The Covenant of Mayors - a vector of change for the European Neighborhood region and Central Asia REDIBA-ELENA. How to implement energy efficiency investments when public funds are scarce- Experiences from Barcelona province Albert Vendrell Roca Barcelona Provincial Council – Diputació de Barcelona Istanbul, 15 November 2013 Barcelona Provincial Council (DIBA) is a 2nd level Local Government whose mission is to promote the progress and welfare of citizens, acting in the territory and in cooperation (technically and economically) with municipalities. 311 municipalities, with a population of 5.6 m inhabitants. Area: 7,719 km2 Budget 2013: 690 m EUR The Scenario that our Municipalities are facing • Obligation to provide basic services • Reduction of income • No investment capability • No borrowing capacity MUNICIPALITY • Forecast energy price increase • Commitment to carry out SEAP actions SEAP - ELENA facility: How do we pull municipalities into the project? Convenant of Mayors On September 2013 (www.eumayors.eu) 5,076 local authorities 171,089,125 inhab 221 Covenant Coordinators and Supporters Barcelona province 206 Municipalities signed the Covenant 95% Population of the province 183 SEAP finished with 3 M€ cost for DiBa More than 1,172 M€ potential investments identified SEAP: Some results ACTIONS Number of SEAP considered Number of actions Expected energy savings (MWh) 175 8,232 5,517,564 Expected energy production (MWh) 599,945 Expected emissions redaction (tCO2) 2,686,715 Total expected costs (€) Cost per Municipality (€) http://www.diba.cat/c/document_library/get_file?uuid=60ff9afa4430-4a54-89aa-7f25b3812abe&groupId=471041 1,172M€ 907M€ 130,1 % diesel oil for heating litre between 2002 – 2011. 85,9% Natural Gas kWh cost (2002‐2012) 86,7% electrical kWh cost for local public buildings from 2005 a 2012. 78,5 % electrical kWh cost at for street lighting since 2002 How can they implement actions to reduce energy consumption? Public‐Private Partnership Own funding resources Grants from other administrations Actions based on behavioural changes from users and workers (almost no investment costs) “Projects that create enough incomes or savings to finance themselves with a reasonable payback period ” ELENA : European Local ENergy Assistance REDIBA: RENEWABLE AND EFFICIENCY DIPUTACIO DE BARCELONA Project starts: May 2010 Project ends: June 2014 (1 year extension) TECHNICAL SUPPORT: Executive projects Feasibility studies LEGAL SUPPORT: Tendering clauses 2,6 M€ COACHING DiBa: 0,6 M€ EC: 2 M€ Staff costs : 586.000€ External support: 2.080.500 € X25 50 M€ INVESTMENT TARGET REDIBA investments in terms of its legal form ESCo contracts EE in Public Lighting Biomass Thermal Heating Renting municipal roofs for PV Maintenance contracts with energy efficiency investments Rentings and leasings of technology EE in Public Buildings Turnkey contracts Different forms of Private-Public cooperation Results at September 2013 Economic Impact Total value of the contracts generated: 70 M € 80 Investments generated according ELENA-EIB criteria: 36,1 M € (72% target accomplished). Currently in the tendering phase: 29,9 M € Total estimated investments at 30th June 2014: 100M € Environmental Impact of the awarded projects Estimated annual energy savings: +19 GWh/year Estimated biomass thermal energy generated: 1,4 GWh/year Estimated annual tn CO2 emissions saved: 10.214 Results at September 2013 by type of technology and funding source 3% Investments (€) 1% 3% Street Lighting SL 4% Biomass B Energy Efficiency Buildings EEB Photovoltaics PV Others (SWH systems, geothermal, etc) Other 89% € 0% 20% 40% 60% Own funding ressources 80% 100% PP Partnership Public Lighting Projects Cànoves i Samalús (960 SL) Duration renting: 10 years Contract Volume: 0.5 M € Savings kWh/year: 518,000 Renovation with LED via renting Tona (1,800 Street lamps- SL) Duration ESCo: 13 years Total investment: 1 M EUR Savings 52% kWh/year and 10% EUR of current energy bill Martorelles (1,100 SL) Duration ESCo: 10 years Total investment: 0.6 M EUR Savings 49 % kWh/year and 20% EUR Santa Susanna (3,200 SL ) Total investment: 2 M EUR Savings : 1.3 MkWh Duration ESCo : 10,5 years Sabadell (29,500 SL) Duration ESCo: 10 years Contract Volume: 7.5 M EUR Savings kWh/year 3.9 GWh 25% renovation with LED Polinyà (2,000 SL) Duration ESCo: 10 years Contract Volume: 0.4 M EUR Savings kWh/year: 410,000 P1 without energy supply Biomass Thermal Heating Municipality Characteristics Energy generation per year Legal form Contract duration/Pay back Investment cost (€) Vic District Heating 5 buildings Power 500 kW Wood chip 416.8 MWh ESCo 10 472,000 Sant Salvador de Guardiola Power: 500 kW 5 buildings Wood chip 474.5 MWh ESCo 6,5 367,877 Caldes de Montbui Power: 500 kW 4 buildings Wood chip 922.6 MWh Leasing 7 318,907 Les Masies de Roda Power: 80 kW 96 MWh Turnkey contract 66,787 Main Barriers in Spain for RES and EE investments in public bodies 1. Renewables payment scenario is changing and uncertain. 2. Credit crunch: high difficulty to access to conventional financing 3. Low debt capacity by local governments 4. Low previous experience of the energy services market for the public sector and lack of clear legal models to promote ESCOs 5. Resistance to change and excessive focus on issues of municipal ownership Final conclusions from REDIBA project • Although the economical context is very hard, REDIBA is mobilizing investments in the province. • Energy saving potential in public administration is high • New models of contracting in public administration requires time. Once it “clicks” and we have reference projects, the investments start piling up. • The challenge for the near future: small and medium sized municipalities are more challenging to get investments because of scale economy effect. • Financing is not enough. Municipalities need coaching throughout the process . Based on our experience: General conclusions on ELENA facility • ELENA way of working is good because is based on real and quantifiable targets. However, with just energy saving investment as a goal you rule out interesting “Energy savings projects” which don’t require big investment. SOLUTION: Climatic (CO2) leverage?Energetic leverage (kWh)? • Access to funding is one of keys of success of the project. The link between funding and the TA has to be arranged before ELENA project starts. Final decision of funding can not just depend on the conventional banks. Based on our experience: General conclusions on ELENA facility (II) • What is investment in terms of ELENA criteria? How we demonstrate it? That should be clear once the contract is signed • The main challenge will be to find ways of funding energy projects in small and medium municipalities. Financial mechanism should be adaptable to smaller projects Thank you! Albert Vendrell Roca Barcelona Provincial Council [email protected] http://www.diba.cat/web/mediambient/elena