ELENA assistance case study - Pool Engineering S.r.l

Marina Turcati
INSTITUTIONS, FINANCE, MARKET:
FACTORS AFFECTING PUBLIC
PROCUREMENT PRACTICE
CASE STUDY: THE IMPLEMENTATION OF THE
ELENA PROGRAMME IN ITALY (MILAN, PADUA, CHIETI)
Workshop on Contemporary Issues in
Procurement Practice
London, October 1 2015

TRACING THE MAP: WHERE ARE WE?
2

ELENA technical assistance facility
implementation in Italy: Milan, Chieti, Padua
Case
study
approach
SME
consultancy
company’s
perspective
Energy
efficiency
services
procurement
Marina Turcati – October 1, 2015
CONCURRING ELEMENTS
3

METHODOLOGICAL APPROACH:
ENERGY EFFICIENCY TARGET COMPLIANCE
 How do we procure energy services?
1. Upfront market survey (level of interest).
2. Stakeholder consultations to analyze barriers and to go deeper into
target analysis (sub-groups and unintended included).
3. Listing options for surmounting each of the main barriers.
4. Develop and test small procurements first.
5. Replicate and expand to scale up.
6. Make it durable through systems institutionalization (templates, budgeting
models, incentives and sanctions schemes, targets and verification
frameworks etc.) and further implementation.
4

… SO, LISTEN AND LEARN FROM THE “TARGETS” OF PUBLIC
POLICY AND FROM THE POTENTIAL SUPPLIERS IS THE
MAIN STEP TO BE TAKEN, SINCE IT IS BOTH FRUSTRATING
AND DIFFICULT – AND THEREFORE PRICELESS – FOR
POLICYMAKERS TO COMPREHEND WHY THE TARGETS OF
POLICY DO NOT SEE THINGS THE SAME WAY THEY DO.
METHODOLOGICAL APPROACH:
ENERGY EFFICIENCY TARGET COMPLIANCE
Kent Weaver, Georgetown University 2009
5

CASE STUDY SOURCE: A TECHNICAL CONSULTANT’S
PERSPECTIVE IN THE EE SERVICES PROCUREMENT PROCESS
 consultant for local PAs procuring energy efficiency services, from
2011 up to present
 Italian SME
 integrated engineering services
 in house energy engineering team
 energy efficiency consultancy projects in Italy, Bulgaria, Romania and
Russia
 Italian PA’s consultant for energy efficiency services tendering within
the framework of the ELENA programme since 2011
 tenders’ dossiers supervised: 5
 highest tender amount assigned under Pool Engineering consultancy
assistance: 25.000.000 euro (energetic master plan of Venice
International Airport “Marco Polo”)
6

EE: THE MORE VALUABLE ENERGY IS THE ONE THAT
WE DO NOT CONSUME
 NECESSITY
• Fossil fuel will be prevalent for a long time
• There are activities where the fossil products cannot be substituted
 SOUNDNESS
• “No regrets” policy
• “Low-hanging fruit” (vs. payback periods and upfront costs)
 IMPORTANCE
• Considering the current rates of construction, demolition and
renovation across Europe, the city of 2050 is now more than 70%
built. Moreover, about 35% of the EU's buildings are over 50 years
old. It is essential then the right choices are made now.
• Leading role of public authorities (central Government)
…HOWEVER, SO FAR COST-EFFECTIVE ENERGY SAVINGS POTENTIAL HAS
NOT BEEN FULLY ACHIEVED. THE MARKET FOR ENERGY EFFICIENT
PRODUCTS, BUILDINGS AND SERVICES IS NOT DEVELOPING QUICKLY
ENOUGH TO MEET THE NEED FOR INCREASED UPTAKE OF THE ENERGY
SAVINGS POTENTIAL.
7

Source: DG Energy, European Commission 2013
EU NEEDS TO DOUBLE ITS EFFORTS IN ORDER TO REAP
ALL THE BENEFITS OF ENERGY EFFICIENCY AND
SAVINGS IN 2020
8

Source: DG Energy, European Commission 2013
EU HAS RIGHT TO ACT (TFEU ART. 194) BUT
ENERGY EFFICIENCY IS NOT LEGALLY BINDING AND
SAVINGS TAKE PLACE AT NATIONAL AND LOCAL
LEVEL
9

