elena assistance case study - pool engineering s.r.l

Marina Turcati

INSTITUTIONS, FINANCE, MARKET: FACTORS AFFECTING PUBLIC PROCUREMENT PRACTICE CASE STUDY: THE IMPLEMENTATION OF THE ELENA PROGRAMME IN ITALY (MILAN, PADUA, CHIETI)

Workshop on Contemporary Issues in Procurement Practice London, October 1 2015

TRACING THE MAP: WHERE ARE WE?

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ELENA technical assistance facility implementation in Italy: Milan, Chieti, Padua

Case study

approach

SME consultancy company’s perspective

Energy efficiency services

procurement

Marina Turcati – October 1, 2015

CONCURRING ELEMENTS

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METHODOLOGICAL APPROACH: ENERGY EFFICIENCY TARGET COMPLIANCE

How do we procure energy services?

1. Upfront market survey (level of interest).

2. Stakeholder consultations to analyze barriers and to go deeper into

target analysis (sub-groups and unintended included).

3. Listing options for surmounting each of the main barriers.

4. Develop and test small procurements first.

5. Replicate and expand to scale up.

6. Make it durable through systems institutionalization (templates, budgeting

models, incentives and sanctions schemes, targets and verification

frameworks etc.) and further implementation. 4


… SO, LISTEN AND LEARN FROM THE “TARGETS” OF PUBLIC POLICY AND FROM THE POTENTIAL SUPPLIERS IS THE MAIN STEP TO BE TAKEN, SINCE IT IS BOTH FRUSTRATING AND DIFFICULT – AND THEREFORE PRICELESS – FOR POLICYMAKERS TO COMPREHEND WHY THE TARGETS OF POLICY DO NOT SEE THINGS THE SAME WAY THEY DO.

METHODOLOGICAL APPROACH: ENERGY EFFICIENCY TARGET COMPLIANCE

Kent Weaver, Georgetown University 2009

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CASE STUDY SOURCE: A TECHNICAL CONSULTANT’S PERSPECTIVE IN THE EE SERVICES PROCUREMENT PROCESS

consultant for local PAs procuring energy efficiency services, from 2011 up to present

Italian SME integrated engineering services

in house energy engineering team

energy efficiency consultancy projects in Italy, Bulgaria, Romania and

Russia Italian PA’s consultant for energy efficiency services tendering within

the framework of the ELENA programme since 2011

tenders’ dossiers supervised: 5

highest tender amount assigned under Pool Engineering consultancy assistance: 25.000.000 euro (energetic master plan of Venice International Airport “Marco Polo”)


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EE: THE MORE VALUABLE ENERGY IS THE ONE THAT WE DO NOT CONSUME

NECESSITY • Fossil fuel will be prevalent for a long time • There are activities where the fossil products cannot be substituted SOUNDNESS • “No regrets” policy • “Low-hanging fruit” (vs. payback periods and upfront costs)

IMPORTANCE • Considering the current rates of construction, demolition and

renovation across Europe, the city of 2050 is now more than 70% built. Moreover, about 35% of the EU's buildings are over 50 years old. It is essential then the right choices are made now.

• Leading role of public authorities (central Government) …HOWEVER, SO FAR COST-EFFECTIVE ENERGY SAVINGS POTENTIAL HAS

NOT BEEN FULLY ACHIEVED. THE MARKET FOR ENERGY EFFICIENT PRODUCTS, BUILDINGS AND SERVICES IS NOT DEVELOPING QUICKLY ENOUGH TO MEET THE NEED FOR INCREASED UPTAKE OF THE ENERGY SAVINGS POTENTIAL.


