Energy saving in municipal buildings, ENSAMB : An innovative approach to financing building upgrades
August 26, 2013
The Energy saving in municipal building (ENSAMB) project was launched in 2012; it aims to achieve at least 25% energy savings in 120 municipal buildings—representing 11 GWh/year and an estimated investment of €11.2 million.
The project partners are 5 small municipalities in rural Norway—Elverum, Engerdal, Stor-Elvdal and Åmot—all of whom have also signed the Covenant of Mayors agreeing to save up to 25% energy in municipal buildings.
The development of the project was funded by Intelligent Energy Europe’s MLEI PDA fund. Additional funding for the project will be sourced from a mix of municipal budgets, subsidies from ENOVA,—a government enterprise responsible for promotion of environmentally friendly production and consumption of energy—bank loans from the Municipal Bank of Norway—with a green interest rate 0.1% below nominal—and some other banks.
The project bundles small rural municipalities that, by themselves, would be too small to set up investments—the Regional Council of South Østerdal leads the project. All municipalities will use energy performance contracting (EPC)—energy saving contracts—for upgrade works on municipal buildings. An EPC contract includes energy analysis, the implementation of measures and a warranty period—one contract will be issued per municipality for all measures on all buildings. This bundling means that buildings with similar challenges can be tackled simultaneously facilitating collective purchasing procedures.
ENSAMB procurement process
ESCOs were invited to investigate 2–4 pilot buildings, provide fixed prices for the pilot buildings and estimate the overall project cost—using an energy performance contracting model to guarantees energy savings. ESCOs have increased capacity to deal with a large volume of contracts—upgrading 150 buildings would mean managing over 1000 contracts—and the municipalities do not have the resources to handle that volume.
The Regional Council of South Østerdal evaluated the bids and asked the ESCO that was awarded the contract to re-evaluate the bid and to give fixed prices for profitable measures. If the ESCO saves more energy than predicted the profit from the EPC will be shared between the ESCO and the municipality, but if less energy is saved the ESCO must cover the difference—making it a safe contract for municipalities.
The main success factor for the South Østerdal project is that there was a dedicated project manager which facilitated good communication between councils and good cooperation between building technicians. The project used the existing cooperation platform between the five municipalities. Furthermore the as-is description of the buildings identified through an energy audit is very important to establish a baseline and estimate future savings.
This project will run until 2015—ManagEnergy will catch up with ENSAMB in the near future!