esco market development: a role for facilitators to play
TRANSCRIPT
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 1
Task 16 ”Competitive Energy Services” www.ieadsm.org
Task 16 @ IEA DSM University
ESCo Market Development: A Role for ‘Facilitators’ to Play
Jan W. Bleyl
Energetic Solutions & IEA DSM Task 16 Operating Agent
Energetic Solutions
Jan W. Bleyl
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 2
Outline Research presentation
1. Motivation 2. Research questions and methodology 3. A clients perspective on procuring energy services 4. Project ‘Facilitators‘ to enable clients
(Market Facilitators not covered in this presentation)
5. Project facilitation cost and funding 6. (Organizational and psychological change management
required => informal session with IEA DSM Task 24) 7. Conclusions and Outlook
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 3
Outline
1. Market participant terminology, motivation and questions to be answered
2. A clients perspective on procuring energy services 3. ‘Project Facilitators‘ to enable clients
(‘Market Facilitators’ not covered in this presentation)
4. Empirical project facilitation cost 5. Organizational and psychological change processes
needed beyond economic rationale 6. Conclusions and discussion
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 4
Client
Faci
litat
or
Structuringof projects
Terminology: ESCo Market Participants
Efficiency & renewable
markets
ESCo (Supply side)
Client (Demand side)
CCI mem-bers
CCI mem-bers
Client
Market
Source: [Bleyl 2011]
‚Facilitator‘ (Intermediary)
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 5
Motivation
1. Energy-Contracting is a proven ‘delivery mechanism’, but: Market volume behind expectations + energy policy goals
2. Empirical evidence: ESCo market development often driven by client side, e.g. by public institutions putting out calls for proposals for ESCos to bid for => buyer-led approach
These clients were enabled by ‘Facilitators’, who served as intermediaries between ESCOs and their (potential) clients
3. However almost no mention of ‘Facilitators’ in literature or outside Europe
4. Policy and consultancy puts too little focus on client perspective on ESP markets
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 6
Questions to be answered
? What are challenges and barriers on the client side of the energy service market, when preparing projects and setting out to procure comprehensive energy service packages?
? Which know-how and processes are needed on the client side?
? How can potential clients be enabled to become knowledgeable partners in EE + ESP markets?
? How high are typical ‘Facilitator’ cost? ? Why do we need organizational and individual change
processes?
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 7
Outline
1. Market participant terminology, motivation and questions to be answered
2. A clients perspective on procuring energy services 3. ‘Project Facilitators‘ to enable clients
(‘Market Facilitators’ not covered in this presentation)
4. Empirical project facilitation cost 5. Organizational and psychological change processes
needed beyond economic rationale 6. Conclusions and discussion
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 8
ESP (+EE) projects: Clients face non-core-business questions
Source: after [IEA DSM Task XVI 2010]
Client
How to structure and specify my energy service needs => ToR
Multi-year financing across Capex and Opex budgets?
Contractual design of long- term energy service agreements
Non-standard procurement procedures
?
? ? ?
How to enable changes in my organization and its individuals ?
How to calculate life cycle cost evaluations ? ESCos
Finance, subsidy programs
Consultants, engineers,
architects …
Manufacturers
Technologies
…
EE Suppliers
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 9
Clients perspective on ESP project workflow
1. Project development, ‘make or buy’ ... (pre-procurement)
2a. Tender announcement + ESCo qualification
2b. Tender documents
2c. ESCo offer
2d. Award negotiations, tender evaluation
2e. Detailed analyses by best bidder (optional)
2f. Awarding of contract
3. Detailed planning, construction, commissioning
4b. Controlling, M&V + quality assurance, reporting, invoicing
Blu
e =
Clie
nt (+
Fac
ilita
tor)
Red
= E
SCo
Sour
ce: a
fter [
IEA
DSM
Tas
k X
VI 2
010]
4a. Service delivery
P r o
c u r
e m
e n t
Cons
truct
Servi
ce
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 10
Client perspective summary
1. Some of the tasks to procure comprehensive energy service packages may constitute significant obstacles for a potential client, because they require know-how and experience, which is often not readily available
2. Project implementation commonly necessitates organizational and personal changes from established routines, procedures and personal relationships, which is an often overlooked but persistent obstacle
=> Support needed!