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Source: DG Energy, European Commission 2013

EU NEEDS TO DOUBLE ITS EFFORTS IN ORDER TO REAP ALL THE BENEFITS OF ENERGY EFFICIENCY AND SAVINGS IN 2020

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Source: DG Energy, European Commission 2013

EU HAS RIGHT TO ACT (TFEU ART. 194) BUT ENERGY EFFICIENCY IS NOT LEGALLY BINDING AND SAVINGS TAKE PLACE AT NATIONAL AND LOCAL LEVEL

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EE IN THE EUROPEAN UNION: THE 5 PILLARS OF THE ENERGY EFFICIENCY POLICY

EEAP

NEAP

LEGAL FRAMEWORK

FLANKING INSTRUMENTS:

FINANCE, INFORMATION AND

NETWORKS

INTERNATIONAL COLLABORATION

IN/OUT EU

Source: Energy Efficiency Plan 2011 - European Commission Communication 2011

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EE IN THE EUROPEAN UNION: STRATEGIES, PLANS AND DIRECTIVES


2010 EUROPE 2020 STRATEGY: SMART, SUSTAINABLE AND INCLUSIVE GROWTH. 5 OBJECTIVES, AMONG WHICH A 20% INCREASE IN ENERGY EFFICIENCY

2020

2011

AFTER 2006 – 2012 EEAP MID-TERM REVISION AND EVALUATION (2009), A NEW EE(A)P IS RELEASED (targets, public sector measures, buildings, energy supply obligations, cogeneration and industry, financing issues, smart meters and smart grids promotion. )

2012

ENERGY EFFICIENCY DIRECTIVE (2012/27/EU) IS THE LEGISLATIVE RESULT OF THE 2011 EEAP. IT HAS REPEALED THE ENERGY SERVICES DIRECTIVE (2006/32/EC) AND INTEGRATES – among others – THE ENERGY PERFORMANCE OF BUILDINGS DIRECTIVE (2010/31/EU), THE DIRECTIVE ON ENERGY-RELATED PRODUCTS ECODESIGN SETTING (2009/125/EC) AND THE DIRECTIVE ON STANDARD INFORMATION AND LABELLING FOR ENERGY-RELATED PRODUCTS

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EE IN THE EUROPEAN UNION: WHAT ABOUT THE PUBLIC SECTOR, BUILDINGS AND FINANCE

EEAP DIRECTIVES

PUBLIC SECTOR LEADING BY EXAMPLE FOR: - CREATION OF NEW MARKETS FOR ENERGY EFFICIENT TECHNOLOGIES, SERVICES AND BUSINESS MODELS; - REFORM OF ENERGY USE PROMOTING SUBSIDIES.

PUBLIC SECTOR FOCUSING ON: - RENOVATION OF PUBLIC BUILDINGS; - ENERGY PERFORMANCE CONTRACTING; - ON THE GROUND IMPLEMENTATION THROUGH VOLUNTARY FORMAL COMMITMENT (Covenant of Mayors – CoM) TACKLING HEAT USE IN BUILDINGS: - ESCO AS CATALYSTS FOR RENOVATION.

APPROPRIATE NATIONAL AND EUROPEAN FINANCIAL SUPPORT: - COHESION POLICY; - INTELLIGENT ENERGY EUROPE PROGRAMME (2007 – 2013).

ART. 3, 19, 20 NATIONAL ENERGY EFFIENCY TARGETS, NEEAP AND EE NATIONAL FUND ART. 4 LONG-TERM STRATEGY FOR MOBILIZING INVESTMENTS IN RENOV. OF NATIONAL STOCK OF BUILDINGS (PUBLIC AND PRIVATE) WITHIN APRIL 30, 2014. ART. 5 EXEMPLARY ROLE. PUBLIC BODIES’ BUILDINGS THROUGH 3% MINIMUM ANNUAL RENOVATION OF TOTAL FLOOR AREA OF HEATED AND COOLED CENTRAL GOVERNMENT BUILDINGS. ESTABLISHMENT OF AN INVENTORY OF CENTRAL GOVERNMENT BUILDINGS WITH FLOOR AREA AND ENERGY PERFORMANCE. SUPPORT TO LOCAL AND REGIONAL PUBLIC BODIES FOR ENERGY MANAGEMENT, EE PLAN AND USE OF ESCO AND EPC. ART. 6 PUBLIC BODIES’ PURCHASES WITH HIGH ENERGY-EFFICIENCY PERFORMANCE. SUPPORT TO LOCAL AND REGIONAL BODIES TO FOLLOW CENTRAL GOVERNMENT EXAMPLE.

