escos for industry in italy

ESCO business in the industrial sector in Italy

Dario Di Santo, FIRE

Brussels, 22 October 2015

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www.fire-italia.org

The Italian Federation for the Rational use of Energy is a no-profit association founded in 1987 that promotes energy efficiency, supporting energy manager, ESCOs and other companies dealing with energy.

Besides the activities directed to its nearly 450 members, FIRE operates under an implementing agreement with the Ministry of Economic Development to manage the Italian energy manager network since 1992.

In order to promote energy efficiency FIRE cooperates and deals with public authorities, energy technology and service companies, consultants, medium and large consumers, universities and associations to promote best practices and improve the legislation.

FIRE manages SECEM - an accredited body - to certify the Energy management experts according to the standard UNI CEI 11339.

FIRE: the association for energy efficiency

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445 members in 2014, 228 persons and 217 organizations.


Some members of FIRE:

A2A calore e servizi S.r.l. - ABB S.p.a. - Acea S.p.a. - Albapower S.p.a. - Anigas - Atlas Copco S.p.a. - Avvenia S.r.l. - AXPO S.p.a. - Banca d’Italia - Banca Popolare di Sondrio - Bit Energia S.r.l. - Bosh Energy and Building Solution Italy S.r.l. - Bticino S.p.a. - Burgo Group S.p.a. - Cabot Italiana S.p.a. - Carraro S.p.a. - Centria S.p.a. - Certiquality S.r.l. - Cofely Italia S.p.a. - Comau S.p.a. - Comune di Aosta - CONI Servizi S.p.a. - CONSIP S.p.a. - Consul System S.p.a. - CPL Concordia Soc. Coop - Comitato Termotecnico Italiano - DNV S.r.l. - Egidio Galbani S.p.a. - ENEL Distribuzione S.p.a. - ENEL Energia S.p.a. - ENEA - ENI S.p.a. - Fenice S.p.a. - Ferriere Nord S.p.a. - Fiat Group Automobiles - Fiera Milano S.p.a. - FINCO - FIPER - GSE S.p.a. - Guerrato S.p.a. - Heinz Italia S.p.a. - Hera S.p.a. - IBM Italia S.p.a. - Intesa Sanpaolo S.p.a. - Iren Energia e Gas S.p.a. - Isab s.r.l. - Italgas S.p.a. - Johnson Controls Systems and Services Italy S.r.l. - Lidl Italia s.r.l. - Manutencoop Facility Management S.p.a. - Mediamarket S.p.a. - M&G Polimeri Italia - Omron Electronics S.p.a. - Pasta Zara S.p.a. - Pirelli Industrie Pneumatici S.p.a. - Politecnico di Torino - Provincia di Cremona - Publiacqua S.p.a. - Raffineria di Milazzo S.c.p.a. - RAI S.p.a. - Rete Ferroviaria Italiana S.p.a. - Rockwood Italia S.p.a. - Roma TPL S.c.a.r.l. - Roquette Italia S.p.a. - RSE S.p.a. - Sandoz Industrial Products S.p.a. - Schneider Electric S.p.a. - Siena Ambiente S.p.a. - Siram S.p.a. - STMicroelectronics S.p.a. - TIS Innovation Park - Trenitalia S.p.a. - Turboden S.p.a. - Università Campus Bio-Medico di Roma - Università Cattolica Sacro Cuore - Università degli studi di Genova - Varem S.p.A. - Wind Telecomunicazioni S.p.a. - Yousave S.p.a.

Our membership include organization and professionals both from the supply and the demand side of energy efficiency services and solutions.

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Besides being involved in many European projects, listed next, FIRE implement surveys and market studies on energy related topics, information and dissemination campaigns, and advanced training.

Some of FIRE clients over the years: Ministry of Environment, ENEA, GSE, RSE, large organizations (such as Centria, ENEL, Ferrovie dello Stato, FIAT, Finmeccanica, Galbani, H3G, Telecom Italia, Unioncamere), universities, associations, energy agencies and exhibition organizers.

www.fire-italia.org

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www.secem.eu

SECEM

SECEM, European System for Certification in Energy Management, is a certification body created by the FIRE.

SECEM was the first body to offer third-party certification for Energy Management Experts (EMEs) according to UNI CEI 11339 and is accredited according to the ISO/IEC 17024 standard.

