Effective Financing Tools for Implementing Energy Efficiency in Buildings Newsletter #1

International Newsletter for building managers #1 Â September 2018

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Table of Contents Financing Toolbox for building managers - 1 Examples of tools and methods - 2 Technology solution providers and building managers - 4

Why building managers should know about the project EFFECT4buildings?

Knowledge of financial support opportunities as well as available technology solutions in the market plays a crucial role for building managers to make decisions on energy efficiency investments in buildings.

The project "Effective Financing Tools for Implementing Energy Efficiency in Buildings" (EFFECT4buildings) in collaboration with public building managers develops financial tools and methods to improve profitability, facilitate the financing of energy investments and lower the risks of implementing energy efficiency measures (retrofitting, upgrading and deep renovation) in buildings.

GreenEST Summit 2018 - 4 Meet the project team - 6

Financing toolbox The main result of the project will be a comprehensive decision-making toolbox with a set of financial instruments and methods. Financial tools and methods will be tested in real-life cases among institutions participating in the project.

The toolbox developed during the project will be available online together with White papers that explain how to use it. For more information visit our website:

CLICK

http://www.effect4buildings.se

Photo: EFFECT4buildings project team together with building managers from seven Baltic Sea Region countries, Energylab Nordhavn, Copenhagen, May 2018

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"The toolbox is needed," agree public building managers One of the main work phase in the beginning of EFFECT4buildings project was to agree on needs and obstacles for public building managers to decide to invest in energy efficiency measures.

Building managers were selected as persons who are responsible of public buildings.

Furthermore, participants of interviews were supposed to be experts of their building stock, for example, current status of energy usage and efficiency, implemented

and/or planned measures, maintenance issues etc.

Totally 37 interviews were conducted during January and February 2018 in all seven project partner countries - Sweden, Norway, Denmark, Estonia, Latvia, Poland and Finland.

EFFECT4buildings project team has made a summary and conclusions based on the interviews together with explanations about each tool.

Examples of tools and methods Financial calculation tools Financial calculation tools are critical and extremely important when justifying energy efficiency measures to get the decisions taken. As many as 92% of the respondents either totally agree or nearly agree to this statement. On the other hand, the easiness of doing and understanding of financial calculations is more challenging. About half (49%) of interviewed find those easy to understand.

Bundling Bundling is a method to merge smaller investments into one bigger package. By operating in this way, it is possible to make the investment large enough to attract investors and also include less profitable measures in the package. Anyhow bundling as a method seems to be not so often used and well-known, thus only 27% of the respondents inform that they have bundled investments.

Funding Funding is a crucial element for implementing energy efficiency activities. Different funding sources are available in all EFFECT4buildings project countries. According to interviews 70 % of respondents inform they have received external funding to implement energy efficiency measures. All funding sources are not acceptable for every energy efficiency investments, there can be special eligibility criteria for funding source. As the result of EFFECT4buildings project different funding sources will be mapped, including description of requirements for application.

Energy Performance Contract Energy Performance Contract (EPC) is a long-term agreement with private company (ESCO) to cooperate in implementing energy efficiency measures by guaranteed energy savings. According to interviews EPC activities seem to need more awareness, as 41% of respondents either totally agree or nearly agree that they have good EPC/ESCO knowledge. Even more good experiences are needed, because only 8% of respondents have enough experience. Good practical references and training to increase awareness could be the way to activate EPC agreements.

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Green Leasing Contract Green leasing contract is a good way to motivate both parties - building owner and tenant to adapt energy saving measures. By this kind of agreement reached energy savings will be shared in a way that both parties will gain on the savings. So far green leasing contract seems not to be common method, thus 88% of respondents have not being involved with this kind of agreements.

Multi Service Contract Multi service contract is used for energy efficiency contracting to add other co-benefits such as lighting, indoor air quality, temperature, noise, esthetical values and well-being issues in the investments. These co-benefits are included somehow in agreements (57% of answers), but not in a systematical way. More knowledge and good practical examples are needed and also guidance how these values can be measured.

Prosumerism

Fo rS AL E

Prosumerism means both energy production and consumption of energy surplus. Renewable energy production includes for example solar, wind and geothermal energy production. Existing legal barriers and low profitability of energy sales unfortunately dilute the interest of prosumerism. Main message based on interview results seems to be, that producing of own energy is a valid option, when produced energy can be fully exploited by self, but not to sell.

Convincing decisions makers Convincing decision makers is in practice a summary of utilizing all other tools in the toolbox.

Main message is that convincing decision makers needs really strong arguments and facts. This means clear numbers and visual charts (like pay-back time), which are simply and easy to understand. Beautiful words are not enough alone, but of course verbal arguments are needed to reach positive decision for energy efficiency investment.

We interviewed public buildings managers representing building stock of about 11 million square meters including more than 10 000 separate buildings.