18, 49, 50, 51, 52 PREMISES: INTEGRATED ENERGY APPROACH (CoM) AND EU-LED FINANCING

NEEAP (ITALY) – JULY 2014 PREAMBLE: - HIGHER ENERGY PRICES; - DIRE SECURITY OF SUPPLY SITUATION; - TOP COUNTRY IN TERMS OF ENERGY EFFICIENCY (-19%); - GOOD TECHNOLOGICAL LEVEL. 2020 NATIONAL ENERGY EFFICIENCY TARGETS: - SAVE 15.5 MTOE/YEAR, AVOID 55 MLN TONNES CO2 EMISSIONS/YEAR; AVOID 8 BLN/YEAR FOSSIL FUEL IMPORTS ENERGY SERVICES MARKET: -QUITE DIVERSE SECTOR COUNTING 1.900 REGISTERED OPERATORS; - ONLY 15% OF ALL OPERATORS WORK ROUTINELY IN THE FIELD; - WIDE RANGE IN TERMS OF ACTIVITIES AND TARGET; - 5% LARGE AND 95% SMALLER (60% WITH LESS THAN 10 WORKERS). HORIZONTAL ENERGY EFFICIENCY MEASURES: -STRUCTURAL FUNDS; -SUSTAINABLE ENERGY ACTION PLANS (CoM); - REGULATORY HARMONIZATION. ENERGY EFFICIENCY IN PUBLIC BUILDINGS: - CENTRAL GOVERNMENT AND OTHER PUBLIC BODIES; - PURCHASING BY PUBLIC BODIES.

EE IN THE EUROPEAN UNION: DIRECTIVE LOGICAL FRAMEWORK

NEW EED

Indicative national energy targets

General measures promoting EE

Monitoring and reporting

Sectoral measures

HOUSEHOLDS INDUSTRY ENERGY SUPPLY

SERVICES PUBLIC SECTOR

LARGE COMPANIES

OBLIGATION

(economic and technical relevance criteria)

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EE IN THE EUROPEAN UNION: THINK GLOBALLY BUT ACT LOCALLY


Covenant of Mayors ELENA Programme

YEAR 2008 2007

BARRIER ADDRESSED CAPACITY, VISIBILITY CAPACITY, ACCESS TO

CAPITAL

TYPE OF TOOL EMPLOYED

NETWORKING, INFORMATION,

STANDARDISATION FINANCE

AREA COVERED ALL EU + ENPI COUNTRIES + OTHER

ALL EU + Norway, Iceland, Lichtenstein, Croatia and FYR Macedonia + OTHER

PROMOTER EU COMMISSION EU COMMISSION and FINANCIAL INSTITUTIONS

STAKEHOLDERS EU MS’ CITIES AND REGIONS, CITIZENS

EU MS’ PAs, ESCOs, LOCAL BANKS

NATURE POLICY TECHNICAL ASSISTANCE FACILITY

BASIC DESCRIPTION

FORMAL COMMITMENT TO REDUCE CO2 EMISSIONS BY MORE THAN 20% BY

2020, THROUGH INTEGRATED ENERGY APPROACH (SEAP)

FINANCIAL SUPPORT FOR TECHNICAL ASSISTANCE

COSTS, TO STRUCTURE AND IMPLEMENT EE PROJECTS AND ATTRACT INVESTORS

Marina Turcati – October 1, 2015 Source: Covenant of Mayors, 2015

COVENANT ACTORS TOTAL

SIGNATORIES 6.477

INHABITANTS 208.669.792

COORDINATORS 172

SUPPORTERS 100

ASSOCIATED PARTNERS 25

LOCAL/REGIONAL ENERGY AGENCIES 48

ACADEMIA PARTNERS 43


Knowledge sharing

Technical assistance

Technical assistance

Knowledge sharing

ELENA Europe ELENA-East

50 mln grants and 2,8 bln investments

2 projects fully

completed (NL and ES)

leverage factor 60

11 countries

> 500 towns

ELENA (through EIB) EIB (co-investment with loc. banks intermediaries)

