ESCOs and white certificates in Italy

ESCOs and white certificates in Italy

Dario Di Santo, FIRE

Roma, 16 November 2016

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www.fire-italia.org

The Italian Federation for the Rational use of Energy is a no-profit association founded in 1987 that promotes energy efficiency, supporting energy manager, ESCOs and other companies dealing with energy.

Besides the activities directed to its over 400 m e m b e r s , F I R E o p e r a t e s u n d e r a n implementing agreement with the Ministry of Economic Development to manage the Italian energy manager network since 1992.

In order to promote energy efficiency FIRE cooperates and deals with public authorities, energy technology and service companies, consultants, medium and large consumers, universities and associations to promote best practices and improve the legislation.

FIRE manages SECEM - an accredited body - to certify the Energy management experts according to the standard UNI CEI 11339.

FIRE: the association for energy efficiency

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Over 400 members, half of them persons and half organisations.


Some members of FIRE:

A2A S.p.A., ABB S.p.A., Aeroporto Valerio Catullo S.p.A., Albapower S.p.A., AMIA S.p.A., AMIAT S.p.A., ANIGAS, Avvenia s.r.l., Axpo Italia S.p.A., Banca Mediolanum S.p.A., Banca Popolare di Sondrio, Birra Forst S.p.A., Bit Energia s.r.l., Bosch Energy and Building Solutions Italy s.r.l., Brembo S.p.A., Burgo Group S.p.A., Cabot Italiana S.p.A., Carbotermo S.p.A., Carraro S.p.A., Carrefour Italia S.p.A., Centria s.r.l., Cofely Italia S.p.A., Comau S.p.A., Compagnia Generale Trattori S.p.A., Consul System S.p.A., CPL Concordia soc. coop., Credito Emiliano S.p.A., CTI, DBA Progetti S.p.A., DNV GL Business Assurance Italia s.r.l., Dolomiti Reti S.p.A., Edison Energy Solutions S.p.A., Electrade S.p.A., Elettra - Sincrotrone Trieste S.p.A., Energika s.r.l., Energon Esco s.r.l., Energy Saving Management Consultants s.r.l., Energy Team S.p.A., ENI S.p.A., Estra Clima s.r.l., Fedabo S.p.A., Fenice S.p.A., Ferriere Nord S.p.A., Fiera Milano S.p.A., FINCO, Finstral AG S.p.A., FIPER, Generali Real Estate SGR S.p.A., Gewiss S.p.A., Gruppo Società Gas Rimini S.p.A., H3G S.p.A., Hera S.p.A., Industrie Cotto Possagno S.p.A., Intesa Sanpaolo S.p.A., ISAB s.r.l., ISPRA, Italcementi S.p.A., Italgas S.p.A., Italgraniti Group S.p.A., Lidl Italia s.r.l., Manutencoop Facility Management S.p.A., Marche Multiservizi S.p.A., Mater-Biopolymer s.r.l., Mediamarket S.p.A., Munksjo Italia S.p.A., Pasta Zara S.p.A., Politecnico di Torino, Publiacqua S.p.A., RAI - Radiotelevisione Italiana S.p.A., Rete Ferroviaria Italiana S.p.A., Roma TPL s.c.a.r.l., Romagna Energia S.c.p.a., Roquette Italia S.p.A., S.p.A. Egidio Galbani, S.p.A. Michelin Italiana, STMicroelectronics s.r.l., Tecno s.r.l., Thales Alenia Space Italia S.p.A., Tholos s.r.l., Tioxide Europe s.r.l., Trenitalia S.p.A., Trentino Trasporti S.p.A., Turboden s.r.l., U, Università Cattolica del Sacro Cuore, Wind Telecomunicazioni S.p.A., Yousave S.p.A.

Our membership include organization and professionals both from the supply and the demand side of energy efficiency services and solutions.

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Besides being involved in many European projects, listed next, FIRE implement surveys and market studies on energy related topics, information and dissemination campaigns, and advanced training.

Some of FIRE clients over the years: Ministry of Environment, ENEA, GSE, RSE, large organizations (such as Centria, ENEL, Ferrovie dello Stato, FIAT, Finmeccanica, Galbani, H3G, Poste Italiane, Telecom Italia, Unioncamere), universities, associations, energy agencies and exhibition organizers.

www.fire-italia.org

European projects on-going:

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www.secem.eu

SECEM

SECEM, European System for Certification in Energy Management, is a certification body created by the FIRE.

SECEM was the first body to offer third-party certification for Energy Management Experts (EMEs) according to UNI CEI 11339 and is accredited according to the ISO/IEC 17024 standard.

In Italy two standards were developed in order to promote the qualification of energy efficiency operators: UNI CEI 11339 for EMEs was issued in 2009, UNI CEI 11352 for ESCOs was published in 2010. A new standard for energy auditor is presently under preparation.

Both the mentioned standards are recognized from the national legislation within the energy audit obl igat ions for large companies introduced by the EED directive and the white certificate scheme.

ESCOs and other EE suppliers

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Energy efficiency project

Energy intensive industries

Non energy intensive industries

Service sector

Public administration

Residential sector

Energy suppliers

Companies involved in building renovation

Installers

ESCOs

Technologies producers

Large-scale distribution

Source: FIRE.

DEMAND

SUPP L Y

Cooperatives

All business models and sales chains need to be developed to effectively

expand the energy efficiency market.

ESCOs and EE incentives in Italy

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White certificates (WhC)

Tax deductions 50% e 65%

RES incentives

Heat account

Other options (Elena, Jessica, EEEF, structural funds, local funds, etc.)

Source: FIRE.

