newlight - energy retrofitting of public buildings and
TRANSCRIPT
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15 October 2015
15 October 2018
NEWLIGHT
57 cities/municipalities
Total investment: app. 20 Mil. €
EIB contribution: 790.000 €
Implements REGEA on
behalf of two counties
First ELENA project in Croatia
Najbolja praksa korištenja obnovljivih izvora energije
NEWLIGHT project – Bright side
• Methodology for energy audits of street lighting and specialized GIS based software for data inventory (over 72,000 luminaires - more than 4,5 million attributes)
• 21 cities and municipalities completed EPC tendering process
• Mayor impact on development of EPC market in Croatia and South-East Europe
• Overall investment so far is over 17 million € with a leverage factor of 27.4 (and still growing)!
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Najbolja praksa korištenja obnovljivih izvora energije
NEWLIGHT project - Lessons learned
• Introducing new models of contracting in public administration requires time and patience - having reference projects can help
• The market is still undeveloped - EPC or PPP projects need to be communicated as early as possible (contract model etc.)
• Take into account election calendar, creation of public budget process and political logic
• Communication, communication, communication• Financial instruments can and should play an important role in
boosting the market!
Najbolja praksa korištenja obnovljivih izvora energije
It looks all excellent but…
• Project documentation has to be developed without any guarantee for co-financing by ESI funds = risk of a substantial and unnecessary (upfront) cost for public authorities
• Poor quality of project documentation and poor quality of construction (civil) works = ineligible costs, higher whole life cycle costs, lower quality of the public service provided
• Securing of own financial share limits the possibility of launching more projects over a short period of time (even with the 85% co-funding rate from EU grant)
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Najbolja praksa korištenja obnovljivih izvora energije
One concrete example (10 schools, 1 hospital)
Projected 79,44 M HRK Planned in County budget
Contracted 88,16 M HRK To be additionally secured
Realized (contracted + unexpected) 102 M HRK To be paid!
ESIF co-financing rate 60% equals 53 M HRK
Own component 35 M HRK
Additionally needed 14 M HRK Ineligible for ESIF, not planned
Own component in total 49 M HRK Loan - 10 M HRK for 10 years
Actual ESIF co-financing rate 52,0%
Najbolja praksa korištenja obnovljivih izvora energije
Some math… and some reality!
• Full life costs up to 2050:– Karlovac County (145 buildings) = 1.125 Bln HRK– Zagreb County (207 buildings) = 2 Bln HRK– Krapina-Zagorje C. (166 buildings) = 1.5 Bln HRK
• nZEB retrofit and O&M• PPP recognized as the most feasible (and
only!) option• Future participation in ESIF grant schemes
highly questionable! Own component?• PPP remuneration through ESIF (2021-2027)?
What they actually do?
Math teacher Cardiologist Politician
School headmaster Hospital director County prefect
Najbolja praksa korištenja obnovljivih izvora energije
Buildings first!
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PRIVATE PARTNERPUBLIC PARTNER
Financial mehanism
Service (renovation, building, maintenance!)
VAT
escrowaccount
Stable growth and employment
Programme:- Guidelines- Documentation- Project
pipeline
Some big numbers…
1 Bn eur(total value)
VAT: 550 M eur(present value)
125 M eur(over 25 yrs)
10.000 jobs
3 Bn eur total project value
Najbolja praksa korištenja obnovljivih izvora energije
…and some big advantages
• Administrative and fiscal relief of the public sector
– Simpler/quicker preparation and implementation of projects by standardized value for money (VfM) methodology
– Contract/procurement documentation, technical standards and output specifications prepared as an of the shell solution
• Lower whole life cycle costs of public buildings
• Quality of expenditure and effective use of EU/ESI Funds;
• Realization of projects without contingencies (turn-key contracts) and payments based on performance or/and availability;
• More projects over a much shorter period of time 28
Najbolja praksa korištenja obnovljivih izvora energije
Conclusions
• For scale and dynamics - blending of public funds and private capital is the key!
• Long-term vision, transparency and stability is critical for involving private partners and capital
• Contracting service is the (only) future!
• Ambitious vision in needed on a national and EU level
• Energy transition supports EU cohesion