NEED TO

KNOW

The building stock was diverse, and it can be divided as follows: kindergartens/schools/universities (29,1 %); housing/residential buildings (28,5 %); care/rest homes/hospitals (10,8 %); commercial buildings (10,4 %); sports/exercise centers (5,8 %); church/religious buildings (2,5 %) and other publicly owned buildings (12,9 %).

Photo: Building manager together with EFFECT4buildings project manager in the building planned to be world's tallest wooden structure building, Brumunddal, Norway

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The market dialogue between technology solution providers and building managers Nowadays, this is a challenge to choose the most appropriate technology for increasing energy efficiency in buildings.

Furthermore, technologies are often bought as single piece of equipment rather than whole solution preventing maximum benefits from being achieved.

In order to not confuse into diversity of technological solutions, there is a need to encourage discussion between public building managers and solution providers. This is another aspect of project EFFECT4buildings.

At the same time, technology solution providers often seek for a bigger market and the feedback on market needs to make further improvements in their operations.

Most challenges that public building managers face, are the same also for private building managers.

Sometimes there is a lack of knowledge on energy saving technologies, their performance and profitability.

SAVE THE

DATE!

To bring together building managers and technology solution providers from the whole Baltic Sea Region and other EU countries, in Tallinn will be arranged a larger-scale matchmaking event.

GreenEST Summit 2018: Future for Buildings, October 30 Tallinn Creative Hub Kultuurikatel, Estonia

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GreenEST Summit 2018: Future for Buildings Tallinn Science Park Tehnopol together with EFFECT4buildings team and international greentech community partners are inviting you to take part of the fresh and vibrant greentech event in Estonia – GreenEST Summit 2018: Future for Buildings!

GreenEST Summit is an international greentech event covering essential topics and latest developments on the field. As of the European Union has set a target for all new buildings to be nearly zero-energy by 2020, but currently, about 35% of the buildings are over 50 years old and almost 75% of the building stock is energy inefficient, this years conference is focused on the future of buildings!

The event brings together public and private sector real estate experts, municipalities, greentech companies and investors from all over Europe - Denmark, Norway, Sweden, Finland, Estonia, Latvia, Poland, etc.

On top of inspiring speakers, we’ll have engaging panel discussions and Europe’s top greentech companies presenting their energy efficient smart buildings solutions. We will cover the topics of building envelope (walls, floors, roof, doors, fenestration's), ventilation, heating and cooling, water, lighting, electricity, building management systems/ICT solutions and more.

Don’t miss out and be part of the world changing greentech community! Mark your calendar and stay tuned for more information!

CLICK

https://www.tehnopol.ee/greenestsummit2018/ See also Facebook event HERE.

Photo: Solar panels on the building of District cooling station "Fortum", Tartu, Estonia

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Meet the project team EFFECT4buildings lead partner is County board of Dalarna. Partnership consist of 9 partners: County board of Dalarna (Sweden), Environmental office of Lappeenranta region (Finland), Hedmark county council (Norway), Vidzeme Planning Region (Latvia), Gate 21 (Denmark), Foundation Tallinn Science Park Tehnopol (Estonia), State Real Estate Ltd (Estonia), Sustainable Building Cluster in Dalarna (Sweden) and Association of Communes and Cities of Małopolska Region (Poland). EFFECT4buildings has 19 associated partners representing regional and local public authorities acting as real estate owners, clusters involving actors from the whole building chain, science park, etc.

Photo: EFFECT4buildings project team, Copenhagen, May 2018 Marit Ragnarsson, County board of Dalarna, Lead partner in EFFECT4buildings project "Buildings stand for 40% of the energy consumption and 36% of the CO2 emissions in the EU. Technically there is a potential to reduce energy consumption with at least 5070 %.

Implementing the solutions will at the same time create economic growth, but action often get stuck on financial barriers.

EFFECT4buildings has formed a team of regional partners from the Baltic Sea Region that are forerunners and has experience in energy efficiency to overcome these barriers. The project is a flagship under both PA Energy and HA Sustainable development of the EU Strategy for the Baltic Sea Region."

International Newsletter for building managers #1 September 2018 EFFECT4buildings project is implemented with the support from the EU funding Programme Interreg Baltic Sea Region (European Regional Development Fund) and Norwegian national funding. The aim of the project is to improve the capacity of public building managers in the Baltic Sea Region by providing them a comprehensive decision-making support toolbox with a set of financial instruments to unlock the investments and lower the risks of implementing energy efficiency measures in buildings owned by public stakeholders.

EFFECT4buildings newsletter is made by Vidzeme Planning Region. If you would like to be kept informed about project news, events and be able to take part in the project activities, subscribe to EFFECT4buildings newsletter by sending us an e-mail with request to baiba.norberte@vidzeme.lv