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Program for energy refurbishment of public sector buildings 2016 -2020 Zagreb, September 2016
III phase Program for energy refurbishment of public
sector buildings 2016 -2020
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1. SUMMARY ........................................................................................................................................ 10
2. REVIEW OF NATIONAL LEGISLATION IN THE CONTEXT OF ENERGY EFFICIENCY ............. 12
2.1. REVIEW OF NATIONAL LEGISLATION IN THE FIELD OF ENERGY EFFICIENCY ........................................... 12
2.2. NATIONAL LEGISLATION IN THE CONTEXT OF ENERGY EFFICIENCY IN PUBLIC SECTOR BUILDINGS ...... 16
2.2.1. Definition of Public Sector Buildings .......................................................................................................... 22
2.3. BARRIERS IN THE IMPLEMENTATION OF ENERGY RENOVATION OF PUBLIC SECTOR BUILDINGS ON THE
BASIS OF EXISTING MODELS IN THE REPUBLIC OF CROATIA .......................................................................... 24
2.3.1. Analysis of the Legislative and Legal Barriers ........................................................................... 25
2.3.2. Technical and Organisational Barriers ...................................................................................................... 28
2.3.3. Analysis of Financial Barriers ..................................................................................................................... 31
2.3.4. Wider Social Barriers ................................................................................................................................... 35
3. OVERVIEW OF THE NATIONAL PUBLIC SECTOR BUILDINGS STOCK .................................... 38
3.1. Analysis of Data Available for Public Sector Buildings .............................................................. 41
3.2 Division of Buildings into Central State Buildings, Buildings LRGUand Public enterprises on
the Basis of Their Purpose and Period of Construction ....................................................................... 42
3.3 The Share of Buildings Pertaining to Cultural/Building Heritage in the Total Public sector
buildings stock ............................................................................................................................................ 44
3.4. Energy Indicators of Annual Energy Consumption .................................................................. 45
3.5. An Assessment of the Total Annual Consumption of Final Energy for Heating, Cooling,
Expandable Hot Water, and Lighting in Public Purpose Buildings, and of Total Primary Energy . 48
3.5.1 An Assessment of Consumption of Final and Primary Energy Before and After Implementation
of Energy Renovation Measures ........................................................................................................................... 51
3.5.2 An Assessment of Possible Savings of Final and Primary Energy After the Application of Energy
Renovation Measures until 2020 .......................................................................................................................... 51
4. ANALYSIS OF COMPLETED AND EXISTING PROGRAMS AND PROJECTS OF INCREASED
ENERGY EFFICIENCY IN PUBLIC SECTOR BUILDINGS OF THE REPUBLIC OF CROATIA ....... 53
4.1. An Analysis of the Existing and Completed Programs and Other Conducted Measures of
Energy Efficiency in Public Sector Buildings at National Level and the Projects of Local
Governments .............................................................................................................................................. 53
4.1.1. The Public Sector Building Energy Renovation Program 2014-2015 .............................................. 54
4.1.2. Pilot Projects from the Operational Plan Competitiveness and Cohesion 2014 - 2020
(MCPP/EPEEF) ....................................................................................................................................................... 55
4.2. Positive Effects of the Program and the Results of Energy Savings ......................................... 59
4.3. Key Problems in the Implementation of the Existing Programs of Energy Renovation of
Public Sector Buildings ............................................................................................................................. 62
4.3.1. Key Problems with OPCC Pilot Projects ................................................................................................... 65
4.3.2. Key Problems of the ESCO Model ............................................................................................................ 65
4.4. Measures for Eliminating Barriers to the Wider Implementation of the Program ................... 66
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5. ANALYSIS OF OBSTACLES TO AN INCREASE IN ENERGY EFFICIENCY IN PUBLIC SECTOR
BUILDINGS ........................................................................................................................................... 68
5.1. An Analysis of Legal, Financial, Organisational, and other Obstacles (Barriers) to Wider
Implementation of Measures for Increasing Energy Efficiency in Public Sector Buildings ............. 68
5.1.1. Legislative and Legal Obstacles ................................................................................................................ 68
5.1.2 Financial Obstacles ....................................................................................................................................... 80
5.1.3 Technical, Organisational, and Social Barriers ......................................................................................... 88
5.2. An analysis of the possibilities and potentials for increasing energy efficiency in the buildings
of protected cultural heritage ................................................................................................................... 91
6. OVERVIEW OF EU LEGISLATION AND THE EXAMPLES OF BEST PRACTICE FROM
EUROPEAN COUNTRIES IN THE INCREASE OF ENERGY EFFICIENCY IN PUBLIC SECTOR
BUILDINGS, IN PARTICULAR THE ESCO MODEL THAT INVOLVES INTEGRAL ENERGY
RENOVATION OF BUILDINGS ............................................................................................................ 94
6.1 Overview of EU legislation in the field of energy efficiency in buildings in connection with the
implementation of the program of energy renovation of public sector buildings and the issue of
state aid ....................................................................................................................................................... 94
6.2. Analysis of successful energy renovation programs for public sector buildings in the EU
Member States ......................................................................................................................................... 105
6.2.1. Overview of the key program elements, including organizational, legal and financial aspects ...... 107
6.2.2. ESCO models which include integrated energy renovation of buildings ............................................ 108
6.3. Program success analysis focusing on ESCO implementation models and other models
without state co-financing and good practice which can be applied in Republic of Croatia ......... 112
7. FINANCIAL ANALYSIS (NATIONAL AND EU RULES AND PROCEDURES) ............................ 114
7.1. DETAILED NEEDS FOR FUNDING FROM NATIONAL FUNDS ALONG WITH EU FUNDS ................................ 115
7.2. Analysis of the investments needed to achieve national objectives ......................................... 118
7.2.1. Cost-optimal energy efficiency measures in public buildings ........................................................... 123
7.2.2. The required level of incentives in relation to the profitability of investments in individual measures
and overall energy renovation ............................................................................................................................. 123
7.3. Long-term funding plans ................................................................................................................. 123
7.4. Specific recommendations on the application of financial instruments applicable in Republic
of Croatia .................................................................................................................................................. 126
7.4.1. Guarantees .................................................................................................................................... 126
7.4.2. Equity instruments ...................................................................................................................................... 127
7.4.3. Specialised line of credit ........................................................................................................................... 128
8. SCENARIOS OF IMPLEMENTING ENERGY RENOVATION IN PUBLIC SECTOR BUILDINGS 129
8.1. Implementation scenarios ............................................................................................................... 129
8.1.2. Central government buildings (ministries and government bodies) .................................................... 134
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8.1.3. Buildings of local and regional government units, of public businesses and other users ................ 135
8.1.4. Cultural heritage buildings ........................................................................................................................ 136
9. SELECTION OF THE OPTIMAL MODEL FOR ENERGY RENOVATION OF PUBLIC SECTOR
BUILDINGS ......................................................................................................................................... 138
9.1. THE OPTIMAL MODEL FOR ENERGY CONSUMPTION REDUCTION IN PUBLIC BUILDINGS THROUGH ESI
FUNDS………………………………………………………………………………………………………………………………………………………..138
9.1.1. MODEL I ........................................................................................................................................ 139
9.1.2. MODEL II ....................................................................................................................................... 141
9.1.2.1 Steps in the public building renovation procedure through MODEL II.............................................. 142
9.1.3. MODEL III ...................................................................................................................................... 161
9.1.3.1. Schemes of grant allocation for energy renovation of public sector buildings ............................... 161
9.1.4. Financial instruments ................................................................................................................... 165
9.2. COMPARISON OF THE INTEGRAL ENERGY RENOVATION IN LINE WITH VALID REGULATIONS AND THE
CONSTRUCTION STANDARD FOR ALMOST-ZERO ENERGY BUILDINGS ............................................................ 165
9.3. KEY INSTITUTIONS, RESPONSIBILITIES, FINANCIAL AND LEGAL ASPECTS ......................................... 167
9.4. RENOVATION PRIORITIES .................................................................................................................. 170
9.5. COSTS OF THE PROGRAM OF RENOVATION OF THE PUBLIC SECTOR BUILDINGS FOR 2016 – 2020 173
9.6. INDICATORS OF THE PROGRAM IMPLEMENTATION ............................................................................ 182
10. ... PROPOSAL OF A COST-EFFECTIVE APPROACH TO THE RESTORATION DEPENDING ON
THE TYPE OF BUILDING AND CLIMATE ZONE .............................................................................. 183
10.1. Forecasts for public sector buildings by 2020. .......................................................................... 183
11. ANALYSIS OF THE NECESSARY MEASURES FOR THE ESTABLISHMENT OF A
SUSTAINABLE MODEL OF ENERGY RENOVATION OF BUILDINGS........................................... 188
11.1. Measures for the establishment of a sustainable model of energy renovation .................. 188
11.2. Analysis of individual measures and overall energy renovation of the public sector buildings
.................................................................................................................................................................... 189
11.3. Sources of financing, realistic return period and realistic required share of co-financing of
measure .................................................................................................................................................... 193
11.3.1. Own funds ................................................................................................................................................. 194
11.3.2. Other assets - debt .................................................................................................................................. 194
11.3.3. Grants ........................................................................................................................................................ 195
11.3.4. Financial instruments .............................................................................................................................. 197
11.4. The benefits of comprehensive energy renovation in accordance with the regulations today
and to the level of nearly zero energy buildings .................................................................................. 197
11.5. Measures for continuous improvement and monitoring of the Program................................ 199
12. EVALUATION OF THE EXPECTED ENERGY SAVINGS AND WIDER BENEFITS .................. 202
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12.1. The expected energy savings and reduction of emissions of CO2, which will be achieved
through the implementation of the proposed energy renovation program by 2020 ....................... 202
12.2. Statistical, computing and modelled data................................................................................... 204
12.3. The impact of the increase of production of thermal insulating materials and efficient
systems in use of alternative and renewable energy sources .......................................................... 204
12.4. The wider benefits of the implementation of the Program in public sector buildings ........... 208
13. MONITORING, MEASUREMENT AND VERIFICATION ............................................................. 211
13.1. Measurement and verification for purposes of calculating the framework and mandatory
energy efficiency target ........................................................................................................................... 211
13.2. Measurement and verification of energy savings for the purposes of the Energy
Performance Contracting ........................................................................................................................ 212
13.3. Suggestions for improvement ...................................................................................................... 218
13.3.1. Enable with a standard contract the realization of savings which are determined by measuring 218
13.3.2. Adopt rules on the composition and conduct of the Expert Commission ......................................... 220
13.3.3. The pilot project of verification of savings by measuring energy consumption before and after
renovation and modes of use with creation of dynamic simulations of the building .................................... 220
14. ANNEXED DOCUMENTS ............................................................................................................. 221
14.1 List of Abbreviations ....................................................................................................................... 221
14.2. ANNEX 1 ......................................................................................................................................... 223
14.3. ANNEX 2 ......................................................................................................................................... 223
14.4. ANNEX 3 ......................................................................................................................................... 224
14.4.ANNEX 4 .......................................................................................................................................... 225
14.6. ANNEX 5 ......................................................................................................................................... 228
14.7. ANNEX 6 ......................................................................................................................................... 230
14.8. ANNEX 7 ......................................................................................................................................... 232
14.9. ANNEX 8 ......................................................................................................................................... 234
14.10. ANNEX 9 ....................................................................................................................................... 246
14.11. ANNEX 10 .................................................................................................................................... 247
14.12. ANNEX 11 .................................................................................................................................... 249
14.13. ANNEX 12 .................................................................................................................................... 252
14.14. ANNEX 13 .................................................................................................................................... 255
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LIST OF PICTURES
Picture 2-1 Legislative framework of energy efficiency in Croatia…...…………………………………..…12 Picture 4-1 An overview of realized savings and number of measures by counties………………….…...61 Picture 5-1 Production index for the construction sector in the Republic of Croatia (2010=100)……...…81 Picture 5-2 Interest rates on credits to non-financial institutions (%)………………………………………82 Figure 7-1 Average share of the system in the cost of integral building renovation…………………….119 Picture 9-1 Scheme of the energy service contracting model…………………………………………….160
Picture 9-2 Scheme of grant allocation for energy allocation……………………………………………163
Picture 11-1 The display of realized energy performance for a standard solution for the average building in accordance with TRRUETIB…………………………………………………………………….192 Picture 11-2 The display of realized energy characteristics for the optimized solution for the average building in accordance with TRRUETIB……………………………………………………………………..192 Picture11-3 Display of actual energy characteristic for standard of nearly zero energy in accordance with TRRUETIB……………………………………..………………………………………………………………193 Picture 11-4 Diagram of calculation of the Financial gap…………………………………………………196 Picture 12-2 The potential of cumulative reduction of CO2for the period 2017- 2020…………………203 Picture 12-3 The shares of different types of buildings in the expected cumulative reduction of CO2 emissions for 2020…………………………………………………………………………………………….203 Picture 12-3 The planned installation in thermal insulation materials in thousands of m2…………….205 Picture 12-4 The potential investment in thermal insulation materials in HRK million………………….206 Picture 12-5 A view of installed solar panels for domestic hot water preparation………………………208 Picture 10-1 The method for determining the zone cost-efficient measures, cost-optimal levels and nZEB……...…………………………………………………………………………………………………….257
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LIST OF TABLE Table2.1. Highest permissible values for new buildings and nearly zero-energy buildings further to the Technical Regulation on Rational Use of Energy and Thermal Insulation in Buildings…………………18 Table 2.2. Highest permissible values for the reconstruction of existing buildings further to the Technical Regulation on Rational Use of Energy and Thermal Insulation in Buildings…………………18 Table 3.1. Share of different bulding types in total public buildings stock registered in EMIS………....40 Table 3.2. Share of LD(R)A and CG public buildings by type and construction period in coastal Croatia……………………………………………………………………………………………………………43 Table 3.3. Share of LD(R)A and CG public buildings by type and construction period in continental Croatia……………………………………………………………………………………………………………43 Table 3.4. Share of public building by ownership…………………………………………………………..44 Table 3.5. Energy consumption and indicators for buildings by type and climate………………………..47 Table 3.6. Share of enegy rating D or worse buildings in building stock by reference climate area…...47 Table 3.7. Specific energy consumption, CO2 emission and primary energy for public buildings by building type, construction period and climate………………………………………………………………..50 Table 3.8. Annual savings in relation to chosen energy refurbishment……………………………………52 Table 3.9. Total final and primary energy and CO2 emissions for current state of the building stock (before refurbishment)………………………………………………………………………………………….52 Table 4.4. Functions of bodies within the system of management and control of the OPCC…………..55 Table 4.5. Savings in public sector buildings registered in SMIV in 2015………………………………….60 Table 4.6. Overview of savings in public buildings in 2015 by counties……………………………..……..61 Table 4.7. Overview of accomplished savings in 2015 according to EED Article 5……………..………...62 Table 4.9. Integral refurbishment of public buildings recorded in SMIV in 2015…………………….…….64 Table 6.1. An overview of European directives that relate, in part, to the renovation of public sector buildings……………………………………………………………………………………..…………………..94 Table 6.2. Examples of integrated renovation programs utilizing an energy performance model3…....109 Table 7.1. Average investment cost by technical system, building type and construction period in Continental Croatia……………………………………………………………………………………………119 Table 7.2. Average investment cost by technical system, building type and construction period in Coastal Croatia………………………………………………………………………………………………………….120 Table 7.3. Integral refurbishment investment - average values by component………………..………..121 Table 8.1. Distribution of consumption for 1st and 2nd scenario…………………………………………130 Table 8.2. Annual refurbishment plan by 1st scenario……………………………………………………..130 Table 8.4. Annual refurbishment plan by 2nd scenario…………………………………………………….131 Table 8.7. Distribution of consumption for 3rd and 4th scenario………………………………………….132 Table 8.8. Annual refurbishment plan by 3rd scenario…………………………………………………….133 Table 8.12. Annual refurbishment plan by 4th scenario……………………………………………………134 Table 8.16. Annual plan for refurbishment of the central government buildings………………………...134 Table 8.17. Annual renovation plan involving buildings of local and regional government, public companies and other users of state………………………………………………………………………….135 Tablica 8.18. Annual refurbishment plan for heritage buildings…………………………………...………137 Table 9 1. Cost-related optimal level of energy renovation per purpose and climate………………….166 Table 9.2. Distribution of building renovation priorities according to energy consumption…………….172 Table 9.3 Implementation of the Program by years………………………………………………………...176 Table 9.4.1 Performed contracting for the Specific Goal 4c1 in 2015……………………………………177 Table 9.4.2 Performance of planned contracting for the Specific Goal 4c1 in 2016……………………179 Table 9.4.3 Performance of planned contracting for the Specific Goal 4c1 in 2017…………………….179 Table 9.4.4 Performance of planned contracting for the Specific Goal 4c1 in 2018……………………180 Table 9.4.5 Performance of planned contracting for the Specific Goal 4c1 in 2019……………………180 Table 9.4.6 Performance of planned contracting for the Specific Goal 4c1 in 2020……………………181 Table 10.4. Savings goals for public buildings in 3rd NEEAP……………………………………………..183 Tablica 10.5. Savings goals for public buildings in 3rd NEEAP with alternative policy measures…….183 Table 10.6. Prediction of energy refurbishment for period 2017.-2020. Godine…………………………184 Table 10.7. Prediction of energy refurbishment for 2017 in 4th scenario…………………………………185 Tablica 10.8. Prediction of energy refurbishment for 2018 in 4th scenario………………………………185 Tablica 10.9. Prediction of energy refurbishment for 2019 in 4th scenario………………………………185 Tablica 10.10. Prediction of energy refurbishment for 2020 in 4th scenario……………………..………186 Tablica 10.11. Cumulative savings according to the 4th scenario for the period 2017-2020………….187
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Table 11.1. Cost and effect comparison of analyzed scanarios of refurbishment of public buildings..189 Table 11.2. Overview of thermal transmittance coefficient for 3 energy standards……………………190 Table 11.3. The comparison of minimum requirements for primary energy during reconstruction, proposed cost-optimal requirements for reconstruction and the proposals of the nZEB reconstruction………………………………………………………………………………………………….198 Table 12.1. Expected final energy savings and reduction of CO2, according to the 4th scenario, for the period 2017- 2020……………………………………………………………………………………………..202 Table12.2. The expected investments into increasing the energy efficiency of the HVAC systems…206 Table 12.3. Avoided cost of CO2 emissions for the period from 2017 to 2020…………………………210 Table 3.2. Classification of the public building stock by building type and climate……………………..223 Table 3.3. Classification of the public building stock by type, construction period and climate……….223 Table 3.7. Distribution of heritage buildings by building type and climate……………………...……….224 Table 3.8. Distribution of heritage buildings by building type, climate and construction period………224 Table 3.10. Energy consumption and indicators for buildings by type and climate for buildings constructed before 1971………………………………………………………………………………………225 Table 3.11. Energy consumption and indicators for buildings by type and climate for buildings constructed between 1971-2005……………………………...……………………………………………..226 Table 3.12. Energy consumption and indicators for buildings by type and climate for buildings constructed after 2005………………………………………………………………………………………...227 Table 3.15. Specific delivered energy Edel (kWh/m2) by building type and age………………………..228 Table 3.16. Specific delivered energy Edel (kWh/m2) by building type and age………………………..228 Table 3.17 Specific final therma energy for heating (kWh/m2) by building type and age………………228 Table 3.18. Specific final thermal energy for DHW (kWh/m2) by building type and age……………….228 Table 3.19. Specific final energy (kWh/m2) by building type and age……………………………………229 Table 3.20. Specific final energy for lighting (kWh/m2) by building type and age……….……………..229 Table 3.21. Other specific final energy (kWh/m2) ) by building type and age…………………………..229 Table 4.1. Display of realized savings at the location Križine……………………………………………..230 Table 4.2. Savings potential if new contracts have been signed up to now in the Renewal Program, based on the energy service model………………………………………………………………………….230 Table 4.8. Results achieved in public sector buildings 2014 and 2015, available in the System for Monitoring, Measuring and Verification of Savings (SMIV)………………………………………………..231 Table 6.2. Key available data on selected approach, defined measures and financial instruments under Article 5 in Member States…………………………...……………………………………………………….232 Table 8.3. Distribution of area and investment according to 1st refurbishment scenario………………246 Table 8.5. Distribution of area and investment according to 2nd refurbishment scenario for buildings with lower consumption…………………………………………………………………………………………….247 Table 8.6. Distribution of area and investment according to 2nd refurbishment scenario for buildings with higher consumption……………………………………………………………………………………………248 Table 8.9. Distribution of area and investment according to 3rd refurbishment scenario for buildings with higher consumption……………………………………………………………………………………………249 Table 8.10. Distribution of area and investment according to 3rd refurbishment scenario for buildings with moderate consumption…………………………………………………………………..………………250 Table 8.11. Distribution of area and investment according to 3rd refurbishment scenario for buildings with low consumption…………………………………………………………………………………………251 Table 8.3. Distribution of area and investment according to 4th refurbishment scenario for buildings with high consumption……………………………………………………………………………………………..252 Table 8.4. Distribution of area and investment according to 4th refurbishment scenario for buildings with moderate consumption………………………………………………………………………………………..253 Table 8.5. Distribution of area and investment according to 4th refurbishment scenario for buildings with low consumption………..……………………………………………………………………………………..254 Table 10.1. Input parameters of cost optimal calculation………………………………………………….256 Table 10.2. Primary energy conversion factors……………………………………………………………..256 Table 10.3. Comparison of requirements to Edel according to TRRUETIB, values used in the calculation of potential savings under the applicable regulation and the level of Nzeb………………………………257
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1. SUMMARY
The existing building stock in the Republic of Croatia represents the single sector with the
highest potential for energy saving, focusing on increasing the rate of building renovation, with
emphasis on public sector buildings that, in view of their visibility in public life, should serve as
a model for implementing energy efficiency measures.
The aim of the Public Sector Building Energy Renovation Program is to raise the level of activity
in energy renovation/retrofitting to 3% of the total public sector buildings stock annualy,
decrease the consumption of energy for cooling/heating of retrofitted public sector buildings by
up to 70%, that is, generate annual savings of around 50 GWh, and achieve the aims of energy
savings in public sector buildings, including the measures from the alternative policy set out in
the Third National Energy Efficiency Action Plan 2014 - 2016.
The Public Sector Building Energy Renovation Program relates to central state buildings (such
as ministries and state administration bodies) and the buildings of local and regional
government as well as buildings owned by the public sector in which community-based
activities are performed (such as education, science, culture, sports, health care and social
welfare), and also the activities of state bodies and organisations and of the bodies and
organisations of local and regional government, the activities of legal persons with public
powers, and also buildings for community housing, civic associations, and religious
communities.
The Program ensures continuity in the fulfilment of the requirements of Energy Efficiency
Directive, which requires member states, from 1 January 2014, to renew each year the central
authority buildings of the total floor area of heated and/or cooled buildings owned and occupied
by its central government and that the alternative approach to achieve energy savings in
buildings owned and occupied by their central government that are at least equivalent to
energy savings generated via the 3 % renovation rate.
In order to exploit 100% of the existing energy savings potential , the aim of the Program is a
thorough renovation of buildings, with maximum investment of private capital in public
buildings, continued development of energy services, and relaying of experiences from public
sector buildings to the area of private sector contracting of energy services. Investments that
have a positive impact on the state budget are encouraged, and the ESCO model ensures
implementation of measures for improving energy efficiency in public sector buildings without
additional spending from the budget of owners/users.
The Energy Renovation Program uses economically justified, energy-efficient technologies
and measures in public sector buildings in the territory of the Republic of Croatia, where public
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sector buildings with the lowest energy features or the highest energy consumption are given
priority. The Program will contribute to decreased consumption of energy sources, fossil fuels
and electricity and to increased use of renewable energy sources.
Indirectly, the Public Sector Building Renovation Program will result in the growth of
construction sector activities and in increased employment in the trading and construction
sector, civil engineering, and in the production of construction products.
The Program is co-funded from the European Regional Development Fund as part of Priority
Axis 4 Promoting energy efficiency and production and use of renewable energy, Investment
Priority 4c Supporting energy efficiency, smart energy management and RES use public
infrastructures, including in public and multi-apartment buildings, Specific goal 4c1 Reducing
energy consumption in public sector buildings, of the Operative Program “Competition and
Cohesion 2014 -2020”, for which EUR 211.810.805 is secured, shown in the State Budget of
the Croatia at source 563 - European Regional Development Fund.
Based on an analysis of the results, experiences, barriers and limitations faced to date by the
public sector and service providers in the implementation of energy renovation through the
implementation of the Public Sector Building Energy Renovation Program for the period 2014-
2015, and based on experiences gained in the implementation of the Pilot Project "Energy
Renovation of Buildings and RES Use in Public Education Institutions" and "Drawing Project
Documents for Energy Renovation of Buildings and RES Use in Public Education Institutions",
a model was developed for continued implementation of the Public Sector Building Energy
Renovation Program for the period 2016-2020, with maximum use of ESI funds.
Based on the scenarios that were analysed, and which are not mutually exclusive, it is foreseen
that the intensity of energy renovation of buildings will increase from 327,000 to 473,000 m²,
with expected cumulative savings in primary energy from 394 to 552 GWh until 2020.
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2. REVIEW OF NATIONAL LEGISLATION IN THE CONTEXT OF ENERGY EFFICIENCY
2.1. Review of National Legislation in the Field of Energy Efficiency
National legislation in the field of energy efficiency includes several laws within the competence
of several ministries; its implementation is within the competence of several institutions.
Picture 2-1 Legislative framework of energy efficiency in Croatia
The basic law transposing the Energy Efficiency Directive is the Energy Efficiency Act (Official
Gazette 127/14). It regulates the field of efficient energy use, the adoption of plans at local,
regional and national level to improve energy efficiency and its implementation, energy
efficiency measures, obligations related to energy efficiency, obligations of the regulatory body
for energy, transmission system operator, distribution system operator, and energy market
operator in connection with the transmission, transport, and distribution of energy, obligations
of the distributor of energy, supplier of energy and/or water, and in particular the activity of
energy service, determining energy savings, and the rights of consumers in the application of
energy efficiency measures. The Ministry of Economy, Entrepreneurship and Crafts, Ministry
of Construction and Physical Planning, Ministry of Environment and Energy, National Energy
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Efficiency Authority, and the Environmental Protection and Energy Efficiency Fund are
responsible for the preparation and implementation of the energy efficiency policy.
Accordance to the Energy Efficiency Act, Article 8, the MCPP participates in the drawing up of
the National Energy Efficiency Action Plan andin reporting on the implementation of the
National Action Plan while according to the Article 10 prepares a long-term strategy for
encouraging investments in the renovation of the national building stock of Croatia by 2050.The
strategy includes an overview of the national building stock, identification of the optimum cost-
efficient approach to the renovation of buildings, policies and measures for encouraging cost-
efficient extensive works on building renovation, long-term guidelines on investments and an
assessment of the expected energy savings and other benefits.
According to Article 7 of the Energy Efficiency Act, it is the task of the National Energy
Efficiency Authority to monitor the measuring and verification of energy savings through the
computer system (SMIV) for collecting, processing and verifying information on energy
efficiency and energy savings in accordance with the Ordinance on the Methodology for
Monitoring, Measuring and Verifying Energy Savings in Direct Consumption (Official Gazette
77/12). Article 8 of the ordinance defines persons obligated to make data entries: persons
obliged to make plans, providers of subsidies, providers of energy services, and the public
sector.
Pursuant to Article 25 of the Energy Efficiency Act, energy service is define as a framework for
implementing energy efficiency projects and other related activities; it is based on the energy
impact contract with a guarantee that within the referential conditions it leads to verifiable and
measurable or assessable improvements in energy efficiency and/or energy/water savings.
The method of contracting energy services for the public sector, obligations of the energy
service provider and of the contracting entity, more specific content of the contract and
budgetary monitoring of the energy service for the public sector contracting entity, are
prescribed in the Regulation on Contracting and Implementing Energy Services in the Public
Sector (Official Gazette 11/15). The State Agency for Real Estate Transactions (APN)
conducts the procurement procedure for the energy service in the building sector on behalf
and for the account of budgetary and extra-budgetary users of the state budget of the Croatia
in accordance with the Public Sector Building Energy Renovation Program.
Pursuant to Article 21 of the Energy Efficiency Act, the public sector is obligated to manage
energy and water consumption in an energy efficient fashion. The Ordinance on Systematic
Energy Management in the Public Sector (Official Gazette 18/15 and 6/16) defines the
obligations of the public sector that there should be energy and water consumption
management in all buildings, that it should conduct analyses of consumption and report on the
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consumption of energy and water through the National Energy Management System (NEMS).
Preparation and monitoring of implementation is within the competence of the APN.
The basic law transposing the provisions of Directive 2010/31/EU of the European Parliament
and of the Council of 19 May 2010 on the Energy Performans of Buildings is the Building Act
(Official Gazette 153/13). It regulates the design, construction, use, and maintenance of
buildings and the implementation of administrative and other procedures to ensure protection
and development of spaces in accordance with legislation governing physical planning and
ensuring basic requirements for buildings and other conditions laid down for buildings in the
Building Act and other legislation adopted on the basis of the Building Act. The MCPP is
responsible for implementing the Building Act.
The Building Act defines the framework for the energy certification of buildings: the obligation
to issue the energy certificate subject to the performance of an energy inspection and the
accompanying report, the obligation to conduct regular inspections of the heating system and
the cooling/air-conditioning system of the building and the accompanying report, the obligation
of public display of the energy certificate, persons authorised to conduct energy certification,
energy inspections of the building and regular inspections of the heating system and the
cooling/air-conditions system, and their obligations, implementation of the training program for
authorised persons, an independent review of the energy certificate and of the report on regular
inspections of the heating system and the cooling/air-conditioning system of the building, and
the register of the entire system.
The key obligation is to draw up the energy certificate for a building or its part in the case of
sale or lease and for all existing public buildings with total surface area larger than 250 m2.
The Ordinance on Energy Inspections of Buildings and Energy Certification (Official Gazette
48/14, 150/14, 133/15, 22/16, 49/16 and 87/16) stipulates the method and conditions for
implementing energy inspections of buildings and regular inspections of the heating system
and the cooling/air-conditioning system in buildings, the content of the report on such
inspections, the method of energy certification, the content and appearance of the energy
certificate and criteria for buildings with small energy needs, the method of energy
management in buildings that consume energy and water, and determining measures to
improve energy efficiency and their feasibility.
In accordance with Article 14 of the Building Act is defined,as the basic requirement, that
buildings and their heating, cooling, lighting and ventilation installations must be designed and
built in such a way that the amount of energy they require in use remains low, when account
is taken of the occupants and of the climatic conditions at the location of the building. Further,
buildings must also be energy-efficient, using as little energy as possible during their
construction and dismantling. Accordance to Article 20 every building, depending on its type
15
and intended purpose, must be designed, constructed and maintained in such a way that
during its use it complies with the prescribed energy performance requirements, where the
requirements are set out in the Technical Regulation on Rational Use of Energy and Thermal
Insulation in Buildings (Official Gazette 128/15). The Technical Regulation defines energy
performance requirements for certain types of buildings. They include minimum requirements
for the energy features of buildings and parts of buildings, define the method of calculating the
energy features of buildings, the minimum compulsory share of renewable sources in the total
consumption of energy of the building, criteria for nearly zero-energy buildings, the content of
studies of alternative energy supply systems, and other requirements connected with the
energy efficiency of buildings, the submission of reports to the European Commission
concerning presumptions, calculations and results of optimum cost analyses. Every building,
depending on its type and purpose, must be designed and built to enable individual measuring
of the consumption of energy, energy sources and water without significant costs, and to
enable remote reading for certain special parts of the building
16
2.2. National Legislation in the Context of Energy Efficiency in Public Sector Buildings
The Regulation on contracting and implementing energy services in public sector buildings
stipulates the conditions related to the energy efficiency contract for the public sector and is
prescribed:
to conclude an energy efficiency contract when the funds invested in energy recovery
are returned from the realized savings
the energy performance contract comes into effect when there is intent to use the
building in the contract period
the savings are proved in accordance with the rules for monitoring, measurement and
verification of energy savings, and the evidence is confirmed by the expert commission
of the contracting authority
the energy service provider is obliged to monitor and maintain energy efficiency
improvement measures and to report it regularly to the contracting authority
when the energy service provider guarantees a savings of at least equal to the fee
payable by the public contractor to the service provider, the energy efficiency contract
shall not be considered as public debt in the sense of the law governing the area of the
budget
charges for energy services is recorded as material cost
upon expiry of the contractual payment period, the client will carry out an assessment
value of the property on which the investments were made to it had maintained in order
to revalue it for any residual value of the investment after the expiration of the effective
period.
The Technical Regulation on Rational Use of Energy and Thermal Insulation in Buildings
(Official Gazette 128/15) stipulates technical requirements for the rational use of energy and
thermal insulation in buildings compulsory as of 1 January 2016:
the highest permissible annual thermal energy use for heating per unit of usable surface
area of the building
the highest permissible annual primary energy use per unit of usable surface area of
the building
17
the highest permissible coefficient of transmission thermal loss per unit of usable
heated surface area of the building
the prevention of overheating in view of the activity of solar radiation in summer
the permissible air tightness of the building
the highest permissible coefficient of the passage of heat of certain construction parts
of the envelope of the heated part of the building and certain construction parts between
heated parts of the building of different users
the reduction of the impact of thermal bridges
the highest permissible water steam condensation within the construction part of the
building
the prevention of surface water steam condensation in the construction part of the
building
the efficiency of the technical systems for heating, cooling, ventilation, air-condition and
DHW
the highest permissible annual energy required for lighting of the building, other than
family residential buildings with one apartment and multi-residential buildings
the automation and building management system efficiency class
the share of RES in the total consumption of primary energy.
The highest permissible annual values for certain technical requirements to be satisfied by new
buildings and nearly zero-energy buildings (table 2.1.) and for more extensive reconstruction
of existing buildings (table 2.2.) are determined separately, based on the purpose and climate
location of the buildings. The following is established:
thermal energy required for heating per annum Q”H,nd kWh/(m²a), supplied energy Edel
kWh/(m²a), and primary energy Eprim kWh/(m²a) for a standard building and for a
building with nearly zero-energy consumption
energy required for cooling per annum Q”C,nd kWh/(m²a) ≤50 (70) kWh/m2.
restriction of the coefficient of transmission loss per unit of usable heated surface area
of the building H’tr,adj u W/(m²K)
and the minimum thermal insulation through maximum permissible values of the
coefficient of heat passage for certain structures on the outside envelope U W/(m²K).
18
Table2.1. Highest permissible values for new buildings and nearly zero-energy buildings further to the Technical Regulation on Rational Use of Energy and Thermal Insulation in Buildings
REQUIREMENTS FOR NEW BUILDINGS AND nZEB Q’’ H,nd [kWh/(m²a)] Eprim [kWh/(m²a)] Edel [kWh/(m²a)]
BUILDING TYPE
NEW BUILDING AND nZEB NEW nZEB NEW
continent, θ mm ≤ 3 °C coast, θ mm > 3 °C
Continent, θ mm ≤ 3 °C
Coast, θ
mm > 3 °C
Continent, θ mm ≤ 3 °C
Coast, θ
mm > 3 °C
Continent, θ mm ≤ 3 °C
Coast, θ
mm > 3 °C
f0 ≤ 0,20 0,20 < f0 < 1,05 f0 ≥ 1,05 f0 ≤ 0,20 0,20 < f0 < 1,05 f0 ≥ 1,05 Multiapartment 40,50 32,39 + 40,58·f0 75,00 24,84 19,86 + 24,89·f0 45,99 120 90 80 80 80 60
Single family home 40,50 32,39 + 40,58·f1 75,00 24,84 17,16 + 38,42·f1 57,50 115 70 45 35 80 50
Offices 16,94 8,82 + 40,58·f2 51,43 16,19 11,21 + 24,89·f2 37,34 70 70 35 25 40 40
Education 11,98 3,86 + 40,58·f3 46,48 9,95 4,97 + 24,91·f3 31,13 65 60 55 55 60 60
Hospitals 18,72 10,61 + 40,58·f4 53,21 46,44 41,46 + 24,89·f4 67,60 300 300 250 250 220 220
Hotels and restaurants 35,48 27,37 + 40,58·f5 69,98 11,50 6,52 + 24,89·f5 32,65 130 80 90 70 90 50
Sports halls 96,39 88,28 + 40,58·f6 130,89 37,64 32,66 + 24,91·f6 58,82 400 170 210 150 290 110
Retail buildings 48,91 40,79 + 40,58·f7 83,40 13,90 8,92 + 24,91·f7 35,08 450 280 170 150 290 170
Other non-residential 40,50 32,39 + 40,58·f8 75,00 24,84 19,86 + 24,89·f8 45,99 150 100 / / 80 60
Table 2.2. Highest permissible values for the reconstruction of existing buildings further to the Technical Regulation on Rational Use of Energy and Thermal Insulation in Buildings
REQUIREMENTS FOR RECONSTRUCTION Q’’ H,nd [kWh/(m²a)] Eprim [kWh/(m²a)] Edel [kWh/(m²a)]
BUILDING TYPE
continent, θ mm ≤ 3 °C coast, θ mm > 3 °C Continent, θ mm ≤ 3 °C
Coast, θ mm > 3 °C
Continent, θ mm ≤ 3 °C
Coast, θ mm > 3 °C
f0 ≤ 0,20 0,20 < f0 < 1,05 f0 ≥ 1,05 f0 ≤ 0,20 0,20 < f0 < 1,05 f0 ≥ 1,05
Multiapartment 50,63 40,49 + 50,73·f0 93,75 27,00 21,59 + 27,06·f0 50,00 180 130 120 85
Single family home 50,63 40,49 + 50,73·f1 93,75 27,00 19,24+38,82·f1 60,00 135 80 120 60
Offices 21,18 11,03 + 50,73·f2 64,29 17,60 12,19 + 27,06·f2 40,60 75 75 40 40
Education 14,98 4,84 + 50,73·f3 58,10 10,81 5,40 + 27,06·f3 33,83 90 75 60 60
Hospitals 23,40 13,26 + 50,73·f4 66,51 50,48 45,06 + 27,06·f4 73,48 340 330 250 230
Hotels and restaurants 44,35 34,21 + 50,73·f5 87,48 12,50 7,09 + 27,06·f5 35,50 145 115 90 80
Sports halls 120,49 110,35 + 50,73·f6 163,61 40,91 35,50 + 27,06·f6 63,93 420 215 295 190
Retail buildings 61,14 50,99 + 50,73·f7 104,25 15,11 9,71 + 27,06·f7 38,13 475 300 290 185
Other non-residential 50,63 40,49 + 50,73·f0 93,75 27,00 21,59 + 27,06·f8 50,00 180 130 / /
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Exemptions from the said requirements are listed as follows:
where at least 70% of the required thermal energy comes from RES
where more than half of thermal losses is compensated through internal heat sources
if the calculated specific value Edel and Eprim for the building is lower by at least 20%
from the highest permissible values, it means that the requirements for Q”H,nd and Q”C,nd
according to the TRRUETIB.
The definition of a nearly zero-energy building is in the form of the requirement to meet specific
energy performance requirements in line with the purpose and climate location of the building
and the additional requirement that at least 30% of primary energy comes from RES. For
buildings that are used by public authorities as owners, the main design for the issuing of the
building permit must be drawn up in accordance with the permissible values Q”H,nd and Eprim
prescribed in the Technical Regulation if the building permit application was submitted after 31
December 2017. For all other buildings, the obligation starts as of 31 December 2019.
All buildings must comply with the obligation to use RES (Article 42 of the Technical Regulation
on Rational Use of Energy and Thermal Insulation in Buildings (Official Gazette 128/15)) in the
optimum variant:
or that at least 20% of the total energy needed for work of building systems comes from
RES
or the share in the total energy supplied for heating and cooling of the building and
DHW is:
1. at least 25% from solar radiation
2. at least 30% from gaseous biomass
3. at least 50% from solid biomass
4. at least 70% from geothermal energy
5. at least 50% from environmental heat
6. at least 50% from a high efficiency co-generation facility in line with special
regulations
or 50% of energy needs of the building comes from remote heating that satisfies the
previously mentioned conditions (according to Article 42, paragraph 2, sub-paragraph
2 of the TRRUETIB).
Exemptions from the obligation to use RES are stipulated as follows:
20
Q’’H,nd
is by at least 20% lower than the permissible values
in existing buildings subject to more extensive reconstruction, at least 10% of energy
needs of the building comes from RES, which may include remote or block heating that
is based, in full or in part, on RES, other than in the case where the achievement of
such conditions is not economically, technically and functionally feasible.
The term of more extensive reconstruction of an existing building is defined to include
retrofitting, renovation or replacement of certain parts of the envelope of the heated part of the
building over an area greater than 25% (relates individually to every geographical orientation
of a particular construction segment), where construction works must be performed with the
coefficients for heat passage according to the valid TRRUETIB.
Reconstruction of an existing building that includes renovation or replacement, in part or in full,
of parts of the envelope of the heated part of the building, and if the works include 75% of the
envelope of the heated part of the building or more, in addition to the fulfilment of the
requirements concerning the coefficient of the passage of heat according to the valid
TRRUETIB, must be designed and performed, depending on the category of the building, in a
way that the compulsory energy characteristics are fulfilled:
the annual thermal energy used for heating per unit of usable surface area of the
building, Q’’H,nd [kWh/(m2a)], is no greater than the permissible values set out in Table
9 of valid TRRUETIB
the annual supplied energy Edel, is no greater than the permissible values set out in
Table 2.2. and valid TRRUETIB
the annual primary energy Eprim, that includes energy for heating, cooling, ventilation,
preparation of the consumption of hot water and, in the case of non-residential building,
lighting, is no greater than the permissible values set out in Table 2.2. and valid
TRRUETIB
it is possible to exclude energy performance of Edel and Eprim if are the Q’’H,nd and Q”C,nd
by at least 20% lower than the permissible values for the relevant purpose of
reconstruction of the existing building based on Table 2.2. and valid TRRUETIB
exceptionally, it is not necessary to fulfil the minimum requirements for energy (Q’’H,nd,
Edel and Eprim) if the performance is not economically feasible, that is, technically or
functionally feasible, which is established in a detailed energy study, that is, the main
design
21
in the case of replacement and modernisation of technical systems (the generator of
heat, energy sources, ventilation, lighting...), systems that are installed have the same
characteristics as for new buildings, with compulsory review of the application of highly
efficient alternative systems and RES to the extent in which that is technically,
functionally and economically feasible; it is also necessary to examine the use of
intelligent measuring systems
an exemption is possible for parts of a building or for a building in its entirety if it is
entered in the Register of Cultural Values of the Republic of Croatia, or a building that
is part of a cultural and historical unit entered in the Register, subject to a consent of
the MCPP, if they would destroy essential features of the building as a monument.
The aim of specific conditions for certain energy technical systems is to ensure rational use of
energy:
Energy efficiency of the system for the preparation of consumable hot water is achieved
through the selection of energy efficient hot water containers or flowing systems and
the related elements, energy efficient exchange, and balanced system regulation in the
building, its parts or places.
Rational use of energy for lighting is primarily achieved through the use of daylight and,
if not possible, through energy efficient lamps with efficient and ecologically acceptable
sources of light as well as through the use of accompanying products and regulation.
Lighting in places must be designed in conformity with the standard HRN EN 12464-
1:2012, based on the values required in tables and textually described requirements
for certain lighting technical sizes. Energy requirements for lighting are set out in HRN
EN 15193:2008 and HRN EN 15193:2008/Corr.1:2011, based on the installed power
of lighting and use at annual level, and depending on the type of the building and the
presence and method of lighting management. Permissible values of the numerical
indicator of lighting energy [kWh/(m2a)] from Addendum F of the standard HRN EN
15193:2008 and HRN EN 15193:2008/Corr.1:2011, must not be exceeded. If the
requirements for the class of the lighting technical solution are high, so the total
installed power of lighting is great, it is necessary to apply additional technical options
that reduce the annual consumption of lighting energy.
Automation and building management systems are designed in conformity with the
requirements from the standard HRN EN 15232:2012. In new buildings and in existing
buildings being renovated for which the automation and building management system
22
is designed, it must be designed and performed in the A or B or C efficiency class
based on the standard HRN EN 15232:2012.
According to the Energy Efficiency Act, where a public procurement procedure is conducted
to procure energy-related products, the contracting entity is obligated to use tender selection
criteria and technical specifications connected with improved energy efficiency to the extent
that is in conformity with cost efficiency, economic feasibility, wider sustainability, technical
fitness, and sufficient level of market competition. Energy efficiency requirements for products
and services that the central government is obligated to apply are defined in the Ordinance on
Energy Efficiency Requirements for Energy-related Products in Public Procurement
Procedures (Official Gazette 70/15). In their invitations to submit tenders for service contracts,
state bodies must provide that in the provision of services the service provider uses only
products that are in line with the requirements stipulated in Articles 5, 6 and 7 of the Ordinance
on Energy Efficiency Requirements for Energy-related Products in Public Procurement
Procedures at the time of providing such services. By way of derogation from the provisions of
this ordinance, governed by public procurement procedures, state bodies conclude contracts
on purchase or lease for buildings that satisfy the minimum requirements defined in the
legislation that prescribes technical requirements for the rational use of energy and thermal
insulation of buildings, to the extent that is in conformity with cost efficiency, economic
feasibility, wider sustainability, technical fitness, and sufficient level of market competition.
There might be an exception if the purpose of purchase is to perform extensive renovation or
demolition of a building or to resell a building, and not its use by the state body, preservation
of the building as an officially protected building because it belongs to a specifically protected
domain or in view of its special architectural or historical value.
2.2.1. Definition of Public Sector Buildings
National legislation differentiates between the terms: public purpose building, public sector,
central government, large town, and large enterprise. The definition of a public sector building
is not fully aligned in all legal documents and is different in view of the purpose of the standard
for which it is used. Four normative documents include parts of the definition of the term public
sector building based on the purpose of the building and its administrative level.
With a view to identifying buildings that must display the energy certificate, in Article 5
the Ordinance on Energy Inspection of Buildings and Energy Certification defines
23
public purpose buildings as buildings or parts of buildings used by central government
bodies for the performance of work, buildings or parts of buildings for community
housing, and buildings or parts of buildings that are not residential and that house
several people or in which the service is provided to a large number of people. However
this definition does not relate to conditions for designing or reconstructing buildings.
Further, the Energy Efficiency Act further defines differences between the public sector
and other public purpose services, where public purpose buildings are include the
public sector as budgetary and extra-budgetary users of the state budget and users of
the budgets of local and regional government and the central government as
administrative bodies within the legal system of state administration.
The Technical Regulation on the Rational Use of Energy and Thermal Insulation in Buildings
(Official Gazette 128/15) includes definitions of buildings based on their purpose, and public
purpose buildings may be classified into any of the nine purposes stipulated according to the
manner of use of the building, viz.:
family house, hotel and restaurant, store - as rarely present purposes in the public
sector,
multi-residential (for community housing), office, educational, hospital, sports hall, and
other non-residential buildings - as mostly present purposes in the public sector.
In Article 5, the Energy Efficiency Directive differentiates between the term central government
buildings and the buildings of local and regional government, and public enterprises:
central government buildings are all administrative departments having jurisdiction
throughout the territory of a member state
buildings of local and regional government, public enterprises, and other users
In the context of the Public Sector Building Energy Renovation Program for the period 2016-
2020, a public sector building are buildings owned by the public sector in which community-
based activities are performed (such as education, science, culture, sports, health care and
social welfare), and also the activities of state bodies and organisations and of the bodies and
organisations of local and regional government, the activities of legal persons with public
powers, and also buildings for community housing, civic associations, and religious
communitie buildings.
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2.2.1.1. Central Government Buildings
According to the said definition of central government buildings, Chapter 3.2 Division of
Buildings into Central State Buildings and Buildings of the Units of Local and Regional
Government on the Basis of Their Purpose and Period of Construction identifies the stock of
central government buildings based on the period of construction, purpose, and climate data
2.2.1.2. Buildings of Local and Regional Government, Public Enterprises, and Other Users
According to the said definition of buildings of local and regional government, public
enterprises, and other uses, Chapter 3.2. Division of Buildings into Central State Buildings and
Buildings of the Units of Local and Regional Government on the Basis of Their Purpose and
Period of Construction.
2.3. Barriers in the Implementation of Energy Renovation of Public Sector Buildings on the Basis of Existing Models in the Republic of Croatia
Energy renovation of public sector buildings, envisaged in the existing renovation programs, is
burdened with a number of barriers that make energy renovation more difficult. The barriers
can be divided into legislative and legal, technical and organizational, financial and social
barriers.
The barriers analyzed here relate to the two existing models of energy recovery of the public
sector building ESCO model, ie the model for contracting energy services, and the grant model
used in Pilot projects of the Ministry of Construction and Physical Planning: 4c1.1 for project
documentation and Pilot Project 4c1.2 for Energy Renewal Works.
The ESCO model, ie the model of contracting energy services, implies the implementation
of a project of energy efficiency and other related activities based on a contract of energy
performance with a guarantee that in reference conditions it leads to a verifiable and
measurable or estimable improvement in energy efficiency and / or energy and / or water
saving. In the energy performance contract, the energy service provider commits the energy
service contractor, in whole or in part by his own means, to implementing measures to achieve
25
energy and / or water saving in relation to the reference consumption, and the contracting
authority shall pay the energy service provider a remuneration realized from the energy and /
or water savings resulting from the investment of the energy service provider.
Model of allocation the non-refundable funds implies direct co-financing of eligible costs of
end-user non-refundable founds in accordance with common national rules and EU
procedures, based on the signed Agreement of allocation the non-refundable funds for projects
funded by the Fund in the financial period from 2014 to 2020.
2.3.1. Analysis of the Legislative and Legal Barriers
In terms of the problem of public building renovation, basic laws that regulate energy
renovation are the Energy Efficiency Act and the Building Act. Ordinances and technical
regulations that more closely define requirements and details of implementation follow from
the said laws. The Government Regulation on Contracting and Implementing Energy Services
in the Public Sector (Official Gazette 11/15) stipulates specifics regarding the renovation of
public buildings by using the energy service, that is, the ESCO model.
At the time of contracting and payment of the renovation of public buildings, the legislative
framework is also governed by the Public Procurement Act (Official Gazette 90/11, 83/13,
143/13 and 13/14), Act on Value Added Tax (Official Gazette 73/13, 99/13, 148/13, 153/13,
143/14 and115/16), and similar legislation.
The legal basis for co-funding of the Program with the funds from the European Regional
Development Fund is provided in the Act Establishing the Institutional Framework for the
Implementation of European Structural and Investment Funds in the Republic of Croatia in the
Financial Period 2014-2020 (Official Gazette 92/14), Regulation on the Bodies in the Systems
of Management and Control of the Use of the European Social Fund, European Regional
Development Fund, and the Cohesion Fund, in Connection with the Goal "Investment for
Growth and Jobs" (Official Gazette 107/14, 23/15 and 129/15), Regulation on the Development
Index (Official Gazette 63/10and 158/13), Decision on the Classification of the Units of Local
and Regional Government Based on the Degree of Development (Official Gazette 158/13),
and the Act on Regional Development of the Republic of Croatia (Official Gazette 147/14) are
the basis for the determination of certain elements in the call for the allocation of EU funds.
26
Thus, a complete legislative framework that makes energy renovation of public buildings on
the basis of various implementation-financial models possible, was created.
2.3.1.1. Main Legislative and Legal Barriers to the Implementation of the ESCO Model
Tax treatment of the energy performance contract
The Energy Efficiency Act, in Article 26, paragraph 7, defines that the obligation to pay value
added tax for services, works, and products under the energy performance contract is paid
over a ten-year period after the energy renovation of the building is finished. The foregoing is
not foreseen in the Act on Value Added Tax, which may lead to contradictory interpretations
at the time of implementation of financial review.
It is necessary to align the Energy Efficiency Act and the Act on Value Added Tax to eliminate
any possibility of various interpretations and reduce the risk for bidders by deleting the
provision of the Energy Efficiency Act on value added tax repayment over a ten-year period.
Definition of public debt and energy performance contract
A particularly significant barrier is the interpretation from the EUROSTAT Guidance Note "The
impact of energy performance contracts on government accounts“, August 2015, and
EUROSTAT "Manual on Government Deficit and Debt", Implementation of ESA 2010, 2016
Edition, where it is stated as a rule that EUROSTAT does not take into consideration contracts
(in order to provide an assessment whether it is a public debt or not) if the contracts do not
satisfy the so-called "50% rule", which says that the value of investment in renovation must be
at least 50% of the value of the building after renovation. In the practical sense, that means
that the new investment would have to be greater than the market value of the existing building,
which leads us to an absurd conclusion that it would be more economical to demolish the
building and build a new one.
EUROSTAT does not examine contracts in which the 50% rule is not realised, that is, it
classifies them a priori as public debt, and since the mentioned condition in the energy
renovation of buildings is impossible to achieve, all energy performance contracts at the EU
level are classified as public debt, provided that they include investments in the envelope of
the building.
Such narrow interpretation of EUROSTAT is to a certain extent contrary even to Energy
Effiency Directive which endeavours to change the interpretation of accounting and statistical
27
rules governing public debt, such that the contracting of energy services is not regarded as
debt.
Insufficiently standardised energy performance contract and tender documents
Based on an analysis of the previous barriers, it follows that it is necessary to draw up/polish
the standardised energy performance contract, which is the basis for setting up a sustainable
model and eliminating important barriers to the implementation of the ESCO model.
