Country Report on EPC Pilot Projects Evaluation and use of …transparense.eu/tmce/Slovenia/Pilotni_proj/D5-04_Country... · 2015-10-27 · Country Report on EPC Pilot Projects Evaluation

SLOVENIA

Country Report on EPC Pilot Projects Evaluation

and use of European Code of Conduct for EPC

DRAFT

Transparense project This document has been conducted within the framework of project “Transparense – Increasing Transparency of Energy Service Markets” supported by the EU program “Intelligent Energy Europe”

www.transparense.eu

Date September 2015 Place Ljubljana Author Damir Staničić [email protected] Jozef Stefan Institute Slovenia http://www.rcp.ijs.si/ceu/

Disclaimer

The sole responsibility for the content of this report lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein.

Contents

1 INTRODUCTION ............................................................................................................................ 5

2 BARRIERS AND SUCCESS FACTORS FOR THE PILOT PROJECT .............................................. 6

2.1 Barriers ................................................................................................................................................... 6

2.2 Success factors ........................................................................................................................................ 6

3 PILOT PROJECT IMPLEMENTATION .......................................................................................... 8

3.1 Pilot project ............................................................................................................................................ 8

4 CODE OF CONDUCT APPLICATION AND EVALUATION ....................................................... 11

4.1 Phase I: Project preparation and development ..................................................................................... 11

4.2 Phase II: Procurement procedure .......................................................................................................... 11

4.3 Phase III: Implementation and operation phase of EPC/Code pilot projects.......................................... 12

4.4 Phase IV: Measurement and verification .............................................................................................. 12

4.5 Overall evaluation of the Code of Conduct ............................................................................................ 13

ANNEX: TRANSPARENSE PILOT PROJECT EVALUATION ............................................................. 14

PART A: BASIC INFORMATION ON THE PROJECT ........................................................................ 16

PART B: QUESTIONNAIRE FOR CLIENTS (ON ESCO AND FACILITATOR) ................................... 18

o Phase I: Project preparation and development ..................................................................................... 19

o Phase II – Procurement Procedure ........................................................................................................ 20

o Phase III – Implementation and Operation ............................................................................................ 21

o Phase IV - Measurement and Verification ............................................................................................. 22

PART C: QUESTIONNAIRE FOR ESCO .............................................................................................. 24

DEFINITIONS AND GLOSSARY ......................................................................................................... 30

4

D5.4: Country Report

5

Country Report on EPC Pilot Projects Evaluation and

use of Code of Conduct – Slovenia

1 Introduction

Within the framework of the project TRANSPARENSE, which received support from the program

IEE (Intelligent Energy Europe) of the European Union, the European Code of Conduct for

Energy Performance Contracting has been developed (hereinafter Code) for energy service

providers (ESCOs) implementing Energy Performance Contracting (hereinafter EPC) projects.

The objective of the Code is to increase the transparency of the EPC markets and ensure the

high quality of the energy services provided by the ESCO. By adhering to its core values and

behaving according to its principles, the ESCOs develop a solid foundation for a working

partnerships with Clients based on trust and confidence. ESCOs are expected to utilise the Code

in order to further develop quality energy efficiency services to meet Clients’ goals and

expectations. In addition, the developed EPC Code of Conduct was tested and evaluated in pilot

projects. This approach provided feedback on the Code.

This report presents the evaluation of the Code application in the EPC pilot project in Slovenia.

The major stakeholders (ESCO/EPC Provider, Client, EPC Project Facilitator) in the pilot project

have been interviewed / asked to supply relevant information. For this, detailed questionnaires

have been used (see Annex), which were the main data source for the analyses included in this

report.

The main objective of this evaluation is to assess whether the application of the Code in

Slovenia manages to ensure the Code’s defined quality criteria in practice, what the success

factors are and which barriers might still exist, which should be further addressed.

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2 Barriers and success factors for the pilot project

2.1 Barriers

Beside “standard” EPC barriers already described in numerous country reports, barriers

encountered during the Transparense pilot project implementation are mainly related to the

innovative integrated EPC and combined financing model used. Energy savings generated by

two other energy efficiency projects (deep renovation of local schools and kindergarten

financed with municipality own funds and grants) were transferred to the selected EPC Provider

- Petrol, in order to reach an overall EPC agreement with EPC Provider for energy management

system based operation of these buildings, and including additional deep renovation of the

municipal hall. Together with energy savings all related implemented energy efficiency

measures risks, comprising even risks for measures not implemented by selected EPC Provider,

were transferred. This approach introduced additional complexity to the integrated EPC model

used (energy supply contracting + energy performance contracting) which is by itself quite

complex. On top of that the business venture model used is a public private partnership

(hereinafter PPP) comprising concession for energy efficiency services, resulting in a quite long

and demanding procurement of planned energy efficiency services, as standardized EPC and

PPP processes, documentation and contracts are not in place.