In Italy two standards were developed in order to promote the qualification of energy efficiency operators: UNI CEI 11339 for EMEs was issued in 2009, UNI CEI 11352 for ESCOs was published in 2010. A new standard for energy auditor is presently under preparation.

Both the mentioned standards are recognized from the national legislation within the energy audit obl igat ions for large companies introduced by the EED directive and the white certificate scheme.

ESCOs and other EE suppliers

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Energy efficiency project

Energy intensive industries

Non energy intensive industries

Service sector

Public administration

Residential sector

Energy suppliers

Companies involved in building renovation

Installers

ESCOs

Technologies producers

Large-scale distribution

Source: FIRE.

DEMAND

SUPP L Y

Cooperatives

All business models and sales chains need to be developed to effectively

expand the energy efficiency market.

ESCO: the European definition

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Technology providers Bank

End-user

ESCO

ESCO financing

Energy savings

Source: FIRE

End-user financing

Bill savingsFinancingService feeEnergy service

Characteristics of an ESCO: offer of energy services; guarantee of performance; third party financing.

ESCO (directive 2006/32/EC): a natural or legal person that delivers energy services and/or other energy efficiency improvement measures in a user's facility or premises, and accepts some degree of financial risk in so doing. The payment for the services delivered is based (either wholly or in part) on the achievement of energy efficiency improvements and on the meeting of the other agreed performance criteria.

ESCO: two definitions in Italy

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EPC+FTT+integrated

approach

Energy service

providers

≈125 certified UNI CEI 11352

≈4,500 accredited≈1,000 active

UNI CEI 11352

Starting from July 2016 ESCOs will have to

be certified to access WhC and thermal account.

Most of the certified ESCOs were recognized under the 2010 edition of the UNI CEI 11352 standard. From 2014 on at least one case study of EPC and TPF is a mandatory requirement.

UNI CEI 11352: certification of ESCOs

These are the contents of the UNI CEI 11352:2014 standard:

1. Scope 2. Normative references 3. Terms and definitions 4. General requirements 5. Checklist for the verification of the requirements

Appendix A: checklist for the verification of the skills.

Appendix B: minimum requirements of ESCOs’ energy service supply.

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4.1 General requirements

ESCO shall:

1. Offer energy efficiency services according to the EN 15900 standard.

2. Carry on the activities listed at point 4.2.

3. Possess the capacity reported by the Standard.

4. Provide contractual guarantees of energy efficiency improvements, with the assumption of the risks associated with the failure to meet agreed targets. Any part of the risks (technical and financial) not assumed by the ESCO must be contractually defined.

5. Link the remuneration of the activities and services provided to the improvement of energy efficiency and the achievement of the minimum performance established by contract.

6. Guarantee to the customer the availability of the data measured during the service.

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4.2 Activities to be offered by the ESCO

Mandatory activities: energy audits; verification of compliance of plants and works legislation; feasibility studies and techno-economic analysis; intervention planning and preparation of the technical specifications; installation, commissioning and testing; management and conduct of operations to ensure maximum performance; maintenance interventions; monitoring and verification of fuel consumption and performance; periodic reports to the client, inclusive of indirect aspects (e.g. water consumption); support for access to financing and incentives; user training and information for staff; energy certification of buildings (if consistent with the scope of business).

Optional activities: financing of the project; purchase of energy sources connected to the provided service; exploitation of renewable energy sources; optimization of supply contracts for energy carriers.

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4.3 Skills

Skills are needed to carry on the activities at point 4.2:

4.3.2 Organization

4.3.3 Energy audit

4.3.4 Design

4.3.5 Management

4.3.6 Economic and financial

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Final energy consumption in industry

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

Metallurgy

Mechanical

Chemical

Construc>onmaterials

Foodandtobacco

Paperandprin>ng

Glassandceramics

Tex>lesandclothing

Othermanufacturing

Petrolchemical

Nonmetalliferousminerals

Construc>onindustry

Miningandextrac>veindustry

ktoe

Industrialfinalenergyconsump5onTotalfinalconsump5on:30.2Mtoe

Source:FIREonMSEdata

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23,6%

13,3%

12,5%11,6%

9,0%

8,6%

7,8%

4,0%3,2%

2,9% 2,5%1% 0,4%

Industrialfinalenergyconsump4onTotalfinalconsump4on:30.2Mtoe

Metallurgy

Mechanical

Chemical

Construc?onmaterials

Foodandtobacco

Paperandprin?ng

Glassandceramics

Tex?lesandclothing

Othermanufacturing

Petrolchemical


Construc?onindustry

Miningandextrac?veindustry


Manufacturing enterprises: 425,000Energy intensive enterprises: ≈3,000

Electricity and thermal energy uses

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0,01,02,03,04,05,06,07,0Metallurgy