EE IN THE EUROPEAN UNION: THE 5 PILLARS OF THE
ENERGY EFFICIENCY POLICY
EEAP
NEAP
LEGAL
FRAMEWORK
FLANKING
INSTRUMENTS:
FINANCE,
INFORMATION AND
NETWORKS
INTERNATIONAL
COLLABORATION
IN/OUT EU
Source: Energy Efficiency Plan 2011 - European Commission Communication 2011
10

EE IN THE EUROPEAN UNION: STRATEGIES, PLANS
AND DIRECTIVES
2010 EUROPE 2020 STRATEGY: SMART, SUSTAINABLE AND INCLUSIVE
GROWTH. 5 OBJECTIVES, AMONG WHICH A 20% INCREASE IN
ENERGY EFFICIENCY
2020
2011
AFTER 2006 – 2012 EEAP MID-TERM REVISION AND
EVALUATION (2009), A NEW EE(A)P IS RELEASED (targets, public
sector measures, buildings, energy supply obligations,
cogeneration and industry, financing issues, smart meters and
smart grids promotion. )
2012
ENERGY EFFICIENCY DIRECTIVE (2012/27/EU) IS THE
LEGISLATIVE RESULT OF THE 2011 EEAP. IT HAS REPEALED
THE ENERGY SERVICES DIRECTIVE (2006/32/EC) AND
INTEGRATES – among others – THE ENERGY
PERFORMANCE OF BUILDINGS DIRECTIVE (2010/31/EU),
THE DIRECTIVE ON ENERGY-RELATED PRODUCTS
ECODESIGN SETTING (2009/125/EC) AND THE DIRECTIVE
ON STANDARD INFORMATION AND LABELLING FOR
ENERGY-RELATED PRODUCTS
11

EE IN THE EUROPEAN UNION: WHAT ABOUT THE
PUBLIC SECTOR, BUILDINGS AND FINANCE
EEAP DIRECTIVES
PUBLIC SECTOR LEADING BY
EXAMPLE FOR:
- CREATION OF NEW MARKETS FOR
ENERGY EFFICIENT TECHNOLOGIES,
SERVICES AND BUSINESS MODELS;
- REFORM OF ENERGY USE
PROMOTING SUBSIDIES.
PUBLIC SECTOR FOCUSING ON:
- RENOVATION OF PUBLIC
BUILDINGS;
- ENERGY PERFORMANCE
CONTRACTING;
- ON THE GROUND
IMPLEMENTATION THROUGH
VOLUNTARY FORMAL COMMITMENT
(Covenant of Mayors – CoM)
TACKLING HEAT USE IN BUILDINGS:
- ESCO AS CATALYSTS FOR
RENOVATION.
APPROPRIATE NATIONAL AND
EUROPEAN FINANCIAL SUPPORT:
- COHESION POLICY;
- INTELLIGENT ENERGY EUROPE
PROGRAMME (2007 – 2013).
ART. 3, 19, 20 NATIONAL ENERGY
EFFIENCY TARGETS, NEEAP AND EE
NATIONAL FUND
ART. 4 LONG-TERM STRATEGY FOR
MOBILIZING INVESTMENTS IN RENOV.
OF NATIONAL STOCK OF BUILDINGS
(PUBLIC AND PRIVATE) WITHIN APRIL
30, 2014.
ART. 5 EXEMPLARY ROLE. PUBLIC
BODIES’ BUILDINGS THROUGH 3%
MINIMUM ANNUAL RENOVATION OF
TOTAL FLOOR AREA OF HEATED AND
COOLED CENTRAL GOVERNMENT
BUILDINGS. ESTABLISHMENT OF AN
INVENTORY OF CENTRAL
GOVERNMENT BUILDINGS WITH
FLOOR AREA AND ENERGY
PERFORMANCE. SUPPORT TO LOCAL
AND REGIONAL PUBLIC BODIES FOR
ENERGY MANAGEMENT, EE PLAN
AND USE OF ESCO AND EPC.
ART. 6 PUBLIC BODIES’ PURCHASES
WITH HIGH ENERGY-EFFICIENCY
PERFORMANCE. SUPPORT TO LOCAL
AND REGIONAL BODIES TO FOLLOW
CENTRAL GOVERNMENT EXAMPLE.
18, 49, 50, 51, 52 PREMISES:
INTEGRATED ENERGY APPROACH
(CoM) AND EU-LED FINANCING
NEEAP (ITALY) – JULY 2014
PREAMBLE:
- HIGHER ENERGY PRICES;
- DIRE SECURITY OF SUPPLY SITUATION;
- TOP COUNTRY IN TERMS OF ENERGY
EFFICIENCY (-19%);
- GOOD TECHNOLOGICAL LEVEL.
2020 NATIONAL ENERGY EFFICIENCY
TARGETS:
- SAVE 15.5 MTOE/YEAR, AVOID 55 MLN
TONNES CO2 EMISSIONS/YEAR; AVOID 8
BLN/YEAR FOSSIL FUEL IMPORTS
ENERGY SERVICES MARKET:
-QUITE DIVERSE SECTOR COUNTING
1.900 REGISTERED OPERATORS;
- ONLY 15% OF ALL OPERATORS WORK
ROUTINELY IN THE FIELD;
- WIDE RANGE IN TERMS OF ACTIVITIES
AND TARGET;
- 5% LARGE AND 95% SMALLER (60%
WITH LESS THAN 10 WORKERS).
HORIZONTAL ENERGY EFFICIENCY
MEASURES:
-STRUCTURAL FUNDS;
-SUSTAINABLE ENERGY ACTION PLANS
(CoM);
- REGULATORY HARMONIZATION.
ENERGY EFFICIENCY IN PUBLIC
BUILDINGS:
- CENTRAL GOVERNMENT AND OTHER
PUBLIC BODIES;
- PURCHASING BY PUBLIC BODIES.