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 11
Outline
1. Market participant terminology, motivation and questions to be answered
2. A clients perspective on procuring energy services 3. ‘Project Facilitators‘ to enable clients
(‘Market Facilitators’ not covered in this presentation)
4. Empirical project facilitation cost 5. Organizational and psychological change processes
needed beyond economic rationale 6. Conclusions and discussion
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 12
‘Facilitators’ as Enablers and Link between Clients and ESCos
Project structuring, business model
Proposal evaluation, contract award
Financial structuring, subsidies
Legal structuring, ESCo contract
Tender documents, procurement
Project goals, feasibility, ‘make or buy‘?
EE Suppliers Client
[Bleyl et al. 2013]
(Pot.) Client
ESCos
Finance, subsidy programs
Consultants, engineers,
architects …
Manufacturers
Technologies
…
‘Facilitator‘ as Intermediary
M & V + quality assurance, mediation
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 13
Outline
1. Market participant terminology, motivation and questions to be answered
2. A clients perspective on procuring energy services 3. ‘Project Facilitators‘ to enable clients
(‘Market Facilitators’ not covered in this presentation)
4. Empirical project facilitation cost 5. Organizational and psychological change processes
needed beyond economic rationale 6. Conclusions and discussion
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 14
0%
2%
4%
6%
8%
10%
12%
14%
0 1 2 3 4
Proj
ect F
acilit
atio
n co
st
[% o
f inve
stmen
t]
Energy efficiency (+ renewable) investment [Million Euros]
Austria BelgiumGermanyNetherlandsSwedenAustria trendGermany trend
[Bleyl et.al. 2012][Bleyl et.al. 2012][Bleyl et.al. 2012][Bleyl et.al. 2012][Bleyl et.al. 2012][Bleyl et.al. 2012][Bleyl et.al. 2012][Bleyl et.al. 2013]
Project facilitation cost Empirical data from 32 European projects
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 15
Outline
1. Market participant terminology, motivation and questions to be answered
2. A clients perspective on procuring energy services 3. ‘Project Facilitators‘ to enable clients
(‘Market Facilitators’ not covered in this presentation)
4. Empirical project facilitation cost 5. Organizational and psychological change processes
needed beyond economic rationale 6. Conclusions and discussion
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 16
‚Economic rationale‘ or ‚Environmental awareness‘ is not enough to drive change
“…we want to raise awareness among Facilitators and other stakeholders, that the identified organizational needs for change require approaches beyond economic rationale or environmental awareness. Instead psychological and organizational change processes need to be put on the agenda, even though this may be new territory for most energy efficiency professionals.” [Bleyl et al. 2013]
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 17
Need for change in client‘s organizations
ESP projects require, e.g.: ð Non-standard procurement procedures (not individual components)
ð Life cycle cost evaluation and
ð Multi-year financing across Capex and Opex budgets
ð New types of life cycle contracts (performance based, planning + construction + operation&maintenance, M&V …)
ESP projects require interdisciplinary cooperation between ð different departments (technical, legal, financial …) and
ð technical divisions/trades (electrical, HVAC, construction …).
⇒ How can this know how and cooperation be enabled/supported beyond economic and technical rationale?
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 18
Need for changes in individuals
Resistance to changes because of ð anticipated loss of power or status, ð possible extra work or ð fear of individual failure to cope with innovations … ð …
=> How can these individual change processes be enabled, supported, imposed beyond technical and economical rational?
=> What are the meaningful sticks, carrots and tambourines?