Miningandextrac9veindustry


Mechanical

Foodandtobacco

Tex9lesandclothing

Construc9onmaterialsGlassandceramics

Chemical

Petrolchemical

Paperandprin9ng

Othermanufacturing

Construc9onindustry

Heattoelectricityra,o(FIREonna,onalenergybalance2012data)


Electricity: 9.4 MtoeThermal energy: 18.8 MtoeSource: FIRE on MiSE data.

Energy efficiency role in industry

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Energy efficiency has had a big impact on energy consumption in industry, in particular from 2004 on.When the activities fall, industry reduces EE projects for lack of resources and concerns for the core business.

-12

-10

-8

-6

-4

-2

0

2

4

Mtep

2000-2012energyconsump3ondecomposi3onforItalianindustry

Varia-onconsump-on Ac-vity Structure Valueofproducts Energysavings Other

Source:FIREonOdyssee-Muredata.

74% of energy consumption reduction is due to energy efficiency, according to Odyssee-Mure data.

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

Mtep

Annualtrendofdifferentcontribu3onstofinalenergyconsump3on

Varia1onconsump1on Ac1vity Energysavings Other Structure Valueofproducts

Source:FIREonOdyssee-Muredata.

0.27-0.80 Mtoe of annual energy savings over 2010-2012 according to Odyssee-Mure VS 1.7-2.0 Mtoe

annual savings linked to white certificates for industrial projects

over 2013-2014.

Some data from surveys

Source: FIRE survey 2008.

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Most ESCOs are start-ups and small or micro enterprises (not considering eventual partners and linked enterprises).

Most ESCOs cover the industrial sector and the vast majority are owned by private capitals.


17Source: FIRE survey 2008.

Cogeneration and RES are the most supplied solutions. 84% of the ESCOs don’t offer an integrated service.

TPF is used by one third of the i n t e r v i e w e d enterprises.


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Type of group/autonomous enterpriseUNI CEI 11352 certification

Bank

Technology provider

Energy service provider

ESCOs dimension as revenues (2013)Business model (type of ESCO)

Source: CESEF 2015.


Source: ENEA 2015, CESEF 2015.

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Turnover, EBITDA, profits (2013)

Average registered capital

76,7%

23,2%

0,1%

ESCOs'revenuespersectorSource:FIREonENEA'sdata

Civilsector

Industry

Agricolture


Source: CESEF 2015.

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Capital/employee

Approved WhC projects

Even if this chart gives a limited picture (EE can be deployed outside WhC and high capital/employee is not necessarily a good thing), it shows the need of structured and capitalized ESCOs.

Energy efficiency incentives in Italy

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White certificates (WhC)

Tax deductions 50% e 65%

RES incentives (D.M. 6 luglio 2012)

Heat account

Other options (Elena, Jessica, EEEF, structural funds, local funds, etc.)

Source: FIRE.

CHP: high efficiency cogeneration DH: district heating

RES: renewable energy sources EEEF: European energy efficiency fund

Energy efficiency Thermal RES Electrical RESCHP-DH

All the national incentives allow ESCOs

to present projects. Their role is particularly

strong within WhC.

Energy efficiency incentives in Italy

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0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

0

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

7.000.000

8.000.000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Savingsrelatedtonewprojects(toe)

Totalsavings(toe

)

BreakdownofissuedWhCbysavingevalua?onmethodology

Deemedsavingsprojects Simplifiedmonitoringprojects MonitoringplanprojectsNewdeemedsavingsprojects Newsimplifiedmonitoringprojects Newmonitoringplanprojects

Source:FIREonGSEdata.Source:FIREonGSEdata.

Almost 80% of WhC comes from industrial savings. Around 80%

are assessed based on on-site measurements.