Since the terms of contract in the implementation of the public procurement procedure are
defined in the tender documents, the drawing up of a standardised contract facilitates the
implementation of the public procurement procedure and diminishes the administrative burden.
The tender documents must include, in addition to the usual parts and the technical basis
described earlier, the standardised energy performance contract and the rules of conduct in
the verification of savings and/or energy renovation projects, where the award criteria must be
foreseeable, transparent, and non-discriminating.
Non-defined difference between public-private partnerships and energy
performance contracts
In practice, there is a problem of varying interpretations of the scope of public-private
partnerships in relation to the energy performance contract. A clear demarcation between the
two institutes is a precondition for security in the public sector, which often received
contradictory instructions regarding the contracting/application of the two models.
2.3.1.2. Legislative Barriers Affecting Implementation of Both Models So Far
Status of cultural heritage buildings
The status of an immobile cultural value or a protected unit causes certain limitations in the
applicable measures of implementing energy renovation. In the implementation of the energy
renovation program to date, there has been need for a separate model of renovation should
be developed to take into account objective limitations (minimal works on the outside envelope
of the building).
Absence of a concise strategy for using energy sources in public sector
buildings
28
The Energy Development Strategy of the Republic of Croatia (Official Gazette 130/09) was
adopted in 2009 for the period leading up to 2020 in order to be aligned with the goals and time-
frame of the strategic documents of the European Union. The Strategy provides a general
framework for safe supply with energy, competitiveness of the energy system, and sustainability
of energy development, but the implementation of the strategy into inferior level plans does not
follow the needs to increase energy efficiency in buildings to any more significant extent.
2.3.2. Technical and Organisational Barriers
2.3.2.1. Technical and Organisational Barriers for Implementing the ESCO Model
Inadequate documentation pertaining to public sector buildings
Data on the existing condition of the building, legality of the building, as-built drawings of the
buildings, in practice they often miss and the original documents are rarely available in the
archives or in the possession of the user/owner of the building. Further, it is also a fact that
interventions in public sector buildings are frequently made without adequate documents, they
affect location conditions or legality of the building.
Our experiences from the implementation to date tell us that the participation of potential
bidders is made more difficult by the fact that in the preparation of the tender they must conduct
research and assessments connected with the actual condition of the building subject to
renovation on their own.
The contracting authority is not responsible for the entry data that are provided and that are
necessary for an assessment of energy savings, that is, the condition of building elements
entering the budget, and the main project is made only after the selection of the tender and the
signing of the energy efficiency contract.
For that reason, potential bidders bear significant costs in the phase of preparation of the
tender and assume higher-ranking risks, thus reducing the interest of potential bidders in
participation in the Program.
The solution to the problem is to insist on the obligation to ensure quality information about the
structure (technical basis) that is to undergo energy renovation, which can be used to provide
a quality and reliable tender for energy renovation
Non-existence of the schedule of implementation of the Program
29
In the implementation of the Program to date, the methodology for establishing priorities for
contracting energy service is not defined. For that reason, potential providers of the energy
service could not make long-term plans for their activities under the Program.
Rules on the Verification of Savings
In the implementation of the Program to date, it is defined that savings are demonstrated
through the project, which must be equipped at the level of the main design, and that evidence
is established by the Expert Commission appointed by the APN. The savings that can not be
demonstrated by the project, which would in practice occurred providers of energy services
are not used. Namely, in the public procurement process it is not possible to pro-futuro
determinite the savings that can be proved by measurement, but only the savings that can be
proved by the project as a reduction in the energy building needs.
The composition and the manner of work of the Expert Commission is not regulated in the
Public Sector Building Renovation Program for the period 2014-2015, although the APN as the
implementing body set rules ensuring the transparency of action and non-discriminatory
access to evidence of savings. Regulating the manner of demonstrating savings in the
Program would boost trust of potential energy service providers and of contracting authorities,
and would simplify the procedure and action.
Unexploited possibility to include "soft" measure
"Soft" measures are those measures that cannot be directly (computationally) connected with
the energy renowal of the building, but represent impact on more rational energy management
or more rational conduct of building users. Such measures do not require significant
investments and they do not have to be separately co-funded, and may lead to significant
savings.
The current standard energy performance contract does not foresee the possibility of
establishing the savings achieved by „soft“ measures and the possibility that would make the
energy performance contract more attractive for potential bidders is thus not exploited.
To eliminate the barrier, it is necessary to adjust the standard energy performance contract in
a way that is discussed in Chapter 13.
Undefined obligations of the public sector in the implementation of the Program
30
In the implementation to date, one of the key problems was different interpretations of public
sector obligations in contracting energy services.
Head of certain public sector bodies did not sign the energy performance contract after the
public procurement has been carried out and after the award decision. Such conduct seriously
undermined the trust of energy service bidders and greatly slowed down the implementation.
Furthermore, representatives of certain public bodies expressed doubts regarding the
implementation of the Budget Act (Official Gazette 87/08, 136/12 and 15/15) or expressed
doubts whether it is necessary to previously provide consents relating to responsibilities for the
conclusion of the energy performance contract.
An additional factor of insecurity was also provided by the letters from authorities competent
for the implementation of public-private partnerships which are further confused and
discouraged heads and responsable persons of public bodies.
2.3.2.2. Technical and Organisational Barriers for Implementing PILOT Projects
Complex administrative procedures
The eligibility of the MCPP Pilots was 30-35% and the award procedure was procees to the
maximum legal deadlines as the result of more complex administrative procedures that the
Project Selection Committee had to conduct in accordance with the Joint National Rules (JNR).
In that sense, the largest number of applications was excluded, because they did not satisfy
the provisions call conditions in the administrative phase of the award procedure. It was
concluded based on the foregoing that in future Invitations in the all phases of the award
procedure, and particularlyin the administrative phase and the phase of verification of
acceptability of the applicant, will be allowed to seek further aclarification when the submitted
dana in the project proposal are not clear or contain errors and thus prevent the objectively
implementation of the award procedure. Clarifications are possible in a extent that does not
affect the concept and activities of the project proposal and does not affect the quality
assessment of the project proposal.
Lack of information about public procurement procedures on the part of users
In terms of the implementation of the agreed projects within the closed Pilot Projects 4c1.1 and
4c1.2, the users were obligated to contract planned project activities besed on Public
31
Procurement Act, which caused difficulties in view of insufficient information about
implementation of public procurement rules on the part of users. In order to avoid the said
problems in implementation, four implementing workshops were organised with around seventy-
five users. At the workshops, mistakes arising from the implementation of public procurement
were singled out and users were instructed in ways of resolving them. The results of measures
taken will be visible in the period ahead.
2.3.3. Analysis of Financial Barriers
2.3.3.1. Financial Barriers for the ESCO Model
The financing of energy service providers did not come to life in full, and the problem lies in
three key areas:
- financing by credit institutions
- developed models are not applicable to the use of subsidies from ESI funds
- calculation of the intensity of support.
Financing providers of the energy service
A problem was observed concerning the financing of projects based on the energy
performance contract in that risk assessment procedures specific for this type of operation are
not developed and there is lack of experience of financial institutions with this type of projects.
Certain specific problems also arise from the model of the energy performance contract. The
problem primarily arises from the fact that the energy service provider invests funds in other
people's property, and does not acquire property that it might provide as a pledge towards
credit institutions.
Financial institutions approach the problem of financing energy service projects by applying
the existing credit risk assessment procedures, therefore starting with the balance and the
available collateral of the company of the service provider. Considering that the company does
not acquire new property, under the existing procedures of financial institutions such projects
may be approved only with the use of collateral on some other property of the company. Thus,
even relatively large companies with sound balance sheets have very limited capacity for the
realisation of larger energy renovation projects, because with each energy performance
contract they reduce their credit potential.
32
Thanks to a clear definition of risks that are by their very nature mostly technical risks
connected with the implementation of measures, after a successful implementation of energy
performance contracts, the risk is no longer connected with the credit risk of the energy service
provider, that is, it is connected with construction elements and technical systems that were
the subject-matter of the investment. Considering that credit institutions usually have no
capacity to make an adequate appraisal and follow technical risks, the credit used to finance
the project remains as debt on the balance of the energy service provider until maturity, and
financial institutions observe it primarily through the prism of the credit risk of the company
itself.
Even if credit institutions would have capacity to evaluate such projects primarily through the
prism of technical risks, the specific legislation of the financial sector obligates credit institutions
to seek adequate coverage via collateral for such placements, and for all others, so the
problem of financing energy renovation projects for public sector buildings actually remains
unsolvable for credit institutions for formal reasons as well.
The issues presented earlier is confirmed through experiences in the implementation of the
Program to date, which is dominated by companies having the capacity to finance investments
through their own balance. Still, in view of the impact of energy performance contracts on static
indicators in the balance sheets of energy service providers, it remains questionable whether
companies can base the dominant business model on the provision of energy services under
conditions that require a high level of investment. Such a situation leads in a direction that is
opposite to the logical direction of energy service market development, because companies
that acquire experience and references actually lose their potential for further investments.
The same problems that are faced by financial institutions in risk assessments also prevent
HAMAG BICRO from the implementation of the program of guarantees for energy service
providers. In the risk assessment procedure, HAMAG uses the same modality used by credit
institutions. The question of support users was an additional problem, because the user of the
guarantee is always the credit beneficiary, which is not in accordance with the provisions of
General block exemption Regulation (Article 39) stating that the user may be only the owner
of the building on which investment works are performed
Applicable subsidy use models from ESI Funds are not developed
In determining the manner of securing subsidies, two basic situations are differentiated:
the user is the owner of the building (public sector)
the user is the energy service provider.
33
In the current scheme of co-financing by EPEEF, there was no clear definition of the user of
co-financing. Although the Public Sector Building Energy Renovation Program was
implemented via the energy performance contract, which defines the service provider as the
investor, EPEEF paid funds to APN, that is, the public sector was co-financed.
The problem lies in the fact that co-financing of the public sector is contrary to the nature of
the energy performance contract. The relationship between the contracting authority and the
service provider basically revolves around the payment of the advance, thus making the
assumption of risks on the side of the service provider questionable.
Regarding the energy performance contract, considering that the energy service provider is
the investor, it is relevant that the service provider is the one selecting the energy efficiency
measures to be conducted. If the contracting authority paid for the services rendered in part
(further to the bills of quantities for the works), it is possible to make an interpretation that the
contracting authority violated the Public Procurement Act, since the service provider was not
obligated to conduct the public procurement procedure.
In the event arises for non-payment of the grant to provider (for example, tax debt providers
that appeared in the period from the public procurement procedure to the completion of energy
renovation), the position of the contracting authority towards the provider is questionable,
because the service provider in such a case should not accept the grant while the contracting
authority is obligated to pay the advance payment of the grant in accordance with the energy
efficiency contract.
Furthermore, there is a question of payment to subcontractors because if the grant component
is paid for the avans, according to the Public Procurement Act the contracting authority is
obligated to make payment directly to subcontractors. In the energy performance contract, the
subject matter of procurement are savings in the contractual period, and the grant relates to
the works of energy renovation, so that contractors are not subcontractors within the meaning
of the Public Procurement Act, which leaves the question of obligations towards subcontractors
unresolved.
Calculation of the Intensity of the Grant Component
If the user of the grant is the public sector, the amount of the subsidy (financial gap) is
calculated in relation to benefits available to the public sector from the measure that was
implemented, throughout its life span, at a discount rate of 4%.
If the user of the grant is the energy service provider, the amount of the grant component is
calculated in relation to the duration of the contract, and a different discount rate may be
applied that takes into consideration risks assumed by the energy service provider.
34
In both cases, savings in the observed period are counted as income.
For the sake of comparison, the table below shows hypothetical measure with a life span of 25
years (the typical life span of a measure in the envelope of the building), with the savings value
of 5% of the investment per year.
A discount rate of 8% is assumed for energy service providers, which closely corresponds to
experiences in the implementation of the Program to date.
PUBLIC SECTOR SERVICE PROVIDER
Discount rate 4% 8%
Cost of investment HRK 100,000.00 HRK 100,000.00
Savings per year (% investment) 5% 5%
Calculation period (years) 25 14
NPV energy savings HRK 78,110.40 HRK 41,221.18
PERMISSIBLE GRANT COMPONENT HRK 21,889.60 HRK 58,778.82
The said calculation shows that for measures with a long life span there is a large difference
in the permissible amount of co-funding. Higher amounts of co-funding for the private sector
are justified in that they achieve an important aim of the Energy Efficiency Directive in terms
of development of the ESCO market by using the public sector as an example and driver for
the market of energy services.
In the Public Sector Building Energy Renovation Program for the period 2014-2015 co-funding
by the EPEEF was implemented by defining the rate of co-funding of 40% of eligible costs in
the public procurement procedure for energy services, by which the implementing body
assumes obligations towards service providers. Such a relationship can affect the treatment
of the entire contract within the meaning of the classification of the contract as public debt,
which is a consequence of two circumstances:
I. Co-financing, that is, disbursement of grants, can be interpreted as the obligation of the
public sector, therefore, the energy service provider does not bear the risks of obtaining
the grant. This is a risk for the contracting authority, because responsibility for the use
of the grant is not clear if during the implementation of the contract there should be
reasons for termination of the contract on co-financing of the energy service provider
(for example, a tax debt that remains unpaid).
II. Considering that the energy service provider provides the service of realisation of
savings in the agreed period, the payment of grants before the completion of
renovation, and before the commencement of the realisation of savings, in the context
35
of the energy performance contract, is actually an advance, by which the public sector
assumes part of the risk for failure to deliver the subject matter of the contract (savings),
because it does not have available the mechanism for repayment of the advance. Even
in the case of establishment of a mechanism by which such an amount would be
compensated, any payment of advance is a strong indicator that the contract results in
public debt..
2.3.3.2. Financial barriers observed in the Pilot projects
Absence of national funds
In view of the low rate of co-financing from the ESI funds, the remaining part was secured by
EPEEF, because public institutions would not be able to make the financial closing. In view of
the lack of funds in the part of the national extra-budgetary co-financing, the Pilot projects are
closed for further applications; so far, the MCPP has contracted almost 60 million Kuna from
the ERDF and EPEEF through the Pilot Project 4c1.1 for drawing up project documents and
the Pilot Project 4c1.2 for the works of energy renovation.
The previous experience of the renovation of public sector buildings has pointed to the problem
of some LRGU securing and a small percentage of their own stake that they should provide in
their budgets from call 4c1.2. (grants amounted to 70-95%, depending on the development
index, and it was difficult to some parts of LRGU to secure 5% of its own share).
Further to the contracts on the award of grants signed to date, the project documents shall be
drawn up by 18 kindergartens, two students' homes, four secondary schools, grammar schools
and music schools, and 48 primary schools, while 23 primary schools, seven kindergartens,
two students' homes, and one grammar school will also perform energy renovation works.
2.3.4. Wider Social Barriers
Awareness of the contracting authority (public sector) and of potential energy
service providers
The awareness of users of public sector buildings about the possibilities and goals in terms of
energy renovation and about the program of energy renovation of public sector buildings, and
the way the contract works, is very low. Through continued promotional and educational
activities, it is possible to increase the understanding of the program, options for the
implementation of measures, and the manner of functioning of the contract. This Program
foresees the role of the implementing body conducting the preliminary analysis and proposing
36
the optimal model of renovation to facilitate the decision of building users/owners on the
initiation of energy renovation. The education should be provided both for the public sector and
for potential energy service providers.
Ownership of the building
Establishment of the State Property Register in Croatia began in 2014 according to the Act on
Management and Use of Property Owned by the Republic of Croatia (Official Gazette 94/13),
but not all data are yet available in the base. In terms of energy renovation, the relationship
between the owner and the user of the building and the relationship of the owner towards the
costs of using and maintaining the building are important. The energy management information
system facilitates the overview of costs of energy sources and provides owners/users with
information about the amount of costs of energy sources, which can be compared to other
costs in the adoption of the decision on the implementation of energy renovation. Commercial
energy information systems are also available, as well as individual solutions – the City of
Zagreb made its Energy Information System with additional functionalities and expansion
options that include the functions of planning future needs and reducing consumption.
Long-term and short-term plans for building management
Management of state real property is within the scope ofMinistry of State Property(which took
over all affairs, rights and obligations of the Central State Office for State Property
Management), while the maintenance of residential facilities and other real property owned
by the Republic of Croatia that are within the competence of the Ministry of State Property
was transferred to the company Državne Nekretnine d.o.o. The owners or users of real
property, conduct their plans of use and maintenance independently, without full co-
ordination with the competent state authority. Ministry of State Property also proposes and
implements the annual plan of state property management according to the Strategy of
Management and Use of Property Owned by the Republic of Croatia for the period from 2013
to 20171, and the new Strategic Plan of the Ministry of State Property for the period 2017-
2019. The said plan could also include, in addition to the obligation to issue the energy
1 The Strategy of Management and Use of Property Owned by the Republic of Croatia for the period from 2013
to 2017, (Official Gazette 6/13)
37
certificate, the goals of the Public Sector Building Energy Renovation Program for period
2016-2020.
Lack of calculations of other influences of boosted energy efficiency in
public sector buildings (employment, improved standard, paid taxes) at
the national level
The Study of the Institute of Economics Zagreb2 examines the area of the Lower Town in the
City of Zagreb and shows positive macroeconomic influences, effects on public finances,
employment, effects on individuals, households, enterprises and sector influences, as well
as influences on energy consumption and energy safety. Further, there are feedback
influences that reduce immediate benefits (reductions in prices increase consumption,
demand for other products and services increases as the result of reduced energy costs and,
finally, the consumption of energy in view of economic growth is increased). Research of this
kind were not conducted at national level.
2 Mikulić, Bakarić, Slijepčević; The Revival and Energy Renovation of the Lower Town, Institute of Economics
Zagreb, December 2014.
38
3. OVERVIEW OF THE NATIONAL PUBLIC SECTOR BUILDINGS STOCK
According to the Long-term Strategy for Encouraging Investments in the Renovation of the
National Building Stock of the Republic of Croatia, and the data processed, the total surface
area of public sector buildings is 13,801,902 m2. The figure is taken as a reference in further
analyses of the surface area of all public sector buildings. Other classifications, such as
according to their purpose, climate zone, period of construction, ownership, etc., are conducted
according to data from ISGE,
Public sector buildings are classified according to their purpose into nine categories:
office buildings
hospitals
buildings for housing
buildings for education
hospitality facilities and hotels
sports halls
stores
family homes
miscellaneous.
The classification of shares of certain categories in the total stock is made from the available
data of ISGE. However in ISGE, there is a large number of purposes for buildings that must
be connected to obtain previously requested categories. Table 3.1. shows the grouping of the
purpose of buildings from ISGE in the previously mentioned categories of buildings, and their
share in the total surface area of public sector buildings.
In order to calculate the share of a particular purpose in the total surface area of the building,
the ISGE system provides data on the total surface areas of all buildings within ISGE. The
purposes of buildings within the ISGE system are grouped as stated in Table 3.1. and the
surface area of each of the groups of buildings based on purpose is divided by the total surface
area of all buildings of ISGE, thus obtaining the share of buildings of specific purpose in the
total stock of public purpose buildings. Apart from the classification of public sector buildings
based on their purpose, buildings are divided on the basis of their climate zone in which they
are located.
In order to calculate the ratio of certain categories of buildings and their climate zones, the
data from ISGE were used, where the buildings were first divided by their purpose and then
39
the ratio was determined depending on the climate zone for each purpose separately. In the
total classification of public sector buildings based on climate zones, approximately 75% of
public sector buildings are in continental Croatia and 25% in coastal Croatia. Further, office
buildings, hospitals, housing buildings and buildings for education have the largest share in all
public sector buildings (93.84%), while hospitality facilities and hotels, stores, and family
houses account for 0.54%, so it is not purposeful to examine them in more detail in view of the
small energy savings potential. (Table 3.2. in Annex 1).
40
Table 3.1. Share of different bulding types in total public buildings stock registered in EMIS
Building type Share in total area Building type in EMIS
Offices 23.59%
Administratice building
Public building
Office building
Office
Social care center
Building ( in general)
Post office
Traffic building
Station
Hospitals 21.39%
Ambulance
Hospital
Visitor center
Healthcare building
Sanatorium
Pharmacy
Multiapartment buildings
8.18%
Boarding school
Children's home
Dormitory (in general)
Row housing with multiple apartments in a unit
Penitentionary
Campus
Residential block
Residential building with more than three appartments
Retirement home
Barracks
Prison
Education 40.68%
Day care center
Faculty buildins
Primary school with sports hall
Primar school
District school
District school with sports hall
High school with workshops
High school
High school with sports hall
Type of facility
Sports halls 3.02% Sports hall
Other 2.61%
Movie theater
Library
Theater
Museum
Community center
Terminal
41
3.1. Analysis of Data Available for Public Sector Buildings
The basic division of public sector buildings relates to their purpose and their climate zone.
Depending on the period of construction, buildings use various quantities of energy and,
therefore, apart from their basic division, buildings must also be divided on the basis of their
year of construction to determine buildings from periods when consumption was higher. In
terms of the division of buildings into periods of construction, the relevant periods were periods
before 1970, from 1970 to 2005, and the period of construction after 2005, while residential
buildings were divided into periods until 1970, from 1970 to 1987, from 1988 to 2005, and from
2005 onwards. The division of buildings was made on the basis of data available on the years
of construction of individual buildings. In the filtration of data from ISGE, all buildings for which
the year of construction was not known were taken out. Further filtration by purpose and
climate zones yielded the surface areas of buildings from certain periods. The share was
determined on the basis of the total surface area of buildings in the same climate zone and
purpose, which was then divided by the surface area of buildings pertaining to a certain period,
climate zone, and purpose. The percentages were then multiplied by the previously calculated
total surface area pertaining to a particular climate zone and purpose.
42
The public sector building fund, or the share of individual building uses in total area,
determinated by ISGE data, which includes all public sector buildings (including buildings of
national parks and nature parks).Almost 50% of buildings was built before 1970, and 40% from
1971 to 2005. There are less than 6% of buildings constructed after 2005, and along presume
that they were built according to the legislation valid at the time of construction, energy
renovation is only theoretically possible, with unacceptable costs and negligible savings.
(Table 3.3. in Annex 2)
3.2 Division of Buildings into Central State Buildings, Buildings LRGUand Public enterprises on
the Basis of Their Purpose and Period of Construction
The division of the public sector building stock according to period of construction was made
according to data from ISGE. The division was made based on purpose, ownership, climate
zone, and the period of construction. Of the total number of buildings from ISGE, only buildings
with the known year of construction, useful floor area, and ownership were filtered. The
database defined in the above manner was used to determine the share of buildings owned
by local and regional government (LRGU) and central state administration (CSA) as well as
coastal and continental Croatia.
43
Table3.2. Share of LD(R)A and CG public buildings by type and construction period in coastal Croatia
Razdoblje gradnje
Površina i udio zgrada javnog sektora primorske Hrvatske prema vlasništvu (m²)
Uredske zgrade Bolnice Zgrade za
stanovanje Obrazovanje Sportske dvorane Ostalo Ukupno
SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S
Udio u fondu zgrada (%) prema namjeni i razdoblju izgradnje
<1971. 59.10% 40.90% 63.89% 36.11% 47.14% 52.86% 4.26% 95.74% 0.00% 100.00% 32.68% 67.32% 35.77% 64.23%
1971.-2005. 59.03% 40.97% 94.67% 5.33% 78.14% 21.86% 0.00% 100.00% 0.00% 100.00% 0.00% 100.00% 38.98% 61.02%
>2005. 75.21% 24.79% 12.45% 87.55% 40.52% 59.48% 6.04% 93.96% 6.24% 93.76% 79.93% 20.07% 28.35% 71.65%
Ukupna površina (m²)
<1971. 271,582 187,974 268,556 151,807 73,248 82,120 32,212 723,861 0 9,414 15,905 32,768 661,503 1,187,945
1971.-2005. 143,458 99,588 296,619 16,706 107,998 30,208 0 621,970 0 69,347 0 20,264 548,075 858,083
>2005. 25,482 8,398 1,280 8,996 12,587 18,474 2,853 44,408 3,685 55,322 8,610 2,161 54,497 137,760
Table3.3. Share of LD(R)A and CG public buildings by type and construction period in continental Croatia
Razdoblje gradnje
Površina i udio zgrada javnog sektora kontinentalnoj Hrvatske prema vlasništvu (m²)
Uredske zgrade Bolnice Zgrade za
stanovanje Obrazovanje Sportske dvorane Ostalo Ukupno
SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S SDU JLP(R)S
Udio u fondu zgrada (%) prema namjeni i razdoblju izgradnje
<1971. 67.69% 32.31% 25.01% 74.99% 54.14% 45.86% 6.95% 93.05% 0.00% 100.00% 58.67% 41.33% 32.43% 67.57%
1971.-2005. 61.55% 38.45% 62.03% 37.97% 59.22% 40.78% 14.62% 85.38% 12.40% 87.60% 40.63% 59.37% 38.26% 61.74%
>2005. 53.34% 46.66% 13.09% 86.91% 18.16% 81.84% 99.03% 0.97% 0.00% 100.00% 0.00% 100.00% 47.46% 52.54%
Ukupna površina (m²)
<1971. 1,015,130 484,604 336,999 1,010,319 150,921 127,837 140,208 1,878,073 0 15,126 66,506 46,843 1,709,763 3,562,802
1971.-2005. 549,427 343,169 496,817 304,149 298,109 205,324 289,630 1,691,614 18,388 129,860 47,881 69,980 1,700,252 2,744,095
>2005. 67,928 59,416 7,887 52,376 3,958 17,833 187,479 1,844 0 115,491 0 48,866 267,252 295,825
44
Table 3.4. defines the shares of buildings based on ownership in correlation with the purpose
of the building.
Table3.4. Share of public building by ownership
Building type CG LD(R)A
Office buildings 63.66% 36.34%
Hospitals 47.69% 52.31%
Residential buildings 57.31% 42.69%
Education 11.62% 88.38%
Sports halls 5.30% 94.70%
Other 38.61% 61.39%
Office (63.66%) and residential buildings (57.31%) are mostly owned by central state
administration, hospitals are for the most part distributed equally between local and regional
government and central state administration, while sports halls (94.70%), educational buildings
(88.38%) and others (61.39%) are in majority ownership of local and regional government.
3.3 The Share of Buildings Pertaining to Cultural/Building Heritage in the Total Public sector
buildings stock
Buildings pertaining to protected cultural or building heritage must be discussed separately in
view of specific conditions that must be satisfied during energy renovation. The specificity of
buildings pertaining to immovable cultural values is shown in the TRRUETIBthrough the
exclusion of building parts or buildings in their totality entered in the Register of Cultural Values
from the obligation to fulfil the minimum technical requirements in the case of reconstruction in
terms of the rational use of energy and thermal insulation if that would undermine essential
monument features of the building concerned. The protection of monument features is in
practice primarily aimed at the outside envelope, while the technical systems on the inside of
buildings were throughout history much more subject to reconstruction and replacement.
Therefore, the potential for energy renovation of cultural heritage buildings is significantly
smaller in terms of the total reduction of energy building needs, but there is significant potential
for increases in the efficiency of technical systems of the building. Further to the available data
from ISGE, some forms of protection of cultural/building heritage are applied to 13.68% of all
public sector buildings. The building stock pertaining to protected cultural/building heritage is
determined through their shares based on the purpose of the building, climate zone, and the
45
period of construction. Entry information for an analysis from ISGE are all buildings, with
respect to which the year of construction and useful floor area are known, and which are
marked as cultural/building heritage. For each purpose and climate zone, the surface area of
buildings for the periods of construction is determined and the share of buildings by period of
construction is also determined. As expected, most such buildings were built before 1970.
The greatest share of buildings having the status of immovable cultural value accounts for
office buildings (38%), educational buildings (32%), and hospitals (18%). (Table 3.7. and 3.8.
in Annex 3)
3.4. Energy Indicators of Annual Energy Consumption
The indicators of annual energy consumption are based on the database of ISGE for CO2
emissions, delivered and primary energy, while data on specific necessary thermal energy for
heating (Q“hnd,ref) are obtained from the register of energy certificates. The indicator of energy
consumption as per useful floor area of the building was defined. Buildings with
overconsumption (buildings with specific consumption exceeding 1,500 kWh/m2) or under
consumption (buildings with pronounced low specific consumption, e.g., consumption under
20 kWh/m2) were excluded from the sample, after which the data were analysed for all
buildings based on their purpose, period of construction, and climate zone.
The analysed buildings were used to add the surface area and consumption separately for the
climate zone and purpose, and finally for the periods of construction. In order to determine CO2
emissions for each purpose, year of construction, and climate zone, the consumption of
buildings for each energy source was added separately and multiplied by CO2 emission
factors.It is visible from the tables 3.10. – 3.12. in Annex 4 that there is increased consumption
in buildings having specific purposes in certain periods of construction. Hospitals have the
largest unit consumption of energy per useful floor area, while sports halls have the lowest
consumption per useful floor area.
Hospitals (333 kWh/m2), followed by residential buildings (276 kWh/m2), office buildings (212
kWh/m2), other buildings (203 kWh/m2) and educational buildings (191 kWh/m2) account for
the greatest specific consumption in continental Croatia.
In terms of coastal Croatia, hospitals (214 kWh/m2), followed by residential buildings (200
kWh/m2), educational buildings (147 kWh/m2), other buildings (122 kWh/m2) and office
buildings (121 kWh/m2) account for the greatest specific consumption. Sports halls account for
46
the lowest consumption of energy. The average specific consumption of buildings on the
continent is 215 kWh/m2, while in the coastal area it is 159 kWh/m2.
The share of buildings based on their energy class are discussed separately for the coastal
and for the continental climate in Table 3.13.. It is visible that the relationship between the
share of buildings with the energy class D or lower based on their purpose follows the
differences in climate conditions and the characteristically better energy class for the same
type of building in the coastal climate in view of the significant impact of insulation for energy
performance, and the absence of the required energy for cooling in the energy class of the
building.
47
Table 3.5. Energy consumption and indicators for buildings by type and climate
Office buildings
Hospitals Residential buildings
Education Sports halls Other Total
Coastal Croatia
Delivered energy Edel (kWh) 12,218,625 40,474,410 7,817,520 60,872,360 6,220,344 1,266,887 128,870,145
Reference area (m²) 100,808 189,421 39,063 415,042 55,752 10,346 810,432
CO₂ emission(kg) 3,084,232 11,208,032 2,185,823 17,131,495 1,634,110 318,853 35,562,543
Contintal Croatia
Delivered energy Edel (kWh) 86,327,530 43,084,451 31,534,315 120,958,962 6,935,109 5,851,436 294,691,803
Reference area (m²) 407,983 129,217 114,117 633,081 57,994 28,792 1,371,184
CO₂ emission(kg) 23,438,862 10,176,294 8,072,111 32,580,371 1,865,359 1,665,169 77,798,166
Indicators Coastal Croatia
Delivered energy, Edel(kWh/m2) 121 214 200 147 112 122 159
CO₂ emission (kg/m²) 31 59 56 41 29 31 44
Useful energy Q"hnd,ref (kWh/m2) 86 92 95 75 123 117 /
Indicators Continental Croatia
Delivered energy, Edel(kWh/m2) 212 333 276 191 120 203 215
CO₂ emission (kg/m²) 57 79 71 51 32 58 57
Useful energy Q"hnd,ref (kWh/m2) 147 176 146 136 204 191 /
Table 3.6. Share of enegy rating D or worse buildings in building stock by reference climate area
Sh
are
of
D o
r w
ors
e
rate
d b
uild
ing
s
Clim
ate
Off
ice b
uild
ing
s
Ho
sp
itals
Mu
ltia
part
men
t
bu
ild
ing
s
Ed
uca
tio
n
Ho
tels
an
d
resta
ura
nts
Sp
ort
s h
alls
Reta
il b
uil
din
gs
Sin
gle
fam
ily h
om
es
Oth
er
% Coastal 20.0 32.6 22.7 18.2 28.4 32.3 8.5 28.4 17.6
% Continental 46.3 71.1 46.5 59.9 50.2 47.7 13.1 58.8 27.6
48
3.5. An Assessment of the Total Annual Consumption of Final Energy for Heating, Cooling,
Expandable Hot Water, and Lighting in Public Purpose Buildings, and of Total Primary Energy
In order to calculate the total consumption of buildings according to their purpose, period of
construction, and the climate zone, the data of ISGE were used. In order to calculate the
consumption of public sector buildings as precisely as possible buildings with overconsumption
(buildings with specific consumption greater than 1,500 kWh/m2) or under consumption
(buildings with extremely low specific consumption, e.g., consumption under 20 kWh/m2)were
removed. For each individual purpose of the building, data for the climate zone and the period
of construction of the building were obtained. The total consumption of all buildings was divided
by the total surface area to calculate specific consumption of each type of buildings by surface
area.
In terms of CO2 emissions, summary data for each type of energy source were used and
multiplied by CO2 emission factors; and the resultant emissions of CO2 were then added and
divided by the total surface area of all buildings.
In terms of calculation of primary energy, data for delivered energy were used for each energy
source separately and for each type of building, and such consumption is multiplied by the
factor of primary energy and at the end it is added and divided by the total surface area of all
buildings.
Table 3.7. shows the indicators of consumption of energy (delivered and primary), CO2
emissions, and specific required thermal energy for heating, depending on the purpose of the
building, period of construction, and climate zone.
Most final thermal energy in buildings is used for heating, while a smaller part is used for the
preparation of expandable hot water. The share of thermal energy in final energy varies in
relation to the age and purpose of buildings, but it is visible that for reconstruction the most
interesting period of construction (until 2005) in continental part is 80% on average, while in
coastal part it is 51%. Based on purpose, the largest share of thermal energy in final energy is
85% for educational, 84% for residential buildings, and 78% for hospitals (everything in
continental part of Croatia).
49
Electricity is used for lighting, cooling, auxiliary energy for thermostatic systems, and for other
consumers. The share of delivered electricity in relation to the total delivered energy is
significantly greater in coastal than in continental Croatia. In buildings with the highest potential
savings (those built until 2005), the largest share of delivered electricity in relation to the total
delivered energy is in office and hospital buildings in the coastal part (55%) and residential
buildings in the coastal part (32%). In the case of educational buildings the relationship is
almost equal to coastal and continental part and is around 15%.
The share of energy for heating in relation to total final energy is dominant in continental
Croatia (on average 67%, in the coastal part the share is 57%), with a particularly high share
for residential buildings, hospitals, and educational buildings.
The share of energy for the preparation of DHW in relation to total final energy is expectedly
dominant in hospitals (in the continental part it is 20%, while in the coastal part it is 14%).
The share of energy for cooling in relation to total final energy is the highest in office buildings
in coastal Croatia, around 44% (in continental Croatia, it is around 22%), while hospitals are
the second largest consumer of cooling energy (around 18% in coastal and 7% in continental
part). The share of energy for lighting in relation to total final energy is the highest in sports
halls, office and hospital buildings.
50
Table 3.7. Specific energy consumption, CO2 emission and primary energy for public buildings by building type, construction period and climate.
Climate zone Construction
period Unit Office buildings Hospitals
Residential buildings
Education Sports halls Other Total
Delivered energy Edel
Coastal
<1970.
kWh/m²
119 217 191 145 163 144 165
1970.-2005. 121 208 259 148 140 48 160
>2005. 130 / 139 210 30 79 90
Continent
<1970. 195 358 268 188 195 206 214
1970.-2005. 247 304 287 196 151 193 225
>2005. 140 205 260 160 83 201 126
Primary energy
Eprim
Coastal
<1970.
kWh/m²
169 302 253 176 241 214 217
1970.-2005. 180 285 339 182 210 78 208
>2005. 214 / 177 255 49 127 138
Continent
<1970. 262 447 342 238 228 288 277
1970.-2005. 333 370 352 252 202 226 289
>2005. 177 255 321 198 118 270 164
CO₂ emission
Coastal
<1970.
kgCO₂/m²
31 61 53 39 43 36 45
1970.-2005. 30 57 72 43 37 11 45
>2005. 31 / 39 56 7 18 22
Continent
<1970. 53 83 73 50 43 61 57
1970.-2005. 67 73 69 53 41 50 59
>2005. 33 46 58 39 23 46 32
Specific useful
heating energy Q"Hnd,ref
Coastal
<1970.
kWh/m²
86 92 95 75 123 117
1970.-2005. 62 74 82 69 107 73
>2005. 30 41 37 38 76 42
Continent
<1970. 147 176 146 136 204 191
1970.-2005. 109 132 107 118 172 137
>2005. 52 62 56 58 107 60
Detailed analysis by purpose of buildings and climatic zones are in Annex
51
3.5.1 An Assessment of Consumption of Final and Primary Energy Before and After Implementation of Energy Renovation Measures
Energy indicators of annual consumption of energy are given in Table 3.22.Total consumption
of the building stock is 2,930 GWh, CO2 emissions 763 ktCO2, and 3,770 GWh of primary
energy.
In order to determine energy indicators, data from ISGE were used and supplemented with
data on specific thermal energy for heating from the registry of energy certificates.
3.5.2 An Assessment of Possible Savings of Final and Primary Energy After the Application of Energy Renovation Measures until 2020
An assessment of possible savings and consumption after the application of measures of
energy renovation is connected with the elaboration of renovation scenarios in Chapter 8.
Table 3.8. shows the current annual savings to be achieved through energy renovation; it
shows that savings in final and primary energy after application of energy renovation measures
until 2020 are possible for:
- 1st scenario – savings in final energy of approximately 430 GWh, and savings in
primary energy of 551 GWh
- 2nd scenario – savings in final energy of approximately 360 GWh, and savings in
primary energy of 462 GWh
- 3rd scenario – savings in final energy of approximately 415 GWh, and savings in
primary energy of 529 GWh
- 4th scenario – savings in final energy of approximately 308 GWh, and savings in
primary energy of 395 GWh
This Public Sector Building Energy Renovation Program plans to reduce consumption of
energy in the public sector building stock in an amount from 10% to 15% per annum, depending
on the selected scenario.
52
Table 3.8. Annual savings in relation to chosen energy refurbishment
2017. 2018. 2019. 2020.
1. scenario
Final energy
GWh
100 116 116 98
2. scenario 69 103 111 77
3. scenario 81 117 126 91
4. scenario 85 98 78 47
1. scenario
Primary energy
128 149 149 125
2. scenario 89 132 142 99
3. scenario 103 149 161 116
4. scenario 108 126 100 61
Table 3.9. Total final and primary energy and CO2 emissions for current state of the building stock (before refurbishment)
Offices Hospitals Residential Education Sports halls
Other Total
Edel (MWh)
Coastal
<1970. 54,669 91,384 29,645 109,333 1,537 6,996 293,564
1970.-2005. 29,369 65,305 35,861 92,136 9,724 972 233,367
>2005. 4,418 N/A 4,318 9,927 1,777 846 21,286
Continental
<1970. 292,630 482,162 74,760 379,158 2,951 23,390 1,255,051
1970.-2005. 220,065 243,711 144,285 388,322 22,388 22,767 1,041,538
>2005. 17,879 12,354 5,657 30,226 9,553 9,823 85,491
Eprim (MWh)
Coastal
<1970. 77,700 127,019 39,241 133,369 2,267 10,412 390,007
1970.-2005. 43,765 89,341 46,892 112,940 14,541 1,573 309,051
>2005. 7,239 N/A 5,491 12,070 2,883 1,368 29,051
Continental
<1970. 393,600 602,100 95,328 480,102 3,454 32,592 1,607,176
1970.-2005. 297,423 296,362 177,133 498,316 29,925 26,655 1,325,814
>2005. 22,601 15,341 7,003 37,560 13,592 13,185 109,283
Co2 emissions
(tCo2)
Coastal
<1970. 14,273 25,542 8,301 29,806 403 1,773 80,098
1970.-2005. 7,185 17,836 10,008 26,609 2,580 229 64,446
>2005. 1,053 N/A 1,201 2,670 419 199 5,543
Continental
<1970. 79,414 112,494 20,319 101,697 657 6,878 321,459
1970.-2005. 60,041 58,565 34,773 105,440 6,095 5,925 270,839
>2005. 4,228 2,782 1,275 7,434 2,687 2,233 20,638
53
4. ANALYSIS OF COMPLETED AND EXISTING PROGRAMS AND PROJECTS OF INCREASED ENERGY EFFICIENCY IN PUBLIC SECTOR BUILDINGS OF THE REPUBLIC OF CROATIA
4.1. An Analysis of the Existing and Completed Programs and Other Conducted Measures of Energy
Efficiency in Public Sector Buildings at National Level and the Projects of Local Governments
Two separately realised models for the renovation of public buildings in Croatia are the Public
Sector Building Energy Renovation Program for period 2014 -2015, which is conducted
through the APN and the Pilot Projects published within the IB1, Priority Axis 04: Promoting
energy efficiency and production and use of renewable energy, Investment Priority 4c
Supporting energy efficiency, smart energy management and RES use public infrastructures,
including in public and multi-apartment buildings, and Specific goal 4c1 Reducing energy
consumption in public sector buildings.
Within the said Specific goal 4c1, two pilot projects were published: Pilot projects 4c1.1.
"Drawing up Project Documents for the Energy Renovation of Buildings and the Use of
Renewable Energy Sources in Public Institutions Performing the Activity of Education" and
4c1.2. "Energy Renovation of Buildings and the Use of Renewable Energy Sources in Public
Institutions Performing the Activity of Education".
By decision of the adoption of the Public Sector Building Energy Renovation Program for period
2014 -2015 and the agreement between APN and EPEEF secured HRK 165,000,000 in the
period from 2014 to 2016 for the renovation of public sector buildings. Of that, HRK 5.5 million
is intended for project documents (energy inspections and certificates, and if necessary project
tasks), and HRK 160 million for energy renovation further to the energy performance contract.
Project documents were funded in full (100%), while in terms of energy renovation pursuant to
the energy performance contract it was possible to co-finance 40% of eligible costs.
The effects of all measures co-funded by the EPEEF, either through the energy performance
contract or directly by co-funding renovation, are monitored from the beginning of
54
implementation; as of 2014 and the adoption of the Energy Efficiency Act, uniform monitoring
of all conducted measures of energy efficiency in all, including the public sector, was improved.
ME has 2015 adopted the Ordinance on the System for Monitoring, Measuring and Verifying
Energy Savings (Official Gazette 71/15), establishing the overall system for monitoring and
appraising the successfulness of implementation of the energy efficiency policy of Croatia. The
methodology prescribed sets the System for Monitoring, Measuring and Verifying (SMIV) as
the central tool for monitoring and calculating consumption indicators at national and sector
level. Goals by now realised in public sector buildings, are the following:
The goal of renovation of 3% under the Energy Efficiency Directive, Article 5, was
exceeded
Further to the pilot project 4c1.1., co-funding project documents ( invitation closed 20
December 2016) 72 contracts were signed, with the total value of the project of
HRK 8,282,143.19, with HRK 7.26 million (85%) being EU grants.
Futher the pilot project 4c1.1, co-funding energy renovation (invitation closed 28 April
2016) 33 grand award contracts with the total agreed value of the projects of
HRK 73,110,000 were signed, with HRK 19.27 million being EU grants, while HRK
30.37 million are national funds.
The model of the energy performance contract from the Public Sector Building Energy
Renovation Program 2014 - 2015 shows significant steps forward and 12 contracts
were signed. So far, the renovation of 12 buildings is finished through the three of the
above 12 projects: Teaching Hospital Split, Križine, which generated the greatest
individual savings in SMIV and for 29% of all savings recorded in SMIV, expects annual
savings in the amount of 7,902,074 kWh.On the Kindergarten Girice in Cres is expected
to generate 42,725 kWh of savings per year while on the General Hospital Karlovac is
expected 7,128,149.71 kWh of savings per year. If savings are observe in all public
buildings recorded in SMIV, a total of 247,0869,835 kWh of savings in public sector
buildings was achieved through 233 measures.
4.1.1. The Public Sector Building Energy Renovation Program 2014-2015
The Public Sector Building Energy Renovation Program 2014-2015 foresaw the realisation of
the following goals by the end of 2015:
to contract and realise a complete renovation of 200 public sector buildings, with the
useful floor area of around 420,000.00 m2
55
to reduce the consumption of energy in renewed buildings by 30-60%, that is, by 150
kWh/m2 per annum
to reduce CO2 emissions by approximately 20,500 t per annum
to launch investments in the amount of approximately HRK 400,000,000.00.
The best example in practice is the Teaching Hospital Split, Križine, where three types of
measures were performed (integral renovation, lighting, and the installation of a solar thermal
system for the preparation of DHW). The renovation resulted in 9,944,244 kWh of savings,
which is equivalent of 2,684 CO2 and HRK 70.5 million in launched investments.
The savings and saving potential is show in detail in Attachment 6.
4.1.2. Pilot Projects from the Operational Plan Competitiveness and Cohesion 2014 - 2020 (MCPP/EPEEF)
The system for management of funds from ESI funds connected with Priority Axis 4 are
financed exclusively from the ERDF. The goal of Priority Axis 4 is to contribute to effective and
sustainable use of energy and reduced emission of greenhouses gases. This Priority Axis
directly contributes to the realisation of energy-climate goals included in the Strategy EUROPA
2020..
Table 4.4. Functions of bodies within the system of management and control of the OPCC:
Management Body - MB
Manages and is responsible for
overall implementation of the
OPCC
MRDEUF
Intermediate Body Level 1 – IB1
Plans resources, implement
measures of information and
visibility, prepares tender
documentation for project selection,
initiates strategic projects,
participates in the selection of
projects to be funded, participates in
customer payment processes and
returns for irregularities, etc.
MCPP
56
Intermediate Body Level 2 – IB2
Participates in the preparation of the
tender documentation and the
selection of projects, concludes the
grant agreement with the user,
"cooperates daily with the user and
advises him, verifies the execution of
the contractual obligations of the user
and monitors the progress of the
project, examines the suspicions of
irregularities, decides on the eligibility
of costs during implementation and
initiates financial corrections (the first
level of ESI Funds control at project
level), etc.
EPEEF
The table presents the Investment Priority, Specific Goal, and financial allocations of the
OPCC, within the competence of the MCPP as the Intermediate Body Level 1 and the EPEEF
as the Intermediate Body Level 2, and the subject matter of the Program are the following:
57
PA 4: Promoting energy efficiency
and renewable energy sources Allocation IB1 IB2
Investment priority 4c
Supporting energy
efficiency, smart energy
management and the use of
RES in public infrastructure,
including public buildings
and the housing sector
Specific aim 4c1
Reduction of energy
consumption in public
sector buildings EUR
211,810,805 MCPP EPEEF
The MCPP published two Pilot Projects in June and July 2015; actually, two invitations within
the pilot projects that respond to the specific goal 4c.1 from the OPCC, for drawing up project
documents and for energy renovation of public sector buildings that are used to perform
educational activities.
Pilot Project 4c1.1. was closed permanently on 15 April 2016, because the available allocation
of HRK 4.5 million ws exhausted. However, further financial allocations of HRK 5 million were
ensured for further 40 projects that are on the reserve list, which is HRK 9.5 million in total.
Pilot Project 4c1.1. was closed permanently on 28 April 2016, because the available allocation
of HRK 50 million was exhausted. Until 20 Decembre 2016, 72 contracts on funding for the
drawing up of project documents (Pilot Project 4c1.1), 33 energy performance contracts (Pilot
Project 4c1.2) as well as 17 decisions on financing were signed. Both Pilots received almost
400 project applications.
The indicator at the level of the OPCC is the average annual thermal energy for heating/cooling
in the renovated public sector building expressed in kWh/m2 shown in the project. At the level
of the invitation 4c1.2., that is, project application, the indicators are the following:
Contribution to the reduction of energy consumption – defined as the difference
between energy needs of the building before and after energy renovation
Contribution to the increased use of RES – defined as the difference in the number of
measures that include RES before and after energy renovation
Contribution to competitiveness, that is, the development of local economies – defined
as the number of employed persons during the implementation of energy renovation of
the building
58
Balanced regional development is valorized through preferential scoring of projects
during evaluating on the basic of the project location ( development index of the self-
government unit).
Results at the level of project application: savings in consumption of energy for heating/cooling
at the annual level in (kWh/year) of at least 20% in relation to the annual consumption of energy
for heating/cooling before implementation of the project. With respect to projects that will
involve two individual energy renovation measures at most, the implementation of which will
not result in the change of energy class of the building, the designed savings in the
consumption of energy must be in an amount greater or equal to 10% at the annual level in
relation to the consumption of energy in the building before the implementation of the project,
depending on the type of the measure.
The results of the project at the level of the design application are defined as the value of the
indicators to be realised by the project after energy renovation, that is, after completion of the
implementation of the project in relation to values before the commencement of the project.
The results of the project at the place of investment must be maintained for three years
following the completion of implementation of the project.
The users i.e., County of Osijek-Baranja, Town of Zadar and IB1 and IB2, point out that the
problem is not the lack of interest or small response to public invitation, but the appraisal
method. The users of funds consider how a significant number of projects is rejected while the
EPEEF reports how eligibility ranges from 18 to 33%, which is extremely low and significantly
slows down the realisation of goals. Problems are mostly administrative and easily remediable
(for example, a certain document or signature that is missing), and the obstacle are competition
guidelines, which instruct that in terms of the type of the invitation to date, which is an open
invitation, the total project should not be examined and an additional time for remedial action
concerning an administrative error not permitted. Instead, a step-by-step procedure is
conducted and the project is approved in phases. That means that it is not possible, for
example, to examine the financial construction until the basic conditions are met. Thus,
whenever an error is detected, the project is sent back to the user, so that a single applicant
must submit projects several times, only to be cautioned each time about an error or
insufficiency.
Applicants are mostly excluded, because they did not submit valid documents stated in the
invitations (e.g., use permit, energy certificate, deed of establishment, etc.).
In order to avoid the most frequent omissions, the MCPP held 18 workshops with more than
250 potential applicants, responded to queries via e-mail, and regularly published all questions
and answers, with instructions for filling in application forms. A list of explanations in the form
59
of questions and answers was made for the most frequent omissions; it is regularly updated
and published on the website of the MCPP. All promotional campaigns and efforts of the MCPP
to date resulted in the submission of better quality applications. Therefore, it is necessary to
consider consolidation of parts of the procedures through the intermediate body according to
a principle that is simpler than the current open invitation. Renovation scenarios examined the
benefits and flaws of the model in relation to the existing model of individual applications.
There is unequal regional representation of projects, so that certain regions implement
exceptionally many projects, while others are not active at all. For example, in the OPCC
tender, 13 of 30 contracts for drawing up projects documents and 4 of 13 renovation contracts
were agreed by the Town of Rijeka. It is necessary to also activate other administrations that
have not been represented in tender procedures so far, because at the moment the great
potential of wasteful buildings owned by inactive or disinterested governments is presently
neglected.
4.2. Positive Effects of the Program and the Results of Energy Savings
Of the 34.66 GWh in annual savings recorded through SMIV, most savings were realised
through the measure of renovation of thermal insulation, viz. 55%. Of the total savings in 2015,
35% was realised through integral renovation and by around 5% through the installation or
replacement of lighting systems and the installation of a solar thermal system for the
preparation of expandable hot water.
Division by type of measure is shown in the Table 4.5. and while Table 4.6 shows regional
division of savings verified throught SMIV in 2015.
60
Table4.5. Savings in public sector buildings registered in SMIV in 2015
Tip mjereBroj
mjera
Godišnja
ušteda
energije
[kWh]
%
ukupne
uštede
CO2
ušteda
(t)
Trošak
mjere [kn]
%
ukupnog
troška
kWh po
mjeri
kn po
ušteđen
om kWh
životni
vijek
mjere
kn po
kWh u
životnom
vijeku
ušteda u
životnom
vijeku
Obnova toplinske izolacije
(M2)178 18.934.725 55% 4.400 139.124.673 56% 106.375 7,35 25 0,29 473.368.125
Instalacija ili zamjena
rasvjetnih sustava u
zgradama uslužnog i
industrijskog sektora (M10)
19 1.333.692 4% 440 12.369.840 5% 70.194 9,27 7 1,32 9.335.844
Integralna obnova
postojećih zgrada (M1)14 11.755.573 34% 3.264 78.525.270 32% 839.684 6,68 25 0,27 293.889.325
Instalacija solarnog
toplinskog sustava za
pripremu PTV (M7)
8 174.497 1% 48 977.112 0% 21.812 5,60 20 0,28 3.489.940
Instalacija ili zamjena
sustava za grijanje i PTV
(M4)
7 1.721.769 5% 875 4.041.454 2% 245.967 2,35 25 0,09 43.044.225
Uvođenje nove građevinske
regulative (M3)5 466.076 1% 90 10.988.005 4% 93.215 23,58 25 0,94 11.651.900
Instalacija ili zamjena
sustava hlađenja (M17)1 27.171 0% 9 1.506.352 1% 27.171 55,44 15 3,70 407.560
Nedefinirano u metodologiji
(M99) - ugradnja
termostatskih radijatorskih
ventila
1 246.949 1% 76 337.129 0% 246.949 1,37 10 0,14 2.469.494
Ukupno: 233 34.660.452 100% 9201,11 247.869.835 1.651.367 7,15 19 0,30 837.656.413
61
Picture 4-1: An overview of realized savings and number of measures by counties
Table 4.6. Overview of savings in public buildings in 2015 by counties
County Annual savings in kWh
Number of implemented measures
Percentage of total savings in kWh
Splitsko-dalmatinska 9,944,244 3 28.7%
Grad Zagreb i Zagrebačka 7,148,847 20 20.6%
Osječko-baranjska 6,467,374 68 18.7%
Koprivničko-križevačka 2,465,910 7 7.1%
Karlovačka 1,357,644 9 3.9%
Bjelovarsko-bilogorska 916,422 10 2.6%
Varaždinska 903,750 17 2.6%
Krapinsko-zagorska 810,753 14 2.3%
Primorsko-goranska 805,896 12 2.3%
Šibensko-kninska 730,730 9 2.1%
Sisačko-moslavačka 726,259 7 2.1%
Međimurska 658,256 11 1.9%
Vukovarsko-srijemska 510,811 8 1.5%
Brodsko-posavska 463,986 6 1.3%
Virovitičko-podravska 319,087 12 0.9%
Požeško-slavonska 309,224 11 0.9%
Istarska 55,155 3 0.2%
Zadarska 38,796 3 0.1%
Ličko-senjska 27,308 3 0.1%
62
Fom Table 4.6. is visible that the County of Osijek-Baranja ranks first in terms of the number
of realised measures (68), and if we observe only local government, without central state
buildings, then the City of Zagreb, the County of Zagreb, and the County of Osijek-Baranja
generated over a third of savings in 2015 and the largest absolute savings of energy of
allLRGU. If one examines the savings of central state buildings, then the renovation of the
Teaching Hospital Split, Križine, accounts for 30% of total savings. A geographical overview
of savings of all public buildings by county is provided in the Table 4.6. and is graphically
presented on Picture 4-1.
