Energy Efficiency Training Week

Transcription

1 Buildings energy efficiency sessions done in partnership with: sustainable energy partnerships Energy Efficiency Training Week Toolkit: Linking buildings energy efficiency policy to investments and finance Buildings: Session

2 Energy Efficiency Training Week Buildings: Program 1. Where to start: Understanding building energy use 2. Where to start: Energy efficiency potential in buildings 3. Toolkit: Building technologies for low energy buildings 4. Toolkit: Linking buildings energy efficiency policy to investments and finance 5. Toolkit: Building energy codes and standards 6. Toolkit: Building energy efficiency policies 7. What are the steps: Set targets and develop policies 8. Did it work: Evaluating the multiple benefits of energy efficiency in buildings 9. Did it work: Tracking progress with energy efficiency indicators 10. Energy Efficiency Quiz: Understanding energy efficiency in buildings

3 Energy Efficiency Training Week (Buildings) 4. Toolkit: Linking buildings EE policy to investments and finance Trainers: Nigel Jollands and Luis Castanheira Purpose: To teach emerging professionals in the emerging economies about how energy efficiency policies can enable effective investment and finance for energy efficiency in buildings. Scenario: You continue to hear from stakeholders that all they need is money and then they will consider doing energy efficiency in buildings. What approaches can be used to enable energy efficiency investment?

4 Developing Investment Grade Energy Efficiency Policy (IGEEP) for buildings Dr Nigel Jollands, Associate Director, EBRD 2015

5 Contents Introductions Recap on importance and definitions Introductions to a Banker The energy efficiency policy/finance tool box How does the IGEEP approach help us to improve energy efficiency outcomes? Mechanics of policy-finance interaction Characteristics of IGEEP Challenges for IGEEP Examples Practice

6 Why is Investment Grade Energy Efficiency Policy (IGEEP) important?

7 Why is Investment Grade Energy Efficiency Policy (IGEEP) important? $13.5 trillion

8 Why is policy important?

9 What do I mean? What is energy efficiency policy? A set of strategies, legislation, regulations, measures, programmes that together stimulate energy efficiency improvement What is investment-grade energy efficiency policy? A set of strategies, legislation, regulations, measures and programmes that together that enable stimulate investments energy efficiency improvement ENERGY EFFICIENCY POLICY IGEEP

10 Introductions to a banker Long term Time horizon Short term Public good Motivation Revenue target Social CBA Evaluation criteria IRR Political Relationship to risk Legal Casio Type of watch Rolex Policy maker Economic impact Political impact Big concern Risk, creditworthiness, bankability Banker

11 The energy efficiency policy/finance tool box

12 How is IGEEP different to ordinary energy efficiency policy? 1. Focused goal 2. Focus on specific set of barriers 3. Focused group of stakeholders 4. Specific criteria for evaluating appropriateness of measures for evaluating success of measures 5. Specific types of measures include measures not traditionally associated with energy efficiency

13 What does IGEEP look like? Policy framework Financial institutions Investors Financial instruments Credit lines Energy efficiency fund Direct lending Energy efficiency project Project originators Tech supplier Project aggregator Energy efficiency improvement

14 IGEEP Examples Energy efficiency in Russia multi-family apartments Western Balkans energy efficiency in buildings ESCOs in Western Balkans - Ukraine standards and labelling - Japan s commercial office space and principal agent problems - Kazakhstan energy audit framework and industrial energy efficiency benchmarking

15 IGEEP Examples Residential energy efficiency in Russia

16 IGEEP Examples Residential energy efficiency in Russia Russia residential energy efficiency ( ) - Buildings energy efficiency law and regulations - HOA law EBRD Credit lines Govt energy efficiency fund Or HOA fund Apartment building energy efficiency project Credit line engineer Tech supplier HOA Energy efficiency improvement

17 IGEEP Examples Western Balkans energy efficiency in buildings

18 IGEEP Examples Western Balkans SEFF REEP is an integrated package of finance, technical assistance and policy dialogue, implemented jointly with the Energy Community Secretariat Objective Sustainable market for energy efficiency in the Western Balkans Window 2 Intermediated financing & Window 3 Direct financing WeBSEFF II 92m financing m grants Credit line for local FI For smaller scale EE & RE projects For both public & private sector borrowers, including ESCOs Grant funds support TA and investment incentives. WeBSEDFF (extension) 50m financing m grants Direct financing facility Medium scale RE and EE improvements in industrial enterprises Window 1 ESCO support & Policy dialogue Energy Service Companies (ESCO) 5m grants Legislative support Technical project preparation Policy dialogue support 1m + 0.5m grants EPBD Procurement of EE goods Utilities