EE IN THE EUROPEAN UNION: DIRECTIVE LOGICAL
FRAMEWORK
NEW
EED
Indicative national
energy targets
General measures
promoting EE
Monitoring and reporting
Sectoral measures
HOUSEHOLDS INDUSTRY
ENERGY SUPPLY
SERVICES
PUBLIC SECTOR
LARGE
COMPANIES
OBLIGATION
(economic and technical relevance criteria)
13

EE IN THE EUROPEAN UNION: THINK GLOBALLY BUT
ACT LOCALLY
Covenant of
Mayors
ELENA Programme
YEAR 2008 2007
BARRIER
ADDRESSED
CAPACITY, VISIBILITY
CAPACITY, ACCESS TO
CAPITAL
TYPE OF TOOL
EMPLOYED
NETWORKING,
INFORMATION,
STANDARDISATION
FINANCE
AREA COVERED
ALL EU + ENPI COUNTRIES
+ OTHER
ALL EU + Norway, Iceland,
Lichtenstein, Croatia and
FYR Macedonia + OTHER
PROMOTER EU COMMISSION
EU COMMISSION and
FINANCIAL INSTITUTIONS
STAKEHOLDERS
EU MS’ CITIES AND
REGIONS, CITIZENS
EU MS’ PAs, ESCOs, LOCAL
BANKS
NATURE POLICY
TECHNICAL ASSISTANCE
FACILITY
BASIC
DESCRIPTION
FORMAL COMMITMENT TO
REDUCE CO2 EMISSIONS
BY MORE THAN 20% BY
2020, THROUGH
INTEGRATED ENERGY
APPROACH (SEAP)
FINANCIAL SUPPORT FOR
TECHNICAL ASSISTANCE
COSTS, TO STRUCTURE AND
IMPLEMENT EE PROJECTS
AND ATTRACT INVESTORS

Marina Turcati – October 1, 2015Source: Covenant of Mayors, 2015
COVENANT ACTORS TOTAL
SIGNATORIES 6.477
INHABITANTS 208.669.792
COORDINATORS 172
SUPPORTERS 100
ASSOCIATED PARTNERS 25
LOCAL/REGIONAL
ENERGY AGENCIES
48
ACADEMIA PARTNERS 43

Knowledge
sharing
Technical
assistance
Technical
assistance
Knowledge
sharing
ELENA Europe
ELENA-East
50 mln grants
and 2,8 bln
investments
2 projects
fully
completed
(NL and ES)
leverage
factor 60
11
countries
> 500
towns
ELENA (through EIB)
EIB (co-investment with
loc. banks
intermediaries)
Beneficiaries Public authorities
Municipal, local and
regional authorities as
well as public and
private entities acting on
behalf of those
authorities
Countries EU-28, NO, IS, LICH. and MK EU
Focus areas
EE buildings and street
lighting, RE in buildings, district
heating renovation, EE and RE
in urban transport
Investments in EE and RE
projects
Invest. size > 30 mln euro
Co-funding
Up to 90% eligible technical
support costs (to prepare,
implement and finance the
investment programme)
Up to 75% of total
investment
Duration 3 years
Variable and related to
the project
Leverage
factor
1 : 20
7 bln euro over 2008 - 2013
BUILDINGS
INDUSTRY
ENERGY SECTOR
OTHER
Source: EIB, 2014