If one examines only the goal of renovation of 3% of the surface area of all central state
buildings, which goal for Croatia is expressed in the renovation of the surface area of heated
area of 33,267 m2 for the standard set of buildings (that is, an equivalent surface area based
on specific savings, which vary significantly from office buildings to hospitals, in the range from
10,941 m² to 51,309 m² per year), it is necessary to realise the equivalent of savings in the
amount of 0.00489 PJ per annum.
Croatia surpassed the goal significantly for 2015, and SMIV records 0.06136 PJ in savings.
Integral renovation of the Teaching Hospital Split, Križine, and of student dorms in Zagreb,
account for a large share in the achieved goal.
Table4.7. Overview of accomplished savings in 2015 according to EED Article 5.
Goal: Planned goal Savings accomplished
3% refurbishment of CG
buildings
0.00489 PJ 0.06136 PJ
4.3. Key Problems in the Implementation of the Existing Programs of Energy Renovation of Public
Sector Buildings
Other than problems with administration and insufficient financing, one of the main problems
observed in all measures on public buildings conducted so far is the level of specific thermal
demand for heating after the implementation of the measure. Namely, a goal from the Public
63
Sector Building Energy Renovation Program for the period 2014-2015 was to reduce the
consumption of energy in renewed buildings by 30-60%, that is, by around 150 kWh/m2 per
annum, which is realized in projects implemented by the energy service model, but not in the
investments that the units of local self-government implement with their own means.
Of all 14 available integral renovations recorded in SMIV, relating to public sector investments,
only five facilities were reconstructed in a way that specific consumption was reduced by more
than 150 kWh/m2. Three facilities exceed the specific annual demand for heat of 100 kWh/m2
even after reconstruction. The number of recorded renovations is too small for final
conclusions, because specific features of the projects are already visible on the examples: on
three facilities, special requirements for the protection of an immovable cultural value can be
confirmed, which resulted in either significantly higher costs or smaller savings (or both). The
indicator of the OPCC program, that is, that the annual demand for heating after renovation
may not be more than 50 kWh/m2, shows that 6 of the 14 renovated facilities achieved the set
goal, even the facility under protection with an especially high price of energy renovation.
If we observe the percentage of reduction of consumption on the basis of the old and new
specific designed annual demand for heating (kWh/m2), the results are somewhat better and
the average reduction is around 60%.
64
Table 4.9. Integral refurbishment of public buildings recorded in SMIV in 2015
Reducing the specific need for heating in a smaller number of cases achieves the declared
goal of 50 kWh/m2 of energy for heating. However, if one takes into consideration reduction in
consumption, it is visible that there is also reduction in consumption in subjects that do not
reach the goal at the level 50-75%, which represents significant savings that are in principle
the result of renovation of the outside envelope of the building. The indicator is set in
accordance with the technical potential of renovation, but restrictions in the applicability of
individual measures depend on a particular project (e.g., Polytechnic of Međimurje in Čakovec,
where in view of the criterion of protection of a cultural value it was not possible to provide
significant insulation of the outside envelope; the same is true for the Home for People with
Mental Illness in Petrinja), so it would be good to revise the said indicator on the basis of values
set for reference buildings, even subject to the condition that different values are set for
individual purposes of the building. On the other hand, significantly lower values are also
possible (Town of Garešnica - 16 kWh/m2; the municipality of Zagorska Sela - doctor's office).
The key element in structures having a smaller heating demand is integral renovation. Through
Ak
[m2]
Spec. g.
potreba za
grijanjem
nakon
obnove
[kWh/m2]
Razlika u
spec. g.
potrebi za
grijanjem
prije i poslije
[kWh/m2]
Godišnja
ušteda
energije
[kWh]
CO2
ušteda
(t)
Trošak
mjere [kn]
Ostvaren
a ušteda
po m2
[kWh/m2]
Trošak
mjere po
m2
[kn/kWh]
%
smanjenja
potrošnje
879 76 170 284.533 93,90 984.811 324 3,46 69%
3283 16 43 194.004 39,19 752.264 59 3,88 73%
815 123 33 94.749 46,58 510.325 116 5,39 21%
380 32 69 50.172 18,40 425.819 132 8,49 68%
516 60 115 114.908 50,08 573.899 223 4,99 66%
3284 16 43 261.821 86,40 716.428 80 2,74 73%
2150 68 71 326.198 65,89 2.669.577 152 8,18 51%
27066 60 190 9.438.889 2.520,18 68.140.514 349 7,22 76%
186 40 194 64.262 12,98 280.338 345 4,36 83%
344 101 192 127.775 45,16 494.925 372 3,87 65%
1725 141 121 470.538 202,78 904.104 273 1,92 47%
1479 93 21 118.993 24,04 159.588 80 1,34 19%
161 23 49 15.065 2,47 591.117 93 39,24 68%
1174 42 86 193.666 55,55 1.321.560 165 6,82 67%
Međimursko veleučilište u
Čakovcu
Općina Zagorska Sela-
Ambulanta
Osnovna škola Draž-PŠ
Batina
Grad Koprivnica
Hrvatski zavod za javno
zdravstvo
Klinički bolnički centar Split-
lokalitet Križine (APN)
Općina Stubičke Toplice-
Vatrogasni dom Pila
Općina Šodolovci-upravna
zgrada
Dom za psihički bolesne
osobe Petrinja
Naslov mjere
Općina Davor-Zgrada
Društvenog doma Davor
Grad Garešnica
Zavod za javno zdravstvo
Karlovačke županije
Hrvatski Crveni križ Gradsko
društvo Crvenog križa Beli
Manastir
Općina Trpinja
65
a comparison of the average costs of renovation (HRK/kWh) pertaining to individual measures
in Table 8.9. one comes to the conclusion that integral renovation has a specific cost that is
higher than individual measures (7.27 HRK/kWh in relation to 7.15 HRK/kWh). However, if we
exclude the facility of the doctor's office in Zagorska Sela with its specific cost of 39.24
HRK/kWh, which deviates significantly from the average in view of its very demanding
architectural plastic (protected immovable value), the average value of cost drops to 4.82
HRK/kWh, which is significantly lower than the average of individual measures. If a facility
takes advantage of fast return measures first, it will be more difficult to achieve economic
feasibility of savings in integral renovation later.
4.3.1. Key Problems with OPCC Pilot Projects
Tender Documents and Project Selection
The main problem is the complexity of the tender procedure, which manifests itself in
application phase by user and refers to complex application documentation and on appraisal
and contracting phase which require administrative capacities and coordination.
Financing
So far, energy renovations were implemented with only 10 to 30% of funds from the user, while
the rest ( up to 90%) was co-financed through the ERDF i EPEEF.
4.3.2. Key Problems of the ESCO Model
Financing
Insecurity in terms of the realisation of loans and guarantees, especially in view of problems
with the solvency of new companiesbecause solvency in banking practice is based on the
previous operation of the bidder, instead of on the project financing of new companies.
Also the cost of interest on funds used to finance ESCO companies is too highbecause
of the risks on the side of the creditor, especially as the ESCO company does not
acquire property that could be a pledge.
The problem is the lack of guarantee mechanism that could be activated if one of the parties
does not perform its contractual obligation.
66
potential companies on the ESCO market to say the least.
The Market
On the other side, the Public Sector Building Energy Renovation Program for the period 2014
– 2015 has resulted in around 15 companies and/or consortia engaged in the provision of
energy services.This market is still in development.
On the side of demand, the problem is that althought there is a great potential for energy
savings in p ublic sector buildings, the private sector ( potencial energy service providers) finds
it difficult to obtain information on spending on public sector building and energy renewal
potentials.
4.4. Measures for Eliminating Barriers to the Wider Implementation of the Program
For the better implemenation of the tender procedure under the OPCC Specific Goal 4c1,
simplification of the procedure is needed. For example, making the submission of a digital
application to tender procedures possible would facilitate the procedure significantly both for
the applicants and the commission. Users point out that the tender procedures of EPEEF are
much simpler and reasonable and that the application would be made simpler if the entire set
of documents would be examined immediately, and not only the administrative offer. The
procedure has been simplified and 5 phases of selection will be joined into 3 phases.
Condition of 50% of reduced consumptionrequire to give priority to buildings that use more
energy (for example, buildings that are used more often and that will realise a larger share of
projected savings than those that are used only part of the week or day).For such an approach,
should examine not only specific consumption, but also the ratio of specific and total
consumption.It is necessary to seek out a model that will give priority to buildings with the
greatest potential, but also taking into consideration the actual consumption.
In terms of development of the ESCO market, it is necessary to adopt a standardized contract
of energy performance and to solve the value added tax treatment.It is necessary to develop
a possibility for crediting ESCO companies that is based on project financing.
It is possible to improve the program (steps that will improve the results further).
67
To expand the building stock suitable for reconstruction
to examine the involvement of cultural heritage by rebuilding according to special criteria.
Funds secured through the monument annuity are not sufficient to cover the financial gap to
make the measure feasible at the level of unprotected buildings.Furthermore, although
complete restoration is a priority, the selection criteria should be set so that they do not exclude
the renovation of buildings that are worse than the average and can not achieve reconstruction
according to the criteria calculated for reference buildings.
Public administration should serve as a good example of reconstruction to the level of a nearly
zero-energy building, and the reconstruction of parts of buildings should definitely be
encouraged not only to the cost-optimal level, but to the level of the nearly zero-energy
building.
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5. ANALYSIS OF OBSTACLES TO AN INCREASE IN ENERGY EFFICIENCY IN PUBLIC SECTOR BUILDINGS
The Energy Efficiency Directive stipulates support to the development of the market of energy
services, new financial mechanisms and incentives, and of institutional, financial, and legal
framework for eliminating the existing market obstacles and defects that prevent effective final
consumption of energy.
Consequently, this Chapter identifies legal, financial, and organisational obstacles to the wider
implementation of measures to increase energy efficiency in public sector buildings. Further,
the causes of the appearance of the said obstacles were analysed as well as proposals for
overcoming them.
A particularly important problem is the increase of energy efficiency in buildings that are
protected as cultural/building heritage in view of a large share of such buildings in public sector
buildings. This Chapter includes an analysis of the possibilities and potentials for increasing
energy efficiency in the buildings of protected cultural heritage
5.1. An Analysis of Legal, Financial, Organisational, and other Obstacles (Barriers) to Wider
Implementation of Measures for Increasing Energy Efficiency in Public Sector Buildings
5.1.1. Legislative and Legal Obstacles
Non-conformity of the Legislation for Implementing the ESCO Model of Energy
Renovation of Public Sector Buildings with Other Legislation
In Public Sector Building Energy Renovation Program 2014-2015 under the ESCO model, the
question of calculation of value added tax is not clearly resolved. By the provisions of the
Article 26, paragraph 7 of the Energy Efficiency Act it is stipulate that on services, works, and
products under the energy performance contract value added tax liability is paid over a ten-
year period after completion of energy renovation. However, Article 30, paragraph 1 in the Act
on Value Added Tax it is prescribed that the taxable event and obligation to calculate the value
added tax arises when the goods are well supplied or the services performed. It is apparent
from the above that the provisions of the Energy Efficiency Act stipulating the payment of value
added tax obligations over a period of ten years are not in accordance with the provisions of
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the Act on Value Added Tax, but the fact is that the provisions of these laws are simultaneously
in force.
Considering that the payment of value added tax represents a considerable financial obligation
for the energy service provider, such providers will not be ready to conclude energy
performance contracts without a clearly defined rule.
Treatment of public debt in energy performance contracts
According to the Budget Act, local and regional government may assume debt via credit, loans,
and the issuing of securities. The total annual liability of the units of local and regional
government may be up to 20% of the income generated in the year preceding the year in which
the debt is incurred. However, the provision concerned does not relate to projects co-funded
from pre-accession programs and funds of the European Union and to projects from the field
of improving energy efficiency that involve the units local and regional government. The aim of
Energy Efficiency Directive is to develop the market of energy services by using the public
sector as an example and leader in the contracting of energy services. With that aim in mind,
the Energy Efficiency Directive stipulates the establishment of the system of budgetary,
accounting, and statistical rules that regulate public debt in a way that the contracting of energy
services is not regarded as public debt, however at the European level, the key problems
connected with the definition of public debt in the energy performance contract are not
resolved. It is expected that during the 2017 detailed rules will be developed at the European
Union level to clarify the implementation of the Debt and Deficit Handbook on energy efficiency
contract, taking into consideration the specificity of such a contract. The Energy Efficiency Act
and the Regulation on contracting energy services in public buildings were establish that, in
terms of regulations regulating the area of the budget, the energy efficiency contract does not
represent public debt. With the Energy Efficiency Act is also regulated that the APN is obliged
to publish the energy efficiency contract.
With regard to the interpretation of EUROSTAT, it is necessary to establish a mechanism for
monitoring the energy efficiency contract, but in accordance with the existing regulation it is
not necessary to carry out the procedure foreseen for borrowing in accordance with the Budget
Law. Standard contract on energy efficiency should be developed in a way that includes all the
elements that can be entered and the contract does not constitute a public debt.
It is important to note that Croatia cooperates with EUROSTAT in developing rules to enable
this barrier to be solved at the level of the European Union.
Energy efficiency contract in the Republic of Croatia is regulated by regulation, by which is
possibility for misuse of the energy efficiency contract eliminated by incorporating clauses
70
which would have changed the nature of the contract in terms of risk allocation. Such an
arrangement is not common in other EU countries, with the respect to there are a number of
possible types of contracts that the public sector may contract under the title energy efficiency
contract, and the public sector is usually only provided with guidelines for assembling such a
contract. Arranged by type contract, the Croatia has good arguments to start an initiative by
the EU authorities to accept the interpretation of the energy efficiency contract as a contract in
which an investitor is an energy service provider, and does not arise the relationship of the
commodity loan.
Investments can be classified as outside the balance of the state (therefore, they are not public
debt) only where it is possible to prove that a private company which is investor bears most
risks connected with the investment and is entitled to most benefits from the investment, that
is, that a private company is the economic owner of the investment.
The allocation of risks between the state and the private side in the contract is a key issue.
The risk is viewed as impact on income or profit arising from activities of the one side and/or
are the result of behaviour of the side on whose behalf and for whose account the activities
were taken.
Although investing in a public sector building, the energy service provider does not become
the owner of all parts incorporated in the building via the performance of energy renovation
works or parts that were otherwise permanently joined with it in some other way under general
legislation. However, economic ownership is established depending on the entire contract, that
is, the energy service provider may be the economic owner of the investment, and the
methodology that is applied is used for differentiation between operative and financial leasing.
Bearing of risks implies that the party bearing the risks is authorised to take activities to prevent
or reduce the impact of such risks.
The first step is to determine the classification on the basis of three main categories of risk:
I. Investment risk (risk of construction/performance): risks such as delayed performance,
quality of works, and additional costs like out-of-budget works.
The investment risk relates to the implementation of measures to improve energy
efficiency of the building and the commencement of performance of works and
services, risks connected with delay in the performance of works, deviations from the
required standards, additional costs resulting from the implementation of the
investment, legal obstacles and unfavourable circumstances, technical defects,
adverse external factors, and other risks connected with the realisation of aims included
in the energy performance contract.
71
II. The risk of availability relates to the phase of realisation of savings, that is, non-
performance of contractual obligations. In the context of the energy performance
contract, the risk of availability relates to regular and investment-related maintenance
of objects in its economic ownership and all other actions required to make the building
comply with the values, that is, the level of energy efficiency as included in the energy
performance contract.
III. The risk of demand is not applicable to this Program, that is, the demand is established
as the intention of the public sector to use the building in the same way during the
contract period, which is a precondition for the energy performance contract.
If the contracting authority assumes the investment risk, the contract creates public debt (cost).
If the energy service provider assumes the investment risk, public debt will not arise, unless
the contracting authority assumes the risks of demand and of availability.
If the energy service provider does not meet the obligations foreseen in the contract (the state
of the building does not correspond to the contractual provisions, the same standard of use
was not delivered) the key criterion is the option of the contracting authority to enforce the
contractual penalty. Enforcement of the contractual penalty must be automatic (such as non-
payment of the remuneration) and punishment may not be only symbolic, that is, it must have
significant impact on income and the profit of the energy service provider.
On the other hand, if the defined minimum aims of the contract are exceeded (realising a higher
level of savings than what was agreed), the contractual relationship must provide the energy
service provider with the right to part of the resulting financial surplus.
In the classification of contracts in relation to public debt it is essential to take into consideration
all other elements or mechanisms that might, either directly or indirectly, affect the transfer of
risks to the contracting authority. Transfer of risks may occur if the contract in its termination
clause includes provisions, such as the obligation of the contracting authority to compensate
non-depreciated value of the investment, a guarantee of the contracting authority to finance
the investment of the energy service provider or a guarantee that realistically depreciates the
value of the investment of the service provider. Even if in the case when the contract would
indulge the other criteria, such a termination clause would classify it as a public debt.
Any purchase of the investment before the expiration of the contract must be established at
the market price. The market price may be set in a way that in the case of termination or
cancellation of the contract the public procurement procedure for a new energy service
provider "purchasing" the investment from the previous provider (in the state in which the
investment was found at the moment of termination or cancellation of the contract) is
72
conducted, and consideration to be paid to the former provider is determined according to the
market price of the investment.
Accounting and tax treatment of the energy performance contract
A major barrier in the implementation of the Program arose in possible different interpretations
by the competent institutions in connection with accounting, and consequently tax treatment
of the energy performance contract. The key issue is the issue of who is an investor in the
energy performance contract. The investor recognises the increase of its assets in terms of
accounting if it expects that by its use during its life cycle it will generate economic gain and
bears the risks connected with the investment (economic owner).
The moment of recording the transaction in the books, that is, the moment of recognising costs
and income, and consequently the manner of calculating tax obligations, arise from the position
of the investor.
The taxpayers are obliged to determine the tax base pursuant to Article 5, paragraph 1 of the
Income Tax Act (Official Gazette 177/04, 90/05, 146/08, 80/10, 22/12, 148/13 143/14, 50/16
and 115/16). The reffered Article of the Income Tax Act stipulates that the tax base is the profit
that is determined according to the accounting rules as a difference in income and expense
before the taxation of income tax, increased and reduced by the provisions of that law.
According to the above, the profit tax base before increasing and decreasing is determined in
accordance with accounting rules that include the application of International Financial
Reporting Standards or Croatian Financial Reporting Standards. In accordance with the
Croatian Financial Reporting Standards 15. - Income, under paragraphs 32 and 33, determines
the manner of recognizing income in the case of construction contracts in such a way that
when the outcome of the construction contract can be reliably estimated, incomes and
expenditures are recognized by level of completion in the accounting period in which the works
were made. When the outcome of the construction contract can not be estimated reliably: a)
the income should be recognized up to the cost, b) the contract costs are recognized as the
expense of the period in which they occur.
As a result, the income tax base includes income using accounting standards by level of
completion in the accounting period or up to the cost of construction in the accounting period.
Proper application of positive tax legislation depends on defining the investor, with respect to,
the economic owner of the property which is being invested under the energy efficiency
contract.
If the investor is the energy service provider, income arises after the delivery of the service,
that is, savings, Investments are recognised as a cost in terms of tax and the investment of the
service provider is subject to pre-tax (refund of value added tax), that is, the investment is a
73
cost of the energy service provider, and income is realised from payments for the service
delivered (savings), and value added tax and the recognition of income are generated on the
invoices issued for savings generated.
If the investor is the contracting authority, the service provider must issue an invoice for all
future remuneration (increased by value added tax) and register all future remuneration as
income in its balance sheet (which consequently affects the calculation of profit tax). The
provider would thus be the provider of commodity loan, which includes other implications
(calculation of interest). The contracting authority would in that case be violating the Public
Procurement Act, because it failed to conduct the procurement procedure for a loan financing
the investment.
Depending on the definition of the investor, implications for the accounting treatment are the
following:
I. If the service provider is the investor:
– The service provider invests in intangible assets , that is, it involves investment in
someone else's property for the right of use
– The service provider recognises assets (rights) in terms of balance, which is then
depreciated in the contractual term
– The service provider recognises pre-tax charged by its contractors and equipment
suppliers
– The service provider recognises income and value added tax in the contractual period
successively, that is, at the moment of issuing the invoice for savings generated
– The contracting authority does not enter into commodity loans
– The costs for the contracting authority are not burdened by value added tax at the
moment of completion of energy renovation
– The contracting authority presents costs for savings (energy service) after the savings
are generated in the contractual period as current costs of energy services received
(invoice 32398 - Remuneration for energy service)
– The contracting authority recognises the use of "someone else's property" outside the
balance sheet.
II. If the contracting authority is the investor:
– A debt arises for the contracting authority, that is, the contracting authority enters into
a commodity loan
74
– The contracting authority enters the increase of assets and debt in the books on the
basis of the level of completion, and payments of remuneration are calculated as
repayment of the loan
– The contracting authority must pay value added tax in the total value of the project
(investment) based on the level of completion
– The provider must register income at the time of making the investment functional, and
such income will affect the calculation of income tax
– Collection of remuneration in the contractual term is the collection of instalments of a
commodity loan granted
– The provider must charge value added tax on the total value of the investment
The issuing of the invoice also establishes a relationship between the provider and the
contracting authority, that is, if the contracting authority accepts the invoice, it would be
obligated to pay the said amount, which possibly might be reduced in a complaint.
It is clear that the accounting treatment is directly connected with the issue of debt, that is, a
different treatment in terms of debt and the obligation to calculate tax would also fundamentally
change the relationship between the service provider and the contracting authority,
Where the outcome of a transaction that includes the provision of the service can be assessed
reliably, income connected with the transaction will be recognised on the basis of the level of
completion of the transaction on the date of the report on the financial position.
Transactions are recognised at the time when all of the following conditions are fulfilled:
a) the amount of income can be measured reliably
b) it is probable that economic benefits connected with the transaction will flow into the subject
c) the degree of completion of the transaction on the date of the report on the financial position
may be measured reliably
d) the costs of the transaction and the costs of completing the transaction incurred can be
measured reliably.
If the service provider retains significant risks entailed in ownership, such a transaction is not
income and income is not recognised further to the energy performance contract.
The risk of ownership is entailed when the service provider retains the obligation for faulty
performance and where the contracting authority is entitled to suspend payment of
remuneration on the grounds of non-delivery of service, that is, if the contracting authority is
not obligated to pay compensation in view of non-realisation of savings.
Income is recognised only when it is likely that the service provider will acquire economic
benefits connected with the transaction, that is, when the obligation of the contracting authority
for payment arises.
75
In this field, there may be various interpretations in practice, which creates an insurmountable
obstacle to investments. The energy service provider must be sure to know how to calculate
income and tax payments correctly, and the method of calculation must include all relevant
elements of the energy performance contract.
In order to eliminate the barrier, it is necessary to make an accounting standard for the
standardised energy performance contract and provide clear instructions for action to the tax
administration in the event of conclusion of the energy performance contract.
It should be emphasised that the accounting treatment can be regulated only for the
standardised energy performance contract, because amendments to certain clauses of the
contract can change the character of the transactions materially, and consequently of the tax
and accounting treatment of the energy performance contract..
Insufficiently standardised energy performance contract and tender documents
Based on the barriers analysed previously, it follows that it is necessary to draw up/polish the
standardised energy performance contract, which is the basis for setting up a sustainable
model and eliminating important barriers to implementation.
Since the terms of contract in the implementation of the public procurement procedure are
defined in the tender documents, the drawing up of a standardised contract facilitates the
implementation of the public procurement procedure and diminishes the administrative burden.
The tender documents must include, in addition to the usual parts and the technical basis
described earlier, the standardised energy performance contract and the rules of conduct in
the verification of savings and/or energy renovation projects, where the award criteria must be
foreseeable, transparent, and non-discriminating.
– The standardised energy performance contract must satisfy the following criteria:
– The investment risk is borne by the energy service provider
– The availability risk is borne by the energy service provider
– The energy service provider is the economic owner of property that is inseparable from
the building under general legislation
– The public procurement procedure sets the minimum value of savings to be generated by
the contracting authority as a consequence of investments by the energy service provider
– If such savings are not generated, the contracting authority is not obligated to pay any
remuneration
– The payment obligation arises only after the realisation and verification of savings, and
remuneration may not be greater than savings generated in energy and/or water that are
the result of investments by the service provider
76
– Remuneration is established as fixed for investments in property that is inseparable from
the building, and as variable for further savings generated
– Savings that are the result of investments in property that is inseparable from the building
(energy renovation of the building) are demonstrated through an assessment (project),
and the calculation is based on entry data from the technical foundation and the
application of the national algorythm
– Further savings are established by measuring costs and comparisons with the referential
cost monitored through ISGE
– The obligation of the service provider includes the maintenance of measures that are the
subject-matter of its investment, and the contracting authority is obligated to issue the
permission
– The obligation of the service provider also relates to the maintenance of investments
conducted under the energy performance contract at least at the level that is foreseen in
the contract in terms of measures demonstrated in the assessment. If during the term of
the contract, the state of the building comes to differ from what is defined in the design
further to which the savings were established, the contracting authority is not obligated to
pay remuneration for savings or to compensate the costs of investments of the energy
service provider in some other way
– The tender documents must include the technical foundation that includes at least: a
presentation of the construction and energy systems of the building, the schedule of use
that is in conformity with the legislation and that is depicted by room (with a presentation
of the minimum quantity of air exchange and minimum temperature).
– The contracting authority shall be responsible for the data stated in the technical
foundation
– A description of the manner of verification of savings, that is, verification of the project
and the manner of monitoring the referential cost of energy, the conduct of the
professional commission, verification deadlines
– The contracting authority reserves the right to supervise the implementation of all
measures arising from the contract, and the service provider is obligated to provide
access and to submit any data requested
– The manner of proving non-realised savings is equally valuable as the manner of proving
realisation of savings
– If a contract is cancelled or terminated, the contracting authority shall introduce another
energy service provider via public procurement, and the new provider will pay out the
investment of the first provider in the amount offered in the public procurement procedure
– The contracting authority agrees that remuneration will be paid via assignment
77
– Deadlines for each phase of implementation of the contract
– Termination clauses must not change the contractual relations mentioned earlier
Difference between public-private partnerships and energy performance
contracts
In practice, there is a problem of varying interpretations of the scope of public-private
partnerships in relation to the energy performance contract. A clear demarcation between the
two institutes is a precondition for security in the public sector, which often received
contradictory instructions regarding the contracting/application of the two models.
Although there are various types of partnerships by and between public and private subjects,
the understanding of certain important general terms and their proper use in practice
indisputably have great impact in this field. This is confirmed in the study of the World Bank of
2010 that includes a note of caution about the acute lack of definitions of many terms regularly
used in practice, that is, the fact that the same terms have very different meanings in various
jurisdictions. The study mentions the example of the term concession that shows very specific,
but also very different definitions in a number of jurisdictions (where the characteristic
examples are from French, Russian, Brazilian, and Chilean legislation and case law).
The said study provides a good overview of various forms of partnerships between public and
private subjects on infrastructural projects.
The term public-private partnerships is understood in the widest possible sense, that is, as any
“contractual or legally regulated relationship between public and private subjects aimed at
improving and/or widening infrastructural services." In the said definition, PPP within the
meaning of the Act on Public-Private Partnerships (Official Gazette 78/12 and 152/14) is only
one of the forms in which public-private partnerships, specific for Croatian legislation, manifest
themselves.
It follows from the definition that the energy service could be characterised as a public-private
partnership in the statistical sense, but not in the sense of the Act on Public-Private
Partnerships.
Differentiation between the model of public-private partnerships and energy service according
the Act on Public-Private Partnerships is most clearly manifested in the three elements defined
by him:
I. The definition of the project of public-private partnership
II. The obligation to establish an SPV
III. The right to build or concession as a compulsory part of the public-private partnership.
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I. The definition of the project of public-private partnership
Article 2 of the Act on Public-Private Partnerships defines the project of public-private
partnership as a "long-term contractual relationship between the public and private partner, the
subject-matter of which is the construction and/or reconstruction and maintenance of a public
building for the purpose of providing public services from within the competence of the public
partner."
It follows from the said article that the subject-matter of a PPP project is to provide a public
service, where the private partner ensures all conditions for the provision of the public service,
therefore, the scope is wider than in the event of the energy service. The private partner is
responsible for the availability of the building within the meaning of providing its service; for
example, that the hospital is able to admit patients in the capacity that is defined in the project
of public-private partnership.
The energy performance contract is aimed only at energy savings, while public-private
partnerships also take into account other costs arising from the investment of the private
partner.
II. The obligation to establish an SPV
Article 3 of the Act on Public-Private Partnerships defines the contract on public-private
partnership as a "contract concluded between a public partner and a special purpose vehicle
in the contractual public-private partnership, or a public and a private partner in a status public-
private partnership, that regulates the rights and obligations of the parties for the purpose of
implementing PPP projects." A status public-private partnership is defined in Article 2,
paragraph 5 of the Act as a "model of PPP based on the contractual relationship between a
public and a private partner establishing a joint company for the purpose of implementing a
PPP."
It follows that in case of public-private partnerships always concern a relationship in which a
public and a private party establish a special company to which they transfer their obligations
from the public-private partnership, while in the case of an energy performance contract the
subject-matter of the contract is the realisation of savings in a relationship in which the energy
service provider assumes risks connected with the realisation of savings, without the obligation
to establish a new entity.
The effect of this type of treatment is that much more important if we consider the goal of the
development of the market of energy services. The public sector should establish the market
for energy services as an example, and the goal follows that entrepreneurs investing in a
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particular market should acquire references in the provision of the energy service, and not
implement individual projects via legally separate entities.
III. The right to build or concession as a compulsory part of the public-private partnership
Article 2, paragraph 6 of the Act on Public-Private Partnerships states that "for the purpose of
implementing a PPP project, the public partner shall transfer the right to build to the private
partner or grant a concession to the private partner." In accordance with the Act on Ownership
and Other Real Rights (Official Gazette 91/96, 68/98, 137/99, 22/00, 73/00, 129/00, 114/01,
79/06, 141/06, 146/08, 38/09, 153/09, 143/12 i 152/14), the right to build relates exclusively to
the construction of a building on someone else's land. In accordance with the Act on
Concessions (Official Gazette 143/12), the concession is provided for the economic
exploitation of the common or some other good of interest for the Croatia.
Investments in a public building in order to save energy cannot be subsumed under the
definition of the right to build or concession, because investments are made exclusively with
respect to an existing building, which is why in terms of the legal framework of the investment
into the renovation of existing buildings they cannot be subsumed under the definition of a
public-private partnership.
The foregoing follows further from the definition of energy savings in accordance with the
Energy Efficiency Act that defines savings as "the quantity of energy and/or water saved as
established by measuring and/or assessment of consumption before and after the application
of one measure to improve energy efficiency, or more of them, in addition to normalisation
under referential conditions", and the energy performance contract as a contract in which the
energy service provider undertakes to "conduct measures that achieve savings in energy
and/or water in relation to the referential consumption of energy and/or water".
Pursuant to the applicable public debt and deficit policy, that is, the European Accounting
Standard, a key feature of PPP is that, in the case of renovation of an existing building, private
partner investment must amount to more than 50% of the final market value of the building
after reconstruction. If such level of investment is not achieved, such contract is not a PPP
contract. As the Energy Efficiency Agreement never achieves such amounts for existing
buildings, this rule places a clear delimitation of the ernergy efficiency contract and Public-
Private Partnership contract.
It follows from the said analysis:
– The public-private partnership contract stipulates investments that result in a new real
property for the provision of a public service, or where investments are higher than 50% of
the final value of the building after renovation.
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– The energy performance contract stipulates renovation of buildings that should not change
their purpose and/or intensity of use, with the aim that the investment generates savings
of energy at least equal to the value of payment of remuneration that is paid to the energy
service provider under such contract.
In conclusion, legislation in the field of public-private partnerships stipulate the manner of
contracting public-private partnerships. Therefore, those buildings that have the basis for such
a contract, arising exclusively from the legislation concerned, perform the investment further
to a decision of the competent authorities. It is evident that we are dealing with the PPP model,
and not the model of energy service provision, and therefore such buildings are not the subject-
matter of this Program.
5.1.2 Financial Obstacles
The economic crisis, present in Croatia since 2008, made a considerable impact on the
appearance of a large number of financial obstacles to the implementation of energy efficiency
measures in public sector buildings. It caused overall insecurity on the market, postponing
many projects and investments, and discouraging potential clients.
Lack of financial capacity of the public sector
According to data of the Ministry of Finance on the Realisation of the Budget of Local and
Regional Government 2010 – 2014, expenses for interest on credits and loans received at the
level of all observed units of local and regional-self government increased by 64% over a four-
year period. One of the main obstacles in the implementation of energy renovation of public
sector buildings follows from such data, which is lack of financial resources and credit
worthiness. The problem becomes particularly obvious when a building is not suitable for
renovation via the ESCO model. Namely, despite the share of grants in energy renovation
projects of public sector buildings, some units of local and regional government are not able to
secure the remaining part of the required investment.
Credit worthiness of the energy service provider
Potential natural energy service providers are enterprises from the construction sector, but
they are already encumbered with indebtedness and insufficient income in view of
unfavourable economic movements on the market over the past several years. Both factors
limit their credit worthiness, especially for the purposes of designing repeated long-term loans.
On the other hand, a low level of income means a limited amount of one's own means.
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The picture in further text shows the movement of the production index in the construction
sector in the Republic of Croatia in the period from 2006 to 2015. one can see that the
production index has been declining continuously since 2008.
Picture 5-1 Production index for the construction sector in the Republic of Croatia (2010=100)
Source: EUROSTAT
Unwillingness of banks to finance public building energy renovation projects
Banks in the Republic of Croatia do not show sufficient interest in financing projects according
to the principle of contracting energy performance. There are several reasons for their position:
credit unworthiness of a large number of potential energy service providers
an insufficient amount of guarantees
high cost of capital in the Republic of Croatia
In view of the low credit rating of Croatia, the cost of capital is extremely high. Further, banks
estimate the level of risk separately for the energy service provider, that is, the client. Banks
are not ready to provide long-term financing to clients who do not assume full risk in the project.
Therefore, banks require further guarantees, such as pledges of real property. Interest rates
are high as the result of the risk of the country and the risk of the client.
The graph in further text shows interest rates on approved loans (in foreign currency and Kuna)
to non-financial institutions in the Republic of Croatia in comparison to other states of the
European Union.
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Picture 5-2 Interest rates on credits to non-financial institutions (%)
Source: CNB, ECB
Absence of guarantees
According to the experience of Programs of Energy Renovation of Public Sector Buildings for
period 2014 - 2015, the system of guarantees issued by HAMAG BICRO has not come to life.
Lack of adequate, long-term financial instruments
On the Croatian market, there are no financial instruments sufficient to ensure energy
renovation of the overall potential of public sector buildings. The goal of the Program is to
define the required financial instruments to achieve the goal of renovation.
5.1.2.1 Eliminating Financial Obstacles
Development of financial instruments
For the financial institutions to be able to monitor energy service providers, it is necessary to
develop financial instruments that are in conformity with the rules for using ESI funds, with a
specific purpose for energy service providers.
Development of financial instruments in the context of this Program should also create
conditions for the development of the market of energy services, that is, the development of
the market amongst private subjects who want to do business according to the principles of
providing the energy service.
In the event of financial instruments, it is possible to offer products that will primarily facilitate
access to financing to all subjects conducting projects according to the energy service model,
and then encourage the development of the market through the elimination of specific barriers
arising from the model of the energy service, and reduce the problem of under-capitalisation
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(which is a systemic problem of the economy as a whole, and is especially pronounced in
ESCO companies in view of the capital intensity and the mentioned specific problem of the
model as such).
Acknowledging the specific features of the FI, it is possible to achieve the following goals:
- enable access to the financing of EE projects
- encourage the development of the ESCO market through specific products
- reduce the price of financing for EE projects.
Three basic instruments are provided here:
a) the guarantee instrument
b) the equity instrument, and
c) the credit facility.
The instrument under (a) can resolve the problem arising from the fact that the energy service
provider in energy renovation projects engages its equity, and does not acquire property on its
own balance. The guarantee resolves the problem in a way that part of the risk is transferred
from the energy service provider to the guarantee scheme (the guarantee portfolio, that is, the
guarantee fund), thus releasing part of the balance (equity) of the company that becomes
available for further investments. With such a guarantee, it is possible to engage credit funds
that would not be available otherwise in the financing of projects according to the energy
service model.
Considering that at the moment there is no such instrument, the price of the guarantee can be
set at a commercial basis (so will not involve aid), thus attracting private investors into the
instrument. The state does not provide aid in this case, but uses its example to open the door
to private investors. If necessary, private investors can be offered some form of preferential
remuneration.
The instrument under (b) is equity fund that would increase the volume of its equity available
for investments into projects according to the energy service model. While the guarantee
enables companies to engage credit funds along with their own equity, thus realising a larger
number of projects than would be possible with only their own equity, this instrument acts to
increase the volume of such equity of energy service providers themselves.
Equity instrument would seek opportunities for investments in companies directly, thus
enabling the placement of capital of private and public investors on the energy service market,
thus directly increasing their capacity. At the same time, investors are enabled to be exposed
on the market in a diversified manner, reducing the risk of investment.
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Considering that through this equity instrument the capital would be provided to companies
under market conditions (requiring market return), such investment of the financial instrument
cannot be regarded as aid.
The equity instrument platform can promote the financing of energy service projects through
green bonds, thus endeavouring to engage the capital of a wider circle of investors. With a
sufficient number of such bond issues, the options available through structured debt products
formed from several different bonds become feasible, so such products can be offered to
institutional investors looking for exposure with a longer term period and adequate incoming
yield.
In the case of such a financial instrument, it will be necessary to examine the need to use some
sort of preferential regime of remuneration.
The instrument under (c) would be a specialised credit facility intended for specific energy
renovation projects. The financial instrument concerned would be used to finance credit
products intended for energy service providers and companies that realise energy efficiency
projects independently. The products that would be formed from the credit facility should be
structured in a way to enable simple combinations with the guarantee under (a).
This instrument can be realised via commercial banks that could also engage some of their
own funds.
Furthermore, as instrument (c), specialized credit lines for energy recovery project could be
developed which user would be the public sector, such financial instruments would combine
with grants.
The manner of awarding grants
The co-financing model should be adjusted in a way that support is awarded in a direct
relationship with the service provider, without the intermediary role of the APN, that is, that the
risk of realising aid is borne by the energy service provider, which does not affect obligations
under the energy performance contract.
The use of grants can (and should) achieve the following goals:
– encourage final recipients to make technical foundations required for the
implementation of energy renovation projects with the aim of developing an offer of
energy renovation projects ready for implementation
– encourage investments in energy efficiency technologies that have still not proven
themselves on the domestic market, with the aim of early use of numerous
innovations that exist on the market
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– subsidise projects, the feasibility of which is below the border level of interests of the
market
– encourage markets to invest in energy efficiency measures that achieve a technical
standard that is higher than the one that is minimally required.
– a proposal of the required grant schemes.
Acknowledging the above goals, and practical needs and defects stated in this Program, grant
schemes should be formed in a way to encourage
(a) investments in technical documents
(b) investments in innovative technologies
(c) investments in projects below the market acceptable level of feasibility
(d) investments in measures that achieve higher levels of technical standards.
The grant scheme under (a) would finance the drawing up of technical and economic
documents to show feasibility of investment in an energy renovation project.
Considering that the implementation of energy renovation projects depends on the findings
and conclusions included in the documents, in this case it is recommended to ensure a high
share of co-financing, so that final recipients would be encouraged to assume risks and
investments through their own co-financing.
For projects in the private sector, this can be co-financing of the investment study, and of the
main and detail designs.
For projects in the public sector, considering that the implementation of public procurement for
the energy service is recommended, the subject-matter of co-financing for this grant scheme
would be to draw up the technical foundation described earlier.
Such documents should include the technical recording of the as-is condition that is sufficiently
detailed to provide all information necessary for selection and design to the subject planning
the implementation of the measure.
In the private sector, it is recommended to include the model of implementation that assigns
vouchers to final recipients with which they can request the service from pre-qualified bidders,
while in the event of the public sector, the services are procured through the public
procurement procedure.
Through the grant scheme under (b), the funds would be approved exclusively to the private
sector for the use of equipment that was not used on the market previously.
This would encourage final recipients to assume the risk of investments into equipment that
was not widely implemented on the market, which indirectly encourages technical innovations
in the field of energy efficiency.
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The grant scheme (c) approves funds for measures or projects with the goal of achieving the
highest level of technical standards. Considering a number of external factors, an investment
over a certain level of technical standard does not have economic justifiability, but what is
actually paid is the price for achieving a non-economic goal (e.g., development of the energy
service market, employment, reduced emissions of CO2). This type of grant scheme would
encourage final recipients who are ready to pay the price.
Finally, the grant scheme (d) encourages investments in projects that are not feasible on the
market. In the context of this Program, projects that are not feasible on the market are those
that, under the available terms of financing, offer to the investor a return on equity (ROE) that
is below the level that can be obtained on the market. The logic is that in the event of insufficient
return on equity in a particular energy efficiency project, any rational subject would use its
capital elsewhere, so such investment should be encouraged in a way that projects that are
below the acceptable level of return on equity from the grant scheme receive aid to bridge the
difference.
Possible models for establishing the grant scheme for energy service providers
There are four possible ways of determining the amount of grants for energy service providers:
I. Based on the offer in the public procurement procedure
II. Based on energy efficiency measures
III. Based on eligible costs in total with a flat rate
IV. Based on eligible costs in total on the basis of the project and a cost-benefit analysis.
I. Subsidising based on offer in the public procurement procedure
In this scheme, the energy service provider would propose the amount of co-financing in the
public procurement procedure. Co-financing could be requested only subject to the condition
that all savings are transformed into the income of the service provider. When assigning points,
that offer that requires a smaller amount of co-financing in relation to the savings generated is
regarded as better.
Advantages:
possibility of renovation of almost all buildings under the energy performance contract
simple procedure for approving co-financing
in complement with public procurement
eligible costs established through the market mechanism.
Disadvantages:
experiences in setting this scheme of co-financing are not known
it is essential to achieve a sufficient level of market competition.
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II. Subsidising based on measures
It is necessary to determine the standard values by energy efficiency measures, that is, the
standard costs of investments and the required amount of co-financing for each measure.
Advantages:
foreseeable terms for bidders help in the development of the ESCO market
simple implementation.
Disadvantages:
depending on the building, the optimum group of measures does not have to coincide
with the intensity of support foreseen for the measures
before implementation, it is necessary to make an ex-ante analysis by measures
III. Subsidising on the basis of the eligible costs in total at the flat rate model
The system is already mostly used in the program of the EPEEF.
Advantages:
there is experience in implementation
foreseeable terms for bidders.
Disadvantages:
administrative burdens in view of the compulsory verification of eligible costs
the service provider has an interest to show eligible costs as higher than real ones to
obtain a higher amount of co-financing
IV. Co-financing based on the eligible costs in total on the basis of the project and
the cost-benefit analysis
After the project is made, a cost-benefit analysis is conducted for each project individually, thus
establishing the eligible amount of subsidy.
Advantages:
demonstrated feasibility of the subsidy
wider benefits of the investment can be taken into account
adjusting the co-financing rate enables the implementation of a larger number of
projects
Disadvantages:
inapplicable in the open public procurement procedure
administrative burdens - it is a demanding task to control eligible costs for the
implementing body, as it must take into consideration all specific features of a
particular project
requires investments and time to draw up the cost-benefit analysis, which postpones
realisation of projects
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the service provider has an interest to show costs to be higher than they really are.
This method is not in line with the implementation of the open public procurement procedure.
If each project is brought to equal feasibility later through a certain amount of co-financing,
then there is no market competition, where an advantage would be taken by the one who
foresees the optimal investment in the increase of energy efficiency. No matter the costs, each
project is equally feasible, where the procedure of public procurement loses any meaning.
This co-financing is acceptable for projects that are implemented according to the model of
public-private partnership, which is conducted further to public procurement according to the
competitive dialogue model, and taking into consideration wider benefits from the investment
by the private partner.
In the implementation of the Model II of this Program, it is necessary to first use the co-financing
according to measures, and for projects that do not achieve energy renovation under such
conditions, that is, there is no interest on the part of the energy service provider to introduce
the co-financing according to bid.
it is necessary to make an ex-ante analysis on the basis of the experiences from the energy
renovation of buildings, that is, establish measures and levels of co-financing on the basis of
the financial gap, and revise the analysis every year. The reason lies in the fact that it is only
on the basis of experiences from the implementation of the Program that adequate support will
be established and its impact on the offers submitted according to the Program evaluated.
In the first year of implementation, the recommendation from the existing ex-ante analysis will
be used, drawn up by Jaspers/COWI, entitled Outline of an energy efficiency and RES use
scheme for public and residential buildings in Croatia, that integral renovation should be viewed
as a single measure, subject to the rate of co-financing of 40% as a flat rate. The analysis of
implementation will yield results from which it will be possible to foresee the impact of
separation of co-financing by measures. In order to establish the aims in full, the national
methodology for identifying wider benefits from the implementation of energy efficiency
measures must be established, and the findings must be included in the reviews of ex ante
analysis every year
5.1.3 Technical, Organisational, and Social Barriers
Inadequate documentation pertaining to public sector buildings
In order to improve the implementation of the Program, it is necessary to have the APN, before
publication of the public procedure, draw up a detailed study that will include all data about the
building used as entry data in the budget of savings and other data that may have significant
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impact on the investment of the energy service provider. Such technical foundation should be
published in the tender documents, and represents entry data for the calculation of savings.
In drawing up the technical foundation, it is necessary to ensure responsibility of the author for
the content of the foundation. The technical foundation will be establish in methodology that
will be draw up in accordance with the experiences in the implementation of the Program and
the practice of review and verification of the project to date.
Monitoring and verifying savings
Monitoring and verifying savings is technically the most demanding and the most important
part of any ESCO project. Realisation of guaranteed savings ensures payment to the bidder
of the energy service, but also a guarantee to the contracting authority. A thorough analysis of
the system of verification of savings is provided in Chapter 13, and so are proposals for its
improvement.
Position of the public sector towards energy efficiency
Most of the public sector is characterised by lack of interest in energy efficiency. The cause
would be lack of information, but also lack of human and organisational resources for the
implementation of energy efficiency projects. Further, the public sector is not always aware of
consumption, energy costs and, in general, the problem of energy efficiency.
Further, the problem of priorities arises in the public sector, that is, the public sector should
make a choice between investments in the energy efficiency of buildings and in some of the
projects of public interest. Considering that the funds of the public sector are limited, this is a
big problem.
Improving the level of information in the public sector about energy efficiency is performed
within the activities of systematic energy management in buildings, in accordance with the
Ordinance on Systematic Energy Management. The aim of the educational modules for energy
counsellors and energy associates is to train public sector employees in performing systematic
energy management via the computer application ISGE, monitoring energy consumption in
buildings, reporting on energy consumption on an annual basis, adopting conclusions on the
possibilities of energy savings and, finally, applying for energy renovation projects to a greater
extent. The APN recruits new users by contacting all institutions in the public sector who then
appoint their representatives in charge of systematic energy management and who have the
task of entering new buildings into the ISGE base and monitoring energy consumption. The
APN continues its activities on recruiting new users and on their education for work in the ISGE
system and, in general, in energy efficiency, which will result in the entry of data about new
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buildings and better level of information of the public sector. So far, around 700 energy
counsellors and advisers have attended educational modules, which accounts for a smaller
share in the total number of buildings in the public sector.
Lack of interest of the public sector may be eliminated via continued promotional campaigns,
via the media, organised workshops, and other events, organised by interest groups involved
in the Program.
Lack of administrative and technical capacity of the public sector
Energy renovation of buildings is a demanding process, organisationally and technically. In the
optimal situation, the public sector has the capacity to use and maintain buildings in its portfolio.
A sufficient capacity can be expected at the level of the units of local and regional government
and at higher organisational levels of central state administration in terms of the procurement
of demanding projects involving energy renovation of buildings, but at the level of an individual
user, the capacities are insufficient.
Inclusion of applications for the energy renovation of buildings on the basis of this Program
into the annual plan of state property management according to the Strategy of Management
and Use of Property Owned by Croatia for the period from 2013 to 2017 and reliance on the
competent institutions (Ministry of State Property) may be create a wider formal framework for
the procurement of energy renovation of buildings for owners and users of public sector
buildings.
Organisational obstacles result in the inertia of the system of energy renovation of public sector
buildings overall. Two main groups can be singled out among organisational obstacles: lack of
interest on the part of the public sector and lack of coordination on the part of interest groups
involved in the problem of energy renovation of public sector buildings.
In the implementation of the Program according to the ESCO model to date, extensive barriers
were observed in the public sector in the capacity of the contracting authority. The competent
services and responsible persons of the contracting authority taking part in the implementation
of the energy performance contract make the procedure of public procurement and
implementation of the contract more difficult and slow in view of lack of information about the
ESCO model and the energy performance contract. MCPP, APN, and the EPEEF organised
continued educational activities with the main goal of raising the awareness in the public sector.
Further to the data that more than 600 buildings were included in the Program, can be
conclude in general that the activities were successful, but an analysis of the buildings by
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region reveals very poor or no interest on the part of the public sector in certain units of local
and regional government, which reveals the need for even stronger promotion.
Raising awareness within the public sector is extremely important, because it creates
preconditions for making decisions on the initiation of the procedure for the energy renovation
of buildings, but even a sufficient level of awareness on the part of the contracting authority
and the energy service provider is not enough to ensure quality and successful implementation
of energy renovation under the ESCO model. Education of all stakeholders in implementation
is essential for implementation.
In order to facilitate the implementation of the ESCO model, it is necessary:
- To organise educational modules for building users – contracting authorities
- It is essential to clearly define procedures and draw up instructions to explain technical,
legal, financial, accounting and other elements of the energy performance contract
Standardisation of the energy performance contract and determining impact on the
budget of the Republic of Croatia, that is, the budget of the units of local and regional
government, are essential.
The ESCO market is in the phase of development
Considering that the ESCO market is in the phase of development in the Republic of Croatia,
there is still an insufficient number of examples of best practice to motivate both the demand
and the offer side to become involved in public sector building energy renovation projects via
the energy performance contract. An important element of success is competition among
energy service providers that motivate potential contracting authorities on the developed
market through direct contact and adjusted services..
5.2. An analysis of the possibilities and potentials for increasing energy efficiency in the buildings of
protected cultural heritage
In the total stock of the existing buildings of Croatia, cultural heritage buildings account for a
smaller segment. However, in view of the social interest to preserve such buildings, they are
still used for their original purpose or they are adapted for some other public purposes.
Therefore, energy renovation should also cover protected cultural buildings, as buildings of
public purpose in which energy needs can be reduced through energy renovation, buildings
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revived, and the protection of cultural heritage ensured through continued use. Buildings
pertaining to protected cultural heritage can be classified into two categories and they are
recognised and described in the Physical Plans, which also state conditions for their use,
adaptation, and protection:
Building units and buildings within historical units that are protected and registered as
cultural values are stated in particular, and works must be performed according to the
conditions and under the supervision of the Directorate for the Protection of Cultural
Heritage – Conservation Department
Blocks and buildings pertaining to building heritage that were erected within any city
area, which are not registered and protected as a cultural value and they have
pronounced period features and architectural value in terms of the period in which they
were created (Historicism, Secession, modern architecture, and post-war architecture
until the 1970s), are stated in particular; in this case, each type of works requires an
opinion of the professional service within the city authorities that will provide information
about all services competent to issue special requirements, consents, and which will
issue special provisions in accordance with the physical plan and laws.
In certain cases, it is permitted to rehabilitate buildings, change materials, and processing
of the facade in order to improve the thermal insulation properties, but at the same time
maintaining the original colour of the facade. All procedures should be in conformity with
the Building Act, Physical Planning Act (Official Gazette 153/13), Ordinance on Simple
Buildings and Works (Official Gazette 79/14, 41/15and 75/15), and the provisions of
physical plans at the location of the building (such as the master plan of urban
development, spatial plan, urban development plan). It is particularly important to request
the requirements for appearance and to obtain the consent of the Directorate for the
Protection of Cultural Heritage - Conservation Department that conducts and supervises
the implementation of works.