Beneficiaries Public authorities

Municipal, local and regional authorities as well as public and private entities acting on behalf of those authorities

Countries EU-28, NO, IS, LICH. and MK EU

Focus areas EE buildings and street lighting, RE in buildings, district heating renovation, EE and RE in urban transport

Investments in EE and RE projects

Invest. size > 30 mln euro

Co-funding Up to 90% eligible technical support costs (to prepare, implement and finance the investment programme)

Up to 75% of total investment

Duration 3 years Variable and related to the project

Leverage factor 1 : 20

7 bln euro over 2008 - 2013

BUILDINGS INDUSTRY

ENERGY SECTOR OTHER

Source: EIB, 2014


EE IN THE EUROPEAN UNION: COVENANT OF MAYORS SUBSCRIPTION AND IMPLEMENTATION

Subscription of COVENANT OF MAYORS

1.

2.

Signing and creation of an adequate administrative

structure

Baseline Emission Inventory and

development of a Sustainable Energy

Action Plan

SEAP implementation – hard (technical activity)

and soft measures (stakeholders involvement)

Preparation of bankable projects and investments (hiring of experts and

capacity building)

Progress monitoring and regular submission of

implementation reports 3. 17


EE IN THE EUROPEAN UNION: RESOURCES EMPLOYED IN COM IMPLEMENTATION

Subscription of

COVENANT OF MAYORS

1.

2.

INTERNAL RESOURCES (HR AND CAPITAL)

EUROPEAN FUNDING PROGRAMMES (URBACT III, HORIZON 2020, TERRITORIAL

COOPERATION)

EUROPEAN STRUCTURAL AND INVESTMENT FUNDS (ERDF,

COHESION FUND, ESF, EAFRD, EMFF) EUROPEAN FUNDING

PROGRAMMES (LIFE, CLLD, CIVITAS Activity Fund, TERRITORIAL COOP.,

HORIZON 2020)

PROJECT DEVELOPMENT

ASSISTANCE (ELENA EIB, ELENA CEB, ELENA EBRD, ELENA

KfW, HORIZON 2020 CALL EE20)

ALTERNATIVE FINANCING SCHEMES (ON BILL FINANCING, TPI – EPC, SOFT LOANS AND GUARANTEES, REVOLVING LOAN FUNDS,

CROWD-FUNDING, GREEN MUNICIPAL BONDS) 1-2-3. 18

EE SERVICES PROCUREMENT (COM AND ELENA PROGRAMME IMPLEMENTATION) IN ITALY

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WHY IS ITALY RELEVANT FOR A PUBLIC PROCUREMENT CASE STUDY RELATED TO COM AND ELENA FACILITY?