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 19
New, practical guidance paper …
… currently under preparation… “Facilitators as intermediaries between ESPs and clients. Practical guidance for change management”, Questions to be answered, e.g.: ? What are Tools to be used by Facilitators for accompanying
change processes? ? How to strengthen project driving forces? ? Who to partner with?
Authored by Dr. Ruth Mourik & Dr. Sea Rotmann, IEA DSM Task 24 ‘Behaviour Change in DSM’ in cooperation with Task 16.
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 20
Conclusions: It’s the Client who must decide!
ü ESCo is just a ‘delivery mechanism’, which clients need to decide for (or not).
ü Clients need to decide what they want? And what kind of (external) support they need to implement DSM projects?
ð In-house implementation or Outsourcing (= make or buy)?
ð In- or excluding financing, maintenance …?
ð … state of the art ESCo packages are modular (packaged according to a clients needs)
⇒ Much more attention on the client/buyer side of the market needed => mass roll outs possible, e.g. in Berlin, Austria …
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 21
Conclusions: A Role for ‘Facilitators’ …
1. Facilitators are enablers for ESCo Market development 2. They serve as intermediaries between clients and ESPs
‘(corporate) cultures’, interests and expectations 3. Buyer-led approach enables competition between ESCos,
other EE suppliers but also financiers
4. Facilitator approach provides a level and knowledgeable playing field for a fair competition
5. F. cost: 1 - 14 % of EE investments. => obstacles for clients. Often outweighed by maximized savings, lower prices and better quality
6. Clients need organizational + individual change processes => new territory for most energy efficiency professionals
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 22
Discussion and Outlook
1. Is the Facilitator approach applicable in your context? 2. How to multiply and fund the Facilitator approach?
3. How to establish and standardize procedures in public and private sector administrations to move from individual projects, led by highly motivated individuals, to mass roll-outs of comprehensive building refurbishment portfolios?
4. What are suitable ‘sticks, carrots and tambourines’ but also practical approaches to enable change processes on the client side of the market?
5. Compare the buyer-led, facilitation approach to the more ESCo-led project development practice, which appears to be prevailing in Anglo-Saxon countries
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 23
Literature reference and webinar: Task 16 paper on the Role of ‚Facilitators‘
Bleyl, Jan W. et al. ESCo Market Development: A Role for Facilitators to play in ECEEE Summer Studies, paper ID 3-‐472-‐13, Belambra Presqu'île de Giens, France June 2013
by Adilipour; Bareit; Bleyl; Bourgois; Coolen; Kempen; Kim, Kil-‐Hwan; Jang, Hye-‐Bin; Cho, Sung-‐Hwan; Vanstraelen
Webinar:www.leonardo-‐energy.org/webinar/esco-‐market-‐development-‐role-‐facilitators-‐play
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 24
Task 16 ”Competitive Energy Services” www.ieadsm.org
Thank you!
Questions and remarks welcome!
What can we do together?
IEA DSM Task 16
c/o Jan W. Bleyl – Energetic Solutions Phone: +43 650 7992820
Energetic Solutions
Jan W. Bleyl
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 25
Task 16 ”Competitive Energy Services” www.ieadsm.org
Reserve slides
Energetic Solutions
Jan W. Bleyl
© Jan W. Bleyl – Energetic Solutions ⏐ For requests: [email protected] ⏐ Task 16_Facilitator-Webinar_04 February 2014⏐ Slide 26
Methodologies
1. Analyses of a standard energy services project life cycle to identify know-how and processes needed to structure and outsource comprehensive energy service projects
2. Procurement model for outsourcing: ‘Negotiated procedure’ 3. Analyses of ‘Facilitator’ services based on interviews with
existing ESP clients, Facilitators and ESCos in six European countries and Korea
4. Economic analyses of project facilitation cost relies on empirical data from 32 “real world” ESCo projects
5. Analyses of change processes based on Kurt Lewin’s Model of Change: First approach to apply it to change processes in client organizations and its individuals to outsource demand side energy projects