Inclusive, if the buildings are located withine protected historical units or are the individual
protected immobile cultural heritage property, prior to submitting a call for submission of
project proposals within this Program, it is necessary to establish special conditions for the
possibility of realization of the subject matter, according to the Law on the Protection and
Preservation of Culturl Heritage (Official Gazette 69/99, 151/03, 157/03, 100/04, 87/09,
88/10, 61/11, 25/12, 136/12, 157/13, 152/14 and 98/15).
Two approaches to energy renovation are possible:
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An integral approach involving the improvement of the outside envelope,
replacement of thermal energy sources, replacement of appliances in the system
of electricity consumption, and replacement of appliances in the system of water
consumption. In order for final energy to be in conformity with the current
requirements of the Technical Regulation, it is necessary to introduce the system
of mechanical ventilation with recuperation of heat. Potential savings are around
50%
Partial deviation from the goals of integral energy renovation is possible if the
implementation of measures is technically or functionally impossible or
economically unfeasible then that minimum upgrades of energy efficiency through
replacement and modernisation of technical systems or use of alternative systems
and RES are applied. Potential savings are from 10 to 30%.
In both approaches, it is necessary to include review of the use of RES, because they do
not change the basic character and appearance of the building, while all measures for
increasing thermal protection of the outside envelope should be adjusted to the
requirements of protecting cultural heritage.
By buildings of protected cultural heritage and buildings within protected units, the biggest
potential have buildings built in the period from 1940 to 1970, where most of the outside
envelope can be improved and energy standards can be achieved in accordance with the
valid Technical Regulation on Rational Use of Energy and Thermal Insulation in Buildings.
Individual measures include:
Thermal insulation of the facade, if permitted under the conservation requirements,
Replacement of the internal glazing with double iso glass and lowe coating Ug≤1,1
W/m2K, g=0,60 and sealing of window-frames,
Thermal insulation of the attic ceiling and basement,
Thermal insulation of windows from the inside,
Thermal insulation of walls and replacement of windows on the side of the yard,
Use of energy efficient lighting and consumption management,
Reconstruction of the systems of heating, cooling and ventilation, with the
centralisation and management of energy consumption with the use of alternative
sources of energy,
Use of RES available at the location of the building,
A central surveillance and management system for all forms of energy and water
consumption in the building.
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6. OVERVIEW OF EU LEGISLATION AND THE EXAMPLES OF BEST PRACTICE FROM EUROPEAN COUNTRIES IN THE INCREASE OF ENERGY EFFICIENCY IN PUBLIC SECTOR BUILDINGS, IN PARTICULAR THE ESCO MODEL THAT INVOLVES INTEGRAL ENERGY RENOVATION OF BUILDINGS
6.1 Overview of EU legislation in the field of energy efficiency in buildings in connection with the
implementation of the program of energy renovation of public sector buildings and the issue of state aid
There are three basic European directives that relate, in part, to the renovation of public sector
buildings:
Directive on the energy performance on buildings 2010/31/EU - EPBD
Directive on energy efficiency 2012/27/EU – Energy Efficiency Directive EED
Directive on promotion of the use of energy from renewable sources 2009/28/EU
– Renewable Energy Sources Directive RES
Table 6.1. An overview of European directives that relate, in part, to the renovation of public sector buildings
Requi rements st ipu lated in the European d i rect ives for renovat ion of publ ic sector bu i ld ings
Name of directive Requirement
Directive on the energy performance on buildings 2010/31/EU - EPBD
Article 7 Existing buildings In the event of major renovation of an existing building, Member States must take the necessary measures to ensure that minimum energy performance requirements are met in so far as this is technically, functionally and economically feasible. Member states will in addition, in the event of major renovation of a building, encourage the parties to consider the installation of highly-efficient alternative systems in so far this is technically, functionally and economically feasible.
Article 2 Definitions Member states may choose to apply one of two possible definitions of "major renovation":
the total cost of the renovation relating to the building
envelope or the technical building systems is higher than 25 % of the value of the building, excluding the value of the land upon which the building is situated; or
more than 25 % of the surface of the building envelope
undergoes renovation;
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Directive on energy efficiency 2012/27/EU – Energy Efficiency Directive EED
Article 4 Building renovation Member States must establish a long-term strategy for mobilising investment in the renovation of the national stock of residential and commercial buildings, both public and private.
Article 5 Exemplary role of public bodies’ buildings Each Member State must ensure that, as from 1 January 2014, 3 % of the total useful floor area of heated and/or cooled buildings owned and occupied by its central government is renovated each year to meet at least the minimum energy performance requirements that it has set in application of Article 4 of the EPBD. Article 7 Energy efficiency obligation schemes Each Member State will set up an energy efficiency obligation scheme. As an alternative to setting up an energy efficiency obligation scheme under paragraph 1, Member States may opt to take other policy measures to achieve energy savings among final customers, provided those policy measures meet the criteria set out in paragraphs 10 and 11. The annual amount of new energy savings achieved through this approach shall be equivalent to the amount of new energy savings required by paragraphs 1, 2 and 3. Provided that equivalence is maintained, Member States may combine obligation schemes with alternative policy measures, including national energy efficiency programs. The Public Sector Building Renovation Program is one of the measures that the Croatia notified as alternative measures of the policies within the meaning of this Article. Article 18 Energy services Member States promote the energy services market and access for SMEs to this market by: ... (d) supporting the public sector in taking up energy service offers, in particular for building refurbishment, by: i. providing model contracts for energy performance contracting which include at least the items listed in Annex XIII; ii. providing information on best practices for energy performance contracting, including, if available, cost- benefit analysis using a life-cycle approach; ... Member States shall support the proper functioning of the energy services market, where appropriate, by: ... taking, if necessary, measures to remove the regulatory and non-regulatory barriers that impede the uptake of energy performance contracting and other energy efficiency service models for the identification and/or implementation of energy saving measures;
Directive on promotion of the use of energy from renewable sources 2009/28/EU – RES directive
Member States must introduce measures to increase the share of energy from RES in new buildings and in existing buildings undergoing major renovation.
Article 5 of the Energy Efficiency Directive supplements the Directive on the energy
performance on buildings in the part relating to the renovation of the existing public purpose
buildings. While the EPBD sets minimum energy efficiency requirements for major renovation
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of existing buildings, Article 5 of the EED states that, as from 1 January 2014, 3 % of the total
useful floor area of heated and/or cooled buildings owned and occupied by central government
is renovated each year to meet at least the minimum energy performance requirements defined
in the EPBD. The EED points out that buildings of central government must be an example in
the renovation of buildings.
Another change to the EPBD directive entered into force in June 2010. It sets out, among other
things, requirements regarding minimum energy efficiency requirements for existing buildings,
building units, and building elements that are subject to major renovation, building elements
that form part of the building envelope and that have a significant impact on the energy
performance of the building envelope when they are retrofitted or replaced, technical building
systems.
According to Article 2 of the EPBD, Member states may choose to apply one of two possible
definitions of "major renovation":
I. the total cost of the renovation relating to the building envelope or the technical building
systems is higher than 25 % of the value of the building, excluding the value of the land
upon which the building is situated; or
II. more than 25 % of the surface of the building envelope undergoes renovation;
In accordance with Article 4 of the EPBD, each Member State must set minimum energy
efficiency requirements for buildings with the aim of achieving cost-optimal levels. A cost-
optimal level means the level of energy efficiency that results in the lowest possible cost during
the estimated economic life cycle. The EPBD permits the setting of special requirements for
new and old buildings, and for specific types of buildings.
The Member State is not obligated to set minimum energy efficiency requirements that are not
cost-optimal during the estimated economic life cycle.
The EPBD makes it possible for Member States not to set the established minimum energy
efficiency requirements with respect to the following categories of buildings:
– buildings officially protected
– buildings used as places of worship and for religious activities
– temporary buildings with a time of use of two years or less, industrial sites, workshops
and non-residential agricultural buildings with low energy demand
– residential buildings which are used or intended to be used for either less than four
months of the year or, alternatively, for a limited annual time of use and with an
expected energy consumption of less than 25 % of what would be the result of all-year
use,
– stand-alone buildings with a total useful floor area of less than 50 m2.
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Article 7 of the EPBD relates to the renovation of existing buildings. In the event of major
renovation of an existing building, Member States must take the necessary measures to ensure
that minimum energy performance requirements are met in so far as this is technically,
functionally and economically feasible. Member states will in addition, in the event of major
renovation of a building, encourage the parties to consider the installation of highly-efficient
alternative systems in so far this is technically, functionally and economically feasible.
Article 8 of the EPBD instructs Member States to also define requirements relating to the
technical systems of existing buildings (Member States may apply such requirements to new
buildings). The requirements relate to the heating systems, systems for preparing expandable
hot water, cooling systems and ventilation systems.
In terms of the mentioned technical systems, Member States must set out requirements
regarding the overall efficiency of a particular technical system, proper installation, proper
dimensions, and regulation and surveillance of the work of the technical system of the building.
Further, Member States are advised to encourage the introduction of an intelligent measuring
system and the setting of active management systems in the course of major renovation of the
existing building.
The Energy Efficiency Directive 2012/27/EU (EED) entered into force in December 2012.
The Directive established the joint framework of measures for encouraging energy efficiency
with the basic goal of increasing energy efficiency in the European Union by 20% by 2020. In
the European Union of 2020, consumption of final energy may not be greater than 1,078
Mtoe = 45,133.704 PJ, that is, consumption of primary energy may not be greater than 1,474
Mtoe = 61,713.432 PJ.
For the purpose of comparison, the total consumption of energy in Croatia in 2013 was 380.51
PJ (source: Energy in Croatia 2013, EIHP).
The EED set a number of time-framed requirements for Member States relating to public
purpose buildings:
each Member State is obligated to set a framework national goal for increasing
energy efficiency on the basis of consumption of primary energy or final consumption
of energy, savings of primary or final energy or energy intensity,
Member States must set up a long-term strategy for encouraging investments in
the renovation of the national stock of residential and commercial buildings,
public and private (the first version of the strategy had to be published by 30 April
2014 and afterwards the strategy must be updated every three years) each Member
State must ensure that, as from 1 January 2014, 3 % of the total useful floor area
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and/or cooled buildings owned and occupied by its central government is
renovated each year
Member States must ensure that its central government buys only products,
services, and buildings with high performance energy features.
According to Article 3 of the EED, each Member State is obligated to set a framework national
goal for increasing energy efficiency on the basis of consumption of primary energy or final
consumption of energy, savings of primary or final energy or energy intensity.
Article 4 of the EED relates to the renovation of buildings. Member States must establish a
long-term strategy for mobilising investment in the renovation of the national stock of
residential and commercial buildings, both public and private. The said strategy includes
an overview of the national stock of real-property, a cost-optimal approach to renovation
depending on the type of building and its climate zone, policies and measures to encourage
cost efficient major renovation of buildings, a far-reaching perspective for guiding decisions on
investments of individual entities, the building industry, and financial institutions and an
assessment of expected energy savings and wider benefits based on proof.
According to Article 5 of the EED, each Member State must ensure that, as from 1 January
2014, 3 % of the total useful floor area of heated and/or cooled buildings owned and occupied
by its central government is renovated each year to meet at least the minimum energy
performance requirements set in Article 4 of the EPBD. The rate of 3% is calculated on the
basis of the total useful floor area of buildings owned and occupied by central government of
the Member State concerned, with the total surface area of the floor of more than 250 m2. In
the renovation of buildings owned and occupied by central government, buildings with the
lowest energy features should have priority in the implementation of energy efficiency
measures. There are two possible approaches to the implementation of Article 5 of the EED
Directive by individual Member States, one renewal of 3% of the total surface area of heated
and / or cooled buildings owned and used by central government each year (standard
approach) or alternative approach to taking other cost effective measures in eligible buildings
owned and operated by central government that are at least equal to the savings in standard
access.
Each Member State may adopt a decision that the compulsory renovation of 3% of the total
useful floor area of heated/cooled buildings should not apply to the following categories of
buildings:
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– buildings officially protected (as part of a designated environment or because of their
special architectural or historical merit)
– buildings owned by the armed forces or central government intended for national
defence
– buildings used as places of worship and for religious activities.
In Article 6 of the EED, it is stipulated that Member States must make sure that central
government buys only products, services and buildings with high energy performance
. Further, Member States will encourage public bodies, including bodies at regional and local
level, to buy only products, services and buildings with high energy performance.
Article 7 of the EED Directive is crucial to the goal fulfillment of energy efficiency obligations
by 2020, as well as the mechanism for achieving the goals of the Paris Accords for 2030 and
beyond. Croatia has chosen the fulfillment of the goal in accordance with this article so called
combined approach. This approach has been selected by most EU Member States, and
includes alternative policy measures and Energy Efficiency Obligation Systems.
Croatia has decided that 41% of the goal of Article 7 will be fulfilled through the obligation
systems, and 59% through alternative policy measures, which make the most of the existing
national building fund (including public and commercial building and high-rise residential and
family housing programs) and measures to increase energy efficiency in traffic, public lighting
and some tax and regulatory measures.
Pursuant to the Energy Efficiency Act, it is urgent to enact the ordinance prescribed by Article
13 paragraph 5, which, pursuant to Article 42 paragraph 3 of the Energy Efficiency Act, should
be passed within three months after the entry into force of the Act (until January 2015).
The Directive on Promotion of the Use of Energy from Renewable Sources 2009/28/EU
(RES Directive) sets out the joint framework for promoting energy from renewable sources of
energy. The RES Directive, inter alia, sets mandatory national goals for the total share of
energy from RES in the final gross consumption of energy for each Member State. Since
Croatia acceded to the EU on 1 July 2013, it is not on the list.
The basic goal of the RES Directive is to achieve a share of energy from RES of at least 20%
in the final gross consumption of energy in the European Union.
Each Member State must adopt a national action plan for renewable energy.
Pursuant to the RES Directive by 31 December 2014, Member States must require the use of
minimum levels of energy from renewable sources in new buildings and in existing buildings
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that are subject to major renovation in their building regulations and codes or by other means
with equivalent effect, where appropriate.
The Energy Development Strategy of the Republic of Croatia (Official Gazette 130/09) shows
the target share of RES in gross direct consumption (S2020) of 20%. The goal of the strategy
was incorporated into the National Action Plan for Renewable Sources of Energy covering the
period leading up to 2020, where the share of energy from renewable sources in gross direct
consumption of energy (S2005) was 12.8%. Further to the foregoing, the expected quantity of
energy from renewable sources in line with the goal for 2020 is 1.469 ktoe.
EU legislation connected with state aid:
Treaty on the functioning of the European Union TFEU (2010/C 83/01)
Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain
categories of aid compatible with the internal market application of Articles 107
and 108 of the Treaty on the functioning of the European Union and of
Investments corresponding to the Europe 2020 priorities in Articles 38 and 39
The Treaty on the functioning of the European Union organises the functioning of the
Union and determines the areas of, delimitation of, and arrangements for exercising its
competences. Article 107 of the TFEU relates to state aid and stipulates the following types of
aid compatible with the internal market:
a) aid to promote the economic development of areas where the standard of living is
abnormally low or where there is serious underemployment, and of the regions referred
to in Article 349, in view of their structural, economic and social situation
b) aid to promote the execution of an important project of common European interest
or to remedy a serious disturbance in the economy of a Member State
c) aid to facilitate the development of certain economic activities or of certain
economic areas, where such aid does not adversely affect trading conditions to an
extent contrary to the common interest
d) aid to promote culture and heritage conservation where such aid does not affect
trading conditions and competition in the Union to an extent that is contrary to the
common interest
e) other categories of aid as may be specified by decision of the Council on a proposal
from the Commission.
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Article 108 of the TFEU defines the procedure followed by the European Commission in terms
of the systems of granting state aid. The Commission must, in cooperation with Member
States, keep under constant review all systems of aid existing in those States. If the
Commission finds that a certain category of aid granted is not compatible with the internal
market, it may issue a decision to have such aid abolished or altered within the prescribed
time. If the Member State concerned does not comply with the decision of the Commission on
aid, the Commission or any other interested Member State may refer the matter to the Court
of Justice of the European Union direct.
The Council of Ministers may, acting unanimously, decide that aid is considered to be
compatible with the internal market if such a decision is justified by exceptional circumstances.
The Commission Regulation (EU) No 651/2014 declaring certain categories of aid
compatible with the internal market application of Articles 107 and 108 of the Treaty on
the functioning of the European Union should enable better distribution of priorities in the
implementation of state aid, its simplification and better transparency, effective evaluation and
control of conformity with the rules on state aid at national level and at the level of the Union.
This Regulation applies to the following categories of aid: regional aid; aid to SMEs in the form
of investment aid, operating aid and SMEs' access to finance; aid for environmental protection;
aid for research and development and innovation; training aid; recruitment and employment
aid for disadvantaged workers and workers with disabilities; aid to make good the damage
caused by certain natural disasters; social aid for transport for residents of remote regions; aid
for broadband infrastructures; aid for culture and heritage conservation; aid for sport and
multifunctional recreational infrastructures; and aid for local infrastructures.
Further, the Regulation includes provisions regulating thresholds for notification, transparency
of aid, incentive effect, aid intensity and eligible costs, cumulation, publication and information,
and monitoring.
The Regulation regulates the granting of aid for investments in the installation of energy
efficient systems of centralised heating and cooling. The Regulation stipulates that aid is
compatible with the internal market within the meaning of Article 107, paragraph 3 of the TFEU
if the criteria set out in the Regulation are met.
In the Republic of Croatia, the Ministry of Finance, on the basis of Article 8 paragraph 2 of the
State Aid Act (Official Gazette 47/14) gives an opinion on certain programs / individual state
aid on which the European Commission decides and applies such programs / individual state
aid to the European Commission for approval, while informing the European Commission on
the specific programs / individual grants under Article 9 paragraph 2 of the SAA, which is the
case with state aid and Commission Regulation 651/2014 of 17 June 2014 on the assessment
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of certain categories of aid compatible with the internal market in application of Articles 107
and 108. of the Treaty on the Functioning of the European Union ( OJ C187, 26 June 2014,
hereafter: the General Block Exemption Regulation), and in accordance with the powers of
Article 3 subparagraph 6 of the SAA the Ministry of Finance, among other things, provides
expert assistance to providers of state aid and small value aids.
Pursuant to Article 2, subparagraph 1 of the SAA, state aid is the actual and potential expense
or reduced state revenue granted by the state aid provider in any form which distorts or
threatens to distort market competition by placing a more favorable position on a particular
entrepreneur or production of certain goods and / or services in so far as it affects trade
between the Member States of the European Union, in accordance with Article 107, paragraph
1 of the TFEU. From the definition of the concept of state aid, there are elements or conditions
that, cumulatively fulfilled, help to determine whether a measure constitutes state aid, which is
the following:
1. The measure includes funds allocated from the state budget, budget of a county, city
or municipality, funds and legal entities owned by the state. In addition to direct budget
expenditures, state aid also includes smaller or unpaid state revenues due to unpaid
taxes, contributions or other unpaid debts, that is, unpaid financial liabilities to the state,
debt write-off, land sales or real estates below the market price and no tenders,
donations land, etc.
2. The advantage of the market is realized by the fact that the user of the aid has received
funds that he could not realize in his regular business. In addition to obvious state aid
such as subsidies, tax exemption, state guarantees there are other state aid that is less
obvious and also provide an economic advantage, namely buying / renting state-owned
land to an entrepreneur at a more favorable price than the market, land, debt write-off,
access to public infrastructure without paying contributions, and recapitalization by the
state under more favorable conditions than would have been done by a private investor.
3. It is necessary to determine whether a particular entrepreneur, sector or region has
received certain funds from the state budget, the local or regional self-government unit
or other legal entity of the aid provider and has therefore been brought to a more
competitive market position. So the aid must be selective. Selectivity can be done when
there is a certain discretionary right of deciding during award aid by the aid provider.
4. The TFEU stipulate a ban on the award of state aid that affects (or could affect) trade
between the Member States of the European Union. Accordingly, it is necessary to
ascertain whether the activity carried out by the user has a real or potential effect on
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trade between Croatia and the European Union, that is, whether there is any distortion
of market competition.
If only one of the above conditions is not fulfilled, the measure is not considered as state aid.
As explained in the Commission Notificitation on the concept of state aid under Article 107,
paragraph 1 of the TFEU (2016 / C of 19 July 2016, hereinafter: Commission Notification) and
in accordance with the case law of the Court of Justice of the European Union, the user must
meet the conditions for an entrepreneur, but these conditions do not depend on his legal status,
whether it is founded on public or private law, or about his economic nature, whether to make
a profit or not. What is crucial for fulfilment the conditions of the definition of entrepreneur is
the fact that it deals with an economic activity consisting of offering products or services on a
particular market. National law is not relavant for defining the term of an entrepreneur , since
sometimes an subject, classified as an association or sports club on the basis of national law,
can be considered as an entrepreneur with regard to the state aid rules.
The SAA itself, in Article 2, subparagraph 7, grants users as defined above, that is, the user of
the aid is defined as any legal and natural person who, performing economic activity, takes
part in the movement of goods and services and receives state aid regardless of its form and
purpose.
So, in the case of non-economic activities, the user of the funds would not be considered as
the user of grant. In the case that the same entity deals with economic and non-economic
activities, public financing of non-economic activities will not be covered by Article 107,
paragraph 1 of the TFEU, if it is possible to unambiguously separate the two types of activities,
their costs, funding and revenues in order to effectively avoid cross-subsidization of economic
activities. As proof of appropriate allocation of costs, financial resources and revenues, the
annual financial statements of the relevant subject may be used.
Established under Article 4, subparagraph 1 of the SAA, the state aid provider shall, amongst
other things, draw up proposals for state aid programs and individual state aid from its scope
of activity and award state aid upon receipt of opinion or approval by the competent authorities
and after being published on its web sites.
When the state aid provider draws up a state aid program proposal, he must take into
consideration following facts: whether the funds allocated under the program proposal or the
individual aid represent state funds, if it is about state funds, whether they are allocated to
entrepreneurs (as state aid users), because allocating such funds to individuals does not
represent state support. Similarly, the state aid provider must determine on which established
European Union's legislative framework will grant aid (General Block Exemption Regulation,
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Guidelines on State aid for environmental protection and energy 2014-2020 ,Official Journal
of the European Union C 200, 28 June 2014, hereinafter referred: Guidelines).
Also, each proposal for a state aid program should include the following datas: the name of
proposal, the data on the provider, the legal basic for for the submission of the proposal, the
purpose, the duration of the measure, the user/users of the aid, the granting instrument, the
budget, the intensity of the grant and department. This follows from the practice of the
European Commission, which is evident from the Official Journal of the European Union in
cases of disclosure of program data / individual grants or decisions stating that funds do not
contain state support.
Namely, state aid which are subject to the notification requirement, EU Member States are
obliged to make official notification of aid measures to the European Commission on prior
approval under Article 108, paragraph 3, TFEU, in which case procedure in Article 8 of the
SAA is applied in the Republic of Croatia. However, prior to the formal application, the grantee
may, through the Ministry of Finance, also commit the previous unofficial subscription
(prenotification) as described in the Code of Best Practice for the conduct of State aid control
procedures.
These procedures (application, subscription) may also apply in cases where the grantor does
not consider a measure to be state aid within the meaning of Article 107, paragraph 1, of the
TFEU, but wishes to (pre)report to the European Commission for reasons of legal certainty.
Therefore, this Program is not a program of state aid under Article 8 or Article 9 of the SAA on
which the Ministry of Finance gives its opinion, but could represent one of the foundations for
the development of a state aid program or a grant fund program for reconstruction outside the
support regime.
As the aforementioned funds represent support if they cumulatively meet the above-mentioned
criteria, that is, if they are awarded to entrepreneurs engaged in economic activity by
participating in the transport of goods and services and in all other cases the existence of aid
is excluded.
If funds are to be allocated to the aid regime (eg. when users are those who perform economic
activities), in that case the MCPP will draw up a state aid program and submit it to the Ministry
of Economic to give its opinion.
In the case of allocated out of aid regime (eg. when users are not those who perform economic
activities- natural persons - owners of housing, public hospitals, public schools), to such
programs the Ministry of Economic does not issue an opinion, but in this case it is necessary
to take into consideration the application of other regulations (for example, public procurement
regulations or ensuriong their own contribution to the renovation of a private home).
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Furthermore, the Ministry of Economic points out that after the accession of the Republic of
Croatia to the European Union, ie after 1 July 2013, estimation, whether there is any state aid
measure or not, exclusively within the competence of the European Commission, therefore
every proposer measures, may, for legal certainty , report the measure to the European
Commission through the Ministry of Economic, and that the Ministry of Economic's opinion on
the exclusion of state aid is of a advisory nature only because the decision on existence and
non-existence is made by the European Commission.
If the funds were allocated to the aid regime, the Ministry of Economic points to the possibility
of drafting a state aid program under the General Block Exemption Regulation, in this case
established under Article 39 of the Regulation.
In order to grant aid under the Regulation in question, the conditions of chapters I to III of the
General Block Exemption Regulation must be cumulatively fulfilled.
6.2. Analysis of successful energy renovation programs for public sector buildings in the EU
Member States
Energy renewal activities of buildings carried out in most EU Member States are regional or
local initiatives, or projects with a view of sustainable development and they are provided with
co financing from development funds. The data available on the implemented energy
renovation programs is related to benefiting from EU Operational Programs (Jessica and
Elena) and development funds (ERDF) and a partial share in the national budget, subsidies or
financing the building occupant himself. Programs focused on a specific group of buildings or
territorial unit are larger in number than the integrated national programs.
Portugal - Energy Efficiency Program in Public Administration (Eco.AP) was opened in
2011 with partially defined tasks, aiming at developing energy services, establishing
agencies and providing equipment for behavioral change in energy use, and it
promotes rational energy services management. The program aims to increase energy
efficiency by 30% by 2020 in public services and public administration bodies (all
institutions under the jurisdiction of the central government). Energy Efficiency Fund
financed the program activities, yet a detailed overview is not available
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City of Berlin - the Berlin Energy Agency manages the project (Berlin Energy Saving
Partnership) in which the partners are the City of Berlin and several ESCOs. The
service is procured through a public tender. Funding is provided through ESCOs which
guarantee savings. Payback period with regard to the measures is 8 to 12 years,
provided that 80% of the savings serves as a compensation for the ESCO, and the
remaining 20% of a direct profit of the City of Berlin. Throughout the term of the energy
saving contract, technical systems are maintained by an ESCO, and the building by the
City of Berlin
Province of Milan - a centrally coordinated and joint preparation of the project for the
energy renovation of 30-40 school buildings in several municipalities. Standardized
energy performance contracts were drafted, and the projects were carried out as an
ESCO service with guaranteed savings of 20% and payment through the realized
savings in energy costs. The project was implemented through local banks and
financed by a EIB loan of MEUR 65 (EIB-ELENA instrument)
City of Prague - energy renovation of 15 schools through three stakeholders: according
to the energy performance contract, modernization/replacement of technical systems
is implemented, and the building envelope is financed by a subsidy from the
Operational Program of the EU Cohesion 2007-2013 and the resources of building
owners (about 28%)
Poland - TM program (Thermo-Modernization) provides a subsidy of 20% for
commercial loans. Subsidies are provided from the state budget and managed by the
state commercial bank (BGK). The program is designed for all sectors, but 90% of
projects were completed in the housing sector. Commercial loans are disbursed
through 16 banks in which the client submits an energy overview showing the project's
feasibility and a unique application for a loan and subsidies.
Graz, Austria - integrated energy contracting included the application of 3 ESCO
service mechanisms: energy savings contract on replacing cogeneration plant boilers;
energy performance contracting for mechanical ventilation equipment and system with
heat recovery; energy savings contract based on renewable energy sources for solar
thermal systems. 75% co-financing (EUR 110,000) was provided through ESCO
service, and the rest was financed by the building user (EUR 38,000). The model was
implemented to a public building under the architectural heritage protection. Final
energy savings amounted to 15% and savings in emissions of CO2 to 35%.
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6.2.1. Overview of the key program elements, including organizational, legal and financial aspects
Article 5 of EED directive provides for the renovation obligation concerning public sector
buildings owned by the central government in all MSs. For this purpose, national plans and
policies were drafted as a framework for the implementation of the reconstruction program.
Each MS has a different approach regarding implementation as well as financial mechanisms.
There is a significant problem with regard to deep energy renovation of buildings using
unconventional financial and operational models - the building owner defrays the financial cost
and supports the renovation operationally.
Implementing Article 5 of EED directive is possible, so called standard approach, that is,
renovation of 3% of the total floor area of heated and/or cooled buildings owned and used by
the central government every year or the alternative approach implementing other cost-
effective measures taken in eligible buildings owned and used by the central government,
provided that they achieve at least equal savings as the standard approach. In alternative
approaches, each MS defines various energy efficiency measures for achieving the required
savings. One of the key factors for a successful reconstruction program are the funding
methods, i.e. financial instruments. Key data available on the selected approach, defined
measures and financial instruments according to Article 5 for each MS are in Table 6.2. in
Annex 7.
Briefly, the following can be noted at the EU level:
Almost all MSs have programs encouraging building renovation by means of classic or
innovative financing models of or external financing
Most of the financial instruments target existing buildings
The most commonly used financing methods are subsidies or co-financing. Loans or
fiscal instruments are used to a lesser extent.
Relevant information on the specifics of individual renovation programs are rarely
available. There is no systematic way of monitoring, of standardized indicators usage
and there are no reports on the final objectives achieved.
A small part of financial instruments is directed at comprehensive building renovation
More active involvement of private financing is not addressed in many MSs
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6.2.2. ESCO models which include integrated energy renovation of buildings
Most of MSs attempt to involve private funding in the energy renovation of public buildings.
Past experience shows that projects of (integrated) building renovation are unprofitable,
especially when including the building envelope in the investment, which discourages potential
private investors. In very rare cases it is possible to carry out an integrated building renovation
using only one funding source - energy Service Providers. Due to a possible market expansion,
the energy Service Providers have been presented with additional methods of financing such
as co-funding and subsidies with a view to ensuring project cost-effectiveness.
According to available data, only Croatia, Lithuania and Slovenia opted for a program of public
building renovation based exclusively or predominantly on the ESCO model. In other MMs, the
ESCO model is one of the instruments most commonly implemented at the local or regional
level, although it is considered to become introduced as the dominant model. For this reason
as well as the aforementioned unprofitability, sample programs of integrated renovation are
smaller in volume and in number.
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Table 6.2. Examples of integrated renovation programs utilizing an energy performance model3
MS Description
Italy, the Milan region
Name Public buildings in the Milan region
Method of financing ELENA and energy performance agreement with savings dividing
Implementation period 2013 onwards
Technology used Building envelope, heating systems, lighting, renewable energy sources, automation
Poland, the Radzionkow municipality
Name Public-private partnership in the Radzionkow municipality
Method of financing Energy performance contract
Implementation period 2010 onwards
Technology used Building envelope, heating systems, lighting, renewable energy sources, automation, energy management
Poland, the Radzionkow municipality
Name Public-private partnership in the Radzionkow municipality co-financed by Green Investment Schemes
Method of financing Energy performance agreement with co-financing
Implementation period 2013 onwards
Technology used Building envelope, heating systems, lighting, renewable energy sources, automation, energy management
Czech Republic, Prague
Name Rebuilding schools in Prague
Method of financing Energy performance agreement with co-financing from the operational program and by building owners
Implementation period N/A
Technology used Building envelope, heating systems, lighting, measures to reduce water consumption
Lithuania Name Renovation of public buildings
Method of financing Energy performance agreement with building owner funding
Implementation period N/A
Technology used Building envelope, heating system, lighting system, ventilation / air conditioning systems
Slovenia Name Renovation of public buildings
Method of financing Energy performance agreement with co-financing
Implementation period 2015 onwards
Technology used Building envelope, heating system, lighting system, ventilation / air conditioning systems
Slovenia has been renovating its public buildings many years now in accordance with different
models involving energy renovation of public buildings. In 2015, the renovation was intensified
by adopting Long-term strategies for the promotion of building energy renovation.
The strategy aims to restore 3% of public sector buildings owned or used by the public sector,
until 2020 or 2030. In accordance with OP-ECP, 1.8 million m2 in buildings in the wider public
sector require renovation. The objective is also to improve the ratio between the invested public
3 http://www.combines-ce.eu/Portals/0/graphics/brochure_CombinES_ENG-for-web.pdf
110
funds and incentives in the public sector to 1: 3 compliant to the OP TGP-2020. The plan is to
conduct five demonstration projects in energy renovation concerning different types of
buildings (OP-ECP). public sector buildings comprise only about 10% of the total fund in
Slovenia.
Annually by 2030, EUR 6.7 billion will be invested in all buildings, of which between 51 and
EUR 53 million, or EUR 415 million in total including 22 % VAT, will be invested in the public
sector annually during cohesion funds utilization from 2016 to 2023. Grants awarded for energy
renovation of public sector buildings make up approximately 40% of the total funding, and the
rest will be covered by ESCO and financial instruments.
In December 2014, a document entitled Guidelines on implementing energy efficiency
improvements in public sector buildings following the principle of energy performance
contracting was adopted. The document elaborated models of public building renovation by
defining models of energy service contracting, the applicability of the model in Slovenia, details
of negotiating and ensuring energy supply and energy performance, budget and legal
problems, project schedule, project identification, the issue of public-private partnership and
concession agreement, as well as various technical annexes related to the consumption
intensity in some public buildings, practices and contract proposal with all its items.
After issuing guidelines, in 2016 three documents were released initiating an intensive energy
renovation of public sector buildings using the cohesion funds and, based on those documents,
the current local and regional government units invite public tenders for the renovation of
buildings which they use or own. These contain the instructions for implementing energy
renovation of public buildings. The three documents are: Operating instructions for
intermediate bodies and beneficiaries in the implementation of energy renovation of public
sector buildings4, Detailed guidelines for public partners in the implementation of energy
renovation of public sector buildings5 and Manual containing eligible costs for the
implementation of energy renovation of public sector buildings6.
Operating instructions for intermediary bodies and beneficiaries in the implementation
of energy renovation of public sector buildings include the core legal basis, instructions
for the execution of works, conditions, criteria and standards for selecting works to be
co-funded, a description of the co-funding system and guidance for preparing the
necessary documentation
4 http://www.mzi.gov.si/fileadmin/mzi.gov.si/pageuploads/Kabinet_ministra/NDPOEPS_2_februar2016.pdf 5 http://www.mzi.gov.si/fileadmin/mzi.gov.si/pageuploads/Kabinet_ministra/PUJPEPS_februar2016_final.pdf 6 http://www.mzi.gov.si/fileadmin/mzi.gov.si/pageuploads/Kabinet_ministra/PUSEPS_februar2016_final.pdf
111
Detailed guidelines for public partners in the implementation of energy renovation of
public sector buildings clarify the concept of energy performance contracting to public
partners through project identification, obstacle removal and facing the challenges
arising in the execution of the projects by means of public-private partnership contracts.
The guidelines aim to improve energy efficiency by energy performance contracting
and they provide clear information on the proper procedure during the execution of
such projects
Manual containing justified costs for the implementation of energy renovation of public
sector buildings systematically displays all justified and unjustified costs incurred in
course of energy renovation works.
The purpose of these instructions and guidelines for the implementation of energy renovation
of public sector buildings is to provide intermediate bodies and users with all the necessary
information, recommendations and guidelines to achieve most profit with lowest investment
(material, financial and human) out of the individual implementation of measures, and to detail
the operation and operation procedures concerning intermediary bodies and beneficiaries in
the implementation of energy renovation measures.
Slovenia will soon publish guidelines for the energy renovation of cultural heritage buildings as
well as instructions and technical guidelines for energy renovation of public buildings.
At the beginning of 2016, The Ministry of Infrastructure conducted a series of workshops for
municipality representatives7 and representatives of the central state administration8, the so
called narrower public sector, and the project was also presented to all interested ESCOs9 as
potential partners and contractors of public-private partnerships which most public sector
buildings are planned to be restored by. By the end of 2016, experts will hold a series of
presentations, educational workshops and seminars for all stakeholders.
As an example of good practice recommendation is to thoroughly analyze the instructions,
guidelines and manuals issued by Slovenia, and, following the same principle, draft documents
adapted to selected models of energy renovation of public buildings in Croatia. All these
documents are extremely important for implementing the energy renovation of public buildings,
primarily in order to convey a clear message to all the stakeholders to pursue the given
objectives as soon as possible. The procedure in which guidelines provide for details and
7 http://www.energetika-portal.si/fileadmin/dokumenti/podrocja/energetika/javne_stavbe/predstavitev_epsjs_ob_
marec_2016.pdf 8http://www.energetikaportal.si/fileadmin/dokumenti/podrocja/energetika/javne_stavbe/predstavitev_epsjs_js_m
arec_2016.pdf 9http://www.energetikaportal.si/fileadmin/dokumenti/podrocja/energetika/javne_stavbe/predstavitev_dunaj_2015
112
options ensures system flexibility, i.e. the necessary changes can be easily implemented
through guidelines.
6.3. Program success analysis focusing on ESCO implementation models and other models without state co-financing and good practice which can be
applied in Republic of Croatia
From EU practices, the following can be concluded:
The ESCO model is used in partial renovation of buildings. The stated is left to the
owners, regional or local government units, to develop or choose. In high-quality
contract development and transfer of necessary risks onto the Service Provider, the
model is not considered a debt. The vast majority concerns individual projects carried
out in most MSs10 (Germany, Poland, Czech Republic, Slovenia, Slovakia, etc.). The
experience of the ESCO model in developed markets such as Italy showed a significant
penetration of energy services in public buildings in partial renovation (HVAC systems,
energy source change). What happens here is that the public building market is
saturated to the extent that it is hard to find buildings which could be brought to a higher
level of renovation (nZEB) since the energy service contracts are still valid11
In a complete renovation of residential buildings, sources of financing without subsidies
such as ESCO models, classic debt or revolving funds are implemented relatively
successfully. It turns out that, primarily because of high energy consumption, market
profitability is found in integrated renovation of residential buildings, which includes
private capital. These models were noted in countries with exceptionally high heating
energy consumption, especially due to climatic specifics (e.g. Latvia)
In a complete renovation of public non-residential buildings, there are rare cases
where financing was covered by the ESCO model without co-financing. First of all,
this depends on the prices of energy, type of energy consumed, how the building is
used and the existing technology (including the building envelope). The examples
10 http://www.combines-ce.eu/Portals/0/graphics/brochure_CombinES_ENG-for-web.pdf 11 RePublic_ZEB project – experiences of the Lombardo region - http://www.republiczeb.org/
113
include individual buildings, without the possibility of replication onto a larger sample.
In order to expand the model, subsidies ensuring profitability to private investors were
introduced.
Overall, it can be concluded that the results achieved in the Republic of Croatia are the best
example of the ESCO model application in terms of complete renovation of public sector
buildings. In renovations performed within the Public Sector Building Energy Renovation
Program 2014-2015, including projects which are in the implementation stage, only Croatia
has achieved significant results by achieving a high level of energy savings.
Applied experiences of other EU MSs refer mostly to the "soft" measures or HVAC
investments, while building envelope investments are made by the public sector. Such
measures do not affect employment or the development of the construction sector by using
private capital.
This is most likely because Croatia has a more detailed legal framework for the implementation
of energy performance agreements (Energy Efficiency Act, Regulation on contracting energy
services for public sector buildings, Public Sector Building Renovation Program, standard
energy performance contract), as well as a monitoring system considering energy efficiency
and energy consumption programs (SMIV, EMIS) at the national level. Such arrangement is
not applied in other EU MSs, which have failed in their efforts to engage private capital in
renovating public buildings.
Republic of Croatia should further develop international cooperation in exchanging
experiences, which Croatia can make use of in implementing some practical experience,
above all technical ones, but it is primarily expected for the model developed in the Repulic of
Croatia to be applied in other MSs as the obvious best practice.
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7. FINANCIAL ANALYSIS (NATIONAL AND EU RULES AND PROCEDURES)
Directive on energy efficiency requires support in developing the energy services market,
development of new financial mechanisms and incentives as well as institutional, financial and
legal frameworks to remove existing market barriers and shortcomings preventing efficient
end-use of energy. Previous experience in energy renovation, especially in the public sector,
indicates a large number of barriers left in a wider and faster implementation of energy
renovation projects in Republic of Croatia. These barriers, detailed in this Chapter, ultimately
come down to financial restraints.
Financial barriers currently hindering the development of energy renovation include:
very limited and volatile funds from public subsidies
a high degree of public indebtedness
a lack of adequate, long-term financial instruments;
high cost of capital since the energy renovation projects are perceived as risky
lack of support instruments for large enterprises
a lack of tax incentives for energy renovation programs
underdeveloped ESCO market
over-indebtedness and/or limited leverage (borrowing capacity) of ESCOs and
construction companies
non-market-based energy prices reduce the profitability of energy efficiency projects
high minimum size of projects for benefiting from EU technical assistance programs for
investors from Croatia.
Through its implementation policy12 and programs, in recent years the European Commission
has been strongly encouraging and promoting a more active role of financial instruments and
private funding in the process of financing energy efficiency projects, with a strong tendency
to move away from financing mechanisms based solely (and/or for the most part) on subsidies
from (supra)national sources. The reasons for the stated are twofold:
12 Example: Energy Efficiency Financial Institution Group ( "EEFIG") and report How to drive new finance for
energy efficiency investments
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The experiences of developed EU MSs (which first began to implement energy
efficiency and energy renovation programs) indicate that public funding sources are not
sufficient to mobilize the financial resources necessary to fund energy renovation
projects in total at the level of achieving the set objectives, which is especially
noticeable in public sector buildings.
In this moment, the cumulative public money available for energy renovation projects
is several times smaller compared to the private money available in the financial
markets, and greatly insufficient to achieve the set objectives. However, the existing
(primary grant) mechanisms have proved insufficient to mobilize private money.
Therefore, the financial instruments, the development and use of which the EU
Commission actively promotes, are seen as one of the mechanisms allowing a wider
mobilization of private money and a greater added value of allocated and invested
public money.
Currently, the existing institutions and related sources of funding in Croatia do not have
sufficient financial strength to provide for the entire investment from the Long-Term Strategy.
This especially applies to limited budgetary resources of the state as well as of regional and
local government units, which should be relieved by means of new and innovative financing
mechanisms.
Existing financial mechanisms are not sufficient to realize the national energy objectives.
This chapter provides an overview of the possible ways of financing and co-financing energy
efficient building renovations by means of incentives and resources offered in the energy
sector. In doing so, special emphasis is placed on the available foreign experience in
promoting, financing and co-financing such projects.
Financing possibilities concerning energy renovation of public sector buildings on grounds of
domestic and foreign experience are elaborated in detail in Annex 8.
7.1. Detailed needs for funding from national funds along with EU funds
According to estimates from 2010, useful floor area in the public sector buildings is
approximately 13.8 million m2. According to NEEAP, 43.9% (about 6.06 million m2) of that area
is heated and has potential for energy renovation.
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Based on estimates13costs for the renovation of the building stock by implementing measures
envisaged in the TRRUETIB is approx. HRK 1,000 per m2. These provisions should be
implemented by 2018 for public buildings, and by 2020 for all other buildings. Directive 2on the
energy performance of buidings, which is in force since 1st January 2015, requires the
integrated energy renovation to be implemented which includes additional costs of approx.
HRK 600/m2 (i.e. total cost is HRK 1,600 per m2). The cost for the renovation of public buildings
for the programming period 2014-2020 can be estimated as the average of these costs, i.e.
approx. HRK 1,300 per m2.
Given these assumptions, it can be concluded that Republic of Croatia must mobilize
resources amounting to around HRK 7.88 billion (EUR 1.03 billion) to achieve the objective of
restoring 100% of public buildings.
Based on the assumptions stated above, it is estimated that the implementation of energy
renovation Program involving public buildings can generate cost savings of approx. HRK
377,900,000 (EUR 49.40 million) in continental areas, HRK 91.8 million (EUR 12 million) in the
coastal area. According to calculations made by PwC,14 a combined investment of EUR 1.03
billion will generate savings of approx. EUR 61 million (combining continental and coastal
areas), which corresponds to the repayment on investment of approx. 6% and a repayment
period of almost 17 years.
To achieve the objectives in 2020, those stated in the national strategy, NEEAP provides a
range of specific measures aimed at public sector buildings (including central government
buildings, as well as local and regional government units, public companies and day cares,
schools and hospitals).
Investments envisaged in NEEAP require significant expenditure from public funds, which are
usually financed by debt. However, the ability of the public sector to contract a debt is largely
limited by a set of regulations, which is a direct and significant factor of limitation with regard
to a wider and faster implementation of the planned measures.
According to the 3rd NEEAP, from 2016 to 2020 this Program is predicted to restore 210 000
m2 of public sector buildings, and to provide HRK 724.1 million for each year, in accordance
with the estimated cost of reconstruction at around HRK 1,500.00 per m2.
Also, the 3rd NEEAP states that through the Public Sector Building Energy Renovation
Program 2014-2015, a comprehensive renovation will be contracted and implemented in 200
13 Dugoročna strategija za poticanje ulaganja u obnovu nacionalnog fonda zgrada Republike Hrvatske 14 Assessing the potential future use of financial instruments in Croatia, EIB, 2015
117
public sector buildings, having useful floor area of approximately 420,000 m2, with a total
investment of about HRK 400 million.
Thus, by adding the objectives and results of both renovation programs involving public
buildings referred to in the 3rd NEEAP, it may be concluded that from 2014 to 2020 the program
implementation will help renovate about 1.5 million m2, which is about 25% of the total heated
floor area of the public building stock in Croatia, and the savings in public buildings will amount
to around 262.5 million kWh.
Coinciding with the OPCC, the implementation of both programs in the Programming Period
from 2014 to 2020 would realize the investment in the amount of about HRK 4 billion (about
EUR 528 million) , HRK 400 million for the Programming Period 2014-2015 and HRK 3.6 billion
(EUR 400 million) for the Programming Period from 2016 to 2020.
With the assumed pace of renovation of public sector building stock (3% annually) in the
upcoming five-year period, there is a need for capital investments of EUR 83 million a year
(cost of integrated renovation of approx. HRK 1500/m2, with a total heated floor area of 13.8
million m2), which indicates that HRK 3.14 billion (EUR 412 million) of investment costs will be
required by 2020.
In priority axis 4, specific objective 4C1 - Reducing Energy Consumption in Public Sector
Buildings as comprised in the Operational Program Competitiveness and Cohesion 2014-
2020, Croatia provided for the allocation of EUR 211,810,805 from theERDF.
Assuming the full absorption of those approx. EUR 212 million in the upcoming five-year
period, there is a need for additional investment capital of approx. EUR 200 million to meet
the total investment needs of approx. EUR 412 million necessary for achieving the objectives
by the anticipated pace until 2020.
Without co-financing of a minimum of 50% of the investment cost at the project level (i.e.
approx. EUR 212 million on a cumulative basis in the five-year period) primarily from EU
sources, the Program will not be financially feasible, and therefore not sustainable. It is
therefore a necessary precondition for creating a sustainable system of absorption of the funds
available in the full amount, in accordance with the relevant specific objective of OPCC. It is
unrealistic to rely on the financial participation of either the central government (issues of
excessive debt, of deficit and of generating public debt growth by taking new loans on account
of energy renovation), and much less local and regional government units (issues of excessive
debt (limited creditworthiness), of restrictions on local budgets in terms of the maximum
amount of debt, of determining priority projects). The key challenge of creating a sustainable
system is not in attracting the public money, but the private money which is sufficient in the
domestic financial market. However, at the moment, the money is inert with regard to
investments into energy renovation of the public sector. The results of the ex-ante analysis
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(PwC, EIB, 2015) indicate that at this point it is impossible to estimate the financial gap
between supply (which is known) as reported through needs and its dynamics, and demand in
terms of money available for financing EE projects in the public sector. It is clear that the only
possible mechanism for mobilizing private money (from purely commercial sources) is
development and implementation (appropriate and feasible for this market) of financial
instruments.
7.2. Analysis of the investments needed to achieve national objectives
The required investment for achieving national objectives is:
public sector building stock m² 13,801,902
specific investment HRK/m² 1,520
annual rate of building renovation % 3
required investment HRK/a HRK 629,000,000
The average investment for an integrated building renovation according to these data is HRK
1,520 /m², which coincides with the costs collected through a detailed bill of costs regarding
energy renovation in the cost optimal analyses of the reference buildings.
The existing cost optimal analyses show that the total investment in the integrated
reconstruction in continental Croatia is 15% higher than the investment in coastal Croatia, and
that the investment ranges from 850 to 1750, depending on the intended use of the building.
The average investment in the building envelope comprises 54% of the total investment, while
41% pertains to the reconstruction of HVAC systems, and 5% to lighting.
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Picture 7-1 Average share of the system in the cost of integral building renovation
These relations vary according to the purpose and the period when the building was
constructed, and the average values are given below.
Table 7.1. Average investment cost by technical system, building type and construction period in Continental Croatia
Building Construction period
Total envelope
Total building technical systems
Total lighting Total
HRK/m² HRK/m² HRK/m² HRK/m²
Hospital <1970 780 522 44 1,347
Hospital 1970-2005 973 498 46 1,516
Education <1970 792 472 31 1,295
Education 1970-2005 589 305 25 920
Sports halls <1970 665 985 58 1,707
Sports halls 1970-2005 709 967 78 1,754
Hotels and restaurants <1970 409 447 27 884
Hotels and restaurants 1970-2005 813 556 41 1,411
Office buildings <1970 949 428 42 1,419
Office buildings 1970-2005 943 523 42 1,509
Retail buildings <1970 942 550 150 1,642
Retail buildings 1970-2005 645 711 150 1,507
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Table 7.2. Average investment cost by technical system, building type and construction period in Coastal Croatia
Zgrada Construction period
Total envelope
Total building technical systems
Total lighting Total
HRK/m² HRK/m² HRK/m² HRK/m²
Hospital <1970 786 538 44 1,368
Hospital 1970-2005 906 638 50 1,595
Education <1970 580 238 29 847
Education 1970-2005 808 230 25 1,063
Sports halls <1970 648 1.032 57 1,737
Sports halls 1970-2005 487 622 45 1,154
Hotels and restaurants <1970 611 473 26 1,109
Hotels and restaurants 1970-2005 524 410 39 973
Office buildings <1970 782 439 42 1,263
Office buildings 1970-2005 848 507 40 1,395
Retail buildings <1970 529 436 165 1,130
Retail buildings 1970-2005 542 578 165 1,286
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Table 7.3. Integral refurbishment investment - average values by component
Building type Construction period
Cliamte walls ceilings floors windows
generator distribution emmiters
ventilation DHW Solar thermal collector
Cooling lighting
HRK/m² HRK/m² HRK/m² HRK/m² HRK/m² HRK/m² HRK/m² HRK/m² HRK/
m² HRK/m² HRK/m² HRK/m²
Hospital <1970 K 177 203 131 269 122 62 135 42 13 11 137 44
Hospital 1970-2005 K 292 235 142 303 120 49 133 57 11 10 116 46
Education <1970 K 239 180 0 373 109 42 102 190 0 0 29 31
Education 1970-2005 K 98 210 0 281 76 27 70 113 0 0 19 25
Sports halls <1970 K 237 118 0 310 128 52 74 124 0 0 607 58
Sports halls 1970-2005 K 240 242 0 227 149 58 38 120 0 0 602 78
Hotels and restaurants
<1970 K 99 101 51 159 98 30 171 21 9 19 100 27
Hotels and restaurants
1970-2005 K 109 146 82 476 124 46 199 22 12 25 127 41
Offices <1970 K 242 127 48 532 71 72 47 62 2 0 174 42
Offices 1970-2005 K 184 116 76 568 66 75 46 58 0 0 278 42
Retail <1970 K 136 311 191 304 133 29 84 118 0 0 186 150
Retail 1970-2005 K 102 239 90 214 86 12 32 124 0 36 422 150
Hospital <1970 P 170 210 140 266 91 64 170 44 12 9 149 44
Hospital 1970-2005 P 202 263 163 278 114 71 194 52 13 19 176 50
Education <1970 P 120 160 0 299 69 37 105 0 0 0 27 29
Education 1970-2005 P 98 318 0 391 69 39 98 0 0 0 24 25
Sports halls <1970 P 230 142 0 276 67 46 60 126 0 2 732 57
Sports halls 1970-2005 P 100 202 0 185 44 23 47 97 0 2 410 45
Hotels and restaurants
<1970 P 115 103 58 335 97 34 184 19 13 16 110 26
Hotels and restaurants
1970-2005 P 109 85 49 280 87 26 167 21 8 12 90 39
Offices <1970 P 196 129 67 390 76 97 40 76 0 0 151 42
Offices 1970-2005 P 138 103 73 534 61 88 39 69 0 0 249 40
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Building type Construction period
Cliamte walls ceilings floors windows
generator distribution emmiters
ventilation DHW Solar thermal collector
Cooling lighting
HRK/m² HRK/m² HRK/m² HRK/m² HRK/m² HRK/m² HRK/m² HRK/m² HRK/
m² HRK/m² HRK/m² HRK/m²
Retail <1970 P 178 160 0 190 74 22 72 72 0 0 196 165
Retail 1970-2005 P 78 213 84 168 51 11 23 131 0 0 362 165
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7.2.1. Cost-optimal energy efficiency measures in public buildings
Current newbuilding requirements in the regulation in force are defined as the cost-optimal
level of requirements for all buildings by purpose. Requirements in existing building
reconstruction are specified in the same way. The values are determined according to an
analysis of the overall costs for buildings, omitting the co-financing and the cost of building
deconstruction after the economic lifetime of the building expires.