n. COUNTRY SIGNATORIES POPULATION COVERED SIGNATORIES WITH SEAP

SIGNATORIES WITH MONITORING

REPORTS

1 ITALY 3.568 38.807.975 (66%) 2.976 (83%) 305 (9%)

2 SPAIN 1.436 26.449.883 (60%) 1.184 (82%) 52(4%)

3 BELGIUM 247 6.642.597 (62%) 112 (45%) 32(13%)

4 PORTUGAL 123 5.742.330 (55%) 111 (90%) 34 (28%)

5 FRANCE 105 15.228.239 (25%) 96 (91%) 5 (5%)

6 GREECE 106 5.042.893 (47%) 78 (74%) 4 (4%)

7 GERMANY 65 17.403.825 (21%) 65 (100%) 12(18%)

8 UKRAINE 94 10.057.803 (22%) 43 (46%) 1(1%)

9 ROMANIA 74 4.455.855 (21%) 60 (81%) 3 (4%)

10 CROATIA 60 1.937.452 (46%) 59 (98%) 5 (8%)

11 HUNGARY 54 3.058.103 (31%) 40 (74%) 0 (0%)

12 SWEDEN 54 4.256.672 (49%) 52 (96%) 15 (28%)

n. COUNTRY TOTAL PROJECTS FINANCED PERIOD BEST / WORST YEAR

1 ITALY 7 2010 – 2015 2011, 2015 / 2012 2 SPAIN 6 2010 - 2014 2010, 2013/ 2012-2015

UNITED KINGDOM 6 2011 – 2015 2011, 2012 / 2010-2013

DENMARK 6 2012 - 2014 2014/ 2010, 2011, 2015

3 THE NETHERLANDS 3 2010 - 2012 2010, 2011, 2012 / others

4 FRANCE 2 2010 – 2014 2010, 2014 / others

PORTUGAL 2 2011 - 2013 2011, 2013 / others

5 GERMANY 1 2014 2014/ others

SWEDEN 1 2011 2011 / others

BELGIUM 1 2013 2013 / others

SLOVENIA 1 2013 2013 / others

GREECE 1 2011 2011/ others


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EE IN THE EUROPEAN UNION: ELENA IMPLEMENTATION IN ITALY

MILAN

MODENA

CHIETI

PADUA

SAVONA

BERGAMO

VERONA and others

Source: EIB, 2015 Marina Turcati – October 1, 2015

City PA EE RE YEAR

Milan Province Public buildings 2010

Modena Province and Local energy agency

Public buildings, lighting

PV plants on public roofs

2011

Chieti Province Public buildings, lighting 2011

Padua Province and banking foundation

Public buildings, lighting, district heating

2013

Savona Province Public build., lighting, d. water supply systems

PV, biomass 2014

CEV Verona Local municipalities’ consortium (10%)

Public lighting 2015

Bergamo Province Public build., lighting and district heating

PV, biomass 2015


COM AND ELENA IMPLEMENTATION IN ITALY: ACTORS INVOLVED, MAIN PASSAGES AND SEQUENCE

• provinces’ participation as “supporting structures” for SEAP preparation by municipalities • municipalities’ subscription of the covenant

• submission of an energy efficiency and RE investment plan to the EIB, in order to obtain a soft (intermediate) loan for ESCOs being awarded an EPC contract by the Italian municipalities/provinces (the loan is granted through the local banking system)

• based on EIB financing agreement, access to ELENA technical assistance grant, funded through the European Commission’s Intelligent Energy-Europe programme and managed by EIB, in order to cover project preparation costs

a.

b.

c.

EE SERVICES PROCUREMENT IN ITALY WITHIN COM AND ELENA FACILITY IMPLEMENTATION FRAMEWORK

SELECTED ESCOs

ENERGY SUPPLIERS

EPC with performance guarantee

MUNICIPALITIES FEE

SAVINGS

EIB FUNDS

Selecting financial intermediaries

FRAMEWORK AGREEMENT BETWEEN PROVINCE AND DG-TREN “SUPPORTING STRUCTURE

Public buildings and lighting energy audits

SUBMISSION OF REQUEST FOR FUNDING

ENERGY AUDIT UPDATING PROCESS (BASELINE)

CONTRACT FORMATS AND ToR

TENDERS FOR THE ENERGY REQUALIFICATION OF BUILDINGS

ELENA PROGRAMME-FUNDED ACTIVITIES

Source: ENEA and MISE, 2013

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POOL ENGINEERING ADVISED AND SUPPORTED LOCAL ITALIAN PA AUTHORITIES IN PREPARING and MANAGING TENDERS FOR THE ENERGY REQUALIFICATION OF BUILDINGS AND PUBLIC LIGHTING

CONSULTANT’S PERSPECTIVE ON EE SERVICES PROCUREMENT

•technical office member •administrative office members (PP)

•accounting and auditing •external relations office member

PA ELENA project implementation unit procuring EE services

•Technical assistance •legal and procedural •economic

Technical consultants

1. Coordination of municipalities.

2. Supervision of and

cooperation with external consultants.

1. Management of

tender preparation, with regard to:

- audit evaluation and baseline revision (tender doc);

- financial analysis (i.e. fee and marginality);

- contract drafting and controversies.

