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LEMON Less Energy More OpportuNities

Periodic Reporting for period 2 - LEMON (LEMON Less Energy More OpportuNities)

Reporting period: 2017-08-01 to 2019-04-30

Shall we say that a comfortable house and a cheap energy bill necessarily contrast with each other, especially for low income families? The LEMON project thinks the opposite and works on balancing economic, environmental and social aspects of living in order to make more sustainable both buildings and investments in energy efficiency.
The European Union is asking for actions that help to deliver its target reducing the greenhouse gas emissions progressively up to 2050. The social housing sector manages over 26 million homes, about 11% of existing dwellings in Europe (Housing Europe data). In Emilia-Romagna the Social Housing companies (ACER) manage in total 78.703 dwellings in 6.404 buildings, whose energy demand ranges from 80 to 450 kWh/m2 per year equivalent and average energy cost ranges from 600 € to 2500 € per year.
LEMON increases saving opportunities, improves housing space quality and creates value for all the actors involved in the energy refurbishment of social housing buildings: from people living in the dwellings to the technicians who manage and keep high building’s performances, from innovators to investors in the construction sector. LEMON focuses on a portion of social housing located in the Emilia-Romagna Region and has the ambition to be replicated in other contests.
LEMON has the purpose of providing technical assistance to accelerate the investment in the energy retrofitting of social housing units, integrating different form of funding available, including regional and national loans and incentives, and apply forms of contract to govern the relations between Local Authorities, dwelling owners, tenants, ACERs (Social Housing Companies), ESCOs (Energy Service Companies) and financing institutions as to ensure a return on investment within 15 years from the retrofitting.
The overall project objectives are:
- To experiment innovative financing models for social housing retrofit through the implementation of new contracting models and EPC contracts, mobilising 15,290 million Euros of investments in energy retrofitting, in order to reduce the buildings energy demand and guarantee the energy performance of the retrofit.
- To develop and implement energy efficiency projects in private and public dwellings involved in the energy retrofit programme, reaching at least an average 40% energy reduction.
- To develop a new lease based on the energy performance of the housing unit, called EPTA - Energy Performance Tenancy Agreement, that will allow the Social Housing Company to charge the 30% of the investment on the tenant renting fee.
The work performed in the second reporting period include:
- The finalisation of the dwelling energy retrofit programme, developing the energy audit. the feasibility studies and the business plan of the energy investment. The engagement of regional stakeholder to share the project outcome and the investment scheme, and to receive support to overcome the barriers and replicate the initiative in other contexts.
In total 616 dwellings have been included in Lemon programme, among them 147 are in Parma Province and 469 in Reggio Emilia Province. The investment programme of about 11.353M€ will reduce by 3.309,6 MWh/y the energy consumption and avoid 795 ton of CO2 per year.
- The development of the economic and financial plan and the approval of the retrofit programme by the City Councils and landlords and the final approval of the EPC tender investment by ACERs board.
- The development of two different tenders: works tender in buildings mostly with mainly autonomous boilers managed by the ACER to achieve the energy performance objective and EPC tender that include investment in buildings with mainly centralized heating system. Through the EPC tender the ACERs are therefore selecting an ESCO that support them in co-finance and achieve the energy saving included in the energy saving programme agreed between the Local Authorities, dwelling owners and the ACERs.
- The recognition of financial institutions interested in financing the ACERs LEMON project through a ‘Competitive dialogue tender’ and negotiation activities with the banks.
- The testing of the EPTA in one building for the boiler substitution after the adoption of the regulation by the Municipality that allows ACER to charge part of the retrofit costs to the tenants, integrating the total dwelling fee
- The publication of 16 work tenders to retrofit 197 dwellings in 16 buildings that received grants from structural funds or national financing programme to be spent urgently and this impact the Lemon project with 2.912.083,2 € of energy efficiency investment.
- The publication of a first Lemon EPC tender, which was published on the 27th of July 2018 and expired the 15th of October 2018. The tender that was addressed to the deep energy retrofit of 395 dwellings got desert.
- The collection of feedback to understand the reason of the EPC tender failure to support the development of a second EPC tender reducing the risks identified with the first EPC tender by the ESCO and retrofit 323 dwellings.
- The organization of capacity building events for social housing companies and local and regional authorities’ representatives and for the tenants, presenting the LEMON Dwelling Energy management Manual.
- The project communication and dissemination: the LEMON Dwelling Energy Management Manual is available in Italian (https://drive.google.com/file/d/1MAMb9pp0uBr_0-ZwiFPOPGcneYAEnVvV/view ) and English (https://drive.google.com/file/d/1NjnOGKyljttD1O4IMa2scuB5Ts9XUFq0/view ) and other training material were developed to support the capacity building activities. Media dissemination and participation of the partners at National and EU events and initiatives ensured a proper dissemination of the project.
The progress beyond the state of the art in the reporting period are:
• Set up a large retrofit programme, interesting for the banks and for the ESCO.
• Engage the regional stakeholder
• Design the energy performance guarantee scheme to launch the investment
• Engage the Local Authorities in the LEMON programme
• Launch investments to achieve a deep retrofit of social housing buildings
• Publish a first EPC tender and develop a second EPC tender
• Develop and implement the EPTA
• Screen and select the financing products available for energy efficiency investment through a tender and a negotiation to select the bank for the loan
• The organization of capacity building events and wide project communication and dissemination
By the end of the project LEMON, the social housing companies expect to deliver the investment programme of at least 11.353M€ with an energy savings of 40% of the energy consumption, developing a pipeline of bankable aggregated project and financial schemes combining the retrofit project of a consistence stock of social housing dwellings with an EPC contract that will involve the ESCOs in the realization of the interventions and in the management of the retrofitted dwellings.
The innovation is based on the integration of different financing instruments available.
Building capacities is one of the specific objectives of the proposed action for preparing the ground for further investments.
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