EE IN THE EUROPEAN UNION: COVENANT OF
MAYORS SUBSCRIPTION AND IMPLEMENTATION
Subscription
of COVENANT
OF MAYORS
1.
2.
Signing and creation
of an adequate
administrative
structure
Baseline Emission
Inventory and
development of a
Sustainable Energy
Action Plan
SEAP implementation –
hard (technical activity)
and soft measures
(stakeholders
involvement)
Preparation of
bankable projects
and investments
(hiring of experts and
capacity building)
Progress monitoring and
regular submission of
implementation reports
3. 17

EE IN THE EUROPEAN UNION: RESOURCES
EMPLOYED IN COM IMPLEMENTATION
Subscription
of
COVENANT
OF MAYORS
1.
2.
INTERNAL RESOURCES
(HR AND CAPITAL)
EUROPEAN FUNDING
PROGRAMMES (URBACT
III, HORIZON 2020, TERRITORIAL
COOPERATION)
EUROPEAN STRUCTURAL AND
INVESTMENT FUNDS (ERDF,
COHESION FUND, ESF, EAFRD, EMFF)
EUROPEAN FUNDING
PROGRAMMES (LIFE, CLLD, CIVITAS
Activity Fund, TERRITORIAL COOP.,
HORIZON 2020)
PROJECT
DEVELOPMENT
ASSISTANCE (ELENA EIB,
ELENA CEB, ELENA EBRD, ELENA
KfW, HORIZON 2020 CALL
EE20)
ALTERNATIVE FINANCING SCHEMES (ON BILL FINANCING, TPI
– EPC, SOFT LOANS AND GUARANTEES, REVOLVING LOAN FUNDS,
CROWD-FUNDING, GREEN MUNICIPAL BONDS)
1-2-3. 18

EE SERVICES PROCUREMENT (COM AND ELENA PROGRAMME
IMPLEMENTATION) IN ITALY
19

WHY IS ITALY RELEVANT FOR A PUBLIC
PROCUREMENT CASE STUDY RELATED TO COM
AND ELENA FACILITY?
n. COUNTRY SIGNATORIES POPULATION COVERED
SIGNATORIES WITH
SEAP
SIGNATORIES WITH
MONITORING
REPORTS
1 ITALY 3.568 38.807.975 (66%) 2.976 (83%) 305 (9%)
2 SPAIN 1.436 26.449.883 (60%) 1.184 (82%) 52(4%)
3 BELGIUM 247 6.642.597 (62%) 112 (45%) 32(13%)
4 PORTUGAL 123 5.742.330 (55%) 111 (90%) 34 (28%)
5 FRANCE 105 15.228.239 (25%) 96 (91%) 5 (5%)
6 GREECE 106 5.042.893 (47%) 78 (74%) 4 (4%)
7 GERMANY 65 17.403.825 (21%) 65 (100%) 12(18%)
8 UKRAINE 94 10.057.803 (22%) 43 (46%) 1(1%)
9 ROMANIA 74 4.455.855 (21%) 60 (81%) 3 (4%)
10 CROATIA 60 1.937.452 (46%) 59 (98%) 5 (8%)
11 HUNGARY 54 3.058.103 (31%) 40 (74%) 0 (0%)
12 SWEDEN 54 4.256.672 (49%) 52 (96%) 15 (28%)
n. COUNTRY TOTAL PROJECTS
FINANCED PERIOD BEST / WORST YEAR
1 ITALY 7 2010 – 2015 2011, 2015 / 2012
2 SPAIN 6 2010 - 2014 2010, 2013/ 2012-2015
UNITED KINGDOM 6 2011 – 2015 2011, 2012 / 2010-2013
DENMARK 6 2012 - 2014 2014/ 2010, 2011, 2015
3 THE NETHERLANDS 3 2010 - 2012 2010, 2011, 2012 / others
4 FRANCE 2 2010 – 2014 2010, 2014 / others
PORTUGAL 2 2011 - 2013 2011, 2013 / others
5 GERMANY 1 2014 2014/ others
SWEDEN 1 2011 2011 / others
BELGIUM 1 2013 2013 / others
SLOVENIA 1 2013 2013 / others
GREECE 1 2011 2011/ others
20

EE IN THE EUROPEAN UNION: ELENA
IMPLEMENTATION IN ITALY
MILAN
MODENