Transcript Varsinais-Suomen Energiatoimisto: KuntaESCO

"FINANCIAL AND ECONOMIC ASPECTS OF
ENERGY SAVING WITHIN THE FRAMEWORK OF THE CSRC APPROACH"
Workshop: "TRANSNATIONAL ENERGY SAVING NETWORKS"
14 December 2005 Vilnius, Lithuania
Seppo Silvonen, Motiva Oy
Finland
Why not more ESCOs?
12.12.2005
Seppo Silvonen
Idea of an ESCO-service
Energy
cost
before
To the ESCO
“fast out”
To the client
Savings
Energy
cost
after
(-)
Time
(-)
Project
cost
paid by
the ESCO
12.12.2005
Seppo Silvonen
=
Energy Agency of Southwest Finland:
Municipalities and ESCO-services – an interview survey
ESCO-activity has been low in the municipal sector.
The aim of the interview survey was
• to collect information of the obstacles on the way to implementing ESCOacitivities and of the possibilities and ways of removing the obstacles
• to collect information of the factors leading to success in ESCO-activities
• to aid Motiva in its planning of ESCO-promotion
12.12.2005
Seppo Silvonen
Energy Agency of Southwest Finland:
Municipalities and ESCO-services – an interview survey
Obstacles
• Few ESCOs offering services
• Limited experience of ESCO-contracts
• Individual ways of marketing and implementing by the ESCOs
• ESCO-contracts unknown to smaller municipalities
• The potential diversity of ESCO-contracts not seen
• ”An ESCO-contract is expensive to the municipality”
• A municipality can get financing cheaper directly than through an ESCO
• ”Political sensitivity”
12.12.2005
Seppo Silvonen
Energy Agency of Southwest Finland:
Municipalities and ESCO-services – an interview survey
Obstacles
• Energy audits by another party are not sufficiently reliable
• The buildings are in good shape, lacking potential for bigger energy
efficiency investments
• The energy efficiency investments are small compared to the total
renovation investments
• Bundling of several smaller investment objects is cumbersome and
difficult from the monitoring point of view
• Investments recommended in the energy audits have already been
carried out taking the economic feasibility from ESCO-projects
12.12.2005
Seppo Silvonen
Energy Agency of Southwest Finland:
Municipalities and ESCO-services –an interview survey
Obstacles
• no clear instructions for arranging competitive bidding for ESCOcontracts
• competitive bidding expensive to ESCOs
• separation in the book-keeping between investments and running costs
• hesitation by the workers: loosing of work or getting extra work
• estimated savings potentials unreliable
• lack of expertise for getting acquainted with the ESCO-concept
12.12.2005
Seppo Silvonen
Energy Agency of Southwest Finland:
Municipalities and ESCO-services – an interview survey
Opportunities
• a municipality has various ways of financing ESCO-projects
• the banks are waking up to ESCO-project financing
• investment subsidy to ESCO-investments available from the Ministry of
Trade and Industry
• information, experience is available in other countries through the
nerworks
12.12.2005
Seppo Silvonen
ESCO-Financing Model
Conventional
Financier
Interest+
Guarantee
Amortization
Loan
ESCO
Subsidy
Regional
Govmnt
Office
Paymensts from
the Savings
Application for
Subsidy
Guaranteed
Savings
Contract
Payments
Contractor
12.12.2005
Seppo Silvonen
Contract 5-7
years
Investment
Guaranteed Savings
Client
Implementation
of the Contract
ESCO for Municipalities
Local
Financier
Loan
ESCO-Contract
as Guarantee
Interest+
Amortization
ESCO
Subsidy
Regional
Govmnt
Office
Application
for subsidy
Guarateed
Savings
Contract
Payments
Contractor
12.12.2005
Seppo Silvonen
Payments from
the savings
Contreact
5-7 yr
Investment
Guaranteed
Savings
Client
Implementation of
the Contract
´Helsinki-ESCO’
Financier
Regional
Govmnt
Office
Subsidy
Application
for Subsidy
Contract
The City will pay the Contract
amount on the basis of the fulfilment
of the Savings Target
Contractor
12.12.2005
Seppo Silvonen
City
Implementation of
the Contract
Guaranteed Savings
ESCO with the Municipality
as the Financier
Regional
Govmnt
Office
Application
for Subsidy
Financier
Guarantee
Interest+
Amortization
Subsidy
The City will pay the Contract
Contract
amount on the basis of the fulfilment
of the Savings Target
Contractor
12.12.2005
Seppo Silvonen
Loan
Municipality
Implementation
of the Contract
Guaranteed Savings
’Turku-ESCO’
Regional
Govmnt
Office
Application
for Subsidy
Financier
Payments from
the Savings
Contract 5-7 yr
12.12.2005
Seppo Silvonen
Client
(Turku)
Investment
Guaranteed
Savings
ESCO
Contractor
Subsidy
Maintenance
Contract
’Spartrim-ESCO’
Application
for Subsidy
Regional
Govmnt
Office
Subsidy
Financier
Pavments from
the Savings
Client
Contract 5-7 yr
ESCO
Contractor
12.12.2005
Seppo Silvonen
Maintenance
Contract
Investment
Guaranteed
Savings
’Bundling-ESCO’
Appplication
for Subsidy
Financier
Regional
Govmnt
Office
Subsidy
ESCO
Payments from
the Savings
Client
Contract 5-7
yr
Investment
Guaranteed Savings
Contractor
(Maintenance
Contract)
12.12.2005
Seppo Silvonen
Object of saving
measures
Direct government support
• The government finances the costs of the operating agent
(Motiva) of the Finnish energy audit program and gives 40…50
% support for the energy auditing project expenses
• 15…20 % subsidies for conventional energy saving
investments for companies who have joined the voluntary
Energy Conservation Agreements with the Government.