CHP: high efficiency cogeneration DH: district heating

RES: renewable energy sources EEEF: European energy efficiency fund

Energy efficiency Thermal RES Electrical RESCHP-DH

All the national incentives allow ESCOs

to present projects. Their role is particularly

strong within WhC.

ESCO: the European definition

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Technology providers Bank/fund

End-user

ESCO

ESCO financing

Energy savings

Source: FIRE

End-user financing

Bill savingsFinancingService feeEnergy service

Characteristics of an ESCO: energy services supply; guarantee of performance (EPC); third party financing (TPF).

ESCO (directive 2006/32/EC): a natural or legal person that delivers energy services and/or other energy efficiency improvement measures in a user's facility or premises, and accepts some degree of financial risk in so doing. The payment for the services delivered is based (either wholly or in part) on the achievement of energy efficiency improvements and on the meeting of the other agreed performance criteria.

ESCO and WhC: towards certification

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EPC+TPF+integrated approach

Energy service

providers

≈250 certified UNI CEI 11352

≈3,700 accredited≈1,000 active

UNI CEI 11352

Starting from July 2016 ESCOs will have to

be certified to access WhC and thermal account.

ESCOs have always been by far the main actor in the WhC scheme, with more than 95% of the presented proposals.

UNI CEI 11352: certification of ESCOs

These are the contents of the UNI CEI 11352:2014 standard:

1. Scope 2. Normative references 3. Terms and definitions 4. General requirements 5. Checklist for the verification of the requirements

Appendix A: checklist for the verification of the skills.

Appendix B: minimum requirements of ESCOs’ energy service supply.

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4.1 General requirements

ESCO shall:

1. Offer energy efficiency services according to the EN 15900 standard.

2. Carry on the activities listed at point 4.2.

3. Possess the capacity reported by the Standard.

4. Provide contractual guarantees of energy efficiency improvements, with the assumption of the risks associated with the failure to meet agreed targets. Any part of the risks (technical and financial) not assumed by the ESCO must be contractually defined.

5. Link the remuneration of the activities and services provided to the improvement of energy efficiency and the achievement of the minimum performance established by contract.

6. Guarantee to the customer the availability of the data measured during the service.

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4.2 Activities to be offered by the ESCO

Mandatory activities: energy audits; verification of compliance of plants and works legislation; feasibility studies and techno-economic analysis; intervention planning and preparation of the technical specifications; installation, commissioning and testing; management and conduct of operations to ensure maximum performance; maintenance interventions; monitoring and verification of fuel consumption and performance; periodic reports to the client, inclusive of indirect aspects (e.g. water consumption); support for access to financing and incentives; user training and information for staff; energy certification of buildings (if consistent with the scope of business).

Optional activities: financing of the project; purchase of energy sources connected to the provided service; exploitation of renewable energy sources; optimization of supply contracts for energy carriers.

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4.3 Skills

Skills are needed to carry on the activities at point 4.2:

4.3.2 Organization

4.3.3 Energy audit

4.3.4 Design

4.3.5 Management

4.3.6 Economic and financial

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Some data from surveys: capitalisation

Source: ENEA 2015, CESEF 2015.

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Turnover, EBITDA, profits bln € (2013)

Average registered capital

76,7%

23,2%

0,1%

ESCOs'revenuespersectorSource:FIREonENEA'sdata

Civilsector

Industry

Agricolture

Most ESCO have been created in the last ten years and have a low registered capital and low capitalisation.

EE turnover <1 bln €

Some data from surveys: solutions

Source: FIRE on CESEF data.

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Source: FIRE.

ESCOs activities cover many sectors and provide a wide range of solution.

Some data from surveys: EPC usage

Source: FIRE in GuarantEE market report 2016.

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Source: FIRE.

EPC is seldom used presently. Most contracts are supply contracts with some basic form of guarantee, but no link between ESCO’s fee and EE.

Some data from surveys: EPC usage

Source: FIRE on Transparense data.

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Some data from surveys: barriers to EPC

Source: FIRE in GuarantEE market report 2016.

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Source: FIRE.

M&V and insufficient know-how about EPC are the main barriers for the growth of such contracts.

ESCOs and WhC: SWOT analysis

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StrengthsESCOs avoid the need for end-users to dedicate time to learn the WhC schemeESCOs can learn from supporting end-users and transfer such know-how to other projectsthe ESCOs’ market can develop thanks to the WhC scheme

Weaknessesthe process to develop the ESCOs’ market requires timeshort pay-back time projects or high incentive are required to start-uppromoting EPC is difficult if the market is not mature

OpportunitiesESCOs’ market development outside the WhC scheme boundariescollection of useful information about EE projects related to industrial processesEPC development

Threatsit could be difficult to recover money in case of non conformities without proper rulesESCOs can speculate by just presenting proposal without developing EPC, TPF or other positive effects information campaigns are strongly needed

Conclusions

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Support schemes can have an important role in ESCOs development. EPC is a key factor for developing TPF and EE.

Some consideration on the topic of ESCO and WhC:

in the next years all the active ESCOs will be certified UNI CEI 11352, ensuring their qualification;

most of the energy service company presently active in the Italian market don’t implement EPC and this reduces third party financing possibilities, especially with small and insufficiently capitalised ESCOs;

consultant companies that were able to enter the WhC scheme in the first years have been able to rise dramatically their capital and revenues, becoming in many cases ESCOs and being able to use the collected know-how to support other industries in designing and implementing new EE projects;

many EE projects in industry are related to the production process;

issues arose in case of non conformities with large projects to recover the money associated with the WhC, due to the lack of a legal agreements among ESCOs and end-users to cover such cases;

it is important to support the diffusion of EPC in industry and M&V protocols like IPMVP can help. FIRE is now the Italian partner of EVO.

Thank you!

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