Due to the significant impact of co-financing in the Public Sector Building Energy Renovation
Program, in Chapter 11 an additional sensitivity analysis was carried out due to the size and
structure of subsidies regarding the selected optimal level of energy renovation of public sector
buildings
7.2.2. The required level of incentives in relation to the profitability of investments in individual measures and overall energy renovation
To determine the required level of incentives in relation to the profitability of investments, a
cost-optimized analysis was carried out with regard to measures targeting public sector
buildings in Chapter 8.
7.3. Long-term funding plans
In line with the set objectives, Croatia is faced with the challenge of implementing projects of
energy renovation of public sector buildings, valued at more than EUR 400 million by 2020.
For this purpose, OPCC provides for the allocation of approx. EUR 212 million from the ERDF.
Aside the prEMISe concerning full absorption of this amount, which would ensure co-financing
up to 50% of the capital investment in the program, a financial gap of approx. EUR 200 million
remains, which should be secured from private (commercial) sources, which in turn are not
interested (for various reasons) to finance projects of this kind at the moment. At this point,
commercial financial institutions perceive the projects of energy renovation of public sector
buildings as highly risky, and accordingly offer unfavorable financing conditions (interest rates
of more than 5%, limit-maturity loans, high demands for securities, mortgages, guarantees,
etc.). Cumulatively, this leads to a situation where the available amount of funding in the market
is not sufficient to cover demand (in terms of project activities) necessary to achieve national
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objectives - terms offered to the project promoters (if it gets to the offering phase) are not
acceptable.
The key to creating long-term sustainable funding plans as part of the Program lies in the
development and implementation of a simple, efficient and transparent system of classification
and determining the priority of energy renovation projects in terms of financial sustainability at
the project level or establish criteria (i.e. the point of demarcation) which would separate
projects into one of the three financing modalities:
Co-financing (grant) from national and EU sources
Financial instruments
Commercial terms of financing (commercial banks).
The points of demarcation result from the guidelines given in the context of methodology for
ex-ante assessment, and they can be summarized as shown in the following figure15.
According to those guidelines, financial instruments should be designed for projects which fall
under the classification category A or B16. This presupposes that all the examined projects are
analyzed in accordance with the CBA methodology in order to calculate their financial rate of
return (IRR) and economic rate of return (ERR). Ideally, the above prerequisites having been
15 Source: Assessing the potential future use of financial instruments in Greece, EIB, 2015 16 Type B: Projects that particular rate of return, but not sufficient to achieve the rate of return required by the market rate (IRR). At the same time, such via computer show strong economic return (ERR) which in principle reflects their contribution to the OPKK. Type C: Projects which are showing significant economic returns that can be generated (ERR), but cannot generate high enough financial return (IRR). These projects may be primarily supported subsidies of the public sector.
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realized, the projects would be classified and ranked on grounds of the only relevant single-
number indicator which summarizes the financial viability of the project and its bankability in
a single number, and thus also implicitly summarizes its technical efficiency (level of savings
achieved in relation to the total project cost) - the DSCR ( Debt Service Coverage Ratio). This
ratio is calculated as the ratio of free cash flow (after settling all obligations under the project
including operational and investment activities) and the total debt. This would easily classify
projects into three groups:
DSCR> 1.25 - commercially viable projects (funds available are 25% greater than the
total debt) - funding solely from commercial sources
1>DSCR<1.25 - support through a financial instrument
DSCR<1 - financially unsustainable project - co-financing (most of the investment)
through a grant.
However, experience shows that the majority of projects in the Republic of Croatian public
sector in the category of financially unviable and very marginally viable ones, and that few
projects are in the category of commercially viable ones and those which require minor
assistance financial instrument to stay commercially viable. Therefore, it is clear that in order
to implement a majority of projects in the Republic of Croatian public sector, it is necessary to
ensure a significant amount of grants and financial instruments, so that the public sector could
close the financial structure. However, regardless of the above, it is necessary to develop a
transparent, simple and effective system of project demarcation within which priority would be
ranked and determined with respect to major projects (in terms of the estimated investment
cost or complexity of the project) and bundles of smaller projects (grouped so that their
cumulative reaches the criteria of the previous categories) according to the calculated level of
needed financial instruments or grant which would promote projects (in terms of financial
viability) to the group closer to the level of commercial viability. One potential solution in this
case is the development of a graduated system of demarcation which would:
in the first step defined technical - economic category of the project under consideration
(e.g. up to certain height investment cost, minimum floor area under renovation, level
of savings achieved, group of other kind of criteria (purpose, ownership, region, etc.),
phase of readiness). In that, efforts should be devoted to grouping smaller projects in
order to reduce the overall transaction and administrative costs
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the second step consists of project grading within each of the project bundle based on
financial criteria defined in a way that the critical values reflect commercial conditions
in terms of market expectations
based on the results of previous grading, the third step defines the level of support
required to bring projects closer to the category of financially viable, and consequently
ranks the projects by giving priority to projects which require the lowest amount of co-
financing in order to reach the category of financially viable.
By applying the criteria of actual energy consumption registered in EMIS in relation to the
minimum requirements or to the average energy consumption in all public sector buildings
included, the building-related shares which are eligible for a specific rate of support to energy
renovation projects are established according to their purpose, and the Chapter 8 of this
Program" contains scenarios elaborating the possible penetration of energy renovation, a
realistically achievable level of savings and the distribution of the necessary funding in the
public sector and private capital.
7.4. Specific recommendations on the application of financial instruments applicable in Republic of
Croatia 7.4.1. Guarantees
Most frequently by guarantee funds used for securing debt with the purpose of funding (loan
granting) an energy renovation project, and the guarantees are accepted as securities in the
process of granting loans
With this instrument, the problem arising from the fact that energy Service Providers engage
their own capital in energy renovation projects, and do not acquire assets in its own balance
sheet, can be resolved. The guarantee resolves the issue in a way that part of the risk is
transferred from the energy Service Providers onto the Guarantee Scheme (guarantee
portfolio or guarantee fund) thus releasing a part of the company balance (capital), which then
becomes available for further investments. With such a guarantee, it is possible to involve loan
funds, which otherwise would not be available, in project funding according to the energy
services model.
Given that currently such an instrument does not exist, the price of such a guarantee can be
placed on a commercial basis (but will not work as a subsidy), and this may attract private
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investors to the instrument. In this case, the state does not give subsidies, but by its own
example creates a pathway for private investors. If necessary, a kind of preferential fees can
be offered to private investors.
It is proposed that a guarantee fund be formed, in which a part of the funds from the ERDF (a
part of the allocated EUR 212 million) would be redirected to establishing a guarantee fund
which would provide guarantees to ESCOs (ESPr) (ESCO), which would use the former as
securities with commercial financial institutions to obtain long-term financing.
7.4.2. Equity instruments
Most frequently by equity funds investing in energy renewal projects or ESCO (ESPr) who
participate in the implementation of such projects.
An equity fund would increase the volume of equity capital available for investments in projects
according to the energy services model. While a guarantee enables companies to engage loan
funds along with their own capital, and thus realize a number of projects in relation to the
exclusive use of their own capital, this instrument increases the scope of equity capital of the
energy Service Providers themselves.
This equity instrument would seek opportunities for investing into companies directly, allowing
for placement of the capital of private and public investors in the energy service market, and
thus directly increase its capacity. At the same time, investors are enabled to participate in this
market in a diversified manner, thus reducing the investment risk.
Since, through the equity instrument, capital would be offered to companies at market
conditions (requiring a market return), such an investment regarding this financial instrument
cannot be considered as subsidy.
Through the equity instrument platform, it is possible to promote and finance energy services
through green bonds, and thus seek to engage the capital of a wider range of investors. With
a sufficient number of such bond issues, options of structured debt products formed from
multiple bonds become viable, and consequently these products can be offered to institutional
investors seeking exposure to longer maturities and respective return.
In the case of this financial instrument, it will be necessary to consider the need to use some
form of preferential fee regime.
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7.4.3. Specialised line of credit
Credit lines or derivative financial instruments that provide more favorable and flexible
financing terms than commercial (longer repayment periods, longer grace periods, lower
interest rates, lower fixed transaction costs, etc.). From this financial instrument credit products
designed for energy Service Providers as well as companies which independently implement
energy efficiency projects would be financed. Products formed from this line of credit should
be structured in a way enabling easy combining with guarantees.
This instrument can be realized through commercial banks, which could also engage a part of
their own funds.
It is also recommended to develop a specialized credit line for energy renovation of buildings,
whose user would be the public sector. Such loans the private sector could combined with the
use of grants.
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8. SCENARIOS OF IMPLEMENTING ENERGY RENOVATION IN PUBLIC SECTOR BUILDINGS
8.1. Implementation scenarios
Energy renovation scenarios and models are based on the assumption that the property
investments ESPu are not considered as additional property investments, nor investment
expenses. The next important assumption is that, under the prerequisite that the Service
Provider bears the risk, the energy service agreement is not included in the public debt of the
government.
All the projects contracted under the current OPCC programs and the Public Sector Building
Energy Renovation Program 2014 - 2015 are transferred into the scenarios of implementing
energy renovation in public sector buildings for the period 2016 - 2020.
Projects initiated during the implementation of the Public Sector Building Energy Renovation
Program 2014-2015, i.e. the projects which the public procurement procedure initiated in will
be completed under the terms of that Program.
Implementation scenarios took into consideration various options of building energy
renovation, on an annual basis, and the last fourth scenario, which involves financial
instruments, was designed specifically for the period of 2016-2020 in Chapter 11.
Scenario 1: Renovation through energy service contracts for all buildings
The assumption in this scenario is that all the buildings are put onto an energy service contract
with co-financing amounting to 50%.
The average consumption of all buildings, depending on the purpose, the year of construction
and the climate zone, is taken as the referential consumption for this scenario. As a
prerequisite for building renovation by means of energy service contracts, in this scenario,
savings are assumed only for buildings with consumption higher than the average
consumption.
Table 8.1 states the consumption and share of buildings distributed according to buildings with
lower and higher consumption. It is clear that an average of 40% of buildings have higher
energy consumption than the average. In this scenario, the assumption is that only buildings
with higher consumption will be renovated.
130
Table 8.1. Distribution of consumption for 1st and 2nd scenario
Buildings with lower consumption
Buildings with higher consumption
% kWh/m² % kWh/m²
Residential buildings
Coastal 1970. 53% 172 47% 377
1970.-2005. 48% 217 52% 350
Continental 1970. 75% 134 25% 357
1970.-2005. 44% 120 56% 368
Offices
Coastal 1970. 60% 131 40% 293
1970.-2005. 56% 185 44% 326
Continental 1970. 60% 85 40% 170
1970.-2005. 72% 91 28% 196
Education
Coastal 1970. 57% 137 43% 256
1970.-2005. 66% 143 34% 298
Continental 1970. 67% 107 33% 223
1970.-2005. 58% 111 42% 200
Hospitals
Coastal 1970. 71% 250 29% 619
1970.-2005. 70% 250 30% 427
Continental 1970. 64% 132 36% 371
1970.-2005. 64% 192 36% 238
Table 8Pogreška! Izvor reference nije pronađen..2 shows that the possible renovation of
3.43% of the total public sector building stock annually (approximately 473,000 m2); savings
in energy supplied amounts to 108 MWh, while the emission of CO2 is reduced by nearly 28
ktCO2 per year.
Table 8.2. Annual refurbishment plan by 1st scenario
Share of buildings
Total investment
Savings Total
buildings
Incentives
Co-financing
Private funding
% HRK kWh HRK kg/CO₂ Primary m² % HRK HRK
3.43% 792,362,875 107,826,9
21 49,665,2
14 27,888,3
06 137,727,3
01 473,59
2 50%
396,181,437
396,181,437
In table 8.3 in Annex 9, the division of the surface and the investment according to the 1st
scenario of reconstruction was elaborated.
131
Scenario 2: Maximum possible share of buildings financed with own resources in
addition to subsidies
According to this scenario, buildings are distributed into categories of buildings with higher and
lower specific energy consumption, as shown in Table 8.1. The total average amount of
incentives for buildings with lower energy consumption is 80%, while for buildings with higher
consumption it is 40% and applies to buildings which are funded under an energy service
contract.
Table 8. shows the annual implementation plan of Scenario 2. In the total floor area, buildings
which receive incentives amounting to 80% have a 0.85% share of the total public sector
building floor area, while those receiving 40% have a 2.58% of the total floor area. Total
savings are estimated at HRK 41.5 mil. / year. Savings in the energy supplied amount to 90
GWh, and savings in of CO2 emissions amount to 23.4 ktCO2.
However, if we look at the total fund of buildings where up to 40% of the co-financing is
sufficient to implement the total justified renovation costs for these buildings, it amounts to
HRK 597 mil. to 357,000 m2 / year.
Table 8.4. Annual refurbishment plan by 2nd scenario
Share of buildings
Total investment
Savings Total buildings
Incentives
Co-financi
ng
Private funding
% HRK kWh HRK kg CO₂
Primarne (kWh)
m² % HRK HRK
Buildings with higher consumption
2.58% 596,871,772
81,223,954
37,411,854
21,007,726
103,747,337
356,748
40% 238,748,709
358,123,063
Buildings with lower consumption
0.85% 195,491,103
9,211,587
4,207,437
2,401,630
11,778,911
116,844
80% 156,392,882
39,098,221
Total: 3.43%
792,362,875
90,435,541
41,619,291
23,409,356
115,526,248
473,592
50% 395,141,591
397,221,284
Tables 8Pogreška! Izvor reference nije pronađen..5 and 8Pogreška! Izvor reference nije
pronađen..6 in Annex 10. show the specific costs of energy renovation by type of building,
target energy consumption after renovation, floor area renovated and assumed investment
by type of building based on energy consumption..
Scenario 3: Subsidies for energy renovation determined according to the current energy
consumption
According to this scenario, buildings are divided according to specific energy consumption into
three categories: buildings with low, moderate and high energy consumption. Distribution of
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buildings is shown in Table 8.., which illustrates specific consumption of observed buildings
and their share in each category of buildings
Table 8.7. Distribution of consumption for 3rd and 4th scenario
Buildings with low consumption
Buildings with moderate consumption
Buildings with high consumption
% kWh/m² % kWh/m² % kWh/m²
Residential buildings
Coastal 1970. 53% 172 29% 328 18% 457
1970.-2005. 48% 217 33% 313 19% 414
Continental 1970. 75% 134 19% 298 6% 550
1970.-2005. 44% 120 27% 278 29% 451
Offices
Coastal 1970. 60% 131 25% 232 15% 392
1970.-2005. 56% 185 30% 291 14% 402
Continental 1970. 60% 85 21% 128 19% 216
1970.-2005. 72% 91 22% 158 7% 316
Education
Coastal 1970. 57% 137 31% 216 12% 356
1970.-2005. 66% 143 25% 236 9% 480
Continental 1970. 67% 107 23% 179 9% 332
1970.-2005. 58% 111 22% 162 20% 243
Hospitals
Coastal 1970. 71% 250 18% 607 12% 636
1970.-2005. 70% 250 2% 335 29% 433
Continental 1970. 64% 132 5% 301 31% 383
1970.-2005. 64% 192 22% 209 15% 279
The share of co-financing depends on the current consumption, i.e. buildings with a higher
specific energy consumption should be co-financed with a lower level of incentives (average
30%), buildings with moderate energy consumption should be co-financed with the average
level of incentives amounting to 60%, while buildings with low energy consumption should be
co-financed with an average of 80% of justified costs.
Table 8. below shows that it is possible to restore 3.43% of the total building stock, with an
average co-financing amounting to 50%. The total annual savings amounts to HRK
47,535,309, with a total annual investment of HRK 792,367,875. The share of renovated
buildings with low energy consumption is estimated to be 0.86%, with moderate consumption
of 0.86%, and those with high consumption of 1.72 %.
133
Table 8.8. Annual refurbishment plan by 3rd scenario
Share of buildings
Total investm
ent Savings
Total buildings
Incentives
Co-financin
g
Private funding
% HRK kWh HRK kg/CO₂
Primarne (kWh)
m² % HRK HRK
Buildings with high
consumption
1.72% 397,221
,284 72,070,
659 33,199,
035 18,808,
021 92,271,36
2 237,4
18 30%
119,166,385
278,054,899
Buildings with
moderate
consumption
0.86% 197,570
,796 21,992,
013 10,084,
077 5,656,5
78 28,051,40
7 118,0
87 60%
118,542,477
79,028,318
Buildings with low
consumption
0.86% 197,570
,796 9,309,5
83 4,252,1
97 2,427,1
79 11,904,21
9 118,0
87 80%
158,056,636
39,514,159
Ukupno: 3.43% 792,362
,875 103,372
,255 47,535,
309 26,891,
779 132,226,9
87 473,5
92 50%
395,765,499
396,597,376
Tables 8Pogreška! Izvor reference nije pronađen..9, 8Pogreška! Izvor reference nije
pronađen..10 and 8Pogreška! Izvor reference nije pronađen..11 in Annex 11 show the
specific costs of energy renovation by type of building, target energy consumption after
renovation, floor area renovated and assumed investment by type of building based on
energy consumption for Scenario 3 of energy renovation.
Scenario 4: Incentives for energy renovation determined according to the current
energy consumption with the use of financial instruments
Similar to Scenario 3, yet the difference is that a part of the resources from cohesion funds is
diverted into financial instruments. The scenario considers different rates of incentives
depending on the current energy consumption. Building energy consumption is divided into
three levels as in Scenario 3. Distribution of buildings is shown in Table 8.., which illustrates
specific energy consumption of observed buildings and their share in each category of
buildings:
Table 8.. below shows that it is possible to restore 2.37% of the total building stock, with an
average co-financing amounting to 50%. The total annual savings amounts to HRK 34,549,31,
with a total annual investment of HRK 546,959,150. The share of renovated buildings with low
energy consumption is estimated to be 0.49%, with moderate consumption of 0.56%, and
those with high consumption of 1.32 %.
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Table 8.12. Annual refurbishment plan by 4th scenario
Share of buildings
Total investm
ent Savings
Total buildings
Incentives
Co-financin
g
Private funding
% HRK kWh HRK kg/CO₂
Primarna (kWh)
m² % HRK HRK
Buildings with high consumption
1.32% 305,714
,810 55,467,
994 25,551,
090 14,475,
283 71,015,13
2 182,7
24 30%
91,714,443
214,000,367
Buildings with moderate consumption
0.56% 128,940
,940 14,352,
682 6,581,1
87 3,691,6
62 18,307,23
4 77,06
7 60%
77,364,564
51,576,376
Buildings with low consumption
0.49% 112,303
,400 5,291,7
63 2,417,0
38 1,379,6
60 6,766,608
67,123
80% 89,842,
720 22,460,68
0
Ukupno: 2.37% 546,959
,150 75,112,
439 34,549,
315 19,546,
605 96,088,97
4 326,9
15 47%
258,921,727
288,037,423
Tables 8Pogreška! Izvor reference nije pronađen..13, and 8Pogreška! Izvor reference
nije pronađen..15 in Annex 12 show the specific costs of energy renovation by type of
building, target energy consumption after renovation, floor area renovated and assumed
investment by type of building based on energy consumption for Scenario 4 of energy
renovation.
8.1.2. Central government buildings (ministries and government bodies)
The first three scenarios provide for renovation of 140,557 m² per year, while theScenario 4
provides for the renovation of 97,537 m2 central government buildings. It is assumed that
energy renovation will cover buildings of all purposes proportionally depending on their share
in the total building stock.
Table 8.16. Annual plan for refurbishment of the central government buildings
Area: m² (1.-3. scenario) Area: m² (4. scenario)
Residential buildings
Coastal 1970. 5,708 3,961
1970.-2005. 9,843 6,830
Continental 1970. 2,301 1,597
1970.-2005. 4,093 2,840
135
Offices
Coastal 1970. 37,903 26,302
1970.-2005. 9,235 6,409
Continental 1970. 6,059 4,204
1970.-2005. 5,323 3,694
Education
Coastal 1970. 5,244 3,639
1970.-2005. 8,367 5,806
Continental 1970. 1,063 738
1970.-2005. 0 0
Hospitals
Coastal 1970. 12,616 8,754
1970.-2005. 13,766 9,553
Continental 1970. 7,794 5,409
1970.-2005. 11,242 7,801
8.1.3. Buildings of local and regional government units, of public businesses and other users
The more buildings of local and regional government are involved in an energy performance
contract, the more building floor area is covered. Due to the increased flexibility of local
government in budget planning clearly defined objectives of energy renovation would enable
grant schemes to be applied to all buildings which lack the potential for energy performance
contract (due to the current energy consumption or size of needed investments). According to
the first three scenarios, renovation of 266,239 m2 of buildings owned by local and regional
government units and public companies is planned, while Scenario 4 provides for the
renovation 183,782 m2 of buildings owned by local and regional government units and public
companies.
Table 8.17. Annual renovation plan involving buildings of local and regional government, public companies and other users of state
Površina: m² (1.-3. scenarij) Površina: m² (4.
scenarij)
Residential buildings
Coastal 1970. 4.861 3.355
1970.-2005. 6.815 4.704
Continental 1970. 2.594 1.790
1970.-2005. 1.151 794
Offices
Coastal 1970. 18.190 12.556
1970.-2005. 5.799 4.003
Continental 1970. 4.216 2.910
1970.-2005. 3.714 2.564
Education
Coastal 1970. 70.615 48.745
1970.-2005. 49.125 33.910
Continental 1970. 24.013 16.576
1970.-2005. 23.589 16.284
Hospitals Coastal 1970. 38.021 26.245
1970.-2005. 8.472 5.848
136
Continental 1970. 4.429 3.057
1970.-2005. 637 439
8.1.4. Cultural heritage buildings
In protected cultural heritage buildings, it is justified to focus energy renovation onto achievable
savings without comparing to energy performance of other buildings.
Concerning cultural heritage protection, the Namur Declaration is a document equivalent to
EPBD and EED with respect to energy efficiency in the buildings sector. Year 2018 will be the
year of cultural heritage and, by the Declaration, energy efficiency is called to offer its
contribution to further develop cultural heritage in order to contribute to the quality of life and
living conditions, which is a good parallel with the requirement of Article 4 of EPBD on
determining a cost-optimal analysis for energy renovation of the existing building stock within
its life span. In Public Sector Building Energy Renovation Program, it is necessary to base the
realization of energy renovation projects involving cultural heritage buildings on the following
principles:
Energy performance of cultural heritage buildings should not be compared with the
criteria specified for standard buildings, but for each building demand the highest
savings acceptable with regard to measures of cultural heritage protection
In planning energy renovation, it is necessary to refer to the possibility of defining
graded criteria of cultural heritage protection for buildings which are individual cultural
goods (stricter criteria of protection) and for buildings located in areas of protected
historical value or local/heritage values or religious buildings (milder protection criteria)
to allow a greater possibility of energy efficiency. Since currently such guidelines are
not defined, the task of each energy renovation project is to secure more favorable
conditions for realization through communication with the Conservation Service. A
similar guideline was issued by the City Administration Department for Spatial Planning
Documents Implementation and Construction in Rijeka for renovating the facade of
multi-residential buildings in the City of Rijeka. The guideline describing the
reconstruction and intervention for each category of protection was developed in
collaboration with the Conservation Department.
Funding should be granted to all eligible and approved measures even if they do not
generate significant savings, since the basic objective is to improve energy features
within the given limits of cultural heritage protection.
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Cultural heritage buildings should be divided into 3 categories of energy consumption
(low, medium and high energy consumption) and their respective percentages of co-
financing should be determined.
Each building of protected cultural heritage has the potential for energy and cost savings of up
to 30%, which can be achieved by replacing the heating system and lighting system by the
best available technology, i.e. by using alternative and renewable energy systems. To some
extent, it is possible to expect thermal insulation of the building envelope, first of all by replacing
windows and insulating the attic or loft.
The example of good practice is energy savings contract on replacing the existing boiler with
a new cogeneration plant; energy performance contract for mechanical ventilation equipment
and system with heat recovery; energy savings contract based on renewable energy sources
for solar thermal systems. Final energy savings amounted to 15% and savings of CO2
emissions to 35%.
It is possible to apply measures such as the use of free night cooling with automatic remote
control, installing windows with insulating glazing and low emissivity coating, using low-
temperature surface heating and cooling systems, cooling systems, replacing fossil fuels with
renewable energy sources, using Central Surveillance and Management Systems. The cost of
renovation measures is about 30% higher compared to standard buildings..
Tablica 8.18. Annual refurbishment plan for heritage buildings
Area: m² (1.-3. scenarijo) Area: m² (4. scenario)
Residential buildings
Coastal 1970. 22 15
1970.-2005. 2,471 1,706
Continental 1970. 1,013 699
1970.-2005. 0 0
Offices
Coastal 1970. 847 584
1970.-2005. 18,925 13,064
Continental 1970. 7,203 4,972
1970.-2005. 195 135
Education
Coastal 1970. 1,009 697
1970.-2005. 17,950 12,391
Continental 1970. 3,725 2,571
1970.-2005. 108 74
Hospitals
Coastal 1970. 630 435
1970.-2005. 8,206 5,665
Continental 1970. 3,751 2,589
1970.-2005. 0 0
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9. SELECTION OF THE OPTIMAL MODEL FOR ENERGY RENOVATION OF PUBLIC SECTOR BUILDINGS
The energy renovation model for public sector buildings is focused on the integral energy
renovation of the buildings as well as realization of the defined goals until 2020, as a part of
the long-term plans until 2050.
The optimal building renovation model ensures the maximum area of renovated buildings
along with the highest energy savings together with identical financial burdens.
The subject of this Program can include only the existing buildings. An existing building implies
those built based on building permits or other appropriate documents in line with the Building
Act as well as any other buildings equalized by a special act and which have not been adapted
or changed in comparison with documents that prove their legality.
9.1. The optimal model for energy consumption reduction in public buildings through ESI Funds
The optimal model has to ensure renovation of the highest number of buildings as much as
possible while withdrawing all of the allocated EU funds and fulfilling the minimum conditions
defined in the Program.
The energy renovation of public sector buildings is performed in two ways: procurement of
energy services or procurement of works.
Buildings which belong to public-private partnership programs or are intended for such an
investment model are not included in this Program.
This chapter evaluates three implementing models for the building energy renovation
Energy renovation of public sector buildings
Procurement of worksProcurement of
services
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MODEL I – includes works regarding the building energy renovation while applying energy
efficiency measures in order to improve building energy characteristics and fulfil the main
requirement – energy management and heat preservation, supported by ESI funds. A
contracting entity has to ensure financial assets for their own participation in the building
energy renovation.
MODEL II – includes contracting of energy services where an Energy Output Agreement is
concluded via the Agency for Transactions and Mediation in Immovable Properties (ATMIP),
in line with the Energy Efficiency Act, Regulation on contracting and implementation of energy
services in the public sector as well as this Program. MODEL II also includes grants from ESI
funds to a service provider as described in this Program. A contracting entity does not have to
ensure financial assets for the building energy renovation. The ESI fund distribution procedure
shall be conducted in line with the energy service contracting procedure.
MODEL III – includes publication of the Call for Project Proposal Submission (CPPS) for
reduction of energy consumption in public sector buildings, supported by ESI funds. In this
case a user ensures their own participation by choosing the optimal implementation type
(procurement of works or procurement of services) with a view to reduce energy consumption
in a public sector building.
9.1.1. MODEL I
An Energy Output Agreement for buildings whose utilization is to be decreased does not
represent a sustainable investment method, so MODEL I is planned for such buildings where
the public sector is co-financed via ESI grants.
This group of buildings mainly includes public educational buildings owned by the Republic of
Croatia, local self-government units or public institutions (established by local self-government
units or the Republic of Croatia), whose renovation was initiated in the Pilot Project “Energy
renovation of buildings and use of renewable energy sources in public institutions performing
educational activities” and the Pilot Project “Preparation of project documentation for energy
renovation of buildings and use of renewable energy sources in public institutions performing
educational activities”.
Buildings for early childhood education and care, primary schooling, secondary education as
well as tertiary education have a specific status within the building energy renovation
procedure. Energy consumption in these buildings related to the building area is relatively less
140
than in other types of buildings. The number of pupils who attend primary schools is in constant
downfall, approximately by 9,000 pupils per year. For this reason, schools are moving from a
two-shift operating mode to a one-shift operating mode.
Schools are very important for the energy renovation, as indirect effects are also realized. They
have a major role in increasing the awareness of energy renovation and thus serve as an
example for pupils, parents and teachers.
The energy renovation of these buildings has wider benefits, especially in the most
demographically-endangered areas, where renovated schools are used as a public place for
other purposes, such as cultural and social events dedicated to all inhabitants.
In that case, a certain amount of available grants will be consumed for energy consumption
reduction through the energy renovation of public educational buildings. The grants shall
support energy renovation measures and use of renewable energy sources which will result in
reduction of the energy consumed for heating/cooling on an annual basis (kWh/year) by at
least 50% compared to the annual energy consumption for heating/cooling before the
implementation of these measures.
A Grant Allocation Agreement is signed by an applicant of the Call for Project Proposal
Submission. The applicant may be a building user, building owner or a founder of a public
institution which performs activities in the building which is a subject of the energy renovation
project. In case the applicant is not a building owner, the application needs to include a Building
Owner’s Consent regarding the energy renovation project. In case the Republic of Croatia is
the building owner, the Building Owner’s Consent is signed by the minister responsible for the
state property management.
The Call for grant allocation is dedicated to:
Regional self-government or local authorities which are: a) owners of buildings in which public institutions established by regional self-government
or local authorities or the Republic of Croatia perform educational activities, or b) founders of public institutions that perform educational activities in the buildings, where
the buildings included in the project are owned by the public institutions or regional self-government or local authorities or the Republic of Croatia.
Public institutions which perform educational activities if they cumulatively meet the following two conditions.
a) They are founded by regional self-government or local authorities or the Republic of Croatia, and
b) Buildings in which they perform the activities in question are in their ownership or owned by regional self-government or local authorities or the Republic of Croatia.
141
An approximate allocation of around HRK 300 million of ERDF grants is planned for this
scheme, where it may be increased subsequently. Depending on the number and financial
value of received project proposals as well as availability of funds within the Specific Goal 4c1
of OPCC, competent bodies may increase the available allocation therefor.
The grant amount intensity per each project is defined in the ex-ante analysis. The grant
amount intensity depends mainly on the area in which the project is performed. Namely, the
energy efficiency measures as well as use of renewable energy sources, horizontal measures,
expert and engineering supervision as well as an employment protection coordinator are co-
financed with 35-45% in the Littoral Croatia, depending on the development index of a local
self-government unit, whereas in the Continental Croatia these activities are co-financed 50-
60%. Preparation of the main project, energy audit and energy certificate after the renovation,
project promotion and visibility, project management and administration are co-financed
equally in the entire Republic of Croatia, in the amount of 85% of acceptable expenses,
regardless of the development index of a local self-government unit.
By using their own funds or external financing (external financing may include funds ensured
by MRDEUF for co-financing of EU projects on regional and local level, such as the Fund for
co-financing the implementation of EU Projects), the user has to ensure funds to finance the
difference between the amount of total acceptable expenses of the project proposal and the
grant amount allocated for financing of acceptable expenses as well as funds for financing of
total unacceptable expenses, with a possibility to ensure advance-payments.
The calls for project proposal submission shall be published as open procedures where
multiple temporary calls shall be published. Available ERDF grants are HRK 152,000,000.00
for the first of multiple temporary calls. The minimum grant amount to be allocated to a certain
project proposal for implementation of energy efficiency measures is HRK 80,000.00, and the
maximum amount is HRK 10,000,000.00.
At this moment, there are around 300 potential projects for energy renovation of buildings
performing educational activities, where the total investment is around HRK 660 million. With
the average co-financing rate of 45%, this means HRK 300 million from ERDF (around €40
million).
9.1.2. MODEL II
The Energy Efficiency Act and the Regulation on contracting and implementation of energy
services in the public sector regulate energy service performance in the public sector, thus
142
enabling that without any additional spending of building owner/user’s budget, energy
efficiency measures are implemented in the public sector buildings.
The main activities in the implementation are the following:
- Determination of buildings which are renovated according to the energy service model (ATMIP)
- Definition of priorities and publishing of the public procurement plan for energy services (ATMIP)
- Preparation and execution of the public procurement procedure (ATMIP) - Preparation and execution of public call for grant allocation to ESP (IB1 and IB2) - Implementation of the Energy Output Agreement (ATMIP) - Supervision of performed energy renovations (IB1, IB2 and ATMIP)
9.1.2.1 Steps in the public building renovation procedure through MODEL II
I. Information campaign and communication
In order to realize the plans regarding the energy renovation of public sector buildings in line
with this Program, the enforcement authority (ATMIP) performs an information campaign
through which it communicates directly with building owners and users (contracting entity). The
information campaign includes workshops, circular letters and personal contacts so as to
encourage building owners and users to apply for the energy renovation. Commitments taken
over by the Republic of Croatia regarding the renovation of public buildings need to be
presented transparently to the owners and users of public buildings, since they are operational
holders of the Program and, in the end, holders of this contract commitment.
II. Form for the Owner (contracting entity)
Public sector, the energy service contracting entity (ESCE) fills out the Form for the Owner and
submits is to the enforcement authority. By filling out the Form for the Owner, ESCE defines
the building/buildings17 for which the procedure is initiated, they accept the obligatory
submission of all required information and appoint a responsible person for building utilization.
The Form includes the basic building information - area, construction year, available
documentation, utilization and information on energy consumption in the last three years, as
well as information on used energy products. The information on consumption includes data
in natural units (e.g. litres of heating oil, cubic meters of gas, etc.). This Form enables the
17 The recommendation is that local self-government units apply as many buildings as possible at the same time
so that potential measures could be associated (for instance, all buildings which belong to one independent
heating system, from RES) and so that the total cost-effectiveness of building renovation could be increased in
that municipality or town.
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building owner and user to apply the building for the Program. Buildings which have not been
in use in the last three years or those which are to be converted or demolished will not be
included in the Program, neither will be the buildings whose use intensity is to be changed
considerably.
Competent ministries submit the list for central government buildings, and responsible persons
of local self-government authorities for buildings belonging to the local self-government. By
submitting this list, they authorize ATMIP to perform the public procurement procedure in line
with the conditions of this Program.
Buildings which have already submitted the documentation required for the Program in earlier
implementation procedures are deemed applied, namely competent authorities of the public
sector may amend and/or revise this list.
III. Data verification in the Energy Management Information System (EMIS)
The information provided in the Form for the Owner/energy audit is compared with the data
available in EMIS and data of the energy inspection. If the building information is not in EMIS,
the public sector has to enter the data in the system. The enforcement authority has to educate
the public sector how to use EMIS independently and functionally.
IV. Selection of buildings and publication of the public procurement schedule
By using the EMIS data, the enforcement authority defines the renovation priorities according
to the following criteria:
1. buildings which have high relative energy consumption 2. the amount of the absolute energy consumption.
According to the relative consumption, the buildings are classified in groups with high, medium
and low consumption per square meter of the gross developed building area. Buildings with
high consumption have priority in relation to buildings with medium consumption which then
have priority before buildings with low consumption.
Within a certain building group, the priorities for procedure publication are defined according
to the highest total energy consumption.
In principle, the EMIS consumption data for the last three years are used. If ATMIP finds it
justified, it may estimate different consumption than the one recorded in EMIS, if there are not
sufficient updated consumption data or there are other circumstances which suggest that the
consumption recorded in EMIS does not reflect accurately the reference consumption of a
building.
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The list of buildings which are included in the Program of energy renovation of the public sector
buildings according to the energy service model is published on ATMIP webpages, together
with the priority list.
ATMIP also publishes on its webpages the public procurement publishing schedule. When
preparing the plan, ATMIP’s organizational capabilities will be taken into account, as well
available funds for co-financing of service providers and expected deadlines for the preparation
of technical basis.
The procedure schedule is published for a period of one year and is updated every 6 months.
V. Publication of the Call for project proposal submission for allocation of grants from
ESI Funds
The grant allocation model to be used in the implementation will be based on the energy
efficiency measures, namely standard investment costs and co-financing amounts required for
each measure.
In order to ensure harmonization within the Program, the first-level enforcement authority
launches the permanently open Call for project proposal submission until the available funds
are consumed until the end of 2020. Applicants who have concluded an Energy Output
Agreement with ATMIP may apply to this Call.
Call Type: Permanently open call for project proposal submission (grants) until consumption
of the available funds
Competent body: MCPP
Area: energy efficiency, renewable energy sources
The general goal of the Call is to achieve energy savings – reduction of energy consumption
in the public sector buildings.
The specific goal of the Call is to contribute to realization of goals and measures defined in the
National Energy Renovation Program for the public sector buildings and Third National Energy
Efficiency Action Plan. The goal is to realize full renovation of public sector buildings and to
use potentials of renewable energy sources.
In the area of renewable energy sources there is a significant potential focused on biomass,
solar energy and heat pumps. This potential will be set as a goal using an integrated approach,
i.e. so that the systems for energy production from renewable sources for public sector
buildings are applied together with the energy efficiency measures, mainly for energy
production needed for heating/cooling.
The Call shall support energy renovation measures and use of renewable energy sources
which will result in reduction of the energy consumed for heating/cooling on an annual basis
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(kWh/year) by at least 50% compared to the annual energy consumption for heating/cooling
before the implementation of these measures.
The Call is for energy service providers with a valid Energy Output Agreement, who meet the
criteria for co-financing from ESI Funds.
The eligibility condition is a verified master project for building energy renovation in line with
provisions of the Program and other eligibility criteria in line with the Call.
Co-financing rate: up to 40% of acceptable energy renovation expenses
Grants may be used to cover a part of the energy renovation expenses upon successful energy
renovation completion, confirmed by ESCE.
The Call shall be permanently open until the available funds are consumed, so that the
tenderers are familiar with foreseeable conditions when preparing their offers within the public
procurement procedure.
This condition must be met so that the competition is not distorted, namely so that all potential
tenderers have the same market position.
Such a grant allocation procedure ensures fulfilment of the criteria according to which a grant
recipient cannot realize inadequate profits. Since all tenderers have the same conditions, they
will be forced to reduce their planned profit to the minimum acceptable one in respect to the
risks, so as to ensure their competitiveness in line with the public procurement conditions.
VI. Preparation and execution of public procurement procedures
In line with the publication schedule, ATMIP procures preparation of the technical basis
according to the priorities. The technical basis includes all information related to contract
performance, namely public procurement, in line with a standard energy output agreement,
such as reference consumption, reference cost modelling, input data for savings calculation,
proof of legality in line with the Building Act, special renovation conditions and other.
Prior to the publication, ATMIP shall organize education of contracting entities and users of
buildings for which the public procurement procedure is executed, and shall inform them on
their commitments in the public procurement procedure as well as the implementation of an
energy output agreement.
Before the public procurement procedure is initiated for the buildings which are included in the
implementation schedule, competent bodies shall submit the following:
- Proof of building existence - Extract from land registry as a proof of ownership or proof of legal sequence of
unregistered ownership of the building subject to the energy renovation
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- In case parcel numbers stated in the land registry extract and in the proof of building existence differ, a certificate/confirmation is needed from a competent cadastral office regarding the parcel identification,
- Energy Audit Report - Energy Certificate.
In the name and on behalf of contracting entities, ATMIP performs the public procurement
procedure for contracting energy services. In line with the Energy Efficiency Act and this
Program, ATMIP is authorized for contracting in the name of budgetary and extrabudgetary
users. A local self-government unit authorizes ATMIP to perform the public procurement
procedure so as to be included in this Program.
Tendering is done through an open public procurement procedure in line with the conditions
described in this Program, where standard contracts and technical basis are published as
appendices, namely they are integral parts of the tendering documentation. ATMIP defines
deadlines in an energy output agreement (project delivery and verification deadline, renovation
deadline, etc.) and enters them in the standard contract published together with the tendering
documentation.
Upon public procurement completion, an authorized person of the competent body, namely a
person particularly authorized by the authorized person of the competent body and a
responsible person of the building user as the contracting entity conclude together an energy
output agreement with an energy service provider selected in the public procurement
procedure.
Tender documentation
The tender documentation needs to include, apart from usual parts, the technical basis,
standard energy output agreement, procedures for verification of savings and/or energy
renovation projects, energy audit and/or project task, special conditions and other available
documentation.
In agreement with the enforcement authority, ESCE can determine the minimum renovation
scope. The minimum renovation scope is defined in the technical basis and represents special
conditions for the renovation of an individual building, starting from materials to be used in the
renovation to inclusion of ESCE's already-existing projects.
In case ESCE defines special renovation conditions, and before publishing the procedure, the
enforcement authority shall make sure that these conditions are not discriminatory and do not
limit the competition.
Selection of the most economically advantageous offer
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After receiving the offers, the public procurement enforcer shall rank the received offers
according to selection criteria. The criteria of the most economically advantageous offer are
always applied in the public procurement procedure. The service procurement model includes
the criteria of a net present value of an energy service fee related to reduction of the total
energy consumption and increase of the renewable energy source share. The criteria for
selection of the most economically advantageous offer have been determined in such a way
so as to maximize potential savings and ensure equable and transparent evaluation method
for different offers. A contract is concluded upon adoption of a decision on selection of the most
advantageous offer.
Criteria for the most economically advantageous offer
For contracting energy services in line with this Program, the most economically advantageous
offer is used according to the following criteria:
Criterion
Maximum points
Reduction of energy consumption 60
Net present value of energy service fees 30
Share of renewable energy sources 10
1. Reduction of energy consumption
It represents estimated reduction of the total required consumption. This way it clearly
contributes to energy savings as the national goal of the energy efficiency policy.
It is calculated by subtracting the designed consumption from the reference energy
consumption published in the technical basis as a part of the tender documentation, presented
in energy kWh regardless the price and type of an energy product.
The tenderer who submits an offer with the highest offered reduction of energy consumption
shall receive the maximum points.
Other offers shall be graded in line with the following formula:
(Offered energy consumption reduction) / (Highest offered energy consumption reduction)
*60.
2. Net present value of energy service fees
The net-present-value method is a calculation method which includes total effects throughout
the entire contracting period. It also takes into account time settings, and with the discounting
technique, future energy service fees are reduced to the present value, namely the value from
the investment period, where discount rates are applied. The net present value of an energy
service fee is calculated iteratively according to the following formula:
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NSV (NPV) - neto sadašnja vrijednost (net present value)
Tp = last year of the sequence
Vt = cash flows per years
K = discount rate
p = observed number of years (14 years).
The net present value is calculated for energy service fees according to the dynamics and
amounts in an offer, where the discount rate of 4% is applied.
This criterion ensures cost-effectiveness of a contract and is in line with the required criteria of
the lowest price according to the Public Procurement Act.
Grading shall be done according to the following formula:
(The lowest net present value of energy service fees from accepted offers) / (Net present value
of energy service fees from the offer) *30
The grades are rounded up, without decimal places.
3. Share of renewable energy sources
It relates only to the share of renewable energy sources used for building requirements, namely
it does not take into account any sales of electricity under the conditions defined for eligible
energy producers. Application of renewable energy sources contributes to national goals of
the energy efficiency policy within the 20/20/20 plan.
It is calculated by comparing the designed energy production needed for building
requirements, presented in kWh/year, and produced on a cadastral parcel or in the building
itself, with the designed energy consumption.
The share of renewable energy sources covering designed requirements according to the
designed energy consumption is valued according to the following formula:
Share of the energy produced from RES (%) in the designed energy consumption * 10.
The points are rounded to a whole number.
VII. Contracting of energy service
An Energy Output Agreement is contracted in line with the Regulation on contracting and
implementation of energy service in the public sector (Official Gazette, 11/15).
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Based on the performed public procurement procedure and decision on selection, ESCE
shall sign the energy output agreement with the most favourable tenderer according to the
procedural criteria and shall provide an energy service provider with access to the building
so that the energy efficiency measures can be implemented.
Energy Output Agreement
Contracting is done through the standard energy output agreement which fulfils the
following criteria:
- investment risk is borne by the energy service provider - risk of availability of implemented energy efficiency measures is borne by the energy
service provider - the energy service provider is the economic owner of an invested asset which is
inseparable from the building according to general regulations - the public procurement procedure defines the minimum savings value to be realized by
the contracting entity due to investments made by the energy service provider - if the savings are not realized, the contracting entity does not have to pay the fee - payment is obligatory only after savings are realized and verified, and the fee cannot
be higher than the realized energy savings and/or water savings which are the result of service provider’s investments
- the energy service fee which is based on guaranteed savings realized through ESP investments in an asset inseparable from the building cannot be changed due to any price changes related to energy products, and the fee amount is harmonized with the average inflation index calculated for a previous annual period according to the data of the Croatian Bureau of Statistics. The fee that is based on additionally realized and measured savings is variable and depends on actual savings and energy product prices in an accounting period
- savings which are the result of investing in an asset inseparable from the building (building energy renovation) are proven through estimation, where the calculation is based on input data from the technical basis and national algorithm
- additionally realized savings are determined through cost measurement and its comparison with the reference cost recorded in EMIS
- the service provider shall also maintain measures which are the subject of their investment, and the contracting entity shall give their approval
- the service provider shall also maintain investments performed based on the energy output agreement at least on the level defined in the agreement in relation to the measures to be proven through evaluation. In case for the duration of the agreement, the building condition differs from the one defined in the project based on which the savings have been defined, the contracting entity does not have to pay the savings fee or in any other way remunerate investment costs to the energy service provider
- the tender documentation includes the technical basis which also includes at least: overview of construction and energy systems of the building, utilization regime aligned with the regulations and shown by zones characterized by the same utilization regime (with the overview of the minimum air exchange quantity and minimum temperature)
- the contracting entity is responsible for the data stated in the technical basis - description of the savings verification method, namely project verification and
monitoring of the reference energy cost, procedures of the Expert Committee, verification deadlines
- the contracting entity reserves the right to control the implementation of all measures arising from the agreement, and the service provider shall grant access and submit requested information
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- the failure to realize savings is proven the same way as the savings realization - in case the agreement is cancelled or terminated, the contracting entity shall introduce
another energy service provider through public procurement, and this new provider shall pay out the investment of the first provider in the amount offered in the public procurement procedure
- the contracting entity agrees to pay the fees via cession - deadlines for each implementation phase of the agreement - termination clauses cannot change the afore-mentioned contractual relations.
The energy output agreement is implemented in line with the following phases:
1. Project design and verification 2. Energy renovation 3. Savings monitoring and verification.
VIII. Design
The service provider shall within the deadline defined in TD submit to ATMIP the building
energy renovation project which has to include and elaborate all investments for the energy
renovation required for the realization of guaranteed savings, without violating the utilization
conditions (standards).
The energy renovation may relate to the following measures:
- Improvement of heat characteristic of the external envelope - Improvement of energy characteristics of the heating system - Improvement of energy characteristics of the cooling system - Improvement of energy characteristics of the ventilation and sewage systems - Improvement of energy characteristics of the sanitary hot water system - Improvement of energy characteristics of the electricity system – lighting, devices and
other appliances, and - Improvement of energy characteristics of specific subsystems. - Full or partial change of energy products and/or use of renewable energy sources for
production of heating energy and/or electricity.
The project must be equipped on the level of the master project, including:
- Project design - Calculation of building’s heating characteristics after the implementation of energy
efficiency measures - Project savings calculation which includes the overview of designed savings in the
same value as the one in the offer submitted within the public procurement procedure - Milestones of the energy renovation works - Detailed maintenance plan for the elements derived and/or installed through the energy
renovation - Overview and plan of monitoring and measuring the energy and/or water consumption
in the building.
The project must be performed in line with professional rules and valid regulations related to
engineering design and construction, as well as prepared and verified by an authorized
designer. Its implementation must result in the building condition that corresponds to the
savings level stated in the service provider’s offer or in a better condition.
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ESP shall receive a deadline for preparation of project documentation. ESP shall prepare a
project which must include and elaborate all investments needed for the savings realization.
In the project documentation, ESP shall prove the realization of all values from the offer and in
line with the standard agreement.
IX. Project verification
ATMIP shall complete the project verification or reject it within the agreed deadline. The
project verification is performed by an Expert Committee appointed by the minister
responsible for construction. Rules for the structure and procedures of the Expert Committee
are published by ATMIP on its webpages, in line with this Program.
Upon project audit completion, the expert group submits a Report on Project Audit which needs
to be signed and verified (authorization provided by a chamber of engineers and/or architects)
by each member of the expert group.
The Project Audit and Report on Project Audit have to determine the following:
- whether the Project is in line with valid regulations of the Republic of Croatia whether the Project meets the special tendering conditions defined in the tender
documentation based on which the public procurement procedure was performed, ESP
selected and Energy Output Agreement concluded
- whether measures included in the project require new or increase the existing maintenance costs (if yes, whether these costs are included in the Project)
- whether the implementation of energy efficiency measures defined in the Project shall keep at least the same or realize a better utilization regime in comparison to the utilization regime before the energy renovation
- whether the Project (quantity-value calculation) proves the values from the offer and energy output agreement (reduction in energy requirements - savings per consumption location and method, type of energy product and production from renewable energy sources)
- whether the implementation of energy efficiency measures defined in the Project shall result in preconditions for the realization of savings from the offer and energy output agreements, assuming that the building utilization conditions shall be on average equal to the reference conditions before the energy renovation (climatic conditions, building utilization method)
Members of the Expert Committee independently control the Project in line with their
authorities. Upon performed project audit, each member of the Expert Committee submits to
the chairman of the Expert Committee their Report on Project Audit by the day of an Expert
Committee session, at the latest.
The chairman of the Expert Committee convenes a session of the Expert Committee at which
each Expert Committee member presents and explains their opinion based on the Report on
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Project Audit. Afterwards, the Expert Committee adopts its Report on Project Verification in
line with presented conclusions.
The Expert Committee has to prepare the Report on Project Verification within 15 days as of
the day of project submission to ATMIP.
In case the Expert Committee determines that the Project has certain shortfalls, it shall propose
to the energy service provider a deadline for their elimination which cannot be longer than 15
days.
For more complex projects (where the contracted deadline for project preparation is longer
than 2 months), the deadline for elimination of project shortfalls can be longer than 15 days.
When a corrected project is submitted, the project audit procedure is repeated. The corrected
project needs to be audited by all members of the Expert Committee, regardless whether they
have previously given their positive or negative opinion and requested elimination of project
shortfalls.
Upon performed audit of the corrected project, each member of the Expert Committee submits
to the chairman of the Expert Committee their Report on Project Audit by the day of an Expert
Committee session, at the latest.
The chairman of the Expert Committee convenes a session of the Expert Committee at which
each Expert Committee member presents and explains their opinion based on the Report on
audit of the corrected project. Afterwards, the Expert Committee adopts its Report on Project
Verification in line with presented conclusions.
The Expert Committee has to prepare the Report on Project Verification within 15 days as of
the day of submission of the corrected project to ATMIP.
The Report on Project Verification can be positive only if all members of an expert group within
the Expert Committee (including additional member/members) give their consent.
Expert Committee
The Expert Committee includes:
- Chairman or Deputy Chairman - Expert group for project audit - Representative of the contracting entity.
The Chairman and Deputy Chairman of the Expert Committee are appointed by the minister
responsible for construction activities.
The expert group includes at least three members:
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- Authorized engineer belonging to the architectural or building profession - Authorized engineer belonging to the engineering profession - Authorized electrical engineer.
ATMIP selects members via the public procurement procedure and submits a proposal for their
appointment to MCPP. The public procurement criteria for members of the expert group are
defined by the minister responsible for construction activities upon an ATMIP proposal.
A responsible person of the energy service contracting entity appoints at least one
representative as a member of the Expert Committee.
ATMIP has to inform the contracting entity on the signed energy output agreement and request
appointment of member/members of the Expert Committee not later than 10 days as of the
day of signing of the energy output agreement. The contracting entity has to appoint its
representatives as Expert Committee members not later than 10 days as of the day of receiving
an ATMIP request.
An authorized person of the contracting entity may appoint permanent member/members of
the Expert Committee for all audit procedures related to projects of energy efficiency
improvements of buildings owned/used by a competent body.
In case the expert group is represented by a legal entity, ATMIP concludes with the legal entity
a contract on expert verification service for the energy efficiency improvement project.
The Expert Committee Chairman has the right to appoint additional expert group members if
they find it necessary due to the complexity of the project or one of its parts.
ATMIP concludes a temporary service contract with additional members of the expert group.
Expert Committee members cannot be included in preparation of the project which is being
verified. They can neither be included in the building energy renovation nor perform expert
supervision of the energy renovation.
The Expert Committee Chairman or Deputy Chairman is responsible for performance of the
Expert Committee.
The Expert Committee Chairman or Deputy Chairman has the following rights and obligations:
- proposes appointment of Expert Committee members - proposes Resolutions on disengagement of Expert Committee member/members if
there is a justified reason showing that the Expert Committee cannot perform its activities or proper work conditions have not been met (conflict of interest, lack of expert competences, illness and other circumstances)
- convenes sessions of the Expert Committee, chairs and presides the sessions - signs conclusions and meeting minutes of the Expert Committee - initiates discussions and analysis of certain issues belonging to the competence of the
Expert Committee - monitors and coordinates tasks of Expert Committee members - is responsible for activities of the Expert Committee and submits to the ATMIP
Executive Director a report on Expert Committee performance.
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The Deputy Chairman of the Expert Committee substitutes the Expert Committee Chairman in
case of their absence or inability to act.
The Expert Committee Deputy Chairman has all the rights and obligations of the Expert
Committee Chairman during the substitution.