Hurdles with the EPC model, PPP and combined financing were mainly overcome by the expert

support to the previously educated Client provided by the EPC project facilitator. The Client,

Municipality Brda prepared local energy concept and SEAP and implemented several energy

efficiency projects in the period 2012 – 2014. These activities were supported by expertise

provided by the local energy agency GOLEA, including EPC model introduction and deep

renovation of Brda Municipal Hall project identification. The Client and EPC project facilitator

continued to cooperate on that project: the EPC Project Facilitator organised consultations with

the Ministry of Finance, prepared in-depth analysis of the EPC project and detailed public-

private partnership legal acts and EPC contract, and guided EPC energy efficiency services

procurement process and negotiations with selected ESCO.

2.2 Success factors

Despite the fact that only one ESCO submitted offer, negotiation process was successful and

resulted in maximized EPC project outcomes, in terms of range of investments provided by the

ESCO, guaranteed and shared savings, and measurement and verification requirements. The

reason for that are highly professional and experienced ESCO, and the Client with clear targets

7



supported by the expert knowledge of EPC project facilitator. The pilot project is used as a

model for design of the national EPC programme in the new cohesion financing 2014-2020

framework: the idea behind the programme is to maximize energy savings through effectively

defining and combining activities of public subsidy programmes and cohesion financing with

the private financing through EPC.

8



3 Pilot project implementation

The tables below summarise the characteristics of the Slovenian Transparense EPC pilot project

“Deep renovation of Brda Municipal Hall”. The first table shows the phases included in the pilot

project; while the second table provides more details around the implementation of the Code

within the project.

Table 1 List of pilot project phases included

Project name Project phases that already STARTED

Phase I - Project Preparation and development

Phase II - Procurement Procedure (after Client announces call for tenders by publication of contract notice)

Phase III - Implementation and operation phase (after signing of the EPC contract)

Phase IV - Measurement and Verification (based on the first consumption measurement)

Deep renovation of Brda Municipal Hall

Table 2 Overview of the Code of Conduct implementation

Project name Code of conduct implementation

ESCO signed Code Code included in tender dossier Code included in contract Other (please specify)


Client signed Code Facilitator signed Code

3.1 Pilot project

Main goal

The pilot project provides energy efficiency services for three public buildings: municipal hall

which is municipal administration building too, school and school/kindergarten. Deep

renovation of Brda Municipal Hall comprises integrated implementation of energy efficiency

measures on energy demand and supply side (EPC + ESC). For other two already deeply

renovated buildings an energy efficient operation system was introduced in order to upgrade

energy efficiency, including some recommissioning activities on already implemented energy

efficiency measures.

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Energy efficiency measures implemented

The measures implemented are:

Municipal hall/municipal administration building

reduction of heat losses from the building envelope (exterior wall insulation, windows

and doors replacement, attic insulation)

new heating and cooling system (heat pump)

new lighting system

Municipal hall/municipal administration building, school and school/kindergarten

building energy management system

The ESCO provided financing of all new energy efficiency measures.

Procedure

1. Design of integrated EPC model (EPC + ESC) for deep renovation of the municipality hall,

including broader combination of public financing (elementary school Dobrovo and

school/kindergarten Kojsko) and private financing (municipal hall Dobrovo, elementary

school Dobrovo and school/kindergarten Kojsko) of energy efficiency measures and

model of transferred public savings from Client to EPC Provider (year 2013).

2. Adoption of the Act on Public Private Partnership: Improvement of energy efficiency of

public buildings in Municipality Brda using EPC (December 2013).

3. Preparation of tendering documentation (January 2014 – April 2014)

4. Tender published in the Official Journal, comprising EPC Provider qualification

documentation too, and announced on due official web sites (May 2014).

5. All candidates are invited to inspect the place of performance and their questions are

answered (all answers are transmitted to all candidates).

6. One tender submitted and subsequently checked in terms of fulfilment of required

qualifications and for completeness (June 2014).

7. First preliminary evaluation and assessment of the tender carried out by the evaluation

committee; first preliminary ranking of the tenders is established (July 2017).

8. The EPC Provider whose tender has been evaluated was required to complete, clarify

and amend tender (July 2014).

9. Second preliminary evaluation and assessment of the tender carried out by the

evaluation committee, including representatives of the Client and EPC Project Facilitator

(July 2014).

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10. The municipality negotiates with the tenderer to reach an agreement on the final form

of the tender (August 2014).

11. Final evaluation and assessment of the tender carried out by the evaluation committee;

the final tender is recommended (August 2014).

12. Statutory bodies of the municipality approve the outcome of the procurement process

and the final form of the draft concession contract – (August 2014).

13. A contract is concluded between the contract parties (30th of September, 2014).

14. Contract award notice published in the Official Journal (binding information about the

contract´s outcome).

Organisational structure

The pilot project has been implemented in co‐operation by the following three market players:

Client: Municipality Brda;

EPC Project Facilitator: GOLEA - Goriška Local Energy Agency (supported by the JSI, Energy

Efficiency Centre, Transparense partner in the process of design of the tender);

EPC Provider: Petrol d.d.

