blocks. Contracting components shall include insulation of the roofs, replacement of the boilers and insulation of the heating pipes. All radiators will be fitted with a thermostatic valve and heat cost allocator. The residents can then control the heating in their own flat. Furthermore

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In social housing, energy costs do not correlate with the thermal comfort and indoor air quality, as both are poor and the costs disproportionately high. Extensive potential for savings and benefits exists in such building stock, but the allocation of investments must first be clarified: the low-income target group wants lower costs but isn‘t in a position to make financial investments for itself and lacks a long-term vision for its real estate property. Many residential buildings are reaching the end of their technical and economic lifespan and will soon require extensive renovation. On the other hand, most occupants wish to remain in familiar surrounds and trust existing social structures. Energy performance contracting (EPC) is a versatile option for resolution of such issues.

A specific problem in the building stock is individual ownership by a large number of residents. This can be solved by organising occupants and forming legal entities. In our experience, this is a time-consuming process but one, which is extremely important if any results or commitments are to be achieved. A multi-level, bottom-up approach can solve the problems being faced. Occupants welcome support as soon as they realise that it is well-intentioned and recognised, but may be reluctant to accept external help.

It is important to provide a balanced set of energy-saving measures. They should also appeal to the target group and offer robust saving potential.

Sensitivity studies conducted within the scope of the ECOLISH project showed that energy savings by improving the building envelope are more stable than upgrading the building services. Architectural improvements are therefore preferred, but not commonplace for ESCOs. Improvement of the building envelope often requires large investments, which may prove disadvantageous in parts. The long amortisation period should match the extended lifespan of the building. A real estate expert can quantify the benefits of the increased building value that renovation would bring before any work is carried out.

Technical measures themselves are quite common building practice, but risk allocation in energy savings and financial exploitation are still a big challenge. In practice, the savings depend a great deal on occupant behaviour and may not meet expectations. Sharing of this risk requires expert attention and clear instructions for the occupants.

Most financial schemes require co-financing from the occupants. Because of their low income (or unemployment even), occupants lack these financial means and may have difficulties in obtaining a loan. An offer from an ESCO to a well-organised group of homeowners for EPC should include a balanced set of technical measures, which suit the target group, and a clear plan of how a group that doesn‘t normally have access to any financial means can finance these.

Conclusions and achievements

Municipalities can play an important role in establishing revolving funds and organising occupants for example. The political lifespan (4 years) and different political interests can prove an issue however. ESCOs could play a new and important role. The residential sector and even individual homeowners could be a new and interesting business area. Several financing schemes are possible but those with mortgage and revolving funds are preferred.

Key characteristics with their main actors include:— A well-structured homeowner

organisation (social and legal experts);

— A balanced set of energy-saving measures and a corresponding financial scheme (technical and financial experts);

— A clear long-term view of the real estate and its neighbourhood (social and real estate experts).

The main achievements of the ECOLISH project are establishment of the following in each pilot location despite the unfavourable local start situation:— New/improved organisation of

homeowners;— Cost-effective packages of

energy-saving measures;— Model contracts within the

valid legal and financial constraints;

— Interest from commercial ESCOs for further implementation.

The pilots are typical of the national building stock and lead to replication on a wide scale.

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Definitions and terms

Energy Exploitation, Energy Service Companies (ESCOs), Energy Performance Contracting (EPC) and Third Party Financing (TPF) are common tools to enhance the use and promotion of sustainable and renewable energy and energy efficiency. ESCOs and EPC are instruments to overcome financial constraints to investment and to pay off initial costs with the energy cost savings achieved through a reduction in energy demands. ESCOs provide an opportunity to curb increasing energy demand and control CO2 emissions while exploiting market benefits for customers by decreasing energy costs and making a profit for themselves. Although ESCOs have been in operation on a large scale since the late 1980s / early �990s, the energy service market in Europe is still a long way from utilising its full potential, even in countries with a particularly developed ESCO sector.

What is an ESCO?

Energy Service Company (ESCO): a natural or legal entity who delivers energy services and/or other energy efficiency improvement measures in a user’s facility or premises, and accepts some degree of financial risk in so doing. Payment for the services delivered is based (either wholly or in part) on the achievement of energy efficiency improvements and on the meeting of other previously agreed performance criteria.

What is Energy Perfor-mance Contracting?

Energy Performance Contracting (EPC): a contractual arrangement between the beneficiary and the provider (normally an ESCO) of an energy efficiency improvement measure. Investments in a measure are financed according to a contractually-agreed level of energy efficiency improvement.

Additional explanationEPC is an innovative financing scheme, which uses cost savings from reduced energy consumption to repay the cost of installing energy conservation measures. In the more traditional sense this service is offered by Energy Service Companies (ESCOs), and often limited to energy efficient installations and building services. Within the scope of the ECOLISH project, buildings were considered as a total system however (i.e. building, installations and its occupants). EPC can be established by traditional ESCOs as well as by other third parties willing to make an investment (builders/real estate developers, housing corporations). For residential buildings, the basic principle is that billing is in line with the “Not More than Business as Usual” principle or even less. Furthermore, all profits and benefits (including avoided costs/investments) must be allocated to investments or future investments.

EPC allows building owners and users to achieve energy savings without up-front capital expenses. The energy improvement costs are borne by the performance contractor and paid back from the energy savings. Other advantages include the ability to use a single contractor to do necessary energy audits and retrofit and to guarantee the energy savings from a selected series of conservation measures.

What is third party financing?

Third-party financing (TPF): a contractual arrangement involving a third party in addition to the energy supplier and the beneficiary of the energy efficiency improvement measure. The third party provides the capital for the measure and charges the beneficiary a fee equivalent to part of the energy savings achieved as a result of the energy efficiency improvement measure. The third party may or may not be an ESCO.

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Project coordination and contact:

Cauberg-Huygen Consulting Engineers BVMr. Peter Op ’t VeldPO Box 480, 6200 AL Maastricht (the Netherlands)

Tel. + 31-43-3467842Fax + 31-43-3476347p.optveld@chri.nlwww.chri.nl

Project partners and organisations:

Heerlen (the Netherlands)

Ogre (Latvia)

Pécsvárad (Hungary)

Project partners www.ecolish.com

Essent Energiediensten (the Netherlands)

Riga Technical University (Latvia)

University of Pécs (Hungary)

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Pieriki Anaptixiaki (Greece) National and Kapodistrian University of Athens (Greece)

Techem Hellas

Federation of European Heating and Air-Conditioning Associations

Climate Alliance of European Cities with Indigenous Rainforest Peoples