Members of the Expert Committee have the following rights and obligations:
- audit the Project falling within their competences - prepare the Report on Project Audit - submit the Report on Project Audit to the Expert Committee Chairman not later than
the day of Expert Committee session - participate at Expert Committee sessions - sign the Expert Committee Report on Project Verification.
The Expert Committee members are responsible individually for their activities falling within
their expert authorizations and responsibilities.
The expert group audits the Project in a way that each member of the expert group audits the
Project within their professional competences. Upon project audit completion, the expert group
submits a Report on Project Audit which needs to be signed and verified (authorization
provided by a chamber of engineers and/or architects) by each member of the expert group.
IX. ESP application to the Call for submission of project proposals for grant allocation
published by IB1
An applicant submits their project proposal under the conditions of the published Call prior to
the start of building energy renovation works, and after the verification of the master project in
line with this Program.
The Call is intended for energy service providers with valid energy output agreements together
with projects verified in line with provisions of the Program and other conditions of the Call.
X. Grant allocation procedure
The grant allocation procedure represents an overall selection procedure for project
proposals, which is performed through the following allocation phases:
1. Receipt and registration
2. Administrative verification and acceptance testing of the applicant and partners
3. Acceptance testing of the project and activities as well as quality evaluation
4. Cost acceptance testing
5. Adoption of the Financing Decision.
With regard to phases 1 to 4, MCPP as IB1 has the discretionary power to determine their
schedule as well as possible merger of individual phases. The schedule in each allocation
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procedure as well possible merger of individual phases is approved by MB when approving
the allocation documentation.
The phases are executed by MCPP as IB1 and EPEEF as IB2 in line with the Act on the
Establishment of Institutional Framework for the Implementation of European Structural and
Investment Funds in the Republic of Croatia in the financial period 2014-2020, Declaration
on bodies in management and control systems of using EU Social Fund, European Fund for
Regional Development and Cohesion Fund, related to Investment for growth and workplaces
(Official Gazette, 107/14, 23/15 and 129/15) and Joint national rules.
XI. Energy renovation works
Upon the project verification, the service provider shall in a timely manner start the energy
renovation works and complete them within the deadline defined in the tender documentation
and inform ATMIP hereof.
The building user shall issue all documents required by the service provider to be registered
as an investor with regard to permits needed for the verified project and energy renovation
works.
The service provider shall perform the energy renovation fully in line with the verified project,
acting as a good master and:
- without any shortfalls - within the deadline not longer than the one defined in TD - within the work regime and a part of the building defined in TD and any other building
parts for which the user, upon service provider’s request, reasonably allows access to people, machines and materials
- by using energy products independent of energy products used in the building or with a fee charged to the user of consumed energy products based on the devices that the service provider has set and maintained at their own expense
- by taking responsibility for adequacy, stability and safety of all operations at the building site and all construction methods
- by complying with the existing permits issued for the building - by providing all information, paying all taxes, customs duties and fees, obtaining all
permits, licenses and approvals required by the regulations relating to construction works and elimination of their shortfalls
- by bearing all costs and expenses for special and/or temporary access rights that might be required or for installation of facilities used in the construction,
- by fulfilling special conditions, if they are defined in TD - in a safe manner, by complying with all professional regulations and rules.
At their own discretion, the service provider selects a contractor for the energy renovation
works; however, the energy output agreement does not regulate a legal relationship between
the energy renovation contractor and ESCE, namely the energy renovation contractor is not a
subcontractor of the service provider with regard to fulfilment of their obligations in accordance
with the energy output agreement.
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ESCE has to in a timely manner include ESP and other persons in the possession on the level
required for the energy renovation works.
The service provider has to complete the energy renovation works in line with the project
timetable, but not later than the deadline defined in TD, where the deadlines may be prolonged
only for justified reasons for which the energy service provider is not responsible.
ESP shall at their own cost secure the damages that may arise from energy renovation works.
ESP shall ensure undisturbed activities in the buildings for the entire renovation duration.
ATMIP and/or ESCE have the right to control the energy renovation at their own expense, but
this person is different from the person who performs the expert supervision in line with the
building regulations and in the name and on behalf of ESP as the energy renovation investor.
Upon ESP notification on energy renovation completion, ATMIP performs energy renovation
verification. Savings defined in the energy output agreement are realized from the day of
energy renovation verification by the expiration of the energy output agreement.
The service provider submits to ATMIP a final report of the supervising engineer confirming
that the energy renovation works have been completed and that all visible shortfalls have been
eliminated. ESP has to attach the entire attest-technical documentation, approvals and permits
(especially operational licence), if the regulations define permits and all documentation that the
building owner has to keep with regard to performed works according to general regulations.
ATMIP performs the energy renovation verification, during which the energy renovation works
are delivered to the user (ESCE). ATMIP confirms that ESP has realized a building condition
in line with the verified project, where preconditions have been met to guarantee savings from
the offer, and that the energy renovation works have been fully performed in line with the
verified project.
While performing the energy renovation and prior to submission of the final report of the
supervising engineer, ESP has to obtain the energy certificate. The enforcement authority
selects a person authorized for energy inspection and preparation of the energy certificate,
where ESP bears the related costs.
XII. Monitoring and verification of energy savings
ATMIP monitors and verifies energy savings based on the energy output agreement, by using
EMIS, where the energy consumption data are entered in line with the scheduled monitoring
and measuring of energy and/or water consumption of the building stated in the verified project,
as well as the data proving realization of technical conditions for building utilization (delivered
utilization regime). The service provider has to establish, maintain and read the measurement
system used to ensure the minimum proof of technical conditions for building utilization.
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Measurements in the savings realization period have to include at least the data on
temperature used to heat or cool each utilized building room, where these measurements have
to be visible to the user (ESCE) as well.
Water consumption is measured with a valid water meter for which the user is responsible.
The reference consumption is calculated using the actual expenses of energy products and
energy required for reference utilization conditions.
In case the expenses of energy products used in the building are higher than its requirements
in reference to the utilization conditions, it can be concluded that these expenses are a result
of user's behaviour, whereas in the savings realization period decreased expenses are a result
of ESP activities.
In case the actual expenses in the considered period are lower than building’s requirements in
reference utilization conditions, it can be concluded that the user did not reach the utilization
standard and that the savings will be realized when building’s requirements are changed
regardless the costs occurred when the building is used in line with the utilization standards
during the savings realization period.
All energy produced from renewable energy sources which are a result of ESP investments,
meaning that the plants from which this energy is produced belong to ESP, can only be used
for building’s requirements. Such energy is given to the user without any fee, as it is already
included in the Fee. In this case, ESP has to procure at their own expense all energy products
needed for the operation of these systems.
Decrease in required energy products determined through consumption measurement for the
term of the contract is calculated according to actual costs of energy products charged to the
user for the fee calculation period.
The reference consumption is monitored in EMIS according to the algorithm defined in the
technical basis published together with the tender documentation.
ESP is authorized and has to regularly maintain and invest in the objects that they economically
own. They also have to perform all other activities required so that the building elements and
technical systems included in the verified project are in line with the designed values from the
verified project, whereas the user (ESCE) has to make it possible for ESP.
The service provider has to contract and maintain fire and other risk insurance in the amount
defined in TD for the objects which they economically own.
For the period of savings realization, the service provider may take over the management of
HVAC and/or water systems of the building, where the contractual parties draw up minutes
with recorded data of the energy systems to be managed by ESP.
By taking over the energy system management, ESP becomes responsible for all current
management costs and system maintenance costs.
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When the contract expires, ESP is responsible for the condition of the energy system which
cannot be in a worse state than the one reasonably expected as a result of usual utilization for
the period of system management.
The reference consumption price (including the gross cost of supply, distribution, transport,
excises, taxes, etc.) of each energy product used in the building includes national average
prices calculated at the moment of TD publication.
For the period of savings realization, ESP is entitled to compensation only for savings realized
in the period preceding the fee calculation.
ESP has realized guaranteed savings in the period preceding the fee calculation, namely those
savings proven in the estimate, only in case the user or ATMIP have not disputed them.
Guaranteed savings may be disputed at any time.
Apart from the fee for guaranteed savings, ESP can calculate an advance for the savings
determined through measurement (additional savings) and which are likely to be realized in
the period preceding the fee calculation.
After the first year of savings realization, the contractual parties shall review actual building
utilization and calculate monthly advance for additional savings, if there are any, as last-year's
average monthly additional savings, if there were such savings. The user pays the advance
for additional savings together with the fee for guaranteed savings for that year of savings
realization. This procedure is repeated each year until the end of contractual obligation.
When the contract is terminated, regardless the reason, total additional savings are calculated
for the entire period of savings realization and the obliged party pays any differences with a
due date after the contract termination.
Together with each invoice for the contracted fee, the service provider has to attach proofs of
savings realization including the overview of a utilization regime in the calculation period. In
the period preceding the fee calculation, ESP has realized savings if the user or ATMIP have
not disputed the proof of savings realization and/or overview of a utilization regime in the
calculation period.
The fee is increased by a related value added tax or any other tax that may replace it.
For the entire term of the contract, the user is entitled to dispute realization of guaranteed
savings in the fee which is still not due, bearing the cost of proving that the actual building
condition is not in line with the project. The user has to inform ESP and ATMIP about all
disputed guaranteed savings, as well as provide evidences verified by an appropriate
authorized person.
The enforcement authority shall conduct a procedure to determine realization of the
savings/service, complying with the contract. Failure in the realization of guaranteed savings
159
is determined in a report on performed calculations, measurements, inspections and testing.
The costs of verifying savings realization are borne by the party which caused them.
Reports on performed testing include a conclusion on realization or failed realization of
contracted savings. Reports on preformed inspections and/or testing are submitted to ESCE
and ESP upon their receipt.
Once the guaranteed savings are disputed, there is a standstill on user's obligation to pay the
fee. In case ESP agrees with the dispute, the fee payment obligation starts in the calculation
period in which ESP eliminated the shortfalls.
In case ESP does not agree with the dispute of guaranteed savings, a resolution shall be
adopted according to the contracted rules set for dispute settlement.
In case the energy savings are realized after a detected shortfall is eliminated within a
reasonable time, the fee payment shall continue as contracted. ESP is not entitled to the fee
amount for the period in which the energy savings have not been realized.
In case ATMIP finds that the savings and service are still not realized after the reasonable
time, namely in case the user proves the dispute, ESCE has the right to unilaterally terminate
the contract.
The contract shall be terminated as of the moment of dispute with the contracted consequence
of termination caused by the provider.
XIII. Audit of performed energy renovations
ATMIP shall regularly audit the executed energy output agreements. The audit has to include
at least 3% of buildings renovated in line with a valid energy output agreement. The EMIS data
will be taken into account when buildings to be audited are selected. The buildings which show
deviations from the designed (planned) consumption shall be audited. The audit shall be
performed by persons authorized for energy inspection of buildings, and ATMIP is authorized
to undertake other activities required for determination of any contract breaches. In case
ATMIP determines that there are reasons for termination of the energy output agreement, it
shall prepare the required documentation at its own expense, and shall without any delay
inform competent body/bodies thereof as well as initiate procedures defined in the energy
output agreement.
Apart from contracting energy renovation of buildings, ATMIP shall continuously perform
educational and information activities needed for the Program implementation.
IB1 performs energy renovation audits in line with its responsibilities.
160
Picture 9-1 Scheme of the energy service contracting model
161
9.1.3. MODEL III
In MODEL III, the Call for project proposal submission (CPPS) for energy consumption
reduction in public sector buildings is published together with co-financing from ESI Funds
where grants are allocated according to the co-financing rate defined in an ex-ante study, and
a user ensures their participation by selecting the optimal implementation type depending on
an available participation model:
- If the participation includes own funds or external financing (such as financial instruments, funds ensured through the Fund for co-financing of EU project implementation on regional and local level, etc.), the energy consumption reduction in public sector buildings is realized through procurement of energy renovation works
- If the participation is ensured through ESP, the energy consumption reduction in public sector buildings is realized through procurement of an energy service.
Since new EU procedures for this model have been established, a pilot project may be
performed with initial lower allocation in the amount of around €30 million, where all elements
of future Calls will be determined and potential implementation difficulties identified. Based on
the response and results of the pilot project, the remaining ESI Funds may also be defined for
the implementation of this model until 2020.
9.1.3.1. Schemes of grant allocation for energy renovation of public sector buildings
This model is performed within the permanently open call until available funds are consumed
in line with OPCC, Priority Axis 4 “Promoting energy efficiency and renewable energy sources",
Specific Goal 4c1 “Reduction of energy consumption of the public sector buildings”.
The Call is announced for grant allocation for energy savings with the co-financing rate of 40%
from ERDF projects and 85% for project preparation.
Acceptable applicants are owners/users of buildings where public activities are performed:
- Local and regional self-government units as well as the Republic of Croatia - Legal entities majority-owned or co-owned by local self-government units or the
Republic of Croatia - Institutions founded by local self-government units or the Republic of Croatia
A Grant Allocation Agreement is signed by an applicant of the Call for Project Proposal
Submission. The applicant may be a building user, building owner or a founder of a public
institution which performs activities in the building which is a subject of the energy renovation
project. In case the applicant is not a building owner, the application needs to include a building
owner’s consent regarding the energy renovation project. In case the Republic of Croatia is
162
the building owner, the Building Owner’s Consent is signed by the minister responsible for the
state property management.
In case there are more users of the building, one of the users may be an applicant provided
that they obtain authorization for the application from other building users.
State aids:
Obligations relating to state aids and de minimis aids do not include project proposals which
did not generate more than 5% income through commercial activities in a previous fiscal year. <0}
Projects which generated more than 5% income through commercial activities in a previous
fiscal year will be included in a state aid model aligned with state aid regulation, provided that
the general block exemption regulations (GBER) are applicable.
Acceptable activities:
- PHASE 1 - preparation of project documentation - PHASE 2 - energy renovation (procurement of works or energy service).
PHASE 2 can start only when PHASE 1 is completed and before the application is submitted
to the Call.
The basic acceptability criterion is reduction of energy consumed for heating/cooling (QH,nd)
at an annual level of at least 50%.
Co-financing is ensured through ERDF Funds, in line with the Priority Axis 4 “Promoting energy
efficiency and renewable energy sources”, Investment Priority 4c “Supporting energy
efficiency, smart energy management and renewable energy use in public infrastructure,
including in public buildings, and in the housing sector” of OPCC for which €211,810.805 have
been ensured for the period in question, where the funds have been ensured in the State
Budget of the Republic of Croatia for 2017 and projections for 2018 and 2019 under the
T538072 activity "Operational Programme “Competitiveness and Cohesion 2014-2020”
(source 563). The funds shall be ensured and consumed until 2023.
163
Picture 9-2 Scheme of grant allocation for energy allocation
These funds ensure grants to users in the amount of 40% of the energy renovation investment,
where the remaining 60% of the investment value is ensured in several ways:
1. Contracting of energy service Applicants are owners/users of buildings performing public activities, and ATMIP performs
the public procurement procedure for the energy service in the name and on behalf of
budgetary and extrabudgetary users of the State Budget of the Republic of Croatia.
The tendering procedure for selection of an ESCO company for the energy service may be
performed before applying to the Call, during the allocation procedure or after adoption of a
GRANT
40%
OWN PARTICIPATION
60%
ESCO
EPC contract
FINANCIAL INSTRUMENT
Favourable interest rate
+
Defferal of payment
(€25 million)
FCFIEUP
(Funds for co-financing the implementation of EU Projects))
- HRK100 million (2017)
- local self-government authorities
OWN PARTICIPATION
(budget or other)
CALL for grant allocation
164
decision on co-financing, and it includes preparation of project documentation, energy service
and maintenance for the term of the contract.
Applicants tender for PHASE 1, and the master project is prepared by an energy service
provider (ESCO Company) upon completion of the public procurement procedure.
The energy service provider ensures the energy service to the energy service contracting
entity, by applying energy efficiency measures. The contracting entity shall compensate the
service fee to the service provider. The public sector has to pay the fee only upon completion
of the building energy renovation. Service payment is based on realized and verified savings,
in the method defined in an energy output agreement signed for a period not longer than 14
years. The energy service provider bears the costs of building energy renovation,
maintenance and design. Since this model includes a condition that the energy service fee
cannot be higher than the guaranteed savings in respect to reference costs of energy
products, namely that the sum of fee amount and new energy product costs is not higher than
reference (initial) costs of energy products, consumption of budget funds shall not be
increased. The funds for fee payment are ensured in line with the Regulation on contracting
and implementation of energy services in the public sector, through redistribution of material
costs.
Performance of energy services in the public sector is regulated by the Energy Efficiency Act.
2. Financial instrument Applicants are users of grants under this Call (the condition for applying is a Decision on Co-
Financing).
Implementation of financial instruments for reduction of energy consumption in the public
sector buildings within the ensured funds shall be defined by MRDEUF together with MCPP.
Financial instruments such as special credit lines with a favourable interest rate and deferral
of payment until completion of energy renovation works may be combined with the grants.
3. Fund for co-financing of EU project implementation Applicants are owners/users of buildings performing public activities:
- Local and regional self-government units - Legal entities majority-owned or co-owned by local and regional self-government units - Institutions founded by local and regional self-government units.
Funds ensured by MRDEUF for co-financing of EU project implementation on regional and
local level (Fund for co-financing of EU project implementation on regional and local level).
The disadvantage of such a financing method are limited funds (around HRK100 million for
2017) and limited maximum amount for a user.
165
4. Own funds ensured in the budget
Applicants are owners/users of buildings performing public activities, who have their own
funds ensured in the budget.
The proposed financing models 2, 3 and 4 may be combined for closing of the financial
construction.
Taking into account quite complex procedures and past experiences in the implementation
of energy renovation of the public sector buildings and multi-apartment buildings, EPEEF can
in this case provide expert assistance to applicants in the interpretation of positive
regulations, conditions and general dilemmas which applicants normally have when
preparing and implementing projects.
Using EPEEF resources as expert support would be the best option for the users, as the
Program implementation and use of EU funds would be more successful.
9.1.4. Financial instruments
In 2017, financial instruments have to be used in the amount of €25 million. Implementation of
financial instruments for reduction of energy consumption in the public sector buildings shall
be defined by MRDEUF together with MCPP. Financial instruments may be combined with
grants. These financial instruments are to be applied from the beginning of 2018.
9.2. Comparison of the integral energy renovation in line with valid regulations and the construction standard for almost-zero energy buildings
Based on the data of reference buildings, the building energy renovation per delivered and
primary energy has been brought to the cost-related optimal level, as well as the level of
almost-zero energy buildings. The regulation does not differentiate the maximum level of
primary energy in building reconstruction or new building. Likewise, in the Technical regulation
on rational use of energy and heating protection of buildings (TRRUEHPB), the values are
rounded and interpolated in cases of significant deviations, and primary energy limits for
almost-zero energy buildings are defined according to buildings with optimized building
characteristic – new buildings.
166
Table 9 1. Cost-related optimal level of energy renovation per purpose and climate
Cost-related optimal level of delivered and primary energy per purpose and
climate
building Edel CO18
kWh/m²a
Eprim CO
Wh/m²a
Edel
G0EZ19
kWh/m²a
Eprim G0EZ
kWh/m²a
Offices - Continent 33.99 54.87 16.20 26.15
Offices - Coast 32.00 51.65 6.65 10.73
Education - Continent 55.13 86.56 13.63 22.00
Education - Coast 43.82 68.51 3.79 6.12
Hotels and restaurants - Continent 88.44 113.87 63.73 82.09
Hotels and restaurants - Coast 64.12 87.39 51.27 66.62
Retail and wholesale - Continent 139.81 225.65 74.55 120.32
Retail and wholesale - Coast 144.71 233.56 75.74 122.24
Hospitals - Continent 143.10 194.82 64.84 102.98
Hospitals - Coast 128.36 203.17 75.25 120.25
Sports halls - Continent 294,20 451,18 88,74 143,22
Sports halls – Coast 186,49 235,34 72,48 116,98
The values shown in the table above are regarded as technically achievable for building energy
renovation, namely values according to which the average results of the buildings will be
converged. Deviations from the values defined for reconstruction in the valid regulation are a
result of rounding the values for regulation purposes, as well as interpolation according to
characteristics of existing buildings. According to these data, the goal of bringing the building
energy renovation to the primary energy for heating and cooling ≤ 50 kWh/m²a presented in
OPCC is not possible, namely it depends greatly on shares of certain building purposes and
applied primary energy factors (the primary energy factor used in this optimization is identical
to the primary energy factor used in defining minimum requirements for the buildings).
When the operational plan (OP) was being prepared, the Republic of Croatia did not have
actual data, but the value was defined based on reference buildings. In the meantime, projects
have been performed based on national programs of building energy renovation as well as
pilot projects of energy renovation of educational buildings co-financed from ERDF, based on
which the real situation and possible realization of goals have been determined. The analysis
18 Cost optimal – troškovno optimalno 19 Almost-zero energy building
167
of these data has shown that even with significant savings most buildings would not contribute
to the realization of indicators. For instance, buildings in E or lower energy class in the
Continental Croatia, which represent more than 50% of the continental pipeline, would not
realize the defined indicator even with savings of over 70% of energy used for heating/cooling
(although the acceptability condition is at least 50%, as agreed with EC). Likewise, the optimal-
cost analysis has shown that the energy renovation of such buildings is not cost effective even
when the indicator is realized. Additionally, only 4 out of 100 family houses would meet the
defined indicator.
Furthermore, TRRUEHPB regulates that during energy renovation of an existing building, the
highest allowed values of annual energy required for heating may amount to 93.75 kWh/m2 for
multi-apartment buildings and family houses in the Continental Croatia. For public buildings,
these requirements may amount to 163.61 kWh/m2 as for sports halls. Such requirements are
among the strictest in Europe, and the aimed indicator value is even stricter.
Since there is a slight deviation from the primary energy defined in OPCC for business
buildings which represent 63% of the total number, a slight total deviation is expected for the
total number of public sector buildings, which will be compensated through the energy
renovation of some buildings up to the level of almost-zero energy buildings.
Therefore the aimed values of specific indicators 4c11 and 4c21 have to be changed, by
reducing them both to 80 kWh/m2.
9.3. Key institutions, responsibilities, financial and legal aspects
List of key institutions included in the implementation of the renovation program for public
buildings
Government of the Republic of Croatia Adopts a decision on the Program, authorizes ministers to sign energy output agreements for
buildings they use and which are owned by the Republic of Croatia, approves financing/co-
financing of the Program implementation, authorizes an enforcement authority to fully
implement the Program and defines IB1 and IB2, approves annual reports on implementation
of the Program at the proposal of MCPP.
MCPP
A body competent for energy efficiency in the building sector. It is responsible for monitoring
the Program implementation and reporting hereof to the Government of the Republic of
Croatia. It is responsible for sector issues related to the implementation.
168
The 1st-level intermediate body plans funds, performs information and visibility measures,
prepares calls for submission of project proposals, participates in the selection of projects to
be financed, participates in payments to users and recoveries in case of irregularities.
At least once a year, MCPP sends reports on the Program progress to the Government of the
Republic of Croatia.
MRDEUF
Management body – manages and is responsible for the entire OPCC implementation.
Ministry of Finance
Issues instructions which clearly define the procedure for local and regional self-government
units regarding approvals needed for signing of an Energy Output Agreement.
Issues instructions on activities of competent bodies related to tax treatment of energy output
agreements for those concluded under the conditions of this Program.
Certifying authority – is responsible for preparation and submission of requests for payment to
the European Commission, together with assurance of the reliability of data, preparation of
annual invoices, exchange of information with the European Commission and adoption of
decisions related to financial issues.
All ministries
Inform MCPP on activities performed in the implementation of the Program every six months.
ATMIP
As the enforcement authority responsible for energy renovation to be in line with the energy
service model, ATMIP implements and promotes the entire ESCO model, selects buildings,
publishes the public procurement schedule, prepares the technical basis and tender
documentation, performs public procurement of energy renovation, monitors the realization of
savings and other obligations defined in energy output agreements according to the provisions
of the Program, monitors implementation results and informs competent bodies of the Program
implementation, selects member of the Expert Committee and ensures their work, co-signs
energy output agreements.
EPEEF
The 2nd-level intermediate body – Participates in preparation of tender documentation and
selection of projects, concludes contracts on grant allocation with users, monitors performance
169
of users’ contractual obligations as well as the project progress, inspects any irregularities,
decides on acceptability of costs during the implementation and initiates financial corrections.
Public sector
Owners/users of buildings: ministries, central government bodies, local and regional self-
government units of the Republic of Croatia.
Participates in the Program implementation in line with decisions of competent bodies, initiates
the application procedure within the Program, procures energy services, and signs energy
output agreements.
170
In order to ensure preconditions for the Program implementation, owners and deadlines have
been defined for activities included in the Program, especially for the activities presented in the
following table.
Activity Activity Owner Activity
Deadline
Harmonization of the Value Added Tax Act with the Energy
Efficiency Act
MCPP or MEPE 2nd quarter 2017
Update of standard Energy Output Agreements and determination
of their impact on the Budget of the Republic of Croatia
ATMIP, MCPP 2nd quarter 2017
Preparation of procedures and instructions explaining technical,
legal, financial, accounting and other elements of the Energy
Output Agreement
ATMIP 2nd quarter 2017
Elaboration of a separate model for renovation of cultural heritage
buildings and breakdown of protection levels and criteria
Ministry of Culture,
MCPP
4th quarter 2017
Preparation of instructions, manuals and instructions for public
bodies, intermediate bodies and tenderers, creation of a software
for energy savings estimate
ATMIP 2nd quarter 2017
Establishment of mechanisms for monitoring of Energy Output
Agreements
MF 2nd quarter 2017
Definition of reference values according to energy efficiency
measures
ATMIP 2nd quarter 2017
Definition of reference consumption calculation and data
harmonization
ATMIP 2nd quarter 2017
Definition of the optimal verification model for energy savings ATMIP 2nd quarter 2017
Development and implementation of the classification system and
definition of priority energy renovation projects in terms of
financial sustainability, definition of demarcation points
ATMIP 2nd quarter 2017
Development of credit financing of ESCO companies based on
project financing
MRDEUF 4th quarter 2017
Development of financial instruments in line with ESIF rules MRDEUF 4th quarter 2017
Establishment of the system to ensure use of experiences gained
during the Program implementation
ATMIP, MCPP 4th quarter 2017
Education ATMIP continuous
9.4. Renovation priorities
Renovation priorities are buildings with the highest energy consumption and highest potential
of savings realization. Within the entire building pool, there are 17% of buildings with the
highest energy consumption which consume 39% of the total energy; therefore, their
renovation shall achieve the quickest energy savings. This is the reason why the renovation
priority is given to buildings of the central government with the highest energy consumption.
171
All analysed scenarios of building renovation take the energy service model as the basic model
which activates private capital, and gives room to allocation of grants in higher amounts for
buildings where a significant potential for conclusion of energy output agreements is not
expected.
Due to the ownership structure and possible achievement of energy savings, the priority is
given to buildings with higher specific and absolute energy consumption, as well as energy
costs.
In respect of ownership, the advantage is given to buildings owned by the Republic of Croatia
and buildings owned by local and regional self-government units.
172
Table 9.2. Distribution of building renovation priorities according to energy consumption
Clima
tic
zone
Construction
period
Buildings with low consumption Buildings with medium consumption Buildings with high consumption
Share in
area
Average
specific
consumpti
on
Building
area
Share in
area
Average
specific
consumpt
ion
Building
area
Share in
area
Average
specific
consumpt
ion
Building
area
% kWh/m² m² % kWh/m² m² % kWh/m² m²
Multi-apartment
buildings
Conti
nent
<1970 53% 172 147,934 29% 328 80,308 18% 457 50,516
1970-2005 48% 217 239,733 33% 313 166,389 19% 414 97,311
Coast <1970 75% 134 115,980 19% 298 30,122 6% 550 9,266
1970-2005 44% 120 60,712 27% 278 36,817 29% 451 40,677
Office buildings
Conti
nent
<1970 60% 131 902,691 25% 232 370,918 15% 392 226,125
1970-2005 56% 185 500,270 30% 291 269,638 14% 402 122,688
Coast <1970 60% 85 274,735 21% 128 97,788 19% 216 87,034
1970-2005 72% 91 173,827 22% 158 52,291 7% 316 16,927
Educational
buildings
Conti
nent
<1970 57% 137 1,149,335 31% 216 622,089 12% 356 246,857
1970-2005 66% 143 1,303,227 25% 236 503,943 9% 480 174,074
Coast <1970 67% 107 508,840 23% 179 176,532 9% 332 70,702
1970-2005 58% 111 363,098 22% 162 135,470 20% 243 123,402
Hospitals
Conti
nent
<1970 71% 250 952,960 18% 607 238,646 12% 636 155,712
1970-2005 70% 250 556,831 2% 335 13,764 29% 433 230,372
Coast <1970 64% 132 269,886 5% 301 21,484 31% 383 128,993
1970-2005 64% 192 199,426 22% 209 67,555 15% 279 46,344
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9.5. Costs of the Program of renovation of the public sector buildings for 2016 – 2020
Overview of all costs arising from the Program implementation including the costs of the
Program implementation and costs arising from use of European Structural and Investment
Funds. The cost estimation does not include costs of public officials who are included as
budgetary costs.
When costs related to the Program implementation are estimated, the following
presumptions are taken into account:
costs calculated based on 300,000 m2 per year.
1) Preparation of the technical basis
This cost relates to preparation of the basis for public procurement procedures, in line with
the conditions stated in this Program. In order to avoid for the public sector additional costs
which would be a result of inadequate preparation of the technical basis, the contracting
party preparing the basis shall be requested to provide guarantees which would cover any
damages that an energy service provider might have as a result of wrongly defined
elements of the technical basis.
The cost of technical basis preparation is 25 HRK/m2, and it is based on empirical indicators.
An individual cost may vary depending on a size and complexity of a building system, and
this indicator is estimated as an average.
Costs are constantly distributed for the term of the project.
2) Project verification
The project verification costs are estimated based on ATMIP experience regarding the
implementation of the Program of energy renovation of the public sector buildings for 2014-
2015. Since proceedings of the Expert Committee are not changed, any changes in these
costs are not planned.
Costs are constantly distributed for the term of the project.
3) Preparation of detailed instructions for public authorities
The cost is estimated based on an experience with preparation of similar documents, and
it is described in Chapter 5. This cost is planned only for 2017 as it is a one-time activity.
The estimate includes preparation of materials (books, brochures).
4) Preparation of detailed instructions for energy service providers
174
The cost is estimated based on an experience with preparation of similar documents, and
it is described in Chapter 5. This cost is planned only for 2017 as it is a one-time activity.
The estimate includes preparation of materials (books, brochures, flyers, web contents).
The costs are higher than the costs of instructions for public authorities, as the scope of
targeted users is larger, and the materials are used for promotional purposes.
5) Instruction for verification of energy savings for an energy output agreement
This cost relates to a change of algorithms defined for energy savings and determination of
savings through consumption measurements. It is guidance for the Expert Committee on
how to verify projects, energy service providers how to prepare offers and the public sector
for the purpose of raising awareness on technical elements of the energy output agreement.
6) Analysis of performed energy efficiency measures
It relates to costs of an independent expert analysis of measures performed in line with the
energy output agreement. It is a part of continuous monitoring of the Program
implementation, and together with other analyses it represents a framework for the
evaluation of implementation benefits and required allocation of EU aids.
7) Analysis of wider benefits of the Program implementation
It relates to independent expert analyses of benefits arising from renovations implemented
in line with the Program, such as increased employment, decreased number of sick-leaves,
decreased building damages, etc. Wider benefits need to be evaluated so as to justify the
aids, and the analysis also represents the basis for preparation of national methodology for
evaluating economic benefits arising from energy efficiency measures and for calculating
justified EU aids for energy efficiency measures based on proven effects confirmed by
independent experts.
8) Cost-benefit analysis of energy efficiency measures
The cost-benefit analysis relates to individual measures performed within the entire energy
renovation of buildings. Such analyses shall enable better definition of energy efficiency
aids, taking into account different effects in interaction with other measures of the integral
building renovation.
Investments of HRK 1,800,000,000.00 are expected within the Program implementation
(the calculation is based on 1500.00 HRK/m2, 300,000 m2 per year).
175
The implementation costs make 2.46% of the planned investments.
The Operational Program “Competitiveness and Cohesion” includes funds in the amount of
€211,810,805.00 from ERDF allocated for the implementation of the program related to
energy renovation of public buildings as well as for promotion of the entire renovation,
incitement of contracting energy output agreements and performance of energy renovation
measures.
For successful implementation, selection of the optimal assurance of user’s own
participation is crucial and it depends on several factors: purpose of the building, utilization
mode and planned reduction of energy consumption.
Table 9.3 shows costs of the Program implementation per years, whereas tables 9.4.1-9.4.1.6
show the overview of contracting planned for the Specific Goal 4c1 until 2020.
176
Table 9.3 Implementation of the Program by years
2017
(HRK)
2018
(HRK)
2019
(HRK)
2020
(HRK)
TOTAL:
(HRK) Owner
Preparation of the technical basis 7,500,000.00 7,500,000.00 7,500,000.00 7,500,000.00 30,000,000.00 ATMIP
Educational and promotional activities for ESCO model 400,000.00 400,000.00 400,000.00 400,000.00 1,600,000.00 ATMIP
Project verification 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 6,000,000.00 ATMIP
Preparation of detailed instructions for public authorities 200,000.00 200,000.00 ATMIP
Preparation of detailed instructions for applicants
(providers) 300,000.00 300,000.00 ATMIP
Instruction for verification of energy savings for an energy
output agreement 100,000.00 100,000.00 ATMIP
Analysis of performed energy efficiency measures 0.00 350,000.00 0.00 350,000.00 700,000.00 MCPP
Analysis of wider benefits of the Program implementation 300,000.00 0.00 100,000.00 100,000.00 500,000.00 MCPP
Cost-benefit analysis of energy efficiency measures 400,000.00 400,000.00 400,000.00 400,000.00 1,600,000.00 MCPP
TOTAL: 10,700,000.00 10,150,000.00 9,900,000.00 10,250,000.00 41,000,000.00
PLANNED INVESTMENTS: 1,800,000,000.00
% OF THE INVESTMENT: 2.28%
Technical basis for m2 per year 300,000
Cost HRK/m2 25.00
* Calculated based on 300,000 m2 per year
177
Table 9.4.1 Performed contracting for the Specific Goal 4c1 in 2015
2015*
CALL: AGREED
AMOUNT (HRK)
ERDF
(HRK)
EPEEF
(HRK)
USER
(HRK)
AVER.
RATE
TOTAL
(HRK)
GRANT (ERDF
+ EPEEF)
(HRK)
USER (HRK)
4c1.1
Preparation of project
documentation for energy
renovation of buildings and use
of renewable energy sources in
public institutions performing
educational activities
7,259,352.00 6,170,449.00 1,088,903.00 0.00 100%
723,320.00 723,320.00 0.00
4c1.2
Energy renovation of buildings
and use of renewable energy
sources in public institutions
performing educational
activities
64,220,412.00 19,266,123.00 30,733,877.00 14,220,412.00 78% (70-95%) 7,940,317.00 6,706,153.00 1,234,164.00
4c1.3
Energy renovation of buildings
and use of renewable energy
sources in public institutions
performing educational
activities
666,666,667.00 300,000,000.00 0.00 366,666,667.00 45% (35-60%) 0.00 0.00 0.00
4c1.4 Energy renovation of public
buildings 2,735,813,864.00 1,094,325,546.00 0.00 1,641,488,318.00 40% 0.00 0.00 0.00
FINANCIAL INSTRUMENTS 190,000,000.00 0.00
178
Σ 3,473,960,294.00 1,609,762,118.00 31,822,779.00 2,022,375,397.00
Σ 457,100,039.00 € 211,810,805.00 € 4,187,208.00 € 266,102,026.00 €
*contracted projects in 2015 and 2016 are shown in this table to present the entire allocation available for SG 4c1
179
Table 9.4.2 Performance of planned contracting for the Specific Goal 4c1 in 2016
Table 9.4.3 Performance of planned contracting for the Specific Goal 4c1 in 2017
1 € = 7.6 HRK 2017
CALL TOTAL
(HRK) GRANT (ERDF) (HRK)
USER
(HRK)
4c1.1
Preparation of project documentation for energy
renovation of buildings and use of renewable
energy sources in public institutions performing
educational activities
0.00 0.00 0.00
4c1.2
Energy renovation of buildings and use of
renewable energy sources in public institutions
performing educational activities
0.00 0.00 0.00
4c1.3
Energy renovation of buildings and use of
renewable energy sources in public institutions
performing educational activities
337,777,778.00 152,000,000.00 185,777,778.00
4c1.4 Energy renovation of public buildings 50,000,000.00 20,000,000.00 30,000,000.00
FINANCIAL INSTRUMENTS 50,000,000.00
1 € = 7.6 HRK 2016
CALL TOTAL
(HRK)
GRANT (ERDF +
EPEEF) (HRK)
USER
(HRK)
4c1.1
Preparation of project documentation for energy
renovation of buildings and use of renewable
energy sources in public institutions performing
educational activities
6,536,032.00 6,536,032.00 0.00
4c1.2
Energy renovation of buildings and use of
renewable energy sources in public institutions
performing educational activities
56,280,095.00 43,293,847.00 12,986,247.00
4c1.3
Energy renovation of buildings and use of
renewable energy sources in public institutions
performing educational activities
0.00 0.00 0.00
4c1.4 Energy renovation of public buildings 0.00 0.00 0.00
FINANCIAL INSTRUMENTS
180
Table 9.4.4 Performance of planned contracting for the Specific Goal 4c1 in 2018
1 € = 7.6 HRK 2018
CALL TOTAL
(HRK) GRANT (ERDF) (HRK)
USER
(HRK)
4c1.1
Preparation of project documentation for energy
renovation of buildings and use of renewable energy
sources in public institutions performing educational
activities
0.00 0.00 0.00
4c1.2
Energy renovation of buildings and use of renewable
energy sources in public institutions performing
educational activities
0.00 0.00 0.00
4c1.3
Energy renovation of buildings and use of renewable
energy sources in public institutions performing
educational activities
328,888,889.00 148,000,000.00 180,888,889.00
4c1.4 Energy renovation of public buildings 1,050,000,000.00 420,000,000.00 630,000,000.00
FINANCIAL INSTRUMENTS 50,000,000.00
Table 9.4.5 Performance of planned contracting for the Specific Goal 4c1 in 2019
1 € = 7.6 HRK 2019
CALL TOTAL (HRK) GRANT (ERDF)
(HRK) USER (HRK)
4c1.1
Preparation of project documentation for energy
renovation of buildings and use of renewable energy
sources in public institutions performing educational
activities
0.00 0.00 0.00
4c1.2
Energy renovation of buildings and use of renewable
energy sources in public institutions performing
educational activities
0.00 0.00 0.00
4c1.3
Energy renovation of buildings and use of renewable
energy sources in public institutions performing
educational activities
0.00 0.00 0.00
4c1.4 Energy renovation of public buildings 800,000,000.00 320,000,000.00 480,000,000.00
FINANCIAL INSTRUMENTS 50,000,000.00
181
Table 9.4.6 Performance of planned contracting for the Specific Goal 4c1 in 2020
1 € = 7.6 HRK 2020
CALL TOTAL (HRK) GRANT (ERDF)
(HRK) USER (HRK)
Preparation of project documentation for energy
renovation of buildings and use of renewable energy
sources in public institutions performing educational
activities
0.00 0.00 0.00
Energy renovation of buildings and use of renewable
energy sources in public institutions performing
educational activities
0.00 0.00 0.00
Energy renovation of buildings and use of renewable
energy sources in public institutions performing
educational activities
0.00 0.00 0.00
Energy renovation of public buildings 835,813,864.00 334,325,546.00 501,488,318.00
FINANCIAL INSTRUMENTS 40,000,000.00
The Program of energy renovation of the public sector buildings for 2016-2020 is co-financed
through ERDF Funds, in line with the Priority Axis 4 “Promoting energy efficiency and
renewable energy sources”, Investment Priority 4c “Supporting energy efficiency, smart energy
management and renewable energy use in public infrastructure, including in public buildings,
and in the housing sector”, Specific Goal 4c1 “Reduction of energy consumption of the public
sector buildings” of OPCC for which €211,810.805 have been ensured for the period in
question, where the funds have been ensured in the State Budget of the Republic of Croatia
for 2017 and projections for 2018 and 2019 under the T538072 activity "Operational
Programme “Competitiveness and Cohesion 2014-2020” (source 563). The funds ensured for
2017 are HRK 30,754,750.00, for 2018 HRK 114,601,737.00 and for 2019 HRK
132,302,000.00. The funds of HRK 334,325,546.00 shall be planned subsequently for 2020.
The remaining funds shall be consumed until 2023. These funds ensure grants to users in the
amount of 40% of the energy renovation investment.
182
9.6. Indicators of the Program implementation
Results of the Program monitoring are defined as indicator values to be realized during the
implementation:
Result indicator at the Program level Indicator description Reporting dynamics
Average annual energy needed for
heating/cooling in renovated public
sector buildings kWh/m2
Each applicant has to prove in the project the
annual consumption of energy needed for
heating/cooling in a renovated public sector
building kWh/m2.
The indicator value is a sum of individual
activities presented in each project.
Annually
Contribution to reduction of energy
consumption
It is defined as a difference between energy
requirements of a building before and after the
energy renovation, measured in kWh.
The indicator value is a sum of individual
activities presented in each project.
Annually
Total renovated usable area (m2 ) in
public sector buildings.
The indicator value is a sum of individual
activities presented in each project.
Annually
Total number of energy efficiency
projects in public sector building
Number of projects Annually
Total number of signed energy output
agreements for public sector buildings
Number of contracts Annually
Total number of signed grant allocation
agreements for public sector buildings
Number of contracts Annually
183
10. PROPOSAL OF A COST-EFFECTIVE APPROACH TO THE RESTORATION DEPENDING ON THE TYPE OF BUILDING AND CLIMATE ZONE
10.1. Forecasts for public sector buildings by 2020.
3. NEEAP brings savings goals through the implementation of two programs of energy
renovation of public sector buildings - the Public Sector Building Energy Renovation Program
for the period between 2014 and 2015, and the Public Sector Building Energy Renovation
Program for the period between 2016 and 2020,
The goal of the Public Sector Building Energy Renovation Program for the period between
2014 and 2015, is 0.1134 PJ savings per year for 2014 and a total savings of 0.2268 PJ in
2015 (and every subsequent year), while the target defined for Public Sector Building Energy
Renovation Program for the period between 2016 and 2020 is 0.14364 PJ per year, with
cumulative savings in 2020 of 0.7182 PJ. The use of alternative measures through the
application for the realization of additional cost savings by reconstructing public sector
buildings raises the cumulative savings to 3.056 PJ in 2020, or 0,312 PJ per year.
Table 10.4. Savings goals for public buildings in 3rd NEEAP
Measure
3. NEEAP
Chapter 3.
NEAAP
Annual
savings
PJ
Annual savings
2016
PJ
Cumulative savings
2020
PJ
P1
Art
5
Energy refurbishment
program of public
buildings 2014-2015
3.3.1 0.1134 0.2268 0.2268
P2
Art
5
Energy refurbishment
program of public
buildings 2016-2020
3.3.1 0.14364 0.14364 0.7182
Tablica 10.5. Savings goals for public buildings in 3rd NEEAP with alternative policy measures
Measure
3. NEEAP
Chapter 3.
NEAAP
Annual
savings
PJ
Annual savings
2016
PJ
Cumulative savings
2020
PJ
P1
Art
7
Energy refurbishment
program of public
buildings 2014-2015
3.1.1 0.191 0.191 1.241
184
P2
Art 7
Energy refurbishment
program of public
buildings 2016-2020
3.1.1 0.121 0.121 1.813
By adopting the Long-Term Strategy for Mobilising Investment in the Renovation of the
National Building Stock of the Republic of Croatia adopted by the Government of Croatia on
11th June 2014, effective measures were identified for long-term stimulation of cost-effective
integrated renovation of the national building stock of Croatia by 2050, which in the long run
reduces CO2 emissions from the building sector. In line with the strategy, the total area of all
public sector buildings amounts to 13,801,902 m2 useful area, and should, with an annual
renovation of all buildings at a rate of 3% per year for public sector buildings, amount to
414,000 m2 useful area.
In this Program, the selected model is the fourth scenario in which the buildings are considered
depending on the average consumption registered in the EMIS system. Depending on the
consumption, buildings with higher consumption, and therefore greater potential for savings
(total of 17% of the buildings) and faster profitability should be co-financed on average with
30% incentive; buildings with moderate fuel consumption by 60% incentive and buildings with
lower consumption with 80% incentives. The following tables contain the reconstruction of
buildings for the period of 2017-2020..
Table 10.6. Prediction of energy refurbishment for period 2017.-2020. godine
year 2017. 2018. 2019. 2020.
Share of buildings % 2.25% 2.89% 2.66% 1.67%
Total justifiable investment HRK 518,188,206 667,200,063 613,729,935 383,906,610
Savings
kWh 84,889,906 98,181,607 77,881,588 47,488,597
HRK 39,092,406 45,183,327 35,815,180 21,856,846
kgCo₂ 22,139,111 25,571,906 20,235,124 12,350,298
Eprim (kWh) 108,707,528 125,665,065 99,626,347 60,795,683
Building area m² 309,882 398,589 366,515 230,182
Co-financing % 38.7% 45.1% 52.9% 54.6%
Co-financing HRK 200,527,461 300,834,481 324,505,912 209,464,145
Private funds HRK 317,660,745 366,365,582 289,224,023 174,442,465
Total savings (PJ) 0.306 0.353 0.280 0.171
According to the forecast, the plan is to directly invest HRK 2,183,024,814 in the period from
2017 to 2020 in the energy renovation of public sector buildings. According to the displayed
tables, it is evident that, by the end of 2020, 9.46% of the total stock of public sector buildings
of the Republic of Croatia or 1,305,169 m2 buildings would be renewed. The savings in
emissions of CO2 would amount to 80,269 tCO2, while the approximate financial savings would
amount to HRK 142 million per year, after full implementation of the Program.
185
The following tables contain each year of renovation separately.
Table 10.7. Prediction of energy refurbishment for 2017 in 4th scenario
Buildings with high consumption
Buildings with moderate
consumption
Buildings with low consumption
Total
Share of buildings % 1.74% 0.29% 0.22% 2.25%
Total justifiable investment
HRK 401,226,622 67,048,961 49,912,622 518,188,206
Savings
kWh 74,805,010 7,631,677 2,453,219 84,889,906
HRK 34,473,701 3,497,658 1,121,047 39,092,406
kgCo₂ 19,531,601 1,967,729 639,780 22,139,111
Eprim (kWh) 95,833,451 9,735,497 3,138,580 108,707,528
Building area m² 239,849 40,201 29,833 309,882
Co-financing % 30% 60% 80% 39%
Co-financing HRK 120,367,987 40,229,377 39,930,098 200,527,461
Private funds HRK 280,858,636 26,819,585 9,982,524 317,660,745
Tablica 10.8. Prediction of energy refurbishment for 2018 in 4th scenario
Buildings with
high consumption
Buildings with moderate
consumption
Buildings with low consumption
Total
Share of buildings % 1.78% 0.59% 0.52% 2.89%
Total justifiable investment
HRK 411,779,132 135,180,018 120,240,913 667,200,063
Savings
kWh 76,799,424 15,485,344 5,896,838 98,181,607
HRK 35,385,072 7,103,520 2,694,734 45,183,327
kgCo₂ 20,049,921 3,985,723 1,536,262 25,571,906
Eprim (kWh) 98,361,555 19,761,794 7,541,716 125,665,065
Building area m² 246,119 80,797 71,674 398,589
Co-financing % 30% 60% 80% 45%
Co-financing HRK 123,533,740 81,108,011 96,192,731 300,834,481
Private funds HRK 288,245,392 54,072,007 24,048,183 366,365,582
Tablica 10.9. Prediction of energy refurbishment for 2019 in 4th scenario
Buildings with
high consumption
Buildings with moderate
consumption
Buildings with low consumption
Total
Share of buildings % 1.11% 0.83% 0.72% 2.66%
Total justifiable investment
HRK 256,690,435 190,664,093 166,375,407 613,729,935
Savings
kWh 47,777,962 21,926,229 8,177,397 77,881,588
HRK 22,016,089 10,062,270 3,736,822 35,815,180
kgCo₂ 12,454,787 5,647,735 2,132,601 20,235,124
Eprim (kWh) 61,167,738 27,996,676 10,461,933 99,626,347
Building area m² 152,847 114.227 99,442 366,515
Co-financing % 30% 60% 80% 53%
Co-financing HRK 77,007,131 114.398.456 133,100,325 324,505,912
Private funds HRK 179,683,305 76.265.637 33,275,081 289,224,023
186
Tablica 10.10. Prediction of energy refurbishment for 2020 in 4th scenario
Buildings with
high consumption
Buildings with moderate
consumption
Buildings with low consumption
Total
Share of buildings % 0.63% 0.54% 0.50% 1.67%
Total justifiable investment
HRK 145,854,799 123,668,719 114,383,092 383,906,610
Savings
kWh 27,255,238 14,611,398 5,621,960 47,488,597
HRK 12,568,533 6,719,249 2,569,065 21,856,846
kgCo₂ 7,116,881 3,767,254 1,466,163 12,350,298
Eprim (kWh) 34,909,135 18,693,969 7,192,579 60,795,683
Building area m² 87,251 74,565 68,366 230,182
Co-financing % 30% 60% 80% 55%
Co-financing HRK 43,756,440 74,201,231 91,506,474 209,464,145
Private funds HRK 102,098,360 49,467,487 22,876,618 174,442,465
The tables show that the total investment in the amount of HRK 2.183 mil. is planning to be
implemented for 1,148 mil. of private capital, and a HRK 1.035 mil. grant from the ESI Funds.
The estimated private investment in high-consumption buildings is HRK 850 million, while other
investments in the amount of HRK 297 mil. refer to buildings of moderate and low consumption.
On the other hand, the amount of co-financing for high-consumption buildings is approximately
HRK 365 mil., and HRK 671 mil. for buildings of moderate and low consumption. Other assets
in the amount of HRK 547.5 mil. are planned for financial instruments.
The total estimated savings in building with high consumption is HRK 104.4 mil. per year and
savings in emissions of CO2 are approximately 59 ktCO2. The total planned investment in
building with high consumption is HRK 1,215 mil..
The total estimated savings in buildings of moderate consumption amounts to HRK 27 mil. and
the savings in emissions of CO2 are approximately 15 ktCO2. The total planned investment in
the building of moderate consumption amounts to HRK 517 mil.
The total estimated savings in building with moderate consumption is HRK 104.4 mil. per year,
and savings in emissions of CO2 are approximately 59 ktCO2. The total planned investment in
buildings with low consumption amounts to HRK 451 mil.
By implementing the selected scenarios, in four years the objective of energy renovation of
public buildings of the 3rd NEEAP (1.813 PJ) was fully achieved, and the launch of an
integrated renovation of the entire building with the planned financial instruments will be.
187
Tablica 10.11. Cumulative savings according to the 4th scenario for the period 2017-2020
Year Unit 2017. 2018. 2019. 2020.
Delivered energy savings (Edel)
PJ 0.306 0.965 1.904 3.014
MWh 85 268 529 837
Primary energy savings (Eprim)
PJ 0.391 1.235 2.437 3.859
MWh 109 343 677 1,072
CO2 emission reduction ktCO2 22 70 138 218
The table 10. shows the cumulative cost savings per year for the implementation of the 4th
scenario of energy renovation of public buildings. The total cumulative savings for 2020
amounts to 837MWh and 3.014 PJ of energy delivered, 1,072 MWh and 3.859 PJ of primary
energy and reducing emissions of CO2 in this period by 218 ktCO2.
188
11. ANALYSIS OF THE NECESSARY MEASURES FOR THE ESTABLISHMENT OF A SUSTAINABLE MODEL OF ENERGY RENOVATION OF BUILDINGS
11.1. Measures for the establishment of a sustainable model of energy renovation
Measures for the establishment of a sustainable energy renovation model are included in
Chapter “Pogreška! Izvor reference nije pronađen. Selecting the optimal implementation
model involving energy renovation of public sector buildings" and they are based on ensuring
preconditions for the implementation of the analyzed models of energy renovation of buildings.
For selected models of energy renovation, an analysis of strengths, weaknesses, opportunities
and threats was performed.
Strengths Weaknesses
Flexibility which allows selection of the
optimal model of contracting energy
renovation (order of works or services) and
the amount of funding after the preparation
and verification of the project design
Contracting actual costs for the
implementation of the project
Contracting the optimal method of financing
for each project
Buildings with high energy consumption were
identified as priorities for energy renovation
Model for co-financing for buildings with low
energy consumption was defined
Different ways of verifying energy savings
measures were defined (estimate, measure,
dynamic simulation), adapted to the type of
measures in
Insufficient capacity in the public sector to
participate in projects of energy renovation
Low interest of the public sector to engage in
PSBERP
Insufficiently prepared projects by the
Purchaser
Opportunities Threats
Collecting detailed information about the
building stock
Poorly performed works of energy renovation
Poor knowledge of the market on the
elements of energy services
189
Improving systematic energy management in
public buildings
Developing activities of energy services in the
market
Improving conditions in public sector buildings
Insufficient expertise of providers of energy
services in the preparation of offers and
communications for contracting works
The analysis shows that the weaknesses are identified in the public sector which does not
have sufficient capacity to monitor energy renovation projects, and the impact of this lack may
be reduced with greater engagement of founder of institutions and their direct financiers who
need to emphasize the interest in reducing energy costs. Also, it is necessary to establish
intensive communication between the implementing body (APN) and the Purchasers as
support to collect all the necessary documentation on the existing state of the buildings.
In order to prevent poor energy renovation projects which would not achieve the defined energy
savings, it is necessary to define the optimal model of verification of energy savings that is
tailored to measures that have been implemented on the building and that provides elements
which may, in the course of use of the building, be changed by the user.
In public buildings, only the possibility of integral renovation of buildings is considered, which
leads to the realization of potential of restoration included in the calculation of the overall
savings target according to the 3rd NEEAP.
Table 11.1. Cost and effect comparison of analyzed scanarios of refurbishment of public buildings
Share of buildings
Total investment Total
buildings Incentives Co-financing Private funds
% HRK m² % HRK HRK
Scenario 1 3.43% 792,362,875 473,592 50% 396,181,437 396,181,437
Scenario 2 3.43% 792,362,875 473,592 50% 395,141,591 397,221,284
Scenario 3 3.43% 792,362,875 473,592 50% 395,765,499 396,597,376
Scenario 4 2.37% 546,959,150 326,915 47% 258,921,727 288,037,423
11.2. Analysis of individual measures and overall energy renovation of the public sector buildings
The approach to energy recovery from the application of individual measures (for the shell or
systems) to achieving complete energy recovery consists of several steps that determine the
characteristics essential for calculating total targeted energy savings at final and primary
190
energy levels. By applying individual measures only to the outer envelope, it is not possible to
achieve targeted savings in reducing the required energy by at least 50%. Although the
characteristics of an average building built before 1987 are very unfavorable with regard to
thermal protection, the requirements of TRRUETIB for the reconstruction of existing buildings
as set out in Table 11.2. , are very strict and require an integral renewal of all elements that
affect the reduction of total final energy and which has an important impact on the total energy
performance of the building of the energy production system on the building.
Therefore, an access to energy recovery is required, which comprises the following steps:
In the first step, we observe the reduction of transmission losses through the outer shell
by applying thermal protection. The table below shows the required heat exchanger
coefficients of the outer shell according to TRRUETIB in Table 11.2. (standard column),
average heat transfer coefficients for existing buildings (column before 1987) and target
heat transfer coefficients for nearly zero energy building nZEB). The table shows the
potential for reducing transmission losses by improving the thermal protection of the
outer shell by 70% measures in accordance with the TRRUETIB standard. For the
achievement of almost zero energy standards it is necessary to reduce the
transmission losses by a minimum of 40% at the request of TRRUETIB.
Table 11.2. Overview of thermal transmittance coefficient for 3 energy standards
nr Building part
U [W/(m2
·K)]
STANDARD before 1987.g. nZEB
Θe,mj,min
≤3 °C Θe,mj,min
>3 °C Θe,mj,min
≤3 °C Θe,mj,min
>3 °C
1. Outside walls, walls to the garage, attic 0.30 0.45 3.56 – 1.13 0.13
2. Windows, patio doors, skylights, transparent
elements of the building envelope
1.60 1.80 5.2 – 3.6 0.80
3. Glazing of the windows, doors, skylights,
translucent elements of the building envelope
(Ug)
1.10 1.40 5.9 – 3.4 0.70
4. Flat and pitched roofs above a heated space,
ceilings facing the attic
0.25 0.30 4.2 – 0.63 0.10
5. Ceilings above outdoor air, ceilings above
garage
0.25 0.30 2.19 – 1.41 0.10
6. The walls and ceilings facing unheated spaces
and unheated stairwells at temperatures higher
than 0 ° C
0.40 0.60 4.42 0.15
7. The walls towards the ground, floors on the
ground
0.30 0.50 2,67 – 0,89 0.15
8. Outside door, the door to an unheated stairwell,
with opaque door wing
2.00 2.40
1.60
191
9. The wall with the blinds box 0.60 0.80
0.15
10. Ceilings and walls between apartments or
between differently heated special parts of the
building (offices, etc.).
0.60 0.80
0.15
In the second step, measures to reduce ventilation losses are fallowed. Article 27 of
TRRUETIB defines the minimum value of air exchange for areas in which people dwell
and the calculation method of ventilation losses. In order to minimize ventilation losses,
Article 26 of TRRUETIB points to the level of airtightness that need to be achieved for
the building, directly measuring the losses (buildings that generate a value of necessary
energy for heating ≤ 25 kWh / m2a) or indirectly by high quality of work and selecting
exterior doors in specified grades of airtightness. For buildings that use mechanical
ventilation systems, Article 28 of TRRUETIB specifies characteristics for the heat
recovery system from exhaust air with minimal degrees of usefulness η:
– when a circular circulation heat recovery system is applied: overall η ≥ 0.55 (use
only in case of separate mounting of pressure and exhaust ventilation units)
– When other heat recovery systems are applied: overall η ≥ 0.70.
In the third step, energy consumption in lighting systems and other energy consumers
and the contribution to savings by introducing a system of automation and management
are rationalized. The criteria for the lighting system is defined in Articles 37 and 38 of
TRRUETIB, and the criteria for system automation and management in Article 39, 40
and 41.
In the fourth step, an appropriate system of energy production applied, which should
include alternative systems and renewable energy sources in the minimum share
specified in Article 42 of TRRUETIB. To select the optimal systems for power
consumption, the profile of the energy consumption of the building and forms of power
which are dominant for the needs of the building should be familiar. The necessary
input data for making a decision on the reduction of the necessary energy required in
the first step through improving thermal protection of the outer shell.
Applying the analyses in steps 1-3, the selected solution in step 4 may be classified through
three models:
Standard solution in accordance with the minimum requirements of TRRUETIB
Optimized solution with higher system share with renewable energy sources
Nearly zero energy building.
192
The standard solution meets the minimum requirement on the heat energy side for heating and
cooling (for the average building QH,nd ≤ 40 kWh/m2a, QC,nd < 50 kWh/m2a), a standard system
based on fossil fuels is used for the production of thermal energy for 30% of energy needs and
a system based on renewable energy sources is used for 70% of demands, and a renewable
energy source based system is used for a domestic hot water system, and the required power
is taken from the network. At the level of final energy consumption for the average building,
the expected result is Edel ≤ 60 kWh/m2a.
Picture 11-1 The display of realized energy performance for a standard solution for the average building in accordance with TRRUETIB
The optimized solution also meets the minimum requirement for necessary energy for heating
(for the average building QH,nd ≤ 40 kWh/m2a), and a system bades on renewable energy
source is used for the production of thermal energy and the required power is taken from the
network. At the level of final energy consumption for the average building, the expected result
is Edel ≤ 40 kWh/m2a.
Picture 11-2 The display of realized energy characteristics for the optimized solution for the average building in accordance with TRRUETIB
0
50
100
150
potrebna energija finalna energija primarna energija
Standardno rješenje (kWh/m2a)
grijanje hlađenje PTV elen
0
50
100
150
potrebna energija finalna energija primarna energija
Optimizirano rješenje (kWh/m2a)
grijanje hlađenje PTV elen
193
For nearly zero energy buildings, the necessary heat energy for heating is minimal (QH, nd ≤ 15
kWh/m2a), and the necessary energy at the building is produced from systems based on
renewable energy sources and, at the level of final energy, the expected result is Edel ≤ 20
kWh/m2a.
Picture11-3 Display of actual energy characteristic for standard of nearly zero energy in accordance with TRRUETIB
11.3. Sources of financing, realistic return period and realistic required share of co-financing of
measure
In each scenario, realistic return periods were analyzed in the integrated energy renovation of
public sector buildings and the required total investment value.
An important step in the previously described optimal model of the implementation of energy
renovation of public buildings is financial closing of the project. A prerequisite for reaching
financial closing of the project is the implementation of a preliminary cost-benefit analysis of
the optimal financing model, whose implementation is the responsibility of the Intermediate
Body level 1 In the analysis, are all available sources of financing in the market taken into
account (grants, contracting energy services, public-private partnerships, financing with own
funds, loan borrowing, etc.). In agreement with the Purchaser, the cost-optimal model that is
enforceable and gives the best indicators in the structure life is selected. It is important that the
energy renovation project that will be implemented under this Program be financially viable
during the entire period of evaluation of the project.
0
50
100
150
potrebna energija finalna energija primarna energija
G0EZ (kWh/m2a)
grijanje hlađenje PTV elen
194
Described below are the sources of financing for energy renovation of public sector buildings
that are available to the Purchaser of energy renovation (ESPu) and sufficient to achieve the
plans defined by this program.
11.3.1. Own funds
Financing the project with own capital, often called self-financing, provides a number of
advantages over other sources of funding. In addition to being a fixed capital of the Purchaser,
own capital is a proof of creditworthiness and the basis for future indebtedness. Financing the
project with own funds reduces the dependence on the financial market and reduces the
problem of maintaining solvency, i.e. payment capability because there is no loan, and with it,
no annuity repayments. The Purchaser will not be paid to use their own capital, until the project
realizes a rate of return higher than the weighted interest rate at which the interest is paid on
the loan capital..
11.3.2. Other assets - debt
In the event of lack of own resources, in order to reach financial closing of the project, the
Purchaser of the energy renovation may go into indebtedness by raising loans on commercial
terms from commercial banks and by non-commercial conditions with development banks.
Development banks have determined energy efficiency as one of the priority areas of funding.
The main advantage of financing from development banks, especially foreign development
banks, is the so-called. case-by-case access. This means that all the conditions and
characteristics of loan granting are determined depending on the individual project. For
possession of considerable resources and taking higher levels of risk, international financial
institutions can grant funds to finance for a longer term than commercial banks. This has a
positive effect on the liquidity of the Purchaser and the Purchaser's ability to repay the loan.
Commercial banks grant interest rates that are higher than the interest rates of international
financial institutions, due to strict requirements regarding the profitability, liquidity and
solvency. Commercial banks can represent an additional source of funding, along with funds
provided from other sources.
Section 7.1. contains an overview of all currently available sources of financing by development
banks and commercial banks that operate in the international market, as well as the Croatian
one.
195
11.3.3. Grants
Environmental Protection and Energy Efficiency Fund
EPEEF was established as an extra-budgetary fund with the purpose of participating in funding
national energy programs with their funds in view of achieving energy efficiency and renewable
energy usage as well as environmental protection. The EPEEF resources are allocated based
on public calls and public tenders published in the Official Gazette, on the EPEEF website and
in the press.
Grants from the European Structural and Investment Funds
According to Article 61 of Regulation 1303/2013, energy renovation of public sector buildings
belongs to projects after whose completion a net income shall be realized. The savings in
operating costs resulting from the project - in this instance, savings in energy consumption -
are treated as net income.
In order to determine the required amount of co-financing, in accordance with Article 61,
paragraph 3(b), the method of discounted net income is applied, in which the so-called
financing gap is calculated. This method takes into account the period of evaluation of the
project, all economic flows during the period of evaluation and profitability that is normally
expected of the subject investment category (expressed through the discount rate). The
amount of the grant is determined as a share of co-financing of the eligible costs of the
investment, in which the project of energy renovation of public sector buildings is
financially profitable. In order for the project to be financially profitable, its net present value
must be a minimum of 0.
The formula for calculating the net present value is as follows:
NPV (i, N) = ∑𝑅𝑡
(1 + 𝑖)𝑡
N
t=1
−𝑅0
(1 + 𝑖)
R0 = Investment in energy renovation of the public sector building
Rt = Annual savings that are made throughout the period of evaluation of the project
N = the period of evaluation of the project, for the purpose of preliminary analysis of the optimal
financing model, fixed at 14 years
i = discount rate
A chart of the Financial gap with relation to a simple return period and the discount rate is
displayed below
196
Picture 11-4 Diagram of calculation of the Financial gap
0%
10%
20%
30%
40%
50%
60%
70%
80%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Ud
io s
ufi
nan
cira
nja
Jednostavni period povrata (investicija [kuna]/ godišnje uštede [kn])
Diskontne stopa:
Odnosno sufinanciranja i jednostavnog perioda povrata prema diskontnim stopama
5% 8% 10% 12% 15% 18% 20%
197
In the event that the full amount of investment in the energy renovation of the public sector
building is not a justified expense, net revenues are allocated pro rata into the eligible and non-
eligible parts of the investment cost. How much of the investment is suitable for co-financing
grants is determined with relation to the amount pro rata During development of the Program,
only eligible costs were used in the calculation of the required co-financing from the European
structural funds. It follows that the pro rata rate is 100%.
The calculated net present value of the project will represent the financial gap of the project.
In the instance of a negative net present value, the amount of funding will be determined for
the project sufficiently so that its net present value be 0 During development of this program,
the assumption was made that the resources of the ERDF shall co-finance 100% of the
financial gap. The rate of the required co-financing is defined as the ratio of the financial gap
and the total eligible investment.
Private investors
The optimal mode of energy renovation of public sector buildings is by means of private
investors. They are usually societies that in its portfolio of services offer ESCO services, as
well as companies from the energy sector, investment funds, construction companies,
manufacturers of enterprise software etc.
11.3.4. Financial instruments
Part of the funds from the European Structural Funds shall be marketed through financial
instruments as mentioned in previous chapters.
11.4. The benefits of comprehensive energy renovation in accordance with the regulations today
and to the level of nearly zero energy buildings
The complete energy renovation in accordance with the applicable legislation in relation to the
existing state of the building represents a significant improvement of their properties. The
difference of the applicable requirements defined as the cost-optimal level of energy renovation
in relation to the renovation of nearly zero energy buildings is very small, mainly due to the fact
that the criterion of maximum permissible primary energy through which the nearly zero energy
198
building is defined in theTRRUETIB shall be determined on the same level as for a new
building, while the choice of specific options for renovation of buildings as a nearly zero energy
building is limited by external conditions. If all options of reconstruction were to be available at
all facilities, the requirements for reconstruction to the nZEB level could be further tightened,
but technically this cannot be expected. The advantage that nZEB buildings have in relation to
the minimum requirements of reconstruction are primarily reflected in the increase of the share
of renewable energy sources in these buildings, as well as a greater energy independence in
relation to meeting minimum requirements.
Table 11.3. The comparison of minimum requirements for primary energy during reconstruction, proposed cost-optimal requirements for reconstruction and the proposals of the nZEB reconstruction
zgrada Eprim TRRUETIB
kWh/m²a Eprim CO20 kWh/m²a
Eprim nZEB kWh/m²a
Offices - Continent 75 54.87 26.15
Offices - Coast 75 51.65 10.73
Education - Continent 90 86.56 22
Education - Coast 75 68.51 6.12
Hotels and restaurants - Continent 145 113.87 82.09
Hotels and restaurants - Coast 115 87.39 66.62
Retail and wholesale - Continent 475 225.65 120.32
Retail nad whosale - Coast 300 233.56 122.24
Hospitals - Continent 340 194.82 102.98
Hospitals - Coast 330 203.17 120.25
Sports halls - Continent 420 451.18 143.22
Sports halls - Coast 215 235.34 116.98
20 Cost optimal – troškovno optimalno
199
11.5. Measures for continuous improvement and monitoring of the Program
Considering that the application of the energy service model in public sector buildings is still
developing, it is necessary to establish a system which will ensure the use of experiences
gained from the implementation of the Program for continuous improvement and improving
conditions for implementation and realization of the objectives of the Program.
As measures for continuous improvement, the following measures take precedence:
Preparation of detailed instructions for public authorities, intermediary authorities
and energy Service Providers.
Detailed guidance to competent authorities in the implementation of energy
renovation of public sector buildings and public partners, which explain in detail the
obligations and opportunities arising from the implementation of the energy renovation
of a building by an energy services model.
Operating instructions for intermediary authorities and beneficiaries during
implementation of energy renovation of public sector buildings include the core legal
basis, instructions for the execution of works, conditions, criteria and standards for
selecting of co-funded works, a description of the co-funding system and guidelines for
preparing the necessary documentation.
Manual for Bidders, that provides guidelines for existing and potential energy Service
Providers on the obligations under the energy performance agreement, the method of
preparing a bid, calculation of energy savings, guidelines for the design of energy
renovation, methods of achieving grants, eligible costs assessment during
implementation of energy renovation of public sector buildings, and examples of good
practices and other issues.
Guidelines for verification of energy savings, with a display and detailed description
of the implementation of the national algorithm and examples, designed for members
of the Expert Commission, the public sector and energy Service Providers, as well as
persons who are indirectly related to the provision of energy services (planners,
contractors, etc.).
Software for estimating energy savings which allows the assessment of energy
savings in the event of application of different measures, according to input data that
200
are provided in the technical background. The software should have the possibility of
simulating costs, and become a tool that helps providers of energy services to form
offers.
It is necessary to regularly organize training for all participants in energy renovation,
which includes:
- public sector
- construction companies
- planners
- financial institutions
- the public
For each target group, it is necessary to organize separate training programs targeted
to their specific roles.
It is necessary to implement Analysis of the energy efficiency measures
The analysis should be carried out every year according to experiences from the
Program, and detailed data on costs related to the implementation of measures in
specific projects will be available from the analysis, as well as the impact of the
implementation of measures in combinations of implemented measures. Such analysis
is the basis for the calculation of the average and eligible costs of the measures. Eligible
costs of the measures largely depend on the combination of measures by projects,
complexity of the project, state of the building etc. The performance of measures also
depends on the specifics of each project. This analysis needs to develop, to the extent
that is possible from the available data, concrete data on costs and savings, to be used
for cost-benefit analysis for each measure.
It is necessary to implement the Analysis of the wider benefits of the Program
The analysis of the wider benefits should be carried out every year in order to be able
to better assess the overall benefits of energy renovation of buildings. The overall
benefits are related to increasing employment, tax revenues, including contributions,
reduction of sick leave, increased use of buildings and other benefits that may be seen
or detected in other countries. Wider benefits depend on the implemented measures
and purposes of the building in terms of providing energy services, as well as the risks
associated with this kind of business. From this analysis, a national methodology for
determining the wider benefits should be developed and improved in order to analyze
the benefits of the use of ESI Funds, or the application of cost-benefit analysis of the
program.
It is necessary to implement a Cost benefit analysis of energy efficiency measures
201
Using the previous analysis, each year a cost-benefit analysis should be carried out,
using the experiences from implementing the Program. The Cost benefit analysis will
provide the basis for the revision of the co-financing rate which will continuously
increase the relevance of awarding grants and maximizing their economic benefits.
Encourage international exchange of experiences in the implementation of
contracting energy services, especially in the public sector, in order to benefit from
experiences of other countries during implementation. The specific objective of the
international exchange of experiences should be directed to harmonizing market
conditions for provision of energy services in countries of the European Union and the
European Energy Community..
202
12. EVALUATION OF THE EXPECTED ENERGY SAVINGS AND WIDER BENEFITS
12.1. The expected energy savings and reduction of emissions of CO2, which will be achieved through
the implementation of the proposed energy renovation program by 2020
The implementation of the proposed Public Buildings Energy Renovation Program, as a result
of the application of measures would lead to significant energy savings, reduced water
consumption and reduction of CO2 emissions. The analyses considered residential buildings,
offices, buildings for education and hospitals, for coastal and continental Croatia. According to
available data, the consumption of natural gas, liquefied petroleum gas, extralight, light and
medium fuel oil, firewood, electricity and heat (steam and hot water) would be reduced. Table
12-1 shows the expected savings in final energy consumption and consequent reduction of
emissions of CO2, according to the 4th scenario for the period from 2017 to 2020
Table 12.1. Expected final energy savings and reduction of CO2, according to the 4th scenario, for the period 2017- 2020.
Year 2017. 2018. 2019. 2020.
Annual saving of final energy (MWh) 84,890 98,182 77,882 47,489
Annual emission reducion CO2 (t) – buildings with hight consumption
19,532 20,050 12,455 7,117
Annual emission reducion CO2 (t) – buildings with moderate consumption
1,968 3,986 5,648 3,767
Annual emission reducion CO2 (t) – buildings with low consumption
640 1,536 2,133 1,466
Annual emission reducion CO₂ (t) 22,139 25,572 20,235 12,350
Cumulative savings final energy (MWh) 84,890 183,072 260,953 308,442
Cumulative emission reduction CO₂ (t) - buildings with hight consumption
19,532 39,582 52,036 59,153
Cumulative emission reduction CO₂ (t) - buildings with moderate consumption
1,968 5,953 11,601 15,368
Cumulative emission reduction CO₂ (t) - buildings with low consumption
640 2,176 4,309 5,775
Cumulative emission reduction CO₂ (t) 22,139 47,711 67,946 80,296
Energy renovation of public sector buildings reduces emissions of CO2 by reducing the amount
of fuel combusted at the site of the building - natural gas, fuel oil, liquefied petroleum gas and
fuel wood and reduces emissions of CO2 due to reduced consumption of electricity, heat and
water. Reducing water consumption contributes to reducing emissions of CO2 due to lesser
203
use of electricity for water supply of buildings. In calculating the emissions of CO2, emission
factors corresponding to the flow of energy from the place of production or import to the point
of final consumption of energy were used. According to the 4th Scenario, the cumulative
reduction of CO2 emissions after the implementation of energy renovation of public sectors
buildings would amount to 80,296 tons (Figure 12-1) in 2020.
Picture 12-1 The potential of cumulative reduction of CO2for the period 2017- 2020
High-consumption buildings have the largest expected potential of reduction of CO2 emissions,
followed by buildings of moderate and low consumption. The share in the cumulative potential
of CO2 emission reduction for 2020 for different types of building is shown in Figure 12-2.
Picture 12-2 The shares of different types of buildings in the expected cumulative reduction of CO2 emissions for 2020
Energy renovation of public sector buildings leads to reduced energy and water consumption,
and consequently to the reduction of CO2emissions. According to the 4th Scenario, the
cumulative reduction of CO2 emissions after the implementation of energy renovation of public
sectors buildings would amount to 80,296 tons in 2020. In this manner, the implementation of
the Public Sector Building Energy Renovation Program would contribute to the realization of
0
50.000
100.000
2017 2018 2019 2020
Kumulativno smanjenje emisije CO2 (t)
Zgrade velike potrošnje
74%
Zgrade umjerene potrošnje
19%
Zgrade niske potrošnje
7%
Udio u kumulativnom smanjenju emisije CO2
204
Croatian and EU targets for reducing greenhouse gas emissions and climate change
mitigation.
12.2. Statistical, computing and modelled data
All analyzes are based on data on the building stock discussed in Chapter "3. Overview of the
national public sector building stock" and models discussed in Chapter "8. Scenarios of
implementing energy renovation in public sector buildings" and "Pogreška! Izvor reference
nije pronađen.Selecting the optimal implementation model involving energy renovation of
public sector buildings".
The total area of the public sector buildings amounts to 13,801,902 m², of which office
buildings, hospitals, residential buildings and buildings for education to which this Program
applies have the largest share in all public sector buildings (93.84%).
Buildings are divided by construction period into the period prior to 1970, from 1970 to 2005
and the construction period after 2005, while residential buildings are divided into periods up
to 1970, from 1970 to 1987, from 1988 to 2005 and from 2005 onwards according to the
available data on the years of construction of individual buildings. For distribution by purpose
of buildings and their climate zones, data from EMIS was used.
The model data on the costs of the integral restoration by systems and purposes of the building
are derived from the data (cost estimate and cost-optimal calculations) from the Reports under
Article 5 (2) of Directive on the energy performance of buildings and Article 6 of Regulation
(EU) 244/2012 of 16th January 2012: for residential and non-residential buildings as well as
data on implemented projects of energy renovation from the SMIV system.
Data on shares and prices of energy sources are derived from the EMIS system according to
the use and climate data on buildings.
12.3. The impact of the increase of production of thermal insulating materials and efficient systems in
use of alternative and renewable energy sources
Thermal insulation of the building envelopes is one of the most important elements influencing
the energy efficiency of buildings. Insulation reduces the need for heating and cooling in the
205
continental and coastal region, and with a significant reduction in consumption it increases
thermal comfort of users who reside in such buildings. As the insulation of the building
envelope affects the reduction of energy needs, the possibility of using renewable energy in
the building also increases, thereby reducing the share of traditional liquid and solid fuels in
the total balance of energy consumption.
The advanced technologies of glazing, such as double and triple glazed windows with a low-
emission layer also significantly improve thermal efficiency of the building. The Technical
Regulation on Rational Use of Energy and Thermal Insulation in Buildings (Official Gazette
128/15) thoroughly defines the technical characteristics of all types of thermal insulation
materials.
This Program and planned investments in the reconstruction of public buildings shall certainly
predominantly include the improvement of external envelopes, which will significantly increase
the need for all kinds of thermal insulation materials. The following graphic shows the planned
area of thermal insulating materials to be purchased and installed, which will have a significant
impact on their actual production in the Republic of Croatia, but also a more significant import.
Picture 12-3 The planned installation in thermal insulation materials in thousands of m2
The total planned investment in thermal insulation materials is slightly higher than one billion
and four hundred thousand kuna throughout the period of renovation of public buildings (by
end of 2020). The largest increase is expected in 2018, when the total investment in thermal
insulating materials shall be slightly lower than 440 million. The greatest financial potential of
thermal insulation materials is the production of windows, and its share is slightly less than
45% of the total investment, followed by insulation of walls, ceilings, and floors.
-
100
200
300
400
500
2017. 2018. 2019. 2020.
Po
vrš
ina
top
lin
sko
izo
laci
jsk
ih
mat
erij
ala
[tis
. m
2]
Planirana ugradnja u toplinsko izolacijske
materijale u tisućama m2
zidovi stropovi podovi prozori
206
Picture 12-4 The potential investment in thermal insulation materials in HRK million
As part of a complete renovation, significant investments to increase the efficiency of installed
engineering systems are provided for. Throughout the observed period of reconstruction from
2017 to 2020, 32% of the total investment consists of investments into heating, cooling, and
ventilation systems, air conditioning and renewable energy sources, which amounts to slightly
more than HRK 694 million. Below is an outline of the expected investments by type and year
of investment.
Table12.2. The expected investments into increasing the energy efficiency of the HVAC systems
Year Heating and cooling
(HRK) Ventilation / air
conditioning (HRK)
Domestic hot water system
upgrade (HRK)
2017. 130,637,564 31,989,326 2,302,855
2018. 168,302,226 41,034,416 3,010,028
2019. 154,870,864 37,699,543 2,779,021
2020. 96,216,037 23,745,080 1,645,620
Total: 550,026,691 134,468,365 9,737,524
As seen in the table above, the largest investments are planned to improve the energy
efficiency of heating and cooling. As part of these investments, 26% of the displayed amount
(HRK 144,542,957) is provided for improving the efficiency of a heat source for heating, which
will ultimately mean improving the overall efficiency of the heating system by approximately
10%. With respect to the defined requirements of the standards of the installed equipment and
the share of renewable energy sources in TRRUETIB and planned investments, an increased
-
50
100
150
200
2017. 2018. 2019. 2020.
Inv
esti
cijs
ki
po
ten
cija
l [m
il.
kn
]
Potencijal investicija u toplinsko izolacijske
materijale u milijunima kuna
zidovi stropovi podovi prozori
207
demand for high-efficiency boilers and biomass boilers is expected. To increase the efficiency
of the distribution and heat delivery system, this program provides for 44% of the displayed
amount, i.e. 243,315,432 kuna. This investment envisages the replacement of the circulation
pumps in heating and cooling systems, hydraulic balancing of the system (control valves),
installation of physical regulatory controls (wall thermostats/radiator thermostats), installation
of efficient systems for heat transfer to the area and insulation of thermal pipelines through
unheated/cooled areas. The current situation on the market of Croatia for the above mentioned
equipment is characterized by a relatively small proportion of domestic production, and the
predictions are that due to increased demand, new domestic producers shall appear and
increase the share of domestic production compared to the current market situation. To
increase efficiency in the production of cooling energy, this Program provides for 29% of the
displayed amount, i.e. 162,168,299 kuna. This investment plans for installation of high-
efficiency equipment for the production of cooling energy, but also a system that will, by its
use, minimize the cost for cooling energy by using alternative energy sources and cooling
energy tanks.
The planned investment for improving the energy efficiency of the ventilation and air
conditioning system is 134,468,365 kuna, or 19% of the total planned investment. This
investment plans for installation of effective systems that will include the use of high-efficiency
heat exchangers, fans with frequency control, new (energy efficient) air chambers and other
equipment needed for as efficient operation of ventilation/air conditioning systems as possible.
At the moment, in the Republic of Croatia, we have several major manufacturers of that
equipment and it is expected that these investments will result in increased production by
existing producers as well as possible new businesses and new jobs.
The planned investment in improving the energy efficiency of the domestic hot water
preparation system is HRK 9,737,524. This investment plans for installation of solar collectors
for domestic hot water preparation and improvement of existing systems.
The figure below shows how the program will work to increase the installed solar collectors for
domestic hot water preparation.
208
Picture 12-5 A view of installed solar panels for domestic hot water preparation
The image above shows how the amount of installed solar collectors increased over the years
(from 1998 to 2014 - EIHP research, 2015 and 2016 is modeled on the basis of growth between
2014 and 2013, and the period between 2016-2020 is modeled based on the Program). Annual
growth in the number of installed solar collectors for the duration of the program varies between
1.53 to 4.78%, and the total increase between 2016 and 2020 is 16.07%.
If a similar growth could be projected to other systems, the result of the implementation of the
Program could be seen through the increase in production of existing companies (and by
opening new ones) and an increase in the number of jobs in the industry of mechanical
equipment and systems using renewable and alternative energy sources..
12.4. The wider benefits of the implementation of the Program in public sector buildings
The cohesion policy is a comprehensive policy, and sustainable energy development is one of
the many objectives of the cohesion policy. Therefore, a comprehensive approach is required,
that guarantees that the improvement of energy efficiency in public sector buildings shall be
carried out only in full, and not through individual energy efficiency measures (a problem that
occurs in individual measures is the so-called lock-in effect). In addition to the energy
renovation of public buildings, it certainly makes sense to simultaneously perform other related
improvements alongside the renovation of the building itself, which are not directly related to
the energy economics of the building. The complete renovation, which includes the energy and
non-energy part, is usually the most financially profitable. That's why it is important to stress
0
5000
10000
15000
20000
25000
(m2)
Godina
Količina instaliranih sunčevih kolektora do 2020.
godine (m2)
209
that, during procurement of works and services within energy renovation of public buildings,
each individual project must be viewed in a broader context in order to analyze the wider
benefits such as economic, social and environmental influence.
When talking about the wider benefits of the implementation of the program in public sector
buildings, it is necessary to emphasize several key benefits:
- Realizing of national goals to reduce emissions of greenhouse gases, primarily CO2
- Reducing emissions at the site produced during combustion of liquid and solid fuels by
using renewable energy sources and efficient energy use
- Environment improvement in the renovated site and increase of comfort in the
renovated building by using a more efficient heating, cooling, lighting system etc.
- Increasing standards of use in public buildings, creating a pleasant and healthy
environment for citizens and users of public spaces
- Improving employee productivity and reducing absenteeism (being absent from work
regardless of the duration or the reason for absence)
- Increasing safety in order to improve the lighting system, reducing failures that occur in
the old energy systems and significantly better systematic energy management in order
to detect all problems in time (the latter stems from the fact that the consumption of
each renovated buildings must be continuously monitored remotely via EMIS, if
necessary, on a minute-to-minute basis; in EU countries, models are set up to
continuously remotely monitor the temperature and humidity of indoor and outdoor
spaces, illumination etc.)
- Investments in buildings and green technologies certainly contribute to an increase of
jobs, especially jobs in locations where public buildings are renovated. Also, it should
be noted that these investments will significantly improve the knowledge and skills of
employees at all levels
- Increasing the employment of highly qualified people from the areas of architecture,
civil engineering, energy economics, mechanical engineering, automation,
telecommunications, information technology and analytics to increase the need for
installation of remote management systems and the control of energy systems (energy
210
and water consumption, temperature, illumination, etc.) and to increase the need for
analysis of large amounts of data obtained by remote measuring devices
- Renovation of buildings in which education activities are performed will positively affect
the entire community, especially in the most vulnerable demographic areas, where
renovated schools serve as a public space and other facilities, such as cultural and
social events.
With the introduction of fees on emissions into the environment or paying allowances for CO2
emissions on the EU emissions Trading System (EU ETS), respecting the principle of "polluter
pays", there is an attempt to include external costs in the price of the final product. Public sector
buildings are not stakeholders in the EU ETS market and have no obligation to purchase
greenhouse gas emission allowances, nor are they liable to pay compensation for CO2
emissions, even after the amendments to the Ordinance on the Environmental Pollution
Register (Official Gazette 87/15) and raising the threshold of discharges/emissions of CO2 to
450 tonnes per year, fee payers to emission CO2. However, in order to evaluate the cost of
avoided emissions of CO2, it was assumed that the cost of avoided CO2 emissions corresponds
to the price of emission allowances on the secondary spot market of ETS on a platform for the
exchange of energy in Europe (on 14th September 2016 at 15:30, the price was 3.97 EUR /
tCO2). It is also assumed that the dynamics of price growth for CO emissions2 shall be in line
with expectations presented in the Low carbon development strategy of the Republic of Croatia
(10 EUR / tCO2 in 2020, 14 EUR / tCO2 in 2025 and 35 EUR / tCO2 in 2030). Alongside the
above assumptions, certain costs of emissions of CO2 are avoided and are displayed in Table
12-3 as an illustration.
Table 12.3. Avoided cost of CO2 emissions for the period from 2017 to 2020
2017. 2018. 2019. 2020.
Cumulative potential od CO2 emission reduction (t) 22,139 47,711 67,946 80,296
Cost of CO2 (EUR/t) 7 8 9 10
Avoided cost of emission CO2 (EUR) 154,974 381,688 611,515 802,964
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13. MONITORING, MEASUREMENT AND VERIFICATION
13.1. Measurement and verification for purposes of calculating the framework and mandatory energy
efficiency target
Measurement and verification are defined in the Croatian legislation in the Ordinance on the
methodology for monitoring, measurement and verification of energy savings in the final
energy consumption has been effective. The Ordinance prescribes the methodology for
monitoring, measurement and verification of energy savings in accordance with the Energy
Efficiency Act and the EED. The Ordinance describes the measurement method savings
through "top-down" and "bottom-up" methods, where the "top-down" method is used to
determine the national framework energy savings target (Article 5).
The calculation of the mandatory target pursuant to Article 7 of the EED is planned to be
determined with an ordinance in accordance with Article 13 of the Act, which has not been
adopted. In Annex V of the EED, there are four possible methods for calculating energy savings
under Article 7 of the EED:
Anticipated savings, or ex-ante savings based on approximate results from previous
similar energy improvements
Measured savings, or ex-post, where real spending reductions are recorded
Estimated savings, with the use of technical estimate of savings.
Savings identified on the basis of research, that establish consumer response to
advice, information campaigns, labeling systems, certification systems and smart
metering systems. This approach is used for savings resulting from changes in
consumer behavior, not for physical measures.
In the Ordinance on the methodology for monitoring, measurement and verification of energy
savings, the Republic of Croatia enabled monitoring and verification of savings with the
"bottom-down" method in two ways, so Article 7, Paragraph 4 of the Ordinance specifies that
the savings are determined:
1. By applying the calculation method contained in Annex II. of the Ordinance
212
2. measuring physical quantities as the difference between the actual and referential
consumption.
Simply put, the energy savings that are monitored in the system for monitoring, measurement
and verification of savings may be actually measured or calculated by the project or another
valid document with formulas and methods set out in Annex II to the Ordinance. However, if
these are energy efficiency obligations that are issued with a savings certificate, during
entering evidence for calculating energy savings, reference values may not be used for that
purpose, but the input data for each project for which the certificate is issued must be used
instead.
Because the System for monitoring, measurement and verification (SMIV) is arranged in such
a way that each registered savings must be provided with proof of savings for which the person
who must enter the savings into the SMIV is responsible. All savings made in the SMIV and
reviewed by the National Coordination Body are verified.
13.2. Measurement and verification of energy savings for the purposes of the Energy Performance
Contracting
Monitoring and verification of energy savings is the most technically demanding and the most
important part of each ESCO project. Achieving the guaranteed savings ensures payment to
the energy services Bidder, but also a guarantee to the energy services Purchaser. According
to the existing legislative solution - Energy Efficiency Act in Article 26, paragraph 4, defines
that when the guaranteed energy savings are determined by measuring, energy performance
contracting in detail determines the calculation of the reference energy consumption and/or
water in accordance with the Ordinance on the system for monitoring, measurement and
verification of energy savings . If the energy savings are determined by assessment, the value
of the guaranteed savings is determined by the person authorized for the design (paragraph
5). Paragraph 6 defines that the method of calculating the value of the guaranteed energy
savings and/or water is determined by the energy performance contracting. The Ordinance
on the system for monitoring, measurement and verification of energy savings defines that
the National coordinating body shall issue a certificate of the savings from the system for
monitoring, measurement and verification of savings to the co-owner of the building that has
213
a valid energy performance contracting at their request. Measuring energy savings in the
system for monitoring, measurement and verification of savings is defined as calculating
energy savings during the lifetime of the energy efficiency measure, and it is identified either
by applying computational methods contained in Annex II (bottom-up method) or by
measuring physical quantities as the difference between actual and referential consumption.
If the savings are determined by assessment, monitoring energy savings is based on input
data and/or evidence defined by an authorized person, and is based on the methodology set
out in Annex II (bottom-up method).
Standard energy performance contracting is defined as the savings are initially proved by the
project and the project is verified by an Expert Commission. The contracting stipulates that
the energy savings are determined by assessment. Measurement and verification of savings
is the responsibility of the Purchaser and is carried out according to the Energy Efficiency Act
or according to the Ordinance on the system for monitoring, measurement and verification of
energy savings. As already mentioned, measurement and verification is performed using the
calculation method contained in Annex II (bottom-up methods). Article 12 of a standard
contract is defined so the Purchaser may challenge the guaranteed savings. Unrealized
guaranteed savings are determined by a report on the achievement of energy efficiency
based on conducted examinations and/or testings based on the methods prescribed by the
methodology of conducting an energy audit of the building and carried out by authorized
persons for energy audits of buildings.
Savings estimate
The Energy Efficiency Act defines that the energy savings can be determined by assessment
and/or measurement.
If the savings are determined by the assessment, it is determined by the person authorized to
design in the profession to which the measure applies, according to algorithms defined in the
Ordinance on the system for monitoring, measurement and verification of energy savings. The
providers of energy services are required to enter the necessary information in the System for
measurement and verification of savings, run by the National coordination body (Center for
Monitoring Business Activities in the Energy Sector and Investments) as a public authority.
The same Ordinance defines the possibility of obtaining confirmation on the achieved energy
savings, on the basis of entry into the System for measurement and verification of savings.
The confirmation on the achieved energy savings may be released if the conditions are met in
accordance with the Energy Efficiency Act and the Ordinance on the system for monitoring,
214
measurement and verification of energy savings, or if the calculation was obtained in the
project (or other appropriate document) in which input data for a specific building are
determined, i.e. reference values are not used. The calculation of energy savings must be
certified by the person authorized for the design, and this verification should be submitted in
electronic form.
The savings from the measures of integral renovation (any set of at least two measures that
are implemented together, and there is interdependence of the implemented measures) are
defined as the difference between the building's energy needs before the renovation and after
renovation. The building's energy need shall be determined by applying the national Algorithm
which defines the methods of calculating the energy needs for a specific project in detail.
The Ordinance provides for a method of challenging the achieved savings, that may be
challenged at any time by the person authorized to determine the energy savings with an
equivalent document, which is, therefore, equally verified.
This regulation of the system results in the creation of legal safety for Service Providers as well
as for Purchasers. Since each chartered designer must have a valid insurance policy from
professional liability, any damage caused by the treatment of an authorized persons would be
actionable by the injured party, and the building owner may challenge the savings at any time
if there is a demonstrable basis.
The confirmation of the achieved energy savings may also be used as evidence by
implementing bodies for allocation of grants, and may also be used as a basis for invoicing for
the savings.
Such a system allows contracting energy services in an open public procurement procedure.
In public procurement procedures, of course, the conditions must be the same for all, and for
an algorithm for demonstrations of savings. Possible defects of the algorithm will be removed
by improving the algorithm, which is a continuous process, but those calculations that are
publicly available at the time of publication of the procurement procedure must be applied, in
order to avoid arbitrary decisions by the Purchaser (which would create room for abuse, and
the procedure of public procurement may be annulled).
Measuring savings
If the savings are determined by measuring, the savings are defined as the difference between
realized consumption and referential consumption. The referential consumption is determined
in the manner specified in the Ordinance on systematic energy management in the public
sector, and follows in the Information System for Energy Management, which is the
responsibility of APN.
215
The method of calculating the referential consumption is not defined in detail, as well as the
method of harmonizing data. For implementation of measuring savings in the context of energy
performance contracting, the scope of data to be monitored and the method of their
determination should be established in detail, during which at least the internal temperature of
the building and the available climate data (data from the nearest meteorological station) must
be monitored. The method of monitoring should be included in the energy performance
contracting.
The power consumption for buildings of the public sector may be reliably monitored because
the Energy Efficiency Act defines the obligation of energy suppliers to submit data on the
consumption of such buildings directly into the EMIS.
Measuring savings is in fact establishing savings by measuring consumption, which is
compared to the referential consumption. Considering that referential consumption is subject
to calculation, rather than measurement, both methods are an estimate, but with a significant
impact on risk allocation.
Comparison of methods of determining the cost savings
The benefits of establishing savings by assessment (project):
– a clear definition of the measure which led to savings
– safety of investors
– possible accurate determination of the contractual obligations
The benefits of establishing savings by measurement (measurement of consumption):
– possible introduction of measures which are not tangible
– adjustment of calculation of savings according to the real intensity of use
– most of the risk is borne by the Service Provider
Fixed or variable fee
The fixed fee gives greater security to the investor, because it creates predictable conditions
for investment in terms of revenue.
In the case of fixed fees, the Service Provider does not assume:
216
– risks and benefits of changes in user behavior
– risks and benefits of changes in energy source prices
– risks and benefits of changes in the intensity of use of the building during the contractual
period
The risks and benefits which in this case belong to the user are those risks and benefits to
which the Service Provider has no direct influence.
The advantages of fixed fees for the Service Provider:
– the possibility of financing their investments by loans, due to a clear relation between
income and expenditure
– clearly defined obligations and manner of proving
– the possibility of estimating future costs and revenues at the time of bidding
– the possibility of investing in measures with a long return period (investing in the
building envelope)
– inability of users to sabotage the implementation of the contract during the contractual
period
The advantages of fixed fees for users:
– planning costs
– increasing the value of the building due to investments in the envelope
– only paying the savings that prove the investment of the Service Provider
– the possibility of conducting a public procurement procedure with transparent criteria
– savings are realized after the end of the contract period
– When agreeing the fixed fees, the user must accept the following assumptions:
– use of the building in the contractual period in an equal or better manner in terms of rational
use of energy by its employees
– energy source prices shall not on average reduce over the contractual period
– an equal purpose and intensity of use of the building over the contractual period is expected
In the case of variable compensation (measurement of consumption), the Service Provider
assumes the risk of proving savings as a result of their investments and/or implementation of
activities. Practically, this means that the Service Provider may achieve revenue in the rooms
without significant investment by decreasing temperature, or benefit from the more rational
behavior of the users, who may not be a result of their investments. In this manner it is possible
217
to achieve significant savings, but these savings are practically not directly attributable to the
activities of the Service Provider, and they are mostly not under their control.
Some energy efficiency measures are verifiable, and that is primarily related to investments in
the envelope and the building systems. Such measures may be proven at any time during the
term of the contract (permeability of the walls, windows, the efficiency of thermal engineering
system etc.). The impact of such measures may be calculated and they represent a real,
physical change to the building. By investing in these measures, the Service Provider may
provide a real reduction in energy needs, while the behavior of the user is under the user's
control in any case. Such energy efficiency measures are also measures which have a longer
return period.
Paying fixed fees is more appropriate for measures which require significant investment. It is
difficult to imagine investors who will take on the risk of user behavior or changes in energy
prices for a measure on which they do not achieve significant return (up to five years with the
simple return period method). Granting loans to such investments is, especially with the use
of financial instruments, possible because financial institutions may accurately assess the
income of the Service Provider. At the same time, measures of investment in the envelope are
those measures that lead to employment and increase of investments at the national level.
Measures that do not have a measurable impact, such as user education or raising awareness,
may achieve significant savings in practice, and without significant investment. In determining
savings, what particularly lead to cost savings is not proven - savings are determined by
comparing the energy bills and the referential consumption. In practice, this also means that
savings may or not be realized due to user behavior or changes in market conditions to which
the Service Provider has no influence. Measuring savings may be the cause of disputes,
precisely because it is difficult to determine who is responsible for achieving savings or
responsible for the not achieving them. There are no practical examples in Europe where the
contracts based on the measurement led to significant investments of the ESCO companies
themselves, and determination of savings by measurement alone will have difficulties in
achieving all the objectives of the program.
The question is also asked, if the user themselves have invested in improving energy efficiency
(for example, regular replacement of windows, which installs energy efficient windows), what
is the benefit for Service Providers, given that energy efficiency has nothing to do with their
investment? Such a question is avoided if the condition of the building is determined in the
project, which may in that instance be exactly corrected. If the savings are determined by
measurements, each, including the regular customer investment, affects the energy
218
performance contracting, which means that after any such investments, an annex to the
contract must be made or the referential consumption must be changed.
13.3. Suggestions for improvement
To improve the ways of determining the energy savings it is necessary to:
– adopt rules on the composition and conduct of the Expert Commission
– enable with a standard agreement the realization of savings which are determined by
measuring
– the pilot project of verification of savings by measuring energy consumption before and
after renovation and modes of use with creation of dynamic simulations of the building.
13.3.1. Enable with a standard contract the realization of savings which are determined by measuring
The former standard energy performance contracting did not provide for the possibility of
determining the benefits of "soft" measures, which did not use the possibility that would make
the energy performance contracting more attractive to potential Bidders.
To remove these barriers, it is necessary to adjust the standard energy performance
contracting.
The standard contract must separate the method of determining energy savings using two
principles:
I. The savings that can be proven by the assessment, for whose achievement the
Purchaser shall pay the fee determined by public tendering. The savings that can be
proven by the assessment relate to the reduction in energy needs, or energy
consumption for the users' performance of activities in the building at referential
conditions of use, therefore, investments may be related to the building envelope
and/or HVAC systems.
When demonstrating the savings, a national Algorithm is applied, and the calculation
is determined in relation to the modeled consumption which is the set by the technical
219
background. The technical background must contain a calculation of the energy needs
of the building in project conditions divided by elements. The same technical
background must state the regulations (standards) applied for calculation of savings
and develop the existing consumption to all elements of the envelope and thermal
engineering system in respect to which the savings are achieved.
This way ensures the lower cost of preparing bids, as well as transparency
requirements for Bidders. Savings proven by the project also mean the obligation of
the Service Provider to ensure the availability of measures with which they proved
savings, thus defining the obligation of the providers to maintenance of these
measures.
Achieving these savings is the obligation of the Bidder, who assumes such an
obligation by bidding in the public procurement procedure. For this reason, non-delivery
of these savings is a reason for termination of the energy performance contract.
II. The savings that can be proven by measurement of consumption mean the difference
between the reference cost and the resulting cost of the accounting period. The
reference cost represents the amount of the building's need for energy sources that
would be incurred in terms of use in the period preceding the energy performance
contract.
The reference cost is calculated taking into account the actual expenditure incurred for
the energy sources in the building at reference conditions of use, and the calculation
of the reference cost is included in the technical basis and adjusted to the changes in
prices of the energy source set which the building used prior to the energy performance
contract.
The reference conditions of use shall be determined from the costs incurred for the
owner of the building during the previous three-year period. The technical background
must contain the information and methodology that will establish the reference cost for
the duration of the contract. Monitoring the reference cost shall be conducted by APN
through the EMIS system.
compensation is paid to the provider of energy services on the basis of achieving the
savings that are determined by measurements in the proportion (percentage) in which
they achieved energy savings which are proven by assessment.
220
13.3.2. Adopt rules on the composition and conduct of the Expert Commission
Elaborated in Chapter 9.
13.3.3. The pilot project of verification of savings by measuring energy consumption before and after renovation and modes of use with creation of
dynamic simulations of the building
Determination of energy demands of the building with a dynamic simulation represents the
highest quality method of calculating the energy performance of a building. A high-quality
dynamic model is used to interpret the measured energy consumption and determining the
energy performance of the building under real conditions of use (adjusted energy rating), since
it defines all the variables that affect energy consumption in the building - the regime of use,
internal and external conditions, in contrast to the national algorithm that relies on standardized
conditions and modes of use, or protocols on measurement and verification based on the
bottom-up method of the budget of savings (for which empirical data on the achieved savings
are important ).
The pilot project of verification of savings includes a minimum of two office buildings, residential
buildings, education buildings and hospitals in the continental and coastal climate; a total of 16
buildings, for which a detailed dynamic model is made and measurement of energy
consumption before (according to EMIS) and consumption after energy renovation is
conducted, as well as measurements of use modes, meteorological data and internal
conditions on the building. Based on this data, variations of other methods of verification (the
national algorithm, certificate, protocol for measurement and verification) are determined and,
based on results achieved, improving the algorithm or introducing new methods in the
verification of savings may be suggested.
The expansion of the pilot project is possible so that it also included buildings with a higher
power consumption (for which the mode of use is closer to standard, or even more intense),
as well as buildings with low energy consumption in which deviations from the standardized
modes of use are more significant.
221
14. ANNEXED DOCUMENTS
14.1 List of Abbreviations
APN Real Property Transaction and Brokerage Agency
BA Building Act (Official Gazette 153/13)
CSA Central state administration
DHW Domestic hot water
EEA
(EEUA)
Energy Efficiency Act (Official Gazette 127/14)
EED Energy Efficiency Directive 2012/27/EU
EMIS National energy management information system
EPBD Directive on the energy performance of buildings EC/2010/31
EPEEF Environmental Protection and Energy Efficiency Fund
ERDF European Regional Development Fund
ESCO Energy Service Company
ESI Funds European structural and investment funds
ESPr Energy Service Provider
ESPu Energy services Purchaser
GBER General block exemption Regulation
HAMAG
BIRCO
Croatian Agency for SMEs, Innovation and Investments
IB1 Intermediate Body level 1 of the Operational program Competitiveness and cohesion
2017-2020 for investment priority 4c: "Supporting energy efficiency, smart energy
management and RES use in public infrastructure, including in public and multi-
apartment buildings"
The Ministry of Construction and Physical Planning
IB2 Intermediate Body level 2 (Fund for Environmental Protection and Energy Efficiency)
ICVICV Buildings classified as immovable cultural value or located in the protection zone
JNR Joint National Rules
LRGU Local and regional government unit
MCPP Ministry of Construction and Physical Planning
ME Ministry of the Economy
MEE Ministry of Environment and Energy
MEEC Ministry of Economy, Entrepreneurship and Crafts
MRDEUF Ministry of Regional Development and EU Funds
NEEAP Nacional energy efficiency action plan
222
NPV Neto present value
nZEB Nearly zero energy buildings
OCPP Operational Plan Competitiveness and Cohesion 2014-2020
OEIBEC Ordinance on Energy Inspection of Buildings and Energy Certification (OG 48/14,
150/14, 133/15, 22/16)
PPP Public – Private Partnerships
RES Renowable Energy Sources
RES Directive on promotion of the use of energy from renawable sources 2009/28/EU
SAA State Aid Act
SMIV System for monitoring, measurement and verification of savings
TFEU Threaty on the functioning of the Europian Union
TRRUETIB The Technical Regulation on Rational Use of Energy and Thermal Insulation in
Buildings (Official Gazette 128/15)
VAT Value added tax
223
14.2. ANNEX 1
Table 3.2. Classification of the public building stock by building type and climate
Office buildings
Hospitals Residential buildings
Education Sports halls
Other Total
Share in total area 23.59% 21.39% 8.18% 40.68% 3.02% 2.61% 99.46%
Area by building type (m²) 3,256,155 2,952,511 1,128,617 5,614,153 416,633 359,784 13,727,852
Share of buildings in coastal Croatia
22.62% 25.20% 28.76% 25.39% 33.07% 22.15% 25.12%
Share of buildings in continental Croatia
77.38% 74.80% 71.24% 74.61% 66.93% 77.85% 74.88%
Total building area in coastal Croatia (m2)
736,481 743,964 324,636 1,425,306 137,768 79,709 3,447,864
Total building area in continental Croatia (m2)
2,519,673 2,208,547 803,981 4,188,847 278,865 280,075 10,279,989
14.3. ANNEX 2
Table 3.3. Classification of the public building stock by type, construction period and climate
Climate region Construction period
Prema godini izgradnje i klimatskoj zoni
Offices Hospitals Education Sports halls
Other Residential Total
Share of building stock (%) by type, construction period and climate
Coastal <1971
62.40% 56.50% 53.05% 6.83% 61.06% 47.86% 53.29%
Continental 59.52% 61.00% 48.18% 5.42% 40.47% 34.67% 51.03%
Coastal
1971-2005 (za stanovanje 1971-1987 i 1988-2005)
33.00% 42.12% 43.64% 50.34% 25.42% 28.72% 39.22%
Continental 45.00% 41.65%
Coastal 35.43% 36.27% 47.30% 53.16% 42.08%
13.85% 1.30%
Continental 17.61% 1.37%
Coastal 2005 -
4.60% 1.38% 3.32% 42.83% 13.51% 9.57% 5.54%
Continental 5.05% 2.73% 4.52% 41.41% 17.45% 2.71% 5.45%
Total area (m²)
Coastal <1971
459,556 420,363 756,074 9,414 48,674 155,368 1,849,448
Continental 1,499,733 1,347,318 2,018,281 15,126 113,349 278,758 5,272,565
Coastal 1971-1987
243,045 313,325 621,970 69,347 20,264 93,240 1,361,192
Continental 892,596 800,966 1,981,243 148,248 117,861 361,824 4,302,738
Coastal 1987-2005
44,966 44,966
Continental 141,609 141,609
Coastal 2005 -
33,880 10,276 47,262 59,007 10,771 31,061 192,257
Continental 127,344 60,263 189,323 115,491 48,866 21,791 563,077
224
14.4. ANNEX 3
Table 3.7. Distribution of heritage buildings by building type and climate
Office buildings Hospitals Residential buildings Education Sports halls Other Total
Share in total area of heritage buildings 38.00% 17.50% 5.36% 31.69% 0.56% 6.88% 100.00%
Area (m²) 717,264 330,364 101,227 598,216 10,554 129,954 1,887,579
Share in Coastal Croatia 27.19% 29.80% 35.37% 16.82% 23.15% 28.59% 24.87%
Share in Continental Croatia 72.81% 70.20% 64.63% 83.18% 76.85% 71.41% 75.13%
Area in Coastal Croatia (m²) 195,001 98,450 35,802 100,599 2,443 37,153 469,447
Area in Continental Croatia (m²) 522,263 231,914 65,425 497,618 8,111 92,801 1,418,132
Table 3.8. Distribution of heritage buildings by building type, climate and construction period
Climate zone Construction period
By construction period and climate zone
Office buildings Hospitals Residential buildings Education Sports halls Other Total
Udio u fondu zgrada (%)
Coastal <1971.
96.95% 100.00% 74.24% 97.19% 88.27% 90.97% 95.39%
Continental 95.11% 92.87% 99.12% 94.68% 36.99% 80.55% 93.49%
Coastal 1971.-2005.
2.62% 0.00% 0.00% 2.81% 0.00% 9.03% 2.41%
Continental 4.25% 7.13% 0.88% 5.32% 22.72% 15.17% 5.76%
Coastal >2005.
0.43% 0.00% 25.76% 0.00% 11.73% 0.00% 2.20%
Continental 0.64% 0.00% 0.00% 0.00% 40.30% 4.27% 0.74%
Ukupna površina (m²)
Coastal <1971.
189,053 98,450 26,580 97,774 2,156 33,796 447,810
Continental 496,726 215,384 64,850 471,125 3,000 74,755 1,325,841
Coastal 1971.-2005.
5,116 0 0 2,824 0 3,357 11,297
Continental 22,219 16,530 574 26,493 1,843 14,080 81,738
225
Coastal >2005.
832 0 9,222 0 287 0 10,341
Continental 3,318 0 0 0 3,269 3,966 10,553
The table above shows the distribution of the area and the share of NKD buildings according to the purpose and climatic zone and year of construction.
14.4.ANNEX 4
Table 3.10. Energy consumption and indicators for buildings by type and climate for buildings constructed before 1971
<1971. Office buildings Hospitals Residential buildings
Education Sports halls Other Total
Coastal Croatia
Delivered energy Edel (kWh) 6,510,912 24,100,261 5,001,891 27,464,843 797,643 1,142,661 65,018,210
Reference area (m²) 54,732 110,860 26,214 189,928 4,886 7,950 394,571
CO₂ emission(kg) 1,699,883 6,736,050 1,400,545 7,487,401 209,160 289,597 17,822,635
Contintal Croatia
Delivered energy Edel (kWh) 50,925,499 25,255,053 15,774,081 56,354,690 903,307 4,409,847 153,622,477
Reference area (m²) 260,994 70,571 58,817 299,980 4,630 21,370 716,362
CO₂ emission(kg) 13,820,237 5,892,291 4,287,290 15,115,355 201,088 1,296,646 40,612,907
Indicators Coastal Croatia
Delivered energy, Edel(kWh/m2) 119 217 191 145 163 144 165
CO₂ emission (kg/m²) 31 61 53 39 43 36 45
Useful energy Q"hnd,ref (kWh/m2) 86 92 95 75 123 117 /
Indicators Continental
Croatia
Delivered energy, Edel(kWh/m2) 195 358 268 188 195 206 214
CO₂ emission (kg/m²) 53 83 73 50 43 61 57
Useful energy Q"hnd,ref (kWh/m2) 147 176 146 136 204 191 /
226
Table 3.11. Energy consumption and indicators for buildings by type and climate for buildings constructed between 1971-2005
1971.-2005. Office buildings Hospitals Residential buildings
Education Sports halls Other Total
Coastal Croatia
Delivered energy Edel (kWh) 3,796,533 16,374,149 2,217,244 33,203,634 4,955,169 100,188 60,646,917
Reference area (m²) 31,418 78,561 8,545 224,144 35,339 2,090 380,097
CO₂ emission(kg) 928,738 4,471,982 618,799 9,589,251 1,314,588 23,602 16,946,960
Contintal Croatia
Delivered energy Edel (kWh) 34,294,717 17,798,649 14,904,622 61,602,898 3,576,833 1,239,482 148,713,791
Reference area (m²) 139,101 58,496 52,005 314,302 23,685 6,417 609,349
CO₂ emission(kg) 9,356,765 4,277,078 3,592,013 16,726,867 973,829 322,585 39,053,800
Indicators Coastal Croatia
Delivered energy, Edel(kWh/m2) 121 208 259 148 140 48 160
CO₂ emission (kg/m²) 30 57 72 43 37 11 45
Useful energy Q"hnd,ref (kWh/m2) 62 74 82 69 107 73 /
Indicators Continental
Croatia
Delivered energy, Edel(kWh/m2) 247 304 287 196 151 193 244
CO₂ emission (kg/m²) 67 73 69 53 41 50 64
Useful energy Q"hnd,ref (kWh/m2) 109 132 107 118 172 137 /
227
Table 3.12. Energy consumption and indicators for buildings by type and climate for buildings constructed after 2005
>2005. Office buildings Hospitals Residential buildings
Education Sports halls Other Total
Coastal Croatia
Delivered energy Edel (kWh) 1,911,180 / 598,384 203,883 467,532 24,039 3,205,018
Reference area (m²) 14,657 / 4,304 971 15,526 306 35,764
CO₂ emission(kg) 455,611 / 166,480 54,842 110,363 5,653 792,949
Contintal Croatia
Delivered energy Edel (kWh) 1,107,315 30,750 855,612 3,001,374 2,454,968 202,108 7,652,126
Reference area (m²) 7,887 150 3,296 18,799 29,679 1,005 60,817
CO₂ emission(kg) 261,860 6,925 192,807 738,150 690,441 45,938 1,936,121
Indicators Coastal Croatia
Delivered energy, Edel(kWh/m2) 130 / 139 210 30 79 90
CO₂ emission (kg/m²) 31 / 39 56 7 18 22
Useful energy Q"hnd,ref (kWh/m2) 30 41 37 38 76 42 /
Indicators Continental
Croatia
Delivered energy, Edel(kWh/m2) 140 205 260 160 83 201 126
CO₂ emission (kg/m²) 33 46 58 39 23 46 32
Useful energy Q"hnd,ref (kWh/m2) 52 62 56 58 107 60 /
228
14.6. ANNEX 5
Table 3.15. Specific delivered energy Edel (kWh/m2) by building type and age
Offices Hospitals Residential Education Sports halls Other Total
Coastal
<1970. 51 119 130 121 67 40 109
1970.-2005. 32 113 176 123 50 0 107
>2005. 0 n/a 105 186 0 0 18
Continental
<1970. 145 270 221 164 168 172 172
1970.-2005. 184 247 244 166 121 174 187
>2005. 106 151 194 136 58 106 97
Table 3.16. Specific delivered energy Edel (kWh/m2) by building type and age
Offices Hospitals Residential Education Sports halls Other Total
Coastal
<1970. 68 99 61 23 97 104 56
1970.-2005. 89 95 84 25 90 48 52
>2005. 130 n/a 34 24 30 79 72
Continental
<1970. 50 88 47 24 27 34 42
1970.-2005. 63 57 43 30 30 19 57
>2005. 35 54 66 24 25 95 29
Table 3.17. Specific final therma energy for heating (kWh/m2) by building type and age
Offices Hospitals Residential Education Sports halls
Coastal
<1970. 48 89 104 112 57
1970.-2005.
30 85 140 113 43
>2005. 0 n/a 84 171 0
Continental
<1970. 137 202 177 151 143
1970.-2005.
175 185 195 153 103
>2005. 100 113 155 125 49
Table 3.18. Specific final thermal energy for DHW (kWh/m2) by building type and age
Offices Hospitals Residential Education Sports halls
Coastal
<1970. 3 30 26 10 10
1970.-2005. 2 28 35 10 8
>2005. 0 n/a 21 15 0
Continental
<1970. 7 67 44 13 25
1970.-2005. 9 62 49 13 18
>2005. 5 38 39 11 9
229
Table 3.19. Specific final energy (kWh/m2) by building type and age
Offices Hospitals Residential Education Sports halls
Coastal
<1970. 34 38 5 2 7
1970.-2005.
50 37 7 3 6
>2005. 81 0 2 2 1
Continental
<1970. 22 33 4 2 1
1970.-2005.
32 21 3 3 1
>2005. 17 20 5 2 1
Table 3.20. Specific final energy for lighting (kWh/m2) by building type and age
Offices Hospitals Residential Education Sports halls
Coastal
<1970. 18 22 11 12 30
1970.-2005. 15 22 11 12 30
>2005. 10 0 11 12 20
Continental
<1970. 18 22 11 12 15
1970.-2005. 15 15 11 13 20
>2005. 10 15 11 12 15
Table 3.21. Other specific final energy (kWh/m2) ) by building type and age
Offices Hospitals Residential Education Sports halls
Coastal
<1970. 17 38 45 9 60
1970.-2005. 24 37 66 10 54
>2005 40 0 21 9 9
Continental
<1970. 11 33 32 10 10
1970.-2005. 16 21 29 14 9
>2005 8 20 49 10 9
230
14.7. ANNEX 6
Table 4.1. Display of realized savings at the location Križine
Project
(measure
title in
SMIV)
Measure
type
Energy
savings
[kWh]
Cost of
measure
[kn]
CO2 savings
(t)
kn per
saved kWh
Lifetime of
measure
kn/kWh in
measure
lifetime
Klinički
bolnički
centar Split-
lokalitet
Križine
(APN)
Solar therma
DHW
system (M7)
50,513 192,998 13 3.82 20 0.19
Instalation or
replacement
of lighting
system in
service and
industrial
sector
buildings.
(M10)
454,841 2,254,063 150 4.96 7 0.71
Integral
building
refurbishme
nt (M1)
9,438,889 68,140,514 2,520 7.22 26 0.28
Table 4.2. Savings potential if new contracts have been signed up to now in the Renewal Program, based on the energy service model
Status of contract
Nu
mb
er
of
co
ntr
acts
Nu
mb
er
of
bu
ild
ing
s
Ak (
m2)
An
nu
al en
erg
y s
avin
gs
in k
n (
wit
ho
ut
VA
T)
An
nu
al en
erg
y s
avin
gs
[kW
h]
– f
rom
SM
IV
Co
st
of
meas
ure
– t
ota
l
co
ntr
act
valu
e i
nclu
din
g
fees,
wit
ho
ut
VA
T
[kn
]
kn
per
kW
h s
av
ed
Kn
per
m2
Refurbishment
finished, formal
decision on
finalization
adopted
3 12 68,425 9,010,733 9,986,698 157,277,493 2,298
Contracted, in
progress 9 43 114,938 17,701,147 / 398,522,427 / 3,483
Contract in
preparation
(assesment of
offers)
3 27 66,703 5,822,382 / 126,303,348 / 1,893
231
Table 4.8. Results achieved in public sector buildings 2014 and 2015, available in the System for Monitoring, Measuring and Verification of Savings (SMIV)
Rezultati 2014.
Sve mjere
javne zgrade
SMIV 2014.
Sve mjere
javne
zgrade
SMIV 2015.
Samo mjere
obnove
toplinske
izolacije
Samo mjere
integralne
obnove
Integralna obnova
2015. bez ESCO
modela
ESCO model
obnove (trenutno u
SMIV-u dostupno
jedino KBC Križine)
SMIV 2015. mjere (trenutno u SMIV-u
nisu unesene
obnove po ESCO
modelu ni OPKK
Pilot projekt)
broj mjera (nije nužno broj
obnovljenih
zgrada)
251 18 233 178 14 13 1 230
korisna
površina (Ak)188.573 15.270 173.302
nije moguće
trenutno utvrditi
iz SMIV-a
43.442 16.376 27.066 156.926
Ušteda
energije
(kWh)
37.714.527 3.054.075 34.660.452 18.934.725 11.755.573 2.316.684 9.438.889 24.716.207
smanjenje
potrošnje
energije (%)
prosjek
obnove oko
60%
prosjek obnove
oko 60%
76% smanjena
spec. g. potreba
za grijanjem
ušteda CO2
(t)10.434,3 1.233 9.201 4.400 3.264 743 2.520 6.517
Ukupna
investicija268.026.455 20.156.620 247.869.835 139.124.673 78.525.269 10.384.755 68.140.514 177.282.260
kn po
ušteđenom
kWh
7,11 6,60 7,15 7,35 6,68 4,48 7,22 7,17
kn/m2 1.421 1.320 1.430 N/A 1.808 634 2.518 1.130
Svi p
ost
ign
uti
re
zult
ati o
bn
ove
zgr
ada
javn
og
sekt
ora
20
14
.-2
01
5.
Rezultati 2015.
SMIV sve
mjere 2014. i
2015.
Prosječni trošak:
232
14.8. ANNEX 7
Table 6.2. Key available data on selected approach, defined measures and financial instruments under Article 5 in Member States
MS Approach Planned measures Financial instruments
Austria Alternative, regional programs
1. Building renovation and sale 2. Energy performance agreement 3. Energy and behavior change management
1. National co-financing
Belgium Alternative, regional programs
1. Implementation of measures found in energy certificates 2. Construction of new efficient buildings 3. Complete renovation
N/A
Bulgaria Standard 1. Public-private fund - subsidies, granting loans, guarantees
Cyprus Standard N/A
Czech Republic
Alternative, regional programs
1. Change in behavior 2. Renovation of the heating system 3. The renovation of the building envelope
1. EU funds 2. National Fund 3. Energy Service Provider
Denmark Alternative 1. Raising awareness 2. Energy-efficient buildings 3. Building renovation 4. Performance optimization
N/A
Estonia Standard 1. Subsidies
Finland Alternative 1. Penalties and bonuses in contracts with real estate management and maintenance companies 2. Raising awareness 3. Building renovation 4. Operation management and monitoring 5. More efficient use of space in buildings 6. "Green" lease agreements
3. Energy Service Provider
France Alternative 1. Building renovation and sale 3. Energy and behavior change management
1. Energy Service Provider / public-private partnership
Greece Standard N/A
Ireland Alternative 1. Campaign on behavior change
Italy Alternative 1. Renovation of energy systems 2. Renovation of building envelopes and energy systems 3. complete renovation
1. Funds 2. Energy Service Provider
Luxembourg Standard N/A
Latvia Standard 1. Subsidies
Lithuania Standard 1. National fund - granting loans, guarantees, co-financing 2. Energy Service Provider / public-private partnership
Hungary Standard N/A
233
MS Approach Planned measures Financial instruments
Malta Alternative 1. Efficient lighting systems 2. Smart meters 3. Energy management 4. Installation of photovoltaic and solar systems 5. Changes in behavior 6. Roof insulation
N/A
Netherlands Alternative 1. Energy system optimization, energy performance agreement 2. Energy saving measures according to advice
1. National fund - granting loans
Germany Alternative, regional programs
1. Energy renovation 1. National funds 2. Energy Service Provider 3. Public-private partnership
Poland Alternative 1. Raising awareness 2. Grants
1. National funds - subsidies, favorable loans 2. EU funds
Portugal Alternative 1. Local energy managers 2. Energy performance agreement
N/A
Romania Standard 1. EU funds
Slovakia Alternative 1. Complete building renovation 2. Energy audits 3. Change in behavior
1. National fund - subsidies, favorable loans
Slovenia Standard 1. EU funds with an energy performance agreement
Spain Standards, regional programs
1. Energy performance agreement 2. National funds
Sweden Alternative Undefined N/A
United Kingdom
Alternative, regional programs
1. Specific schemes and strategies 1. National funds 2. Energy Service Provider
234
14.9. ANNEX 8
Financing possibilities concerning energy renovation of public sector buildings on
grounds of domestic and foreign experience
The chapter gives an overview of the current funding options for energy renovation of public
sector buildings on the Croatian market. Furthermore, some of the ways of financing energy
renovation of public sector buildings in the European Union are also stated.
Funding sources concerning energy renovation of public sector buildings in Republic of Croatia
Below are the funding sources available on the Croatian market which the energy efficiency
projects involving public sector buildings could be funded and/or co-financed from. Many of
these funding sources are available not only to the public sector, but also to other users (natural
person, SMEs, etc.).
Croatian Bank for Reconstruction and Development (CBRD)
CBRD is the development and export bank established for granting loans for the renovation
and development of the Croatian economy. Special financial programs were introduced for
providing financial support and encouraging investments in environmental protection projects,
energy efficiency projects and renewable energy. Loans can be obtained directly or through
commercial banks co-operating with CBRD.
PROGRAM NAME Loan granting program for projects involving environmental protection, energy efficiency and renewable energy sources
PROGRAM PURPOSE
founding investments,
land,
buildings,
equipment and devices
permanent working capital - up to 30% of the total loan amount
PROGRAM BENEFICIARIES
Local and regional government units
utility companies
companies, craftsmen and other legal persons
TYPE OF FUNDS Loans - granting loans to end-users through commercial banks21 and direct loans
21 The list of banks is available at www.hbor.hr
235
AMOUNT OF THE TOTAL BUDGET AND INDIVIDUAL CONTRACT
the largest amount is not limited and it depends on CBRD's financing possibilities, specific investment program, the creditworthiness of the borrower, value and quality of security offered
CBRD finances up to 75% of the estimated investment value, VAT excluded; applications lower than HRK 100,000.00 are typically not considered
TERMS OF FUNDING
Interest: 4% with possible reduction for the environmental projects and energy efficiency projects
grace period: 3 years
payback period: 14 years including grace period
collateral:
bills of exchange and promissory notes,
pledge or fiduciary transfer of title to property supported by property insurance policy endorsed in favor of CBRD,
bank guarantees,
warranty by HAMAG BICRO, warranty by the Republic of Croatia,
other customary securities in banking.
PROGRAM NAME Loan granting program for building energy renovation22
PROGRAM PURPOSE
building adaptation and reconstruction
equipment and devices
PROGRAM BENEFICIARIES
energy Service Providers (companies and crafts which provide energy efficiency improvement services concerning public sector buildings, and which will be selected by tender)
Energy Service Purchasers (government bodies, local and regional government units as well as institutions, agencies, schools and hospitals in their ownership)
all companies and crafts investing in energy efficiency.
TYPE OF FUNDS loans - through commercial banks23or direct loans
AMOUNT OF THE TOTAL BUDGET AND INDIVIDUAL CONTRACT
the maximum loan amount is not limited and it depends on CBRD's financing possibilities, specific investment program, the creditworthiness of the borrower, the eligibility of the project on the grounds of APN's Certificate on Technical and Financial Project Feasibility, or the Expert Commission and the value and quality of securities offered
22 In the Program for energy refurbishment of public sector conducted by the Real Property Transaction and
Brokerage Agency 23 The list of banks is available at www.hbor.hr
236
loans are granted in HRK with foreign currency clause. CBRD may consider granting loans up to 50% of the estimated investment value, excluding VAT.
TERMS OF FUNDING
Interest: 4%
grace period: 1 year
payback period: 14 years including grace period
collateral:
bills of exchange and promissory notes by the loan end-
beneficiary and the owner of the loan end-beneficiary
bills of exchange and promissory notes by local and regional government units or government bodies when they are loan end-beneficiaries
contract on assignment of a chose in action (cession agreement) by which the claims which the energy service Provider has towards the energy services Purchaser will be assigned to the creditor
performance bonds transferrable to CBRD
warranty by HAMAG BICRO for loan repayment of up to 80% of the loan granted by CBRD
exceptionally when deemed necessary due to the project size and quality, CBRD may consider other securities customary in banking
European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development is the most recently founded
international financial institution, whose mission is to finance primarily private sector projects
which cannot find funding sources in the market, referring only to the projects aiding the
transition towards market economy and a democratic society.
In Croatia, EBRD has the possibility of granting direct loans or loans through commercial
banks. As a rule, direct loans are granted only to major projects (valued at a minimum of about
EUR 3 million) and other projects are financed through commercial banks. When assessing
large projects, EBRD evaluates the customer's creditworthiness and project profitability, and
subsequently the loan and financing is determined according to a financial model. Within the
loan, EBRD offers grants (a percentage of the loan amount) reducing the loan principal, to end-
beneficiaries. The end-beneficiary will be entitled to a grant if they meet certain conditions (for
237
example, if they managed to reduce CO2 emissions and energy consumption by a certain
percentage).
In Croatia, the current line of credit intended for financing energy efficiency projects and
renewable energy sources: Western Balkans Sustainable Energy Financing Facility II
(WEBSEFF II). The funds from this credit line are distributed through the following commercial
banks which determine the commercial terms independently:
Privredna banka Zagreb (budget EUR 20 million)
Zagrebačka banka (budget EUR 20 million)
Erste & Steiermärkische Bank (budget EUR 10 million)
PROGRAM NAME Western Balkans Sustainable Energy Financing Facility II (WEBSEFF II)
PROGRAM PURPOSE
energy efficiency (building energy renovation, energy efficiency improvement) resulting in a minimum of 30% savings
modern technologies which will reduce energy consumption/ CO2 for 20%
renewable energy sources
PROGRAM BENEFICIARIES
public sector
private sector (SMEs, ESCOs)
TYPE OF FUNDS
loan
grant
free technical support
AMOUNT OF THE TOTAL BUDGET AND INDIVIDUAL CONTRACT
total budget for Croatia is EUR 50 million, with a maximum of EUR 2.5 million per public sector project and EUR 2 million for private sector projects
due to achieving the stated performance related to the reduction of energy consumption/CO2, successful projects can obtain a grant in form of a reduction of loan principal (for private sector 10% - 15%, and public sector 5% - 10%)
TERMS OF FUNDING
financing conditions are determined by the participating bank for each credit-line beneficiary individually
238
PROGRAM NAME Loan granting program for projects involving environmental protection, energy efficiency and renewable energy sources
PROGRAM PURPOSE
founding investments,
land,
buildings,
equipment and devices
permanent working capital - up to 30% of the total loan amount
PROGRAM BENEFICIARIES
Local and regional government units
utility companies
companies, craftsmen and other legal persons
TYPE OF FUNDS Loans - granting loans to end-users through commercial banks21 and direct loans
AMOUNT OF THE TOTAL BUDGET AND INDIVIDUAL CONTRACT
the largest amount is not limited and it depends on CBRD's financing possibilities, specific investment program, the creditworthiness of the borrower, value and quality of security offered
CBRD finances up to 75% of the estimated investment value, VAT excluded; applications lower than HRK 100,000.00 are typically not considered
TERMS OF FUNDING
Interest: 4% with possible reduction for the environmental projects and energy efficiency projects grace period: 3 years payback period: 14 years including grace period collateral:
bills of exchange and promissory notes, pledge or fiduciary transfer of title to property supported by property
insurance policy endorsed in favor of CBRD, bank guarantees, warranty by HAMAG BICRO, warranty by the Republic of Croatia, other customary securities in banking.
239
PROGRAM NAME Loan granting program for energy renovation of buildings22
PROGRAM PURPOSE building adaptation and reconstruction
equipment and devices
PROGRAM BENEFICIARIES
energy Service Providers (companies and crafts which provide energy efficiency improvement services concerning public sector buildings, and which will be selected by tender)
Energy Service Purchasers (government bodies, local and regional government units as well as institutions, agencies, schools and hospitals in their ownership)
all companies and crafts investing in energy efficiency.
TYPE OF FUNDS loans - granting through commercial banks23 or direct loans
AMOUNT OF THE TOTAL BUDGET AND INDIVIDUAL CONTRACT
the maximum loan amount is not limited and it depends on CBRD's financing possibilities, specific investment program, the creditworthiness of the borrower, the eligibility of the project on the grounds of APN's Certificate on Technical and Financial Project Feasibility, or the Expert Commission and the value and quality of securities offered
loans are granted in HRK with foreign currency clause. CBRD may consider granting loans up to 50% of the estimated investment value, excluding VAT.
Terms of funding
Interest: 4% grace period: 1 year payback period: 14 years including grace period collateral:
bills of exchange and promissory notes by the loan end-beneficiary and the owner of the loan end-beneficiary
bills of exchange and promissory notes by local and regional government units or government bodies when they are loan end-beneficiaries
contract on assignment of a chose in action (cession agreement) by which the claims which the energy service Provider has towards the energy services Purchaser will be assigned to the creditor
performance bonds transferrable to CBRD
warranty by HAMAG BICRO for loan repayment of up to 80% of the loan granted by CBRD
exceptionally when deemed necessary due to the project size and quality, CBRD may consider other securities customary in banking
European Investment Bank (EIB)
European Investment Bank is an EU development bank the purpose of which is to contribute
to the integration and balanced development as well as the economical and social cohesion of
240
EU MSs, and it implements similar objectives outside the EU territory. In Croatia as well, EIB
participates in financing public and private sector projects by direct funding or through partners
commercial banks.
EIB directly funds only projects valued at over EUR 25 million, and all the smaller projects will
be financed through commercial banks.
PROGRAM NAME Erste & Steiermärkische Bank
PROGRAM PURPOSE
energy efficiency
PROGRAM BENEFICIARIES
small and medium-sized enterprises
large companies
public sector and other businesses
TYPE OF FUNDS loan + part of the grant
AMOUNT OF THE TOTAL BUDGET AND INDIVIDUAL CONTRACT
a grant in the amount of 15% of the principal loan
minimum cost of project is EUR 40,000, and maximum EUR 2.5 million for production modernization (more energy efficient technology), and EUR 250,000 for improving energy efficiency in buildings
TERMS OF FUNDING
more favorable funding conditions (interest rate) compared to the commercial ones
PROGRAM NAME Raiffeisen Bank
PROGRAM PURPOSE
expansion and modernization of production capacity, infrastructure, knowledge economy, education, energy, environment and health
PROGRAM BENEFICIARIES
small and medium-sized enterprises (up to 250 employees on a consolidated basis) and medium capitalized companies (up to 3000 employees)
TYPE OF FUNDS loan
AMOUNT OF THE TOTAL BUDGET AND INDIVIDUAL CONTRACT
maximum amount is EUR 25 million
for small and medium-sized enterprises and medium-capitalized companies up to 100% of the total project amount (up to 12.5 million)
for public administration units and other entities up to 50% of the total project cost (up to EUR 12.5 million for infrastructure projects related to providing public services, which are candidates for approval of EU grants of up to EUR 2.5 million)
TERMS OF FUNDING
funding terms are determined by the commercial bank
in agreement with the EIB, the interest rate will be more favorable than the market interest rate
Green for Growth Fund
241
In Croatia, funds are also available from the Green for Growth Fund (GGF) Fund, which was
launched as a public-private partnership in December 2009 by the German development bank
KfW and the European Investment Bank (EIB), with financial support from the European
Commission, the German Federal Ministry for Economic Cooperation and development (BMZ)
and the European Bank for Reconstruction and development (EBRD). Up to now, two
commercial banks, Privredna banka Zagreb (budget EUR 25 million) and Zagrebačka banka
(budget EUR 20 million), signed funding agreements with GGF.
PROGRAM NAME Green for Growth Fund (GGF)
PROGRAM PURPOSE
energy efficiency
renewable energy sources
PROGRAM BENEFICIARIES
large corporate clients
small and medium enterprises
households
industry
public sector
TYPE OF FUNDS loan
AMOUNT OF THE TOTAL BUDGET AND INDIVIDUAL CONTRACT
small projects: up to EUR 500,000 for projects resulting in a 15% reduction of CO2 emissions or energy savings
large projects: more than EUR 500,000 for projects resulting in a 20% reduction of CO2 emissions or energy savings
TERMS OF FUNDING
funding terms are determined by the commercial bank
Environmental Protection and Energy Efficiency Fund (EPEEF)
Environmental Protection and Energy Efficiency Fund was established as an extra-budgetary
fund with the purpose of participating in funding national energy programs with their funds in
view of achieving energy efficiency and renewable energy usage as well as environmental
protection.
Regarding energy efficiency of public sector buildings, the Fund participates in two ways:
through public tenders for co-financing energy renovation of non-residential buildings as well
as through co-financing energy Service Providers in accordance to the Public Sector Building
Energy Renovation Program conducted by APN.
The Fund's resources are allocated based on public calls and public tenders published in the
Official Gazette, on the Fund website and in the press. For each financial year, the Fund's
Management Board delivers the Work Program and Financial Plan, in which programs and
projects as well as secured funding are showed individually.
242
Commercial banks
A number of commercial banks offer various lines of credit and financing models as a basis for
strategic commitment to offer financial solutions for projects involving energy efficiency and
renewable energy sources, in order to increase participation in this growing market. Some of
the commercial banks are partners to CBRD and major EU lines of credit, yet they have
developed their own models of financing.
Financing sources involving energy renovation of public sector buildings in EU states
Some of the financing methods concerning energy renovation of public sector buildings in the
European Union are stated below.
Lithuania - Energy Efficiency Fund24
Energy Efficiency Fund was established in 2015 by the Lithuanian Ministry of Finance, Ministry
of Energy and the Public Investment Development Agency. Total resources for the planning
period up to 2030 amounts to EUR 79.6 million, of which EUR 65.1 million will be provided as
long-term loans in order to modernize central government buildings, and the remaining EUR
14.5 million is intended for street lighting modernization projects as guarantees.
This fund acts as a revolving fund to allow reinvestment in new energy efficiency projects and
increase the portfolio of successfully completed projects.
Each of the projects submitted for obtaining funding from the Fund must be in accordance with
the National Energy Independence Strategy and the Public Sector Building Energy Renovation
Program. Some of the project terms are as follows: a building needs to hold energy class D or
lower, 51% of the building should be used by the state, period of repayment in energy
renovation must be shorter than 20 years, the building must be used at least 10 years.
Characteristics of loans are given in the table below.
24 Available at: http://www.vipa.lt/
243
LOAN BENEFICIARIES
ESCOs owners of central government buildings
LOAN GRANTING TERMS
The loan is granted for a period of up to 20 years with a fixed interest rate of 2% (if the 12M EURIBOR does not exceed 2%). It is possible to repay the loan in annual payments or instalments
LOAN AMOUNT up to 80% of justifiable resources if the beneficiary is an ESCO up to 100% of justified resources if the user is the owner of the central government building
GRANTS
up to 20% of grant for technical assistance (project preparation, energy audit, project drafting, project supervision) up to 20% in the form of reduced interest rates if the project meets certain standards, such as energy class C
NOTES ESCO must provide not less than 20% of project value project must be carried out over a period of 2 years from signing the loan agreement
Bulgaria - Energy Efficiency and Renewable Sources Fund 25
Energy Efficiency and Renewable Sources Fund, which functions as a revolving fund, was
founded in 2004 in Bulgaria. Initial capitalization of the entire Fund resulted from grants by: the
Global Environmental Facility through IBRD (USD 10 million), the Austrian Government (EUR
1.5 million), the Bulgarian Government (EUR 1.5 million) and several private Bulgarian
companies. The Fund offers services: granting loans, providing guarantees and technical
support.
Characteristics of the products offered for energy efficiency projects involving public sector
buildings are stated below.
PROGRAM TYPE Loan
PROGRAM BENEFICIARIES
Local government units
LOAN GRANTING TERMS
The loan is granted for a period up to 7 years, at an interest rate of 4% - 7%.
LOAN AMOUNT The loan amount can be from EUR 15,000 to EUR 1,500,000
NOTES The loan beneficiary must provide a minimum of 10% of the entire investment.
PROGRAM TYPE Guarantees
GUARANTEES BENEFICIARIES
ESCO
GUARANTEE AMOUNT
The guarantee will amount to 5% (the exact percentage is subject to negotiation) of the overall investment. In this way, ESCOs can achieve more favorable interest rates with banks
25 http://www.bgeef.com/display.aspx?page=about
244
By the end of 2015, the Fund has funded 98 energy efficiency projects in local government
units (the total value of the projects is EUR 18.5 million) and 19 energy efficiency projects in
hospitals and universities (total value of the projects is EUR 6 million). Almost 9 million
guarantees were issued to ESCOs for energy efficiency projects.
United Kingdom - London Energy Efficiency Fund26
London Energy Efficiency Fund is one of the three revolving funds financed from the London
Green Fund, and it is responsible for the area of energy efficiency. The umbrella Fund is
financed by ERDF (2007 - 2013 European Regional Development Fund), GLA (Greater
London Authority) and LWARB (London Waste and Recycling Board), and it is supported by
the European Investment Bank.
Among other users, it offers a line of credit for energy efficiency in public sector buildings.
Characteristics of the loan are previewed in the table below.
LOAN BENEFICIARIES
Local and regional government units, ESCOs
LOAN GRANTING TERMS
The loan can be granted to 5-10 years, and for a longer period if necessary. The interest rate depends on the creditor, but may amount to as low as 1.55% per year.
LOAN AMOUNT On average, the loan amount ranges from GBP 3 million to GBP 10 million, with a minimum amount of GBP 1 million up to a maximum of GBP 20 million.
NOTES
Those energy efficiency measures are funded the implementation of which achieves at least 20% savings. Loan flexibility is manifested in the possibility of harmonizing repayment instalments with savings realized, in order for the cash flow to appear neutral or positive for the creditor.
Loan granting programs by development banks
German Development Bank KfW27
Founded in 1942, the German Development Bank (KfW) has a long tradition in supporting and
initiating the development of local government units, as a financial partner.
26 http://www.leef.co.uk/ 27 https://www.kfw.de/kfw.de.html
245
One areas of loans extended is the energy efficiency of public sector buildings. Characteristics
of loans are presented below.28
LOAN BENEFICIARIES
Local government units
LOAN GRANTING TERMS
The loan can be granted to 10, 20 or 30 years with a respective grace period of 2, 3 or 5 years. The interest rate on the loan is 0.05%.
LOAN AMOUNT
The loan amount is not limited, and it is financed up to 100% of justified investment costs (except energy efficiency measures, the bank can also finance project preparation costs, the establishment of energy management systems and the decommissioning of old power systems).
NOTES In case of better energy performance, grants in the form of reductions of loan principal (up 17.5%) are also available.
Grants
EEA Grant and Norway Grant Fund
These grant funds were established by Liechtenstein, Iceland and Norway to reduce economic
and social disparities and to strengthen bilateral relations in the 15 countries of Central and
Southern Europe and the Baltic countries.
In the new funding period (2014- 2021), EUR 2.8 billion will be available to 15 EU MSs, among
others to Croatia. Funds will be allocated to beneficiary countries on the basis of population
and GDP/capita.
The Fund allocates resources based on the eligible programs which are proposed by the
beneficiary countries, and which are in accordance with the following priority areas:
Innovation, Research, Education and Competitiveness
Social Inclusion, Youth Employment and Poverty Reduction
Environment, Energy, Climate Change and Low Carbon Economy
Culture, Civil Society, Good Governance and Fundamental Rights
Justice and Home Affairs
28 https://www.kfw.de/inlandsfoerderung/%C3%96ffentliche-Einrichtungen/Energetische-Stadtsanierung/Finanzierungsangebote/Energieeffizient-Sanieren-Kommunen-(218)/#1
246
14.10. ANNEX 9
Table 8.3. Distribution of area and investment according to 1st refurbishment scenario
Goal consumption
Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 5,738 4,861 22 16,336,856
1970.-2005. 80 1,540 9,895 6,815 2,471 27,335,430
Continental 1970. 60 1,299 2,313 2,594 1,013 6,832,466
1970.-2005. 60 1,299 4,115 1,151 0 6,838,972
Offices
Coastal 1970. 34 1,886 38,103 18,190 847 106,887,424
1970.-2005. 34 1,886 9,284 5,799 18,925 45,076,914
Continental 1970. 32 1,697 6,091 4,216 7,203 23,546,240
1970.-2005. 32 1,697 5,351 3,714 195 15,549,613
Education
Coastal 1970. 55 1,720 5,272 70,615 1,009 131,359,900
1970.-2005. 55 1,720 8,411 49,125 17,950 113,809,244
Continental 1970. 44 1,420 1,069 24,013 3,725 38,162,221
1970.-2005. 44 1,420 0 23,589 108 33,573,532
Hospitals
Coastal 1970. 143 2,272 12,682 38,021 630 116,001,908
1970.-2005. 143 2,272 13,839 8,472 8,206 60,989,082
Continental 1970. 128 1,898 7,836 4,429 3,751 27,400,964
1970.-2005. 128 1,898 11,301 637 0 22,662,109
247
14.11. ANNEX 10
Tables 8Pogreška! Izvor reference nije pronađen..5 and 8Pogreška! Izvor reference nije pronađen..6 show the specific costs of energy
renovation by type of building, target energy consumption after renovation, floor area renovated and assumed investment by type of building
based on energy consumption..
TAble 8.5. Distribution of area and investment according to 2nd refurbishment scenario for buildings with lower consumption
Goal consumption Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 4,323 3,661 16 12,306,241
1970.-2005. 80 1,540 7,454 5,134 1,861 20,591,256
Continental 1970. 60 1,299 1,743 1,954 763 5,146,766
1970.-2005. 60 1,299 3,100 867 0 5,151,666
Offices
Coastal 1970. 34 1,886 28,703 13,702 638 80,516,248
1970.-2005. 34 1,886 6,993 4,368 14,256 33,955,576
Continental 1970. 32 1,697 4,588 3,176 5,426 17,736,932
1970.-2005. 32 1,697 4,031 2,798 147 11,713,225
Education
Coastal 1970. 55 1,720 3,971 53,193 760 98,950,896
1970.-2005. 55 1,720 6,336 37,005 13,521 85,730,323
Continental 1970. 44 1,420 805 18,088 2,806 28,746,870
1970.-2005. 44 1,420 0 17,769 81 25,290,299
Hospitals
Coastal 1970. 143 2,272 9,553 28,640 474 87,382,015
1970.-2005. 143 2,272 10,424 6,382 6,182 45,941,907
Continental 1970. 128 1,898 5,902 3,336 2,826 20,640,621
1970.-2005. 128 1,898 8,513 479 0 17,070,932
248
Table 8.6. Distribution of area and investment according to 2nd refurbishment scenario for buildings with higher consumption
Goal consumption Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 1,416 1,199 5 4,030,615
1970.-2005. 80 1,540 2,441 1,681 610 6,744,174
Continental 1970. 60 1,299 571 640 250 1,685,700
1970.-2005. 60 1,299 1,015 284 0 1,687,305
Offices
Coastal 1970. 34 1,886 9,401 4,488 209 26,371,175
1970.-2005. 34 1,886 2,291 1,431 4,669 11,121,338
Continental 1970. 32 1,697 1,503 1,040 1,777 5,809,309
1970.-2005. 32 1,697 1,320 916 48 3,836,387
Education
Coastal 1970. 55 1,720 1,301 17,422 249 32,409,004
1970.-2005. 55 1,720 2,075 12,120 4,429 28,078,921
Continental 1970. 44 1,420 264 5,924 919 9,415,351
1970.-2005. 44 1,420 0 5,820 27 8,283,234
Hospitals
Coastal 1970. 143 2,272 3,129 9,380 155 28,619,893
1970.-2005. 143 2,272 3,414 2,090 2,025 15,047,175
Continental 1970. 128 1,898 1,933 1,093 925 6,760,343
1970.-2005. 128 1,898 2,788 157 0 5,591,176
249
14.12. ANNEX 11
Table 8.9. Distribution of area and investment according to 3rd refurbishment scenario for buildings with higher consumption
Goal consumption
Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 2,877 2,437 11 8,189,868
1970.-2005. 80 1,540 4,960 3,417 1,239 13,703,588
Continental 1970. 60 1,299 1,160 1,300 508 3,425,200
1970.-2005. 60 1,299 2,063 577 0 3,428,461
Offices
Coastal 1970. 34 1,886 19,102 9,119 424 53,583,984
1970.-2005. 34 1,886 4,654 2,907 9,487 22,597,613
Continental 1970. 32 1,697 3,053 2,113 3,611 11,804,021
1970.-2005. 32 1,697 2,682 1,862 98 7,795,213
Education
Coastal 1970. 55 1,720 2,643 35,400 506 65,852,338
1970.-2005. 55 1,720 4,216 24,627 8,998 57,053,978
Continental 1970. 44 1,420 536 12,038 1,867 19,131,192
1970.-2005. 44 1,420 0 11,826 54 16,830,826
Hospitals
Coastal 1970. 143 2,272 6,358 19,060 316 58,153,187
1970.-2005. 143 2,272 6,938 4,247 4,114 30,574,579
Continental 1970. 128 1,898 3,928 2,220 1,880 13,736,441
1970.-2005. 128 1,898 5,665 319 0 11,360,795
250
Table 8.10. Distribution of area and investment according to 3rd refurbishment scenario for buildings with moderate consumption
Goal consumption
Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 8,189,868 1,431 1,212 5
1970.-2005. 80 1,540 13,703,588 2,467 1,699 616
Continental 1970. 60 1,299 3,425,200 577 647 253
1970.-2005. 60 1,299 3,428,461 1,026 287 0
Offices
Coastal 1970. 34 1,886 53,583,984 9,501 4,536 211
1970.-2005. 34 1,886 22,597,613 2,315 1,446 4,719
Continental 1970. 32 1,697 11,804,021 1,519 1,051 1,796
1970.-2005. 32 1,697 7,795,213 1,334 926 49
Education
Coastal 1970. 55 1,720 65,852,338 1,314 17,607 252
1970.-2005. 55 1,720 57,053,978 2,097 12,249 4,476
Continental 1970. 44 1,420 19,131,192 266 5,987 929
1970.-2005. 44 1,420 16,830,826 0 5,882 27
Hospitals
Coastal 1970. 143 2,272 58,153,187 3,162 9,480 157
1970.-2005. 143 2,272 30,574,579 3,451 2,112 2,046
Continental 1970. 128 1,898 13,736,441 1,954 1,104 935
1970.-2005. 128 1,898 11,360,795 2,818 159 0
251
Table 8.11. Distribution of area and investment according to 3rd refurbishment scenario for buildings with low consumption
Goal consumption
Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 1,431 1,212 5 4,073,494
1970.-2005. 80 1,540 2,467 1,699 616 6,815,921
Continental 1970. 60 1,299 577 647 253 1,703,633
1970.-2005. 60 1,299 1,026 287 0 1,705,255
Offices
Coastal 1970. 34 1,886 9,501 4,536 211 26,651,720
1970.-2005. 34 1,886 2,315 1,446 4,719 11,239,650
Continental 1970. 32 1,697 1,519 1,051 1,796 5,871,110
1970.-2005. 32 1,697 1,334 926 49 3,877,200
Education
Coastal 1970. 55 1,720 1,314 17,607 252 32,753,781
1970.-2005. 55 1,720 2,097 12,249 4,476 28,377,633
Continental 1970. 44 1,420 266 5,987 929 9,515,515
1970.-2005. 44 1,420 0 5,882 27 8,371,353
Hospitals
Coastal 1970. 143 2,272 3,162 9,480 157 28,924,360
1970.-2005. 143 2,272 3,451 2,112 2,046 15,207,251
Continental 1970. 128 1,898 1,954 1,104 935 6,832,261
1970.-2005. 128 1,898 2,818 159 0 5,650,657
Tables 8Pogreška! Izvor reference nije pronađen..9, 8Pogreška! Izvor reference nije pronađen..10 and 8Pogreška! Izvor reference nije
pronađen..11 show the specific costs of energy renovation by type of building, target energy consumption after renovation, floor area renovated
and assumed investment by type of building based on energy consumption for Scenario 3 of energy renovation.
252
14.13. ANNEX 12
Table 8.3. Distribution of area and investment according to 4th refurbishment scenario for buildings with high consumption
Goal consumption
Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 2,214 1,875 8 6,303,197
1970.-2005. 80 1,540 3,818 2,629 953 10,546,741
Continental 1970. 60 1,299 893 1,001 391 2,636,148
1970.-2005. 60 1,299 1,588 444 0 2,638,658
Offices
Coastal 1970. 34 1,886 14,701 7,018 327 41,240,030
1970.-2005. 34 1,886 3,582 2,237 7,302 17,391,880
Continental 1970. 32 1,697 2,350 1,626 2,779 9,084,770
1970.-2005. 32 1,697 2,064 1,433 75 5,999,457
Education
Coastal 1970. 55 1,720 2,034 27,245 389 50,682,166
1970.-2005. 55 1,720 3,245 18,954 6,926 43,910,653
Continental 1970. 44 1,420 412 9,265 1,437 14,724,007
1970.-2005. 44 1,420 0 9,101 42 12,953,568
Hospitals
Coastal 1970. 143 2,272 4,893 14,669 243 44,756,642
1970.-2005. 143 2,272 5,339 3,269 3,166 23,531,221
Continental 1970. 128 1,898 3,023 1,709 1,447 10,572,025
1970.-2005. 128 1,898 4,360 246 0 8,743,648
253
Table 8.4. Distribution of area and investment according to 4th refurbishment scenario for buildings with moderate consumption
Goal consumption
Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 934 791 4 2,658,491
1970.-2005. 80 1,540 1,610 1,109 402 4,448,285
Continental 1970. 60 1,299 376 422 165 1,111,845
1970.-2005. 60 1,299 670 187 0 1,112,904
Offices
Coastal 1970. 34 1,886 6,201 2,960 138 17,393,754
1970.-2005. 34 1,886 1,511 944 3,080 7,335,351
Continental 1970. 32 1,697 991 686 1,172 3,831,672
1970.-2005. 32 1,697 871 604 32 2,530,383
Education
Coastal 1970. 55 1,720 858 11,491 164 21,376,152
1970.-2005. 55 1,720 1,369 7,994 2,921 18,520,139
Continental 1970. 44 1,420 174 3,908 606 6,210,125
1970.-2005. 44 1,420 0 3,839 18 5,463,409
Hospitals
Coastal 1970. 143 2,272 2,064 6,187 102 18,876,951
1970.-2005. 143 2,272 2,252 1,379 1,335 9,924,732
Continental 1970. 128 1,898 1,275 721 610 4,458,949
1970.-2005. 128 1,898 1,839 104 0 3,687,797
254
Table 8.2. Distribution of area and investment according to 4th refurbishment scenario for buildings with low consumption
Goal consumption
Investment CG LR(D)A Heritage Total investment
kWh/m² HRK/m² m² m² m² HRK
Residential buildings
Coastal 1970. 80 1,540 813 689 3 2,315,460
1970.-2005. 80 1,540 1,402 966 350 3,874,313
Continental 1970. 60 1,299 328 368 144 968,381
1970.-2005. 60 1,299 583 163 0 969,303
Offices
Coastal 1970. 34 1,886 5,400 2,578 120 15,149,399
1970.-2005. 34 1,886 1,316 822 2,682 6,388,854
Continental 1970. 32 1,697 863 597 1,021 3,337,262
1970.-2005. 32 1,697 758 526 28 2,203,882
Education
Coastal 1970. 55 1,720 747 10,008 143 18,617,939
1970.-2005. 55 1,720 1,192 6,963 2,544 16,130,444
Continental 1970. 44 1,420 151 3,403 528 5,408,819
1970.-2005. 44 1,420 0 3,343 15 4,758,453
Hospitals
Coastal 1970. 143 2,272 1,797 5,389 89 16,441,215
1970.-2005. 143 2,272 1,961 1,201 1,163 8,644,122
Continental 1970. 128 1,898 1,111 628 532 3,883,601
1970.-2005. 128 1,898 1,602 90 0 3,211,952
Tables Pogreška! Izvor reference nije pronađen.8.3, 8Pogreška! Izvor reference nije pronađen..4 and 8Pogreška! Izvor reference nije
pronađen..5 show the specific costs of energy renovation by type of building, target energy consumption after renovation, floor area renovated
and assumed investment by type of building based on energy consumption for Scenario 4 of energy renovation.
255
14.14. ANNEX 13
10.1 Cost optimal method according to EN 15459/2008, the regulation Regulations,
Commission Delegated Regulation (EU) No 244/2012 and the accompanying guidelines
The method of optimal costs is based on determining the global cost for all parts of the building
that affect energy consumption in the building, all costs of maintenance, operation, and energy
and decommissioning and eventual costs of CO2 emission. The method is described in detail
in EN 15459/2008: Energy performance of buildings - Economic evaluation procedure for
energy systems in buildings, and may be used for:
- evaluation of the economic feasibility of options of energy efficiency in buildings,
- comparison of different solutions for increasing energy efficiency in buildings,
- evaluating the economic impact of the overall design of the building and systems in the
building (e.g. in relation to the energy needs)
- determining the impact of measures to increase energy efficiency in the existing system
through the economic calculation of the cost of energy use and without the cost.
For the purposes of energy renovation of public buildings, the data identified by optimizing the
energy efficiency measures for the reference building are used, with the following restrictions:
- data on existing buildings were observed for a total period prior to 1970 and from 1970
to 2005, buildings after 2005 are not included in the analysis;
- Data from the calculations made to determine the minimum requirements for the
reference building - on delivered and primary energy, and the cost of energy efficiency
were used for control and comparison of cost-optimal levels with the prescribed
requirements for buildings. the cost-optimal level was determined by the parameters of
the calculations in table
- Pogreška! Izvor reference nije pronađen.Table 10.1.
- the highest cost for the reference condition of the outer shell and all systems analyzed
at the variant of the building envelope was taken as the upper limit of the global cost of
cost-effective renovation
256
Table 10.1. Input parameters of cost optimal calculation
label unit value
Amortization period year 50
Calculation period τ year 30
Inflation rate Ri % 0.30
Market interest rate R % 6.60
Real interest rate RR % 5.91
Discount rate29 % 7.00
Value added tax % 25
CO2 emission cost HRK/t 150
When calculating the primary energy, overall factors of primary energy were used, as in the
source documents from which the data was taken for analysis. In the table 10.2.Pogreška!
Izvor reference nije pronađen. primary factors for those energy sources that were actually
used in the packages of measures for the renovation of buildings for cost-optimal calculation
were transferred.
Table 10.2. Primary energy conversion factors
Fuel Primary energy factor Emission tCO2/TJ (kgCO2/GJ)
Ukupno
Firewood 1.111 8.08
Wood pellets 1.191 9.56
Wood chips 1.211 11.76
Natural gas 1.097 61.17
LPG 1.162 72.47
Extra light fuel oil 1.140 83.21
Electricity 1.614 65.22
District heating 1.523 100.69
In the process of selecting the cost-optimal level of energy renovation for public buildings,
values from TRRUETIB were compared with calculations, with the applied input parameters
selection of buildings
29 Decision on the discount rate of Croatian National Bank, Official Gazette, No. 66/11
257
- all the building (all variants) were grouped by purpose and climate, regardless of the
period of construction
- buildings constructed after 2005 were excluded from the comparison
- building outside cost-effective areas were excluded from the comparison
In chapter "Pogreška! Izvor reference nije pronađen.Comparison of the possibilities of
complete energy renovation in accordance with regulations today, and according to the
construction of the building of nearly zero energy ", the values of cost-optimal levels and nZEB
level were given, which partly do not correspond with the values enshrined in TRRUETIB.
Here, certain values are lower because in TRRUETIB variants, the worst case scenario was
selected, and during the preparation of regulations, values increased further by rounding up.
Table 10.3. Comparison of requirements to Edel according to TRRUETIB, values used in the calculation of potential savings under the applicable regulation and the level of nZEB
Cost optimal level of delivered and primary energy in relation to building type and climate
building Edel TPRUETZZ
kWh/m²a Edel CO
kWh/m²a Edel nZEB kWh/m²a
Office - continent 40 33.99 16.20
Office - coast 40 32.00 6.65
Education - Continent 60 55.13 13.63
Education - Coast 60 43.82 3.79
Hotels and restaurants - Continent 90 88.44 63.73
Hotels and restaurants - Coast 80 64.12 51.27
Retail and wholesale - Continent 290 139.81 74.55
Retail and wholesale - Coast 185 144.71 75.74
Hospitals - Continent 250 143.10 64.84
Hospitals - Coast 230 128.36 75.25
Sports halls - Continent 295 294.20 88.74
Sports halls - Coast 195 186.49 72.48
Picture 10-1 The method for determining the zone cost-efficient measures, cost-optimal levels and nZEB
258
Detailed information on the investment costs for each combination of measures are the result
of the cost estimate for each building.
Data on the lifetime of components and technical systems was determined according to EN
15459: 2007 Energy performance of buildings - Economic evaluation procedure for energy
systems in buildings, Annexes A and E and good engineering practice in Croatia for systems
and components that are not included in the standard.
Cost-optimized analysis of microeconomic and macroeconomic perspective was conducted
according to regulation 244/2012, Annex I, section 4.3. (2) and 4.4. (2), fully in accordance
with EN 15459: 2007 Energy performance of buildings - Economic evaluation procedure for
energy systems and buildings.