All market players filled dedicated questionnaire to report on the pilot project implementation

and Code of Conduct use. No reporting barriers were identified as the JSI Energy Efficiency

Centre was strongly supported by the EPC Project Facilitator GOLEA and even played a minor

role of the EPC project facilitator, in terms of EPC pilot project tender design.

Code of Conduct implementation

The Code of Conduct was presented individually to the EPC Provider and EPC Project Facilitator.

It was the EPC Project Facilitator who introduced the Code to the Client. The EPC Provider

Petrol (ESCO) committed itself to comply with the principles of the Code before the project

implementation. The company confirmed this by signature of the Code on 26th of November,

2014. It was assessed that direct inclusion of the Code in the procurement dossier is not

possible as that approach requires in-depth legal analysis (not foreseen in the framework of the

Tranparense project) and therefore it would slow down the EPC project implementation.

Overall however, as can be seen in the Part C questionnaire, every principle from the Code of

Conduct was adhered to: the answers to the questionnaire indicate that all Code principles are

“fully” applied.

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4 Code of Conduct application and evaluation

4.1 Phase I: Project preparation and development

According to the evaluation provided by the Client, the overall expectations of the Client have

been "fully met" during the preparation phase of the project.

First EPC project implemented in the Municipality Brda was the public lighting project in 2013

so the Client was aware of the EPC process. The Client was supported by the EPC Project

Facilitator GOLEA from the beginning of the pilot project development. The facilitator prepared

the preliminary analyses showing suitability for using the integrated EPC model (EPC + ESC) at

the public buildings owned by the Client.

The information necessary to prepare and develop the project was provided by the GOLEA and

obtained using establishment of baselines of energy consumption, an evaluation of solutions on

the market, working with the Ministry of Finance to establish the financing model combining

private and public financing, and an audit.

4.2 Phase II: Procurement procedure

As the Client is a municipality, the award of concession i.e. EPC procurement procedure was

implemented according to the public procurement law. According to the evaluation provided

by the Client, the overall expectations of the customer have been "almost fully met" during the

procurement phase of the project, including negotiation process. In particular, the Client

provided the following information:

The Client had had sufficient information on the EPC process. However, the process was

extremely complex and innovative introducing integrated EPC model (EPC + ESC),

energy efficiency public private partnership (concession) and combined private public

financing.

There was a slight delay in comparison to the planned time schedule of the

procurement process caused by legal questions raised by interested parties due to non-

existing legal practice related to this kind of procedures.

The ESCOs were required to fulfil standard qualification criteria and to provide reference

projects. Only one offer has been received by the Client indicating still undeveloped EPC

market in terms of limited number of reference EPC projects and national EPC Providers.

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The final choice of the winning tenderer was made by the Mayor on the basis of the

suggestion of the Procurement Selection Committee.

4.3 Phase III: Implementation and operation phase of EPC/Code pilot projects


been "fully met" during the implementation and start of the operation phase of the project. In

particular, the Client provided the following information:

The EPC Provider introduced building energy management systems and explained the

process of energy efficiency measures implementation and M&V to the customer

sufficiently.

The EPC Provider verified the up to date statuses of energy systems in the building

within the contract and the Client did not find any differences in comparison with the

tender.

The EPC Provider prepared a design/concept of project documentation for the

implementation phase, which was found good and comprehensive by the Client. The

sub‐suppliers were found of a good quality and the Client did not have to negotiate

directly with them.

The installation of the energy efficiency equipment and measures started in December

2014 and it was finished in April 2015. Two months extension of implementation period

was needed due to harmonisation with other renovation projects implemented in

parallel.

The installed energy efficiency equipment and measures will be transmitted into

property of the Client at the end of EPC contract/concession. There were regular

supervisor meetings between the EPC provider and customer during implementation

phase each 15 days.

The actual investment costs did not differ from than volume stipulated in the contract.

4.4 Phase IV: Measurement and verification


been "fully met" during the measurements implementation phase of the project. In particular,

the Client provided the following information:

The EPC Provider provided trainings for the operational personnel of the implemented

energy efficiency equipment and measures sufficiently. The EPC Provider specified rules

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and obligations in relation to measurement of energy consumption. Measurement of

the operation of the installed equipment is provided both by the EPC provider and the

Client. The verification is provided according to the protocol defined by the EPC Project

Facilitator.

As energy efficiency measures were implemented in April 2015, no contractual results

yet volume of energy savings reached higher than the guaranteed level of savings

stipulated in the contract

4.5 Overall evaluation of the Code of Conduct

Usefulness of the Code

The EPC Providers in Slovenia played and still play a crucial role in development of the EPC

market. In order to establish sustainable EPC business model they had to strive to deliver

professional service with excellence. Their feedback on the European Code of Conduct for EPC

was very positive as the Code puts their EPC business values in action through guiding principles

on EPC projects implementation and positions themselves at the forefront of the EPC industry.

Clients saw it as basic guidelines that could be used to facilitate EPC quality projects and to

enhance communication with EPC Providers and financing institutions. The Code is seen as a

communication tool too - a professional statement that informs internal and external

stakeholders about what is quality EPC.

The feedback also showed that the Code proved useful at all stages of pilot project: during the

project preparation and development, procurement procedure, implementation and operation

phase, and measurement and verification phase.

Understandability of the Code

The EPC Providers are aware that the Code is some kind of compromise at the EU level and

therefore in this phase of implementation the Code should be clear in statements and guidance

and not imposing stringent rules. The feedback on that point was positive: the Code was

accepted by key EPC market stakeholders as a document easy to understand. However this high

acceptability can be a result of already quite transparent EPC model used by EPC Providers

operating at small EPC market.

Amendments suggested to the wording

No amendments were suggested.

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Annex: Transparense Pilot Project Evaluation

Methodology

Basis for the evaluation of the Code application in the pilot project in Slovenia are observed

values and implemented principles. The following principles and values which are set in the

Code (JSI and SEVEn 2014) have been taken over for evaluation via questionnaires:

Values: Efficiency, Professionalism, Transparency

Principles: Cost Effectiveness, Sustainability, Relationship, Transparency,

Comprehensiveness, Financing, Interest in success, Quality

For the pilot project, relevant information is compiled in 3 parts:

Basic information on the project is given in Part A.

In Part B the pilot project Client is enquired about the project with a clear focus also

on ESCO/EPC Provider (and EPC Project Facilitator) evaluation.

Part C collects information from ESCO/EPC Provider how/if they consider the Code

useful and appropriate.

The feed-back information was collected during different phases of the EPC pilot project on

how effective and practical the Code was and also on how the pilot project was carried out.

The four phases have been outlined as:

Phase I: Project preparation and development

Phase II: Procurement procedure

Phase III: Implementation and operation phase of EPC/Code pilot project

Phase IV: Measurement and Verification

These phases form the structure of the Part B questionnaire - whereas the above mentioned

values and principles form the criteria and indicators. Each phase has its role in providing the

feedback on the Code and the EPC pilot project. The potential user of this evaluation

approach will have to decide if all phases are applicable for his/her procedure.

In all four phases a quantitative evaluation is performed in which data information are

collected – giving also a technical overview of the EPC pilot project. As the most important

criteria for the selection of a suitable EPC projects are various effective measures and the

subsequent calculation of savings, these are included as well in the questionnaire. In

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addition, it also focuses on the amount of investments as well as the method through which

the project is financed.

More evaluative and subjective questions (qualitative evaluation) are also part of the

evaluation. The goal of this qualitative evaluation is to select those parameters which have

the most significant impact on the quality. At the same time, qualitative evaluation should

reflect the satisfaction of the Client in respect of the taken actions, technical solutions and

the results achieved.

All three questionnaires form the basis for the evaluation in the context of the country

report. For the Transparense EPC pilot project in Slovenia, the filled in parts A, B and C are

attached as Annex to this country report.

Pilot Project Deep renovation of Brda Municipal Hall - Evaluation

The evaluation of the Code application in the pilot project Deep renovation of Brda

Municipal Hall:

PART A: Basic information on the project

Part B: Questionnaire for Clients (on ESCO and Facilitator)

Part C: Questionnaire for ESCO

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PART A: Basic information on the project

Questionnaire filled in by

Name of the person Damir Staničić

Organisation name Jozef Stefan Institute, Energy Efficiency Centre

Project description

Pilot project name i.e. facility name


Location (city, region) Dobrovo, Municipality Brda, Primorska region

Country code SI

Type of customer Municipality

Sector Other public organisations: Municipal administration Number of buildings 1 (municipal hall/municipal administration building)

1 school

1 school/kindergarten

Main goal of the project Deep renovation of building, implementation of energy efficiency

measures on energy demand and supply side

Measures reduction of heat losses from the building envelope - municipal hall (exterior wall insulation, windows and doors replacement, attic insulation)

new heating and cooling system - municipal hall (heat pump)

new lighting system - municipal hall

building energy management system - all buildings

If there are other important aspects of the project, innovations and Client´s advantages, not mentioned above, please, describe here

Energy savings generated by two other energy efficiency projects

(deep renovation of local schools and kindergarten financed with

municipality own funds and grants) transferred to the ESCO,

including risk, in order to reach an overall EPC agreement with

ESCO for all buildings, including comprehensive renovation of the

municipal hall.

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Timing From Till Duration

[YYYY-MM] [YYYY-MM] [No. of months]

Project identification 2013 January 2013 December 12

Acquisition time span of the project

2013 October 2014 June 9

Procurement procedure 2014 May 2014 September 4

Installation of energy efficiency measures

2014 December 2015 April 5

Contract duration 2014 September 2030 April 15 years 7 months

Period of repayment 2015 May 2030 April 15 years

Financing

Total investment [EUR] 374.038

Co-financing [EUR] 30.000

Guarantee of savings Defined guaranteed electric energy savings and heat savings in kWh/year and EUR/year (at fixed price of energy), savings split 90% ESCO : 10% Client, penalties for underperformance, additional savings split 50% : 50% Client

Quantitative evaluation Baseline (initially before

the project)

Annual savings

Guaranteed Achieved (yearly average of available data for

2014-15)

Final consumption of heat [MWh/a] 619,22 247,68 N.A.

Final consumption of power [MWh/a] 196,22 7,47 N.A.

Primary energy [MWh/a] 1.375,20 372,50 N.A.

GHG emissions [tCO2e/a] 335 99 N.A.

Total operational costs (energy costs)

[EUR/a] 90.162 49.641 N.A.

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Part B: Questionnaire for Clients (on ESCO and Facilitator)

Within the framework of the project TRANSPARENSE, which receives support from the

program IEE (Intelligent Energy Europe) of the European Union, European EPC Code of

Conduct has been developed (hereinafter Code) for energy service providers (ESCOs)

implementing EPC projects. The objective of the Code is to increase the transparency of the

EPC markets and ensure the high quality of the energy services provided by the ESCO. By

adhering to the EPC core values and code of conduct, the ESCOs and customers develop a

solid foundation for a working partnerships based on trust and confidence. They are

expected to utilize the Code in order to further develop energy efficiency services to meet

their goals and expectations which shall be evaluated at a later stage.

In addition, the developed EPC Code of Conduct will be tested and evaluated in EPC pilot

projects. The outcome and results of this questionnaire will provide feedback on the Code

and its usefulness.


Name of the person Franc Mužič, Major (interviewed by Irena Pavliha, GOLEA, EPC Project Facilitator)

Organisation name Municipality Brda




Country code SI

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o Phase I: Project preparation and development 1 How was the first information on the EPC

project obtained?

Municipality Brda prepared local energy concept and SEAP and implemented several energy efficiency projects in the period 2012 – 2014. These activities were supported by expertise provided by the local energy agency GOLEA, including EPC model introduction and project identification in 2013.

2 Was the above mentioned information sufficient and clear?

Yes No ☐

3 Did you have assistance for the energy efficiency project preparation?

Yes Local energy agency GOLEA as a project facilitator

No ☐

4 Who prepared the preliminary analyses of suitability for using the EPC method for implementing the energy efficiency project?

Local energy agency GOLEA as a project facilitator

5 Was the planned time schedule of the project preparation kept - or were there any delays?

Yes ☐ No

6 When it comes to the project preparation: were the customer expectations met?

on 1 to 5 scale: 1 = no 2 = almost not 3 = partly 4 = almost fully 5 = yes, fully

1 ☐

2 ☐

3 ☐

4 ☐

5 7 What was the value of expected energy

saving potential? 31,3 % of baseline/original consumption

8 What was the (approx.) volume of investment costs for implementing energy efficiency measures?

374.000 €

9 What were the biggest barriers in the phase of project preparation?

complexity of EPC concept lack of information lack of trust quantify energy baseline raising finance other

☐

☐

☐

☐

☐ please specify:

How were the barriers chosen above overcome?

Consultations with the Ministry of Finance, in-depth analysis and preparation of detailed public-private partnership legal acts and contract, expertize provided by the project facilitator

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o Phase II – Procurement Procedure 1 How did the obtain information for

preparation of the EPC project procurement?

From the EPC Project Facilitator, Ministry of Finance and based on own knowledge

2 Was the above mentioned information sufficient and clear?

Yes No ☐

3 Did you have preparation assistance for the EPC procurement?

Yes Local energy agency GOLEA as project facilitator

No ☐

4 Was the planned time schedule of the

procurement process kept - or were there any delays?

Yes Two months, due to change in public call formal way of announcement (legal issues)

No ☐

5 How long did it take to sign the contract between ESCO and customer (after the first publication of a contract notice)?

4 Months

6 How many ESCOs expressed their interest in the EPC procurement? How many ESCOs submitted their tenders (i.e. offers)?

Only one Only one

7 Were ESCOs required to fulfil any qualification criteria?

Yes Legal (in line with public procurement requirements), technical (projects reference list), financing capacity (investments made in last three years)

No ☐

8 Did the customer negotiate with the ESCOs the conditions of their tenders during the procurement process?

Yes No ☐

9 What was the volume of savings provided by the winning tenderer (ESCO)?

31,3 % of baseline/original consumption

10 How guarantees the winning tenderer the expected volume of savings?

In line with the contract – underperformance established by the M&V results in penalties payments

11 What was the volume of the investment costs proposed in the winning tender?

374.000 €

12 Who decided that the procurement procedure will be implemented?

Municipality, in line with national legislation

Was there an official approval required (e.g. by the City council etc.)?