2. Working method, know-how and best practices transfer and sharing.

won technical assistance tenders in:

24 2011, Milan – open tender for legal, economic and technical assistance (temporary consortium) 2013, Chieti – open tender for legal, economic and technical assistance (temporary consortium) 2014, Padua – indirect source of information (former consortium’s partner working as Province’s advisor)

PROCURING EE SERVICES: MILAN, CHIETI AND PADUA EXPERIENCES

MILAN CHIETI PADUA CoM SIGNING * 2010 2010 2012

ELENA project implementation period 2010 - 2014 2011 - 2015 2014 - 2016

Project ENERGY EFFICIENT MILAN CHIETI TOWARDS 2020 3L LESS ENERGY, LESS COST, LESS IMPACT

EE services procurement: investments expected 90 mln euro (EIB 65) 80 mln euro (EIB 60) 83 mln euro (EIB 62)

Investments made 25.000.000 9.700.000 (so far) n.a.

Stage Tendered Partially tendered To be tendered (ongoing auditing stage)

Internal organization project implementing unit project implementing unit project implementing unit

Expenditure 1.944.900 1.809.000 1.958.870

Preliminary assessment (audit)

• CARIPLO FOUNDATION (PREEXISTING); • 2 ROUNDS FOR MILAN PROVINCE AND LOCAL MUNICIPALITIES THROUGH DIRECT AWARD 331 BUILDINGS IN 47 MUNICIPALITIES

• LOCAL MUNICIPALITIES’ SEAP; • 1 ROUND FOR 136 BUILDINGS IN 21 LOCAL MUNICIPALITIES • 2 ROUNDS FOR PUBLIC LIGHTING, EACH FOR APPROX. 20.000 LIGHT POLES • POTENTIAL EXTENSION TO LANCIANO MUNICIPALITY AND SOME OF AQUILA PROVINCE MUNICIPALITIES

• LOCAL MUNICIPALITIES’ SEAP; • 1 ROUND FOR 57 BUILDINGS OWNED BY PADUA PROVINCE • 1 ROUND FOR 103 BUILDINGS OF MUNICIPALITIES IN PADUA PROVINCE

Project content

energy renovation of PA buildings (heating and other meas.) in small municipalities (293) and schools in Milan municipality (38)

energy renovation of PA buildings (heating and other meas.) in small municipalities in Chieti province and public lighting EE implementation

energy renovation of public buildings, public lighting EE implementation and EE district heating development


MILAN CHIETI PADUA Local banking intermediary Mediocredito Mediocredito n.a.

EE services tendering process

2012 1° tender for 100 buildings and 16 municipalities in energy renovation (single lot); (restricted procedure) 2 tenderers (an Italian-based multinational construction-turned-ESCO company and a temporary consortium involving 4 ESCOs); performance: • 35% guaranteed savings (1,3 mln/year); • 15,7 mln euro invest.

2014 1° tender for 130 buildings and 21 municipalities in energy renovation (single lot); (restricted procedure) NO tenderers possible reasons are: • geography; • fragmentation; • relatively low consumption.

Re-edited 2° tender with minor changes (open procedure) NO tenderers

Expected size of the project is: 646 building in 41 municipalities and approx. 100.000 light poles in 38 municipalities. However coordination issues have emerged; i.e. Rovigo municipality already tendered autonomously part of the energy building renovation services (110 buildings), and several municipalities might abandon the project in the coming weeks

possible reasons are: • organizational and procedural red tape; • provinces’ competences reform.

Critical areas • FINANCE (2011-2013) • PA • MARKET • PA

Follow up Complaint (2 years) _ _


MILAN CHIETI PADUA


2012-2013 2° tender for 230 buildings and 31 municipalities in energy renovation (two lots); (restricted procedure) NO tenderers possible reasons are: • lower energy consumption; • greater fragmentation. Re-edited 2° tender with reduced and simplified maintenance activities (some of which have been taken out); (restricted procedure) NO tenderers

2015 2° tender for public lighting energy efficiency implementation (approx. 20.000 light poles) in 47 municipalities; (restricted procedure) 1 tenderer (locally based ESCOs’ temporary consortium); performance: • 50% guaranteed savings; • 9,7 mln euro investment