19 IGEEP Examples Western Balkans EPBD Primary legislation Secondary legislation IT software Albania BiH-RS BiH-Fed Croatia FYR Macedonia Kosovo Serbia Law Law submitted N/A N/A N/A N/A submitted N/A 10/2014 1/2015 MEPS N/A N/A N/A N/A NCM N/A N/A Final NCM submitted 7/2015 N/A EPC N/A N/A N/A N/A Inspection N/A Calculation software EPC registry (database) Final regulations submitted 3/2016 N/A Review (1/2015), Procedures (4/2015), Control system (5/2015) Regulatory Final regulatory requirements changes submitted submitted 7/2015 7/2015 Final NCM amendments submitted 6/2015 Review completed and policy proposals submitted 7/2015 Recommended regulatory amendments submitted 5/2015 Final NCM submitted 5/2015 Final regulation submitted 7/2015 Final regulation submitted 4/2015 Final software delivered Croatia (5/2015), BiH-F (7/2015), FYR Macedonia (7/2015), Kosovo (7/2015) PLUS TRAINING (2016) EPC register specification: Croatia (10/2014) EPC database delivery: BiH-F (5/2015) N/A N/A N/A N/A Final regulations (4/2015), Equivalence report (2/16)

20 IGEEP Examples ESCOs in the Western Balkans EE Project preparation EE Project preparation TC project preparation for ESCO projects: Legislative support for EE Projects 9 tenders prepared by REEP 11 tenders under preparation by REEP EE Project preparation Legislative support for EE Projects Legislative support for EE Projects EE Project preparation EE Project preparation Ad-hoc EE Project preparation available Policy dialogue Legislative support for EE Projects TC assignments Energy efficiency (EE) Project preparation Street lighting tenders prepared by REEP ESCO tenders under preparation by REEP Feasibility/scoping studies prepared by REEP

21 IGEEP Examples ESCOs in the Western Balkans ESCOs in Western Balkans - E.g. Serbia (legal infrastructure for EnPC, procurement laws) EBRD WEBSEFF Lighting Framework WEBSEFF engineer Donor Municipalities/ manufacturers Tech supplier PIU Energy efficiency improvement

22 Japan Principal Agent problems in commercial office space - 70% of rental office space (80 million m 2 ) tenant doesn t pay energy bill - Policy prescriptions: - Compulsory energy audits for large buildings - Stringent energy efficiency standards for buildings - Tenancy contracts that allocate energy costs between owner and tenant

23 The tool box with IGEEP

24 Investment Grade Energy Efficiency Policy Group exercise 1. Break in to groups: preferably one country/region per group 2. Select a policy instrument: e.g. one you are working on/have worked on/would like to see in your country 3. Evaluate the strong and weak IGEEP components: e.g. what stakeholders were involved? what investment does it lead to? etc.

25 Summary Recap on definitions Introduced the banker The energy efficiency policy/finance tool box How does the IGEEP approach help us to improve energy efficiency outcomes? Mechanics of policy-finance interaction Characteristics of IGEEP Challenges for IGEEP Examples Practice

26 For all further enquiries, please contact: Dr Nigel Jollands Associate Director Energy Efficiency and Climate Change Tel: jollandn@ebrd.com EBRD, One Exchange Square London, EC2A 2JN United Kingdom

27 The Investor Confidence Project case study Luís Castanheira, Technical Director, ICP Europe 2015

28 The Energy Efficiency Capital Gap Projects Untapped Market Opportunity Healthy Returns Established Industry Excess Capacity Investors Search for yield Risk/Return Growing emphasis on Impact Investing Growing interest in EE Source: Investor Confidence Project

