[email protected] 31.01.08 FEDESCO Presentation 31.03.2008 in Delhi IEA DSMIV Task XVI National Implementation Activities - Belgium Lieven

[email protected] FEDESCO

Presentation 31.03.2008 in Delhi

IEA DSMIV Task XVINational Implementation Activities - Belgium

Lieven Vanstraelen – Managing Director


Ⅰ Content

Ⅰ Recall of Fedesco’s activities• Framework and energy usage

• Summary on Fedesco

• Fedesco approach compared to other approaches

Ⅰ Recent market developments in Belgium

Ⅰ Recent achievements by Fedesco

Ⅰ Remaining obstacles• For Fedesco

• For ESCO market development

Ⅰ Proposed solutions

Ⅰ Current Progress on Task XVI activity areas

Ⅰ Current progress on targets and expected results

Ⅰ Plans for the next 6 months


Ⅰ Framework of our business

Ⅰ “20 by 2020” objective of the EC translated to Belgium

• 15% energy savings by 2020

• 13% renewable energy by 2020

• To be approved by federal and regional parlements

Ⅰ Control and reduction of federal public expenses

Ⅰ Example function of the federal government


Ⅰ An overview of the federal public buildings

Spread of federal public buildings per surface

20; 1%

159; 9%

120; 7%

795; 42%

750; 41%

Gebouw en ≥ 50.000 m²




Gebouw en < 1.000 m²

spread, per province, of the buildings larger than 10.000 m²

19; 11%11; 6%

15; 8%

8; 4%

9; 5%

74; 42%

5; 3%

14; 8%

15; 8%

7; 4%

2; 1%Antw erpen

West-Vlaanderen

Oost-Vlaanderen

Limburg

Vlaams-Brabant

Brussel

Luxemburg

Luik

Henegouw en

Namen

Waals-Brabant


Ⅰ Energy use in the federal public buildings

± 1800 buildings = ± 8.000.000 m²

• ± 1200 owned by the state

• ± 600 rented from private owners

Ⅰ Energy (and water) bill (1): ± 150.000.000 €/year !

Ⅰ Energy use: > 2.000.000.000 kWh/year = 2 TWh/year

• 20% of the buildings represent ± 80% of the consumption

Ⅰ CO2 emissions: > 600.000.000 kg/year

(1) From now on we talk only about energy, but this includes water most of the time


Ⅰ Potential for energy savings

Ⅰ Average consumption of federal buildings ± 250 kWh/m²

Ⅰ Average consumption in Belgian tertiary sector 223 kWh/m²

Ⅰ An energy efficient tertiary building 120 to 150 kWh/m²

Ⅰ Potential for energy savings 30 to 40 %

Ⅰ A “low energy” building 30 to 60 kWh/m²

Ⅰ A “passive” building 0 to 30 kWh/m²


Ⅰ Summary on FedescoⅠ Initiative of Belgian Federal Government

• SA (Ltd.) of public Law• Creation: 4 March 2005• Operational : 1 September 2005

Ⅰ Goal: reduce energy consumption in public buildings• Reduce GHG emissions• Financial Savings

Ⅰ Belgian state = 100% shareholder (via Federal Participation and Investment Company)

Ⅰ Capital : € 6,5 millionsⅠ Loan capacity with state guarantee: € 10 millionsⅠ Role: facilitate, coordinate and pre-finance energy saving

measures in (federal) public buildings: “Integrated” ESCO & Third Party Financer

• Services/Engineering & Banking !• Outsource services and projects to private sector

Ⅰ Current objective: Turnover of € 35 millions over the next 5 years


Ⅰ Approach « Integrated ESCO & Third Party Financer

Client

Entrepreneurs

Equipment suppliers/installers

Energy Agencies

Banks

Engineering Bureaus

Ⅰ Single Point of Contact

Ⅰ Integrated Expertise

Ⅰ Experience

Ⅰ Integrated « Service contracts » (!) incl. TPF

Ⅰ Unique Guarantee

Ⅰ Turnkey projects

Ⅰ Specifically focused on sector of federal public customers (!)