• Higher subsidies (20..25 %) have been granted for ESCO
investment projects at least until the end of the year 2004 by
the government
12.12.2005
Seppo Silvonen
How to find the project potential to ESCOs?
3,0
• Energy audit reports
• What was not identified in the
energy audits
Savings potential(million €)
2,5
2,5
2,5
2,0
1,5
1,0
0,8
0,4
0,5
0,4
0,3
0,3
0,2
0,2
0,1
0,0
0,0
0
0-1
1-2
2-3
3-4
4-5
5-6
6-7
Pay back time (years)
12.12.2005
Seppo Silvonen
0,1
7-8
8-9
9-10
10
Motiva’s role in promoting ESCO–
business in Finland
• To act as an information link between ESCO’s, energy
users, potential clients, energy auditors …
• To prepare information material, to organise information
dissemination and seminars and to be directly in contact
with possible ESCO’s and their potential clients
• To follow the development of the ESCO industry abroad
and to participate in the international co-operation
• To Identify possible obstacles to the growth of the ESCObusiness
• To disseminate information of exemplary ESCO projects
12.12.2005
Seppo Silvonen
Clients’ views on the ESCO-concept
•
Good for the core-business thinking – does not tie up own
capital
•
Decision making is taken to the level in charge of the costs
•
ESCO has the responsibility for the savings
•
Neutral towards the equipment suppliers
•
Turn-key saves own time
•
Owns the equipment until paid – in charge for the
maintenance and functioning
•
ESCO bears the risk of the new technology utilised
12.12.2005
Seppo Silvonen
ESCO-project register in Motiva
- Target: to promote ESCO-business
- Contact information
- Description of different kinds and sizes of ESCO -projects
- Following the ESCO-business volumes
- Started in 2003
- Registered some 40 projects: 40 % municipal, 60 %
industrial
12.12.2005
Seppo Silvonen
ESCO-project register – Examples
- Municipal projects
- schools
- sports centres
- swimming halls
- ice-hockey halls
- greenhouse
12.12.2005
Seppo Silvonen
The smallest ESCO- project
Customer: City of Nokia, Ice-hockey arena
ESCO: Enespa Oy
Measures based on a free pre-audit
• water consumption of showers
• updating the controls of the refrigeration system
Energy Performance Contract (Enespa Model Contract)
• investment 13.000 EUR
• estimated savings 5.000 EUR/a
• repayment: 50 % of savings x ESCO´s share of ownership but
minimum 25 % of the savings (first year repayment was 3.300 EUR)
• based on the repayment formula the contract period is 6½ years
• cumulative customer`s savings are 28.300 EUR
12.12.2005
Seppo Silvonen
Modes and capacities of ESCOs
Capacity
Knowledge of
Knowledge of
cost engineering
financial
engineering
Mode of
ESCO
Theoretical knowledge of energy
systems and
technology
Experience in
energy saving
projects
Project
management
capability
Installation
experience
and resources
Broker-ESCO
No
Yes
Yes
Yes
Yes
No
No
No
No
No
No
Yes
Small
installation
company
Large
installation
company
Energy
company
No
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
ConsultingESCO
Yes
Yes
Yes
Yes
Yes
No
Technology
supplier
Yes
Yes/No
Yes
No/Yes
No
Yes
Super-ESCO
Yes
Yes
Yes
Yes
Yes
Yes
12.12.2005
Seppo Silvonen