_

Critical areas • PA • MARKET _ _

Follow up Re-edition and reduction _ _


MILAN CHIETI PADUA

Local banking intermediary Mediocredito 2010 2012


2014 3° tender for 38 schools in Milan municipality in energy renovation (single lot), benefiting from a 500.000 euro grant coming from EXPO for CO2 emissions reduction; (restricted procedure) 1 tenderer (medium-sized ESCO) performance: • 35% guaranteed savings; • 5,4 mln euro investment

2015 3° tender for lighting energy efficiency implementation (approx. 20.000 light poles divided into 2 10.000 lots); (restricted procedure) requirements: • 25% guaranteed savings; • 2.5 mln euro investment

_

Critical areas _ _ _

Follow up _ _ _

BARRIERS ENCOUNTERED AND ROOM FOR IMPROVEMENT

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http://www.google.it/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCIrUpPbY7scCFUrpFAod_mwE5g&url=http://design-site.net/paradoxgallery/success-next-exit&psig=AFQjCNGZxMceJFU5S2a5o8tPlwTJN1-txw&ust=1442050993338063

EE PROCUREMENT IN THE EUROPEAN UNION: BARRIERS MET IN THE PRACTICE OF EE SERVICES PROCUREMENT AT LOCAL LEVEL (PREMISE)

LIMITED INVESTMENTS

LIMITED INVESTMENTS

…WITH MORE PROJECTS MORE KNOWLEDGE

EIB EU Commission Others

Institutional framework and organization:

lack of PA capacity, lack of qualified

consultants, low level of communication

Market failures: energy costs relatively low compared to other

costs, information failure, principal-agent

Consumers and end-users: lack of awareness, lack of trust, complexity

and hassle; end-user diversity

Financial issues: high level of initial investment, biased financial

perceptions, lack of knowledge, resources and capacity,

transaction costs (average size of investments), dependency on

grants

Institutions, stakeholders, capacity: institutional and legal frameworks, split incentives, knowledge and capacity

Financial and economic context: austerity and

reluctance in committing to large investments, limited

knowledge of financial tools and opportunities

Buildings and measures: stifling innovation, complex administration, deep renovation, risk management

Regulatory framework: insufficient or lax reg., wrong incentives, unclear labelling, frequent

changes, lack of enforcement/supervision

Finance: access to capital, risk exposure, payback periods, size,

standardized measurement

OUTLINE OF THE SITUATION, BUT…

BARR

IERS

CLA

SSIF

ICA

TION

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EE PROCUREMENT IN THE EUROPEAN UNION: BARRIERS AND ROOM FOR IMPROVEMENT, BASED ON THE ITALIAN EXPERIENCE (CASE STUDY)

INSTITUTIONS (players)

Coordination and knowledge

transfer

Choice of stakeholders

Alternative, emerging

stakeholders (L. 89/2014)

INSTITUTIONS (organization) Scale

Time, accountability, complexity, and

cost issues

Impact of the

legal framework

Different assignment of tasks, greater

role of consultants,

legal framework pre. evaluation

FINANCE Leveraging and

knowledge transfer

Bank rating and economic

conjuncture Timing, conditions

More effective communication,

direct involvement

MARKET Increased and qualified demand

Bundling issues vs. firms coordination

Ex-post analysis (business

sustainability check)

STRENGHTS BARRIERS ENCOUNTERED POSSIBLE ADJUSTMENTS


INSTITUTIONS (PLAYERS) CHOICE OF STAKEHOLDERS (Milan, Chieti and Padua)

INSTITUTIONS (ORGANIZATION) TIME, ACCOUNTABILITY,

COMPLEXITY, COST ISSUES (Milan, Chieti and Padua)



32


INSTITUTIONS (ORGANIZATION) IMPACT OF THE LEGAL FRAMEWORK


33


INSTITUTIONS (ORGANIZATION) IMPACT OF THE LEGAL FRAMEWORK (Chieti and Padua)

FINANCE BANK RATING, TIMING AND

CONDITIONS (Milan, Chieti and Padua)

34


MARKET TENDERERS’ PROFILE

• 66% tenders for Milan and about 50% for Chieti (ongoing 3rd tender) have received offers • 2 out of 3 tenders have been awarded to temporary consortiums • tenderers’ identikit:

