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Quality certification frameworks for Energy Efficiency services to scale up responsible investment in the building sector

Periodic Reporting for period 2 - QualitEE (Quality certification frameworks for Energy Efficiency services to scale up responsible investment in the building sector)

Reporting period: 2018-12-01 to 2020-06-30

Energy efficiency services are expected to make a key contribution to the achievement of the EU’s energy and climate objectives for 2030, namely the energy efficiency headline target of 32.5 %, as stated in the IEA’s Energy Efficiency market outlook of October 2018. Energy efficiency services (EES) are agreed tasks which lead to energy efficiency improvements based on energy audit, implementation of energy efficiency improvement actions and verification of savings. The most common forms of energy efficiency services are energy performance contracting (EPC) and energy supply contracting (ESC).

Even though the European energy efficiency service market has seen substantial growth over the last 20 years, market expectations are not yet completely met. One of the major obstacles for fully exploiting the market potential is insufficient private investment in the energy efficiency service markets. One reason why energy efficiency investments fall short is a lack of trust in service providers. Numerous initiatives and projects supported market development and tried to overcome existing barriers of the energy efficiency service markets.

The QualitEE project aims to increase market transparency and the quality of energy efficiency services and therefore increase trust of clients, investors and financial institutions. Higher trust will lead to higher investments in energy efficiency services.
Higher quality of EES will be achieved by applying QualitEE's technical and financial quality criteria during the procurement and implementation of energy efficiency services. The quality criteria provide a common understanding of “good quality” for market actors on the energy efficiency service market. The quality criteria are operationalized in national quality assurance schemes, which are set up in national stakeholder processes. These quality assurance schemes will be the basis for a future standardisation of EES to further increase trust in the ESCO industry and reduce complexity of EES.
The first half of the QualitEE's project duration focussed on market analysis and the development of the core elements of the future national quality assurance schemes for energy efficiency services (EES).
A thorough market analysis consisting of an online survey, expert interviews and desk research has been performed as basis for further activities in the QualitEE project. The 15 EU countries covered by QualitEE are at different stages of development of their energy efficiency services markets.
Even though the needs, expectations and characteristics differ depending on the level of advancement of the markets, the 2017 survey of the European energy efficiency service markets showed that the market has seen substantial growth over the last decade. While limited budgets and pressure to reduce costs are key drivers for the business, lack of trust in market actors and the complexity of the business model prevent the market from prospering. A clear recommendation from the performed country analyses was that quality assurance schemes should be developed and implemented to overcome some of the market barriers.

Quality criteria as basis for quality assurance schemes
Quality assurance for energy efficiency services is one way to increase trust in the service and providers. It will serve clients as a tool to distinguish good quality projects.
The QualitEE project developed technical and financial quality criteria for energy efficiency services (energy performance contracting in first place). The technical criteria build the basis for quality assurance and represent a major step towards European standardisation of energy efficiency services. The technical guidelines are targeted at public and private clients, energy service providers, financial institutions, procurement staff and policy makers. The criteria define and operationalize technical, economic, communicational, and other criteria, which allow a comprehensive set of quality criteria to be applicable in quality assurance and certification schemes.

Pilot projects
The criteria have been applied to existing projects with a total project value of over 13.5 Mio. €, ranging from project values of 20,000 to 6.6 Mio € to test their applicability for quality assurance and gain information of the quality assuring processes.

National quality assurance schemes
The development process of national quality assurance schemes for EES is based on the constitution of National Promotion Teams, which consist of representatives of the most important stakeholders. First meetings have taken place in the individual partner countries to assess the market needs and perspectives. Results of the national promotion team preselection are discussed in larger panels, called National Discussion Platforms to acquire market acceptance for the quality assurance schemes. Additional capacity building activities shall further increase understanding and acceptance of stakeholders.
The European Report on the Energy Efficiency Services Market and Quality is one of the most comprehensive and focussed studies on energy efficency services to date. It brings together various sources of evidence, it is primarily based on an extensive survey of EES providers and facilitators, and interviews of clients and financial institutions involved with EES, but also incorporates relevant literature and the market knowledge of the authors. It compares results across 15 European countries captured in 2017 with previous surveys conducted in 2013 & 2015. Survey results can also be explored via our interactive web tool. The report focusses on two common forms of EES; Energy Performance Contracting (EPC) and Energy Supply Contracting (ESC).

The technical and financial quality criteria, which build the basis for the to-be-established national quality assurance schemes, have been subject to an intensive feedback process on national and international scope to gain a broader picture of the market perspectives and acquire acceptance for the criteria, which will continue also in the second half of the project. The criteria will be further discussion in workshops, will be presented in trainings and are implemented in new energy efficiency service projects for testing. Results will feed into a further revision and adaptation of the quality criteria.

In the second half of the project term the project's focus clearly lies on the real-life implementation of quality assurance schemes for energy efficiency services based on a stakeholder process. The national stakeholder process consists of the establishement of national promotion teams, which preselect adequate business models, and the National Discussion Plattforms where approaches are discussed in a wider target group. This process assures acceptance and backing from the market actors for the implementation of national quality assurance schemes. The national quality assurance schemes build on a common background and are adapted to the specific requirements of the individual national markets.

These steps help to increase trust and therefore investment into the energy efficiency service markets and support the achievement of the EU's energy efficiency targets.
Cover pages of the QualitEE European Market Report on Energy Efficiency Services
QualitEE Training Module 1 in UK, presented by Nick Keegan, EEVS