Almost 96% of the proposals in 2014 were

presented by ESCOs.

Examples of projects presented by ESCOs

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MULTISECTORAL PROJECTS

PRODUCTION OF NITROGEN ON-SITE

HEAT RECOVERY EXCHANGER FOR USE IN THE PROCESS

HEAT RECOVERY EXCHANGER FOR USE OUT OF PROCESS

HEAT RECOVERY WITH SAVING

COMPRESSOR CHILLER WITH MAGNETIC LEVITATION

REFRIGERATOR WITH MANAGEMENT SYSTEMS PLC

TRACTION BATTERY FOR ELECTRIC VEHICLES

MANAGEMENT OF CENTRAL AIR WITH DEDICATED SOFTWARE

TREATMENT WITH SOLVENTS COMBUSTOR recuperative CERAMIC

HEATING ROOMS WITH RADIANT STRIPS

LED INDUSTRIAL LIGHT AND REMOTE CONTROL SYSTEMS

In 2015 FIRE produced a study with typical industrial EE projects that got WhC.

Examples of projects presented by ESCOs

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SECTOR MONOSECTORIAL PROJECTS

FOOD PASTEURIZATION WITH RADIO FREQUENCY DESCENDING FILM EVAPORATION AND CONTINUOUS CRYSTALLIZATION

ROTARY COMPRESSED AIR DRYIER DRUM

LIME WOOD BIOMASS OVEN

PAPEREFFICIENCY OF CONTINOUS PAPER MACHINE

RECOVERY FROM FIBER PRODUCTION TETRAPACK TISSUE

CEMENTUSE OF SECONDARY SOLID FUELS (RDF) AS PARTIAL SUBSTITUTION FOR FOSSIL FUELS

CONTINUOUS PARTICLE-SIZE ANALYZER FREE LIME IN CLINKER

CERAMIC / BRICKSOVEN FOR TILES COOKING WITH HEAT RECOVERY

CHEMISTRYREACTOR FOR POLYCRYSTALLINE SILICON MANUFACTURING

INNOVATIVE PRODUCTION OF POLYMERS: PET BARRIER

RUBBER / PLASTICSRECOVERY OF HEAT GENERATED BY MECHANICAL FRICTION IN TIRES PROFILING

BUBBLE EXTRUDER FOR PLASTIC FILMS

WORKING NON METALLIC MATERIALS (MARBLE, STONE,

DIAMOND CUT WIRE

PETROCHEMICALRECOVERY OF GAS TORCH WITH COMPRESSOR LIQUID RING

LAUNDRY-SERVICES INDUSTRY

MACHINE WITH PROCESS ELECTROLYTIC BATCH WASHER

STEEL INDUSTRY ENERGY EFFICIENT MELTING FURNACE

PRINTING / GRAPHICS ROTARY MACHINE

TELECOMMUNICATIONS

ENERGY EFFICIENT RADIO BASES

TEXTILE HEAT RECOVERY ON DRYING MACHINE

TRANSPORTATIONMANAGEMENT OF WASHING FOR AIRCRAFT ENGINES

AUXILIARY SYSTEM FOR THE PRODUCTION OF ELECTRICITY ON AIRPLANES

GLASSEFFICIENCY OF THE MELTING FURNACE FOR GLASS

Most projects were presented by ESCOs that acted as consultants, supporting the end-user in delivering the EE project.

Conclusions

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Support schemes can have an important role in ESCOs development. EPC is a key factor for developing TPF and EE.

Some consideration on the topic of ESCO in industry:

in the next years all the active ESCOs will be certified UNI CEI 11352;

most of the energy service company presently active in the Italian market don’t implement EPC and this reduces third party financing possibilities, especially with small and insufficiently capitalized ESCOs;

consultant companies that were able to enter the WhC scheme in the first years have been able to rise dramatically their capital and revenues, becoming in many cases ESCOs and being able to use the collected know-how to support other industries in designing and implementing new EE projects;

many EE projects in industry are related to the production process;

in recent years some EPC and TPF projects not linked with cogeneration, RES, or “simple” EE projects (electricity motors, compressed air, etc.) started to be proposed and implemented in industry;

it is important to support the diffusion of EPC in industry and M&V protocols like IPMVP can help. FIRE is now the Italian partner of EVO.

Thank you!

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