NATION COMPANY TURNOVER LOCATION

Italian Multiutility (construction company) 400 – 450 mln euro (2013) CENTER ITALY

Emilia-Romagna (operating abroad)

Italo – British ESCO and CFC (energy trader) 100 – 150 mln euro (2013) NORTH ITALY Lombardy

Italian ESCO (equipment manufacturer) 50 – 100 mln euro (2013) NORTH ITALY Lombardy

Italian Equipment manufacturer controlled by

an Italian ESCO (energy trader) < 50 mln euro

(2013) NORTH ITALY Lombardy

Italian ESCO (engineering company) controlled

by an Italian financial holding < 50 mln euro (2013) CENTER ITALY Lazio

Italian ESCO (construction company) < 50 mln euro (2013) SOUTH ITALY Abruzzo

Italian ESCO (equipment manufacturer)

controlled by an Italian construction, real estate and TLC group

100 – 150 mln euro (2013) NORTH ITALY Veneto

Italian ESCO 350 – 400 mln euro (2013) NORTH ITALY

Trentino Alto Adige (operating abroad)

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INSTITUTIONS •Different stakeholders

(i.e. local PA consortium and central buying units according to the L. 89/2014) to be addressed?

• Better division of labour and continuity (increased role for consultants) ?

FINANCE •Well-timed involvement

of financial operators and promotion of partnerships ?

MARKET •Can some PPPs

operate at loss?

• Economic operators’ coordination (collusion) vs. bundling issues: need for an ex-post analysis

POSSIBLE ADJUSTMENTS EARLY INVOLVEMENT AND CONSULTATION OF BENEFICIARIES AND INTERMEDIARIES THROUGHOUT THE ENTIRE PROGRAMME CYCLE. CAREFUL CHOICE OF STAKEHOLDERS. GREATER ATTENTION TO THE LOCAL/NATIONAL CONTEXT.

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MAIN SOURCES OF INFORMATION (ENGLISH AND ITALIAN):


CoM website: http://www.covenantofmayors.eu/Funding-Instruments,87.html EIB website: http://www.eib.org/products/advising/elena/index.htm Interviews with Pool Engineering S.r.l. and SINLOC S.p.A. engineering and project finance staff Singh, J., Limaye, D. R., Henderson, B., Shi X., Public Procurement of Energy Efficiency Services , The World Bank, 2010 Weaver, R. K., “Target Compliance: The Final Frontier of Policy Implementation”, Issues in Governance Studies, n. 27, 09/2009, Brookings Di Santo, D., Tommasetti, G., Venturini, V., et al., “Energy efficiency in the building sector: skills, business models and public private partnerships”, ENEL Foundation Working Paper, 13/2014 Bullier, A., Milin, C., “Alternative financing schemes for energy efficiency in buildings, ECEEE Summer Study proceedings, 2013 Rezessy, S., Bertoldi, P., “Financing energy efficiency: forging the link between financing and project implementation”, JRC of the European Commission, ISPRA, 2010 Zabot, S., Di Santo, D., Guida ai contratti di prestazione energetica (EPC) negli edifici pubblici, ENEA – Agenzia nazionale per l’energia Report RdS/2013/150 Di Santo, D., Le ESCO, l’EPC e l’FTT, FIRE – Federazione Italiana per l’uso razionale dell’energia, 2005 Guertler, P., Royston, S., Wade, J., “Financing energy efficiency in buildings: an international review of best practice and innovation”, ACE report to ADEME, June 2013 EU Commission, “Financial support for energy efficiency buildings”, Consultation Paper, 2012 EU Commission DG Energy, Technical Guidance. Financing the energy renovation of buildings with Cohesion Policy funding, Final Report, 2014 Hinrichs-Rahlwes, R., Sustainable Energy Policies for Europe: Towards 100% Renewable Energy (Sustainable Energy Developments), CRC Press, 2013 VV.AA., Energy Efficiency Finance, The World Bank / IFC / MIGA, 2010

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http://www.covenantofmayors.eu/Funding-Instruments,87.html












http://www.eib.org/products/advising/elena/index.htm









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elena assistance case study - pool engineering s.r.l

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