Ⅰ On Fedesco’s balance

Buildings Agency/Owner

Energy Suppliers/Distributors


Ⅰ Future: EPC

Client

Buildings Agency/Owner

Banks

optionally

Entrepreneurs

Equipment suppliers/installers

Energy Agencies

Engineering Bureaus

Energy Suppliers/Distributors

Single Contractor

(private ESCO’s)

+

Long term EPC contract

(± 7-10 yrs) incl. TPF, maintenance

and savings guarantee

Ⅰ On private ESCO’s balance

Ⅰ Fedesco takes over financial risk and guarantees performance risk


Ⅰ ESCO market developments since last meeting

Ⅰ Energy Efficiency and Renewable Energy are starting to boom, but driven by regional regulatory frameworks and subsidies

Ⅰ The new “gonna be ESCO’s” (traditionally building solutions providers: Siemens, Honeywell, Johnson Controls…) are taking the lead in developing a promising market

Ⅰ The existing “should be ESCO’s” (traditionally maintenance providers: Axima Services, Dalkia, Cegelec…) are hesitating about what there strategy should be and seem to be in a latent mode

Ⅰ Some new smaller players but unclear about role = “Wanna be ESCO’s”Ⅰ Fedesco, EnergyMag, Siemens and Honeywell have taken the initiative to

create a “Belgian ESCO association” following the existing model in other countries, inviting other players around the table. This has created some reaction from the existing federation of maintenance companies (Febetec) which is member of EFIEES although their position is unclear.

Ⅰ Photovoltaic solar energy is growing with small installations in Wallonia and Brussels and larger ones in Flanders

Ⅰ Federal public fund (FRGE) as TPF provider for low income households is starting to increase the number of local entities, driven by municipal initiatives


Ⅰ ESCO market developments since last meeting

Ⅰ Some more generalist engineering bureaus are starting to specialize or at least develop new niche markets (passive buildings, cradle-to-cradle, CHP)

Ⅰ Private equity is starting to float into the renewable energy market through the creation of the first solar funds

Ⅰ Energy suppliers are not very active on the energy services market, although this can partially be explained by the fact that most are part of a group that also owns an ESCO and or Installer

• Suez: Electrabel + Axima Services + Fabricom GTI• EDF: EDF + Dalkia

Ⅰ This could change as new entrants or smaller players understand that energy services could be an added value service and competitive advantage

Ⅰ Many obstacles remain for the development of EPC and TPF in the public sector, although Fedesco is contributing on lifiting them

Ⅰ Some news from the conference front• 4-5/11/2008: ESCO Europe 2008 will be held in Brussels• 13-14/11/2008: The moderately succesfull Innova Energy fair and

Buildings/Industry Forum conference in 2007 are growing into a real Energy Forum conference and fair focused on the B2B sector in Belgium (and to some extent Europe). This year a “Public Forum” will be added with special attention for EPC


Ⅰ Recent achievements by FedescoⅠ Implementation of 4 standard services we developed

• Majority of 25 new Quick Scans (focused audits) realized• realized Development of Extranet-access to 15 first Energy Care

subscriptions almost completed• Energy Monitoring & bookkeeping system selected (customized

platform based on EMC from Siemens) and first 20 buildings implemented:

• Sensibilisation campaign for occupants: Development of graphical ad written supports finished; Energy watchers trained; poster & sticker campaign and distribution of brochures to start this week to 7000 people in 20 countries

Ⅰ Detailed inventory and tariff optimization of 200 largest buildings ongoing, based on 100 energy and building parameters

Ⅰ Two additional Cogeneration studies confirm interest for them with ROI of less than 3,5 years

Ⅰ Advancing rapidly on standard specifications and (typically 10 year) framework contract for first pool with EPC, based on BEA-know-how transfer and a Request for Information (RFI) to all Belgian ESCO’s. Currently integrating ongoing from different sources. We can share this to the Task XVI members.


Ⅰ Recent achievements by Fedesco

Ⅰ Specs for installation and operations of 3.200 m² PV solar panels ongoing

Ⅰ Draft attribution report for 10.000 m² of PV solar panels finished

Ⅰ Defined and internally approved a new multiyear investment plan of 152 million € net (investment capital) and 210 million € gross (including interests and Fedesco operations)

Ⅰ Assured 2008 budgets

Ⅰ Developed a new long term strategy document “Energy efficiency in federal public buildings: Vision 2008- 2020”

Ⅰ Initiated creation of a Belgian ESCO association

Ⅰ Development and launch of a new service for “transfer of know how” (on EPC and TPF) to other local, provincial and regional public authorities


Ⅰ Approved budgets 2008

Ⅰ 2008 expenses: 2,917 million €

• 1,407 million € (Project POD DO 2007)

• 1,510 million € (Transversal measures)

Ⅰ 2008 engaged: 12,152 million €

• 1,407 million € (Project POD DO)

• 5,600 million € (EPC-contracts)

• 0,200 million € (Studies/Technical Specs CHP)

• 2,000 million € (Isolation)

• 2,000 million € (Regulation/replacement HVAC)

• 0,715 million € (Uplamping)

• 0,230 million € (Inventory remaining 1600 (?) buildings)