29 Energy Efficiency the first fuel for the EU Economy Source: Investor Confidence Project

30 Energy Efficiency the first fuel for the EU Economy Top Demand and Supply Drivers of Energy Efficiency Investment: Standardisation Clear Business Case Increased Investor Confidence & Change in Risk Perception Transaction costs / simplicity Measurement, Reporting & Verification (MRV) and Quality Assurance Source: Investor Confidence Project

31 Lack of Standardisation = Greater Risk Source: Investor Confidence Project

32 Lack of Standardisation Impacts Investors: High transaction costs Project size is too small Can t build a project pipeline Administrators: High programme costs Lack of quality data Unsustainable public funding Source: Investor Confidence Project Developers: Hard to communicate project risk Difficulty accessing financing High transaction costs

33 Citigroup conclusions Energy efficiency is in a category by itself. With the exception of one company packaging energy efficiency, energy efficiency projects do not yet meet the requirements of capital markets. The industry is just too disaggregated. No two projects or contracts are alike. Securitization is not practical or possible under these circumstances. Say you have 1,000 energy efficiency projects, Standard & Poor s would have to read 1,000 documents to assess the risk. Fees won t pay for that level of review. Michael Eckhart Managing Director & Global Head of Finance and Sustainability at Citigroup Source: Investor Confidence Project

34 EEFIG Recommendations February 26, 2015 Market Recommendations Standards should be developed for each element in the energy efficiency investment process These standards should be open source and establish a common vocabulary and shared knowledge across Europe. Source: Investor Confidence Project

35 What Owners and Investors Want Clear and transparent renovation project plan based on industry best practices Evidence of the qualification of professionals Third-party measurement and verification Consistent documentation A project label that represents these components and can live with the project Source: Investor Confidence Project

36 Standardized project development Cx BASELINING SAVINGS COMMISSION OPERATIONS MEASUREME Existing Building Drawings Weather File Energy Usage Energy Rates Occupancy Model File Calibration Data Bid Packages Certifications Cx Plan Cx Authority Test Procedures Facilities Req. BMS Points Fault Plan Maintenance Plan M&V Model Regression Model Adjustments Impact Baseline Adjustments Source: Investor Confidence Project

37 Standardized project development Source: Investor Confidence Project

38 1. Baseline Development Baselining provides a reference regarding energy use of a certain system, allowing for prediction of energy consumption in different utilisation contexts, which in turn allows for energy savings calculations months of utility data Develop 12 month baseline Determine end-use energy use Collect building asset, operational and performance data Weather data Occupancy data Source: Investor Confidence Project

39 2. Savings Calculations Large (& Standard) Savings calculations provide utmost relevant information for project valuation, demanding for the determination and modelling of the Energy Conservation Measures to be implemented. Energy modeling software Modeler credentials Supporting model files Model calibration Model process description Key metric benchmarks Source: Investor Confidence Project ECM model variables Individual savings results, and packaged results

40 3. Design, Construction and Verification Design, Construction and Verification are all crucial phases, consequently proper procedures and documentation of these processes is a key element of the entire ICP structure. Operational performance verification (OPV) Plan OPV Effort (targeted commissioning) OPV approaches inspection, spot measurements, data logging, BAS trends, FPTs Training Systems manual Source: Investor Confidence Project

41 4. Operations, Maintenance & Monitoring The way systems are operated and maintained are key elements of their energy performance, and only by having crucial information about these elements we may guarantee performance. OM&M plan OM&M process Inspections, RCx, ongoing Cx, monitoring-based Cx OM&M management framework Operator s manual OM&M training Source: Investor Confidence Project

42 5. Measurement & Verification Proper Measurement and Verification procedures validate the reliability and effectiveness of the foreseen energy savings. M&V provider credentials Options A and B: Retrofit Isolation Option C: Utility Bill Analysis M&V report Source: Investor Confidence Project

43 Standardized approach Does NOT: invent new standards attempt to impose national standards in another country restrict engineering solutions define a set level of energy savings Source: Investor Confidence Project

44 Near-Term & Long-Term Near-Term: Increase Deal-Flow Increase Confidence in Savings Reduce Transaction Costs Streamline Origination Process Source: Investor Confidence Project Long-Term: Reduce Risk & Cost Develop Data to Manage Performance Attract Project Finance Investors Enable Portfolios and Securitization Reduce Cost of Capital

45 Luís Castanheira luis.castanheira@eeperformance.org

46 Discussion 2015