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ENERGY EFFICIENCY PROJECT DEVELOPMENT FOR SOUTH ATTICA

Periodic Reporting for period 1 - PRODESA (ENERGY EFFICIENCY PROJECT DEVELOPMENT FOR SOUTH ATTICA)

Reporting period: 2017-05-01 to 2018-10-31

PRODESA is funded by H2020 - EE22 – Project Development Assistance. It addresses the problem of limited financial resources faced by the Greek municipalities which inhibit the undertaking of actions for improving energy efficiency in their infrastructure. The municipalities in Greece and in the southern European member states have to limit their public expenses due to the economic recession. Their limited budget is allocated in more pressing social needs and consequently, energy efficiency becomes a second priority. Currently, most municipalities carry out energy improvements only as part of the regular operation and maintenance activities. Thus, under these perpetuating conditions, they are not able to assume costly actions necessary to organise and develop large-scale energy efficiency projects that are required to meet their commitments and obligations, and, be in line with the European timeframe for achieving the 20 20 20 targets. The attraction of private funds is a “one-way road” to reach energy efficiency goals.
PRODESA supports 7 municipalities, located in the Athens Metropolitan area, to reduce their energy bills by means of energy efficient systems and to satisfy a large percentage of the energy demand by locally available renewable energy sources. PRODESA will provide the means to the involved municipalities to mature projects and sign implementation contracts for energy efficiency measures in 116 municipal buildings and 6.3 MW streetlighting and for integration of 3.2 MW rooftop PVs. The expected energy savings are 45.6 GWh/y and the renewable electricity production is 4.8 GWh/y. The investment to be triggered sums up to 20.24 M€.
To achieve this objective, the project focuses on optimal bundling of fragmented municipal projects that will lead to a considerable size, reasonable payback time and risk diversification for all parties involved. Further objectives of the project are:
• To demonstrate financing and organisational innovation for the municipalities in Greece and produce “Data Evidence” on the performance of energy performance contracts, EPCs, and investments
• To develop a pipeline of projects in two municipalities participating in the project as replicators and support the development of a replication plan
• To develop a network of at least 30 municipalities willing to replicate PRODESA’s solutions and provide coaching for the development of energy efficiency project pipeline
• To support municipalities in building capacities in developing energy efficiency projects
Having established all the practical issues, the municipalities supported by the technical team have prepared and launched tenders for the final selection of the energy efficiency renovation options for the municipal buildings and the streetlighting.
The development procedure of the energy efficiency projects in PRODESA differs from the traditional due to the fact that implementation will be carried out by means of energy performance contracts. This type of contract entails differences as it introduces new requirements at the technical level. Specifically, new approaches and provisions must be integrated into technical solutions to facilitate the monitoring and verification of energy savings. The energy efficiency options must be reliable, have minimum performance risks, good guarantees, and moreover, skills and expertise must be available for operation and maintenance.
Thus the technical team has prepared a set of technical specifications that include the aforementioned requirements. They also include provisions of the energy consumption baseline and for the technical and economic appraisal as well as for provisions for the monitoring and verification of the options to be proposed.
Additionally, a methodology and tools for the economic appraisal of the energy efficiency options have been produced. The tools enable the formulation of various financing scenarios and the combination of various financing sources. They provide annual cash flow balances and indicators for both parties, i.e. municipality and contractor/ESCO. Since the uniformity of the economic evaluation was of paramount importance, instead of using generic evaluation tools, tailor-made ones were prepared for the project. They support calculations for (i) Energy efficiency options for streetlighting, (ii) Energy efficiency options for buildings, (iii) Photovoltaics (PV) for net-metering, (iv) A supplementary tool for the estimation of payback period for joint PV and energy saving measures in buildings.
All municipalities have prepared the tenders and four have proceeded with the launching and selection of the contractors. Up to now, two municipalities have completed the design of the energy efficiency options. They include, in the majority of buildings, the replacement of fossil fuel for heating with electricity and the use of rooftop PVs to generate green electricity. Thus oil burning heating systems are proposed to be replaced with heat pumps or split units. Additionally, the current lighting is replaced with LED and presence sensors, the installation of ventilation heat recovery units is foreseen where needed, air-tightness improvements, and external insulation and glazing improvements are also foreseen where necessary. Moreover, two municipalities have completed the energy efficiency improvement of the streetlighting and are underway to proceed with the implementation tender.
In order to facilitate both the municipalities and ESCOs, especially for the implementation of energy efficiency investments in buildings, the project has established a cooperation with the Deposit and Loan Fund, (TPD), and has proceeded with the development of a pilot financing scheme. Its main feature is that the Fund (TPD) can guarantee the payment of the Energy Performance Contractor if the results are technically sound. By having such a guarantee, the EPC provider can have easier access to debt financing with more favourable terms. This is a key factor for enabling, currently in Greece, an energy performance contract of the size addressed in PRODESA as access to debt financing from Greek banks is still very difficult and costly.
The project has performed capacity building workshops for both the 5 leading municipalities and their contractors and the replicator municipalities. Also, progress has been made regarding the development of a pipeline of energy efficiency projects of the replicator municipalities.
The financing scheme developed by the project is new in the country and goes beyond the state of the art. Following the completion of PRODESA, the scheme will be operated by TPD to finance the municipalities and regional governments in Greece. Moreover, PRODESA will produce actual examples of large-scale energy performance contracts which will facilitate the uptake of the ESCO market in the country. These examples will also contribute to the promotion of standardisation of energy efficiency investments.
High-quality guidelines and tools for countrywide replication of the PRODESA solutions and blueprints of tenders for energy performance contracting will be produced. PRODESA will establish a network with at least 30 municipalities that will replicate the results.
PRODESA’s expected societal impacts are summarised below: Energy savings of primary energy: 55,414 MWh/year; Renewable energy produced: 5,658 MWh/year; Avoided GHG emissions: 16,545 tCO2e/year; Expected job creation: 236 job years.
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