Yes ☐ No

13 Who decided on the final choice of the winning tenderer?

Major, based on public procurement body decision

Was there an official approval required (e.g. by the City council etc.) and if yes, by whom?

Yes ☐ No

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14 What were the biggest barriers during the procurement process?

The biggest barrier was only one tenderer

How were the above mentioned barriers overcome?

Negotiation process was used in order to maximize EPC project outcomes, in terms of range of investments, guaranteed savings and M&V requirements

15 Were the expectations of the customer met within the procurement process?

on 1 to 5 scale: 1 = no 2 = almost not 3 = partly 4 = almost fully 5 = yes, fully

1 ☐

2 ☐

3 ☐

4

5 ☐

o Phase III – Implementation and Operation 1 Did the ESCO introduce and explain the

process of energy efficiency measures implementation to the customer sufficiently?

Yes

No ☐

2 Did the ESCO verify the up to date statuses of energy systems in the building within the contract?

Yes

No ☐

3 Did the customer find any differences in comparison with the tender, which was necessary to solve?

Yes ☐

No

4 Did the ESCO prepare a design/concept of project documentation for the implementation phase?

Yes The quality:

1 ☐ good, comprehensive

2 substantial

3 ☐ not substantial/unclear

No ☐

5 Was the project documentation for implementation of EE measures checked by an external expert company?

Yes

No ☐

6 If the ESCO had any sub-suppliers, how was the quality of those?

1 = good 2 = moderate 3 = poor

1

2 ☐

3 ☐ Was it necessary to negotiate directly with the sub-suppliers?

Yes ☐

No

7 How long lasted the EE measures implementation phase?

From December 2014 till April 2015

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8 Time schedule of the EE measures implementation was kept or were there any delays?

Yes Two months extension of implementation period was needed due to harmonisation with other renovation projects implemented in parallel

No ☐

9 Was the implementation of EE measures checked by an external expert company?

Yes No ☐

10 Were there any supervisor meetings between the ESCO and customer during implementation phase?

Yes In line with the legislation (Building Act), approximately each two weeks

No ☐

11 Were there any significant problem(s) in relation to the EE measures implementation?

Yes ☐ No

12 Were installed EE measures transmitted into property of customer? If yes, when?

Yes ☐ No

13 Had the Client any comments to the EE measures implementation after its finalisation and after the equipment ownership had been transferred? If yes, what were the comments and how these were reflected by ESCO?

Yes ☐ No

14 Were the actual investment costs different from than volume stipulated in the contract?

Yes ☐ No

15 Did the ESCO provide trainings for the operational personnel of the implemented EE measures sufficiently?

on 1 to 5 scale: 1 = no 2 = almost not 3 = partly 4 = almost fully 5 = yes

1 ☐

2 ☐

3 ☐

4

5 ☐ 16 Were the overall expectations of the

customer met – especially during the process of the EE measures implementation?


1 ☐

2 ☐

3 ☐

4

5 ☐

o Phase IV - Measurement and Verification 1 Did the ESCO introduce and explain the

process of measurement and verification to customer sufficiently?

on 1 to 5 scale: 1 = no 2 = almost not 3 = partly 4 = sufficient 5 = very sufficient

1 ☐

2 ☐

3 ☐

4 ☐

5

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2 Did the ESCO specify rules and obligations - in relation to measurement of energy consumption - clearly to the involved personnel?

Yes

No ☐

3 Who is providing measurement of the operation of the installed equipment?

1 ☐ ESCO (via data-transmission)

2 ESCO (directly on site)

3 Customer / caretaker of building 4 Who is providing verification of energy

consumption and savings?

Project facilitator – local energy agency GOLEA

5 Is verification of consumption and savings provided according to guidelines stipulated in the tender?

Yes

No ☐

6 Is verification provided in relation to the IPMVP (International Performance Measurement and Verification Protocol) or another standard form?

1 ☐ IPMVP

2 ☐ ASHRAE Guideline

3 ☐ FEMP Guideline

4 ☐ National M&V Protocol

5 Other (prepared by the project facilitator)

6 ☐ Don’t know 7 How often is the verification of

consumption and savings provided? Energy savings - once per year Heat consumption – once per month Electricity consumption – once per month

8 How often is the customer informed on the energy savings achieved?

Officially once per year, on-line energy management system in place

9 Has the ESCO submitted to the customer a report on the achieved energy savings?

Yes ☐ No

10 What was the value of the achieved

energy savings? N.A. – measures implemented in April 2015, no contractual results yet

11 Was the volume of energy savings reached higher than the guaranteed level of savings stipulated in the contract?

Yes ☐ N.A.

12 Was the volume of savings reached below the guaranteed level of savings stipulated in the contract?

Yes ☐

N.A.

13 Which main problems appeared during the measurement and verification phase?

N.A.; measurements phase started in May 2015

How were these issues solved by the ESCO?

N.A.; measurements phase started in May 2015

14 Were the overall expectations of the customer met with respect to the actions taken by ESCO during the measurement and verification phase?


1 ☐

2 ☐

3 ☐

4 ☐

5 in terms of measurements

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Part C: Questionnaire for ESCO

Within the framework of the project TRANSPARENSE, which receives support from the

program IEE (Intelligent Energy Europe) of the European Union, European EPC Code of

Conduct has been developed (hereinafter Code) for energy service providers (ESCOs)

implementing EPC projects. The objective of the Code is to increase the transparency of the

EPC markets and ensure the high quality of the energy services provided by the ESCO. By

adhering to the EPC core values and code of conduct, the ESCOs and customers develop a

solid foundation for a working partnerships based on trust and confidence. They are

expected to utilise the Code in order to further develop energy efficiency services to meet

their goals and expectations which shall be evaluated at a later stage.

In addition, the developed EPC Code of Conduct will be tested and evaluated in EPC pilot

projects. The outcome and results of this questionnaire will provide feedback on the Code

and its usefulness.


Name of the person Damir Staničić (interview with Miha Valentinčič)

Organisation name Petrol,




Country code SI

Below are listed the principles of the Code of Conduct for EPC. Please answer the questions

for each principle:

1. EPC projects are economically efficient

The EPC provider aims at economically efficient combination of the energy efficiency

improvement measures. Such combination of the measures maximizes the net present

value of an EPC project for the Client (defined as sum of all the discounted incoming

cash flows (operational cost savings) and all outgoing cash flows associated with

implementing the project over the term of the contract).

A) Have you implemented the principle within the pilot project /Scale Fully 1-5 Not at all

fully almost fully partly almost not not at all

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B) What kind of problems/barriers have you encountered when implementing the pilot project and what is your recommendation to overcome them?

The Client had very specific requirements in terms of energy efficiency measures,

investment and energy savings range, resulting in almost optimized NPV at the EPC

project Client’s level. Full implementation of this principle was met by negotiated shared

savings. This kind of situation (quite rigid energy efficiency measures framework) is

overcome by the procurement process leaving more EPC project design mandate to the

EPC provider, in terms of combination of the measures.

2. EPC provider takes over the performance risks

The EPC provider assumes the performance risks of the project during the whole

duration of the contract. Such risks include, inter alia, risk of incorrect estimates of

savings, design risks, implementation risks and operational risks.




The project “Deep renovation of Brda Municipal Hall“ is very complex, considering EPC

model used: two schools and kindergarten were beforehand deeply renovated by Client’s

and grants and subsidies funding, and their energy savings where transferred to and

enabling us as the EPC provider to deeply refurbish the municipal hall, including

implementation of an energy management system for all buildings. On top of that the

business model used is a public private partnership comprising concession for our energy

efficiency services. Therefore, we took over all risks even for energy savings not

implemented by us. In the case of combining EPC with subsides we propose that EPC

provider is involved in all phases of the project, i.e. design, implementation and

operation.

3. Savings are guaranteed by EPC provider

The EPC provider guarantees the achievement of the contractually agreed level of energy

savings and/or related costs. In case an EPC project fails to achieve performance

specified in the contract, the EPC provider is obligated by the contract to repay savings

shortfalls over the life of the contract. The contractually agreed quantified energy

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savings should be defined in a fair and transparent manner based on realistic

assumptions and appropriate methodology defined in the contract. At the end of the

specific contract period the full benefits of savings revert to the facility owner.




As mentioned above, we took over the risk of incorrect estimates of savings, as the Client

has provided estimates based on their calculations. We have performed in-depth

analysis of all energy efficiency measures already implemented and planned to be

implemented based on our own methodology, assumptions and additional data

collected, enabling us to reach an agreement with the Client on the savings guaranteed.

4. EPC provider supports long-term use of energy management

The EPC provider actively involves the Client in the implementation of an energy

management programme during the contract period and eventually after the contract

period by agreement. This supports the benefits from the project to sustain also after the

contract period.




No problems encountered, it is our standard approach to implement an energy

management systems differing in a level of automation. We realize that the energy

management is a backbone for the transparent and successful EPC project and long-term

relationship with the Client.

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5. The relationship between the EPC provider and Client is long-term, fair and transparent

The EPC provider and the Client work together very closely and as partners with the

common objective to achieve contractually agreed level of savings. They strive to keep

their relationship long-term, fair and transparent. They both provide access to their

information which is relevant to the project in a non-distortive manner. They do not hide

such information to the other party. Both EPC provider and Client fulfil their obligations

according to the contract terms. For instance, the Client is committed to inform the EPC

provider about any changes in the operation of its facilities during the contract duration

that could affect the energy demand. The establishment of such relationship between

the EPC provider and the Client supports achieving their common interest to achieve the

contractually agreed level of energy savings and to preserve long-term co-operative

relationship.




No problems encountered, the partners have worked together on other energy efficiency

projects (e.g. public lighting) and already established fair and transparent relationship.

The project “Deep renovation of Brda Municipal Hall“ introduced energy management

element upgrading the partners relationship providing information relevant to the EPC

project in a non-distortive manner. We also agreed on a process of verification of savings

by an independent institution.

6. All steps in the process of EPC projects are transparent

The EPC provider and Client comply with all laws and regulations that apply to the EPC

project in the country in which the project is implemented. The EPC provider and the

Client avoid conflict of interests and apply a zero tolerance policy against corruption and

self-dealing.




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No problems encountered, since the most demanding legal form (public private

partnership) was used, and an independent project facilitator and specialized advisory

company were involved covering all phases of the EPC project.

7. Support in financing of EPC projects

The EPC provider supports the EPC Client in finding the most suitable solution providing

for project financing taking into account the credit risk of both parties. The capital to

finance the EPC project can either be supplied out of the Client’s own fund, by the EPC

provider or by a third party. Provision of financing by the EPC provider is an option, not a

necessary part of the EPC project.




C)

No problems encountered. However, due to the fact that the Client Municipality Brda

had no own funds we agreed on the concession model in order to enable the most

suitable solution for project financing.

8. EPC projects require qualified staff

The EPC provider maintains a qualified staff in order to provide the right technical,

commercial, legal and financial abilities. EPC provider ensures that the experts working

for them have the adequate qualifications and capacities related to the implementation

of the EPC projects in order to ensure e.g. sound engineering evaluation, design, project

management, risk management and implementation of energy efficiency improvement

measures. The Client can use a specialized advisory company (EPC facilitator) that will

steer the correct implementation and procurement of the EPC project on his side.




29



No problems encountered. On our side we paid a special attention to the comprehensive

renovation of buildings which was brought into the EPC project. EPC provider pre-

qualification criteria were introduced. The Client used the project facilitator that steered

the procurement phase and a specialized advisory company that supervised the

implementation phase.

9. The EPC provider focuses on high quality and care in all steps of project

implementation

The EPC provider uses certified procedures, high-quality and reliable equipment and

products, and cooperates with reliable sub-suppliers. It adheres to the principles of

ethical business conduct, meets its obligations towards sub-suppliers and conducts itself

responsibly with respect to Client and its representatives.




No problems encountered. All requirements of this principle are necessary for a

successful EPC project and we have to fulfil them according our internal rules. As we took

over risk for all energy efficiency measures implemented, including “not our own

measures”, we had to put an additional effort in assessment of quality aspects of those

measures.

10. General Question about the Code of Conduct

a) Was the Code of Conduct formulated in a clear and understandable way?


b) If not, please describe suggestions for improvement:

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Definitions and Glossary

Term Definition

Client means any natural or legal person to whom an EPC provider delivers energy service in the form of EPC

Energy Efficiency Directive (EED)

means Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency

energy efficiency improvement*

means increase in energy efficiency as a result of technological, behavioural and/or economic changes

energy efficiency* means the ratio of output of performance, service, goods or energy, to input of energy

energy management system*

means a set of interrelated or interacting elements of a plan which sets an energy efficiency objective and a strategy to achieve that objective

energy performance contracting* (EPC)

means a contractual arrangement between the beneficiary and the provider of an energy efficiency improvement measure, verified and monitored during the whole term of the contract, where investments (work, supply or service) in that measure are paid for in relation to a contractually agreed level of energy efficiency improvement or other agreed energy performance criterion, such as financial savings

energy savings* means an amount of saved energy determined by measuring and/or estimating consumption before and after implementation of an energy efficiency improvement measure, whilst ensuring normalisation for external conditions that affect energy consumption

energy service* the physical benefit, utility or good derived from a combination of energy with energy-efficient technology or with action, which may include the operations, maintenance and control necessary to deliver the service, which is delivered on the basis of a contract and in normal circumstances has proven to result in verifiable and measurable or estimable energy efficiency improvement or primary energy savings

energy service means a natural or legal person who delivers energy services or

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provider* other energy efficiency improvement measures in a final customer's facility or premises

energy* means all forms of energy products, combustible fuels, heat, renewable energy, electricity, or any other form of energy, as defined in Article 2(d) of Regulation (EC) No 1099/2008 of the European Parliament and of the Council of 22 October 2008 on energy statistics

EPC provider means an energy service provider who delivers energy services in the form of Energy Performance Contracting

savings means energy savings and/or related financial savings; the financial savings include the costs of energy provision and can also include other operational costs, such as the costs of maintenance and workforce

The International Performance Measurement and Verification Protocol (IPMVP)

is the widely referenced framework for "measuring" energy or water savings and is available at www.evo-world.org

Notes: *Definitions according to the Energy Efficiency Directive

Documents

Country Report on EPC Pilot Projects Evaluation and use of …transparense.eu/tmce/Slovenia/Pilotni_proj/D5-04_Country... · 2015-10-27 · Country Report on EPC Pilot Projects Evaluation