Ⅰ Remaining obstacles for Fedesco

Ⅰ Lack of objectives and motivation by Management of Admin’sⅠ Need to get support from government for multiyear investment

plan to impose objectivesⅠ Get customers to agree to step into TPF and EPC Ⅰ Long decision cycles and intrinsic bureaucracyⅠ Complex and long investment and administrative cycleⅠ Incompatibility between multiyear TPF and annual budget of

state and administrations + Restrictive budget laws and rulesⅠ Sale of public buildingsⅠ Although the political situation has improved (new government

after 9 months of crisis) there is no real governmental agreement and there remains still uncertainty until the summer

Ⅰ Lack of sales forceⅠ Lack of resourcesⅠ Lack of technical innovation


Ⅰ Remaining obstacles for ESCO market development

Ⅰ Still relatively “low” energy prices although important increase of prices in 2007 and 2008

Ⅰ No “specific subsidies for ESCO services”, mainly for audits and specific technical measures

Ⅰ Lack of market awareness and education

Ⅰ Lack of financing of creation of new ESCO’s


Ⅰ Proposed solutions

Ⅰ Currently trying to get certain elements included in new governmental agreement or Minister’s policy plan

Ⅰ Address issues and obstacles with new Minister(s)

Ⅰ Try to sell the concept of Energy Performance Contracting with pooling of buildings to the customers

Ⅰ Involve Fedesco in case of sale of buildings and fixes rules and investment scenarios concerning energy saving measures


Ⅰ Current progress on Task XVI Activity areas

A. Capacity build-up, training of market actors• Still informal and through conferences• New service for know-how transfer to other public authorities (end users)

B. Development of standards/templates, model contracts, procurement• Within EPC project and for PV Solar project• Will be used withing know-how transfer service

C. Participation in the activities of the centre of excellence• None

D. Adoption of the manuals• To be done

E. General market information and development• Regular through website, conferences, annual trade faire, PR

F. Developing model projects, projects for selected market segments• Case for EPC 5 public buildings pool project planned for 2008

G. Designing, elaborating and testing of innovative ES´s and financing models• 4 standard services with budgettary guarantee, transversal measures

with TPF and budgettary guarantee, EPC with savings guarantee, know-how transfer


Ⅰ Current progress on Targets and Expected Results

1. Enlargement of the ES-market• On supplier side creation of ESCO market will provide an impulse through

standard framework for Belgium and market education• Know-how transfer should increase demand for ES in public sector

2. Higher qualilty of ES´s and implementation capacity• Within Fedesco, certainly• Standard adopted framework and certification foreseen in ESCO

association

3. Contribution to the implementation of the Energy Services Directive• Yes, but not currently measuring or reporting on this• No coordination with Belgian authorities

4. Integration with the international ES-community• Good

IEA DSMIV Task XI Collaboration on know-how transfer on EPC with Berliner Energy Agency Will participate at ESCO Europe 2008 and Energy Forum conference in Brussels Member of Agora Energy in Sophia Antipolis Speaker at national and international conferences


Ⅰ Plans for the next 6 months

Ⅰ Try to get approval and support from government for multiyear investment plan and Vision 2008 - 2020

Ⅰ Continue to lift current obstacles in particular for TPF and EPCⅠ Get first EPC project up and runningⅠ Get transversal measures implemented: we need to spend the budgetⅠ Invoice and collect income from 2007 and 2008 projectsⅠ Successfully continue first phase of sensibilization campaign on “energy

savings on the work floor”Ⅰ Operate energy monitoring and bookkeeping systemⅠ Implement first Energy Care servicesⅠ Negotiate deal and - if finalized - coordinate implementation for 10.000

m² PV Solar Panels investment by private sector Ⅰ Install 3.200 m² of own Solar PanelsⅠ Get first customers for know-how transfer service (3 regional seminars

foreseen end of April)Ⅰ Create and assure financing for the Belgian ESCO associationⅠ Thinking on stimulating development of “manuals/guides” and “market

studies”Ⅰ Increase the staff by 33%, buy hiring Project & Operations Manager ;o)


Thank you for your attention !


Ⅰ Contact information

Christophe MadamTechnical DirectorTel +32 2 762 02 [email protected]

Lieven VanstraelenManaging DirectorTel +32 2 772 00 [email protected]

Carine VivierAdministrative Assistant Tel +32 2 762 02 [email protected] [email protected]

Fedesco sa I Avenue de Tervuren 168/8 I 1150 Brussels I Belgium I Tel +32 2 762 02 80

Documents

[email protected] 31.01.08 FEDESCO Presentation 31.03.2008 in Delhi IEA DSMIV Task XVI National Implementation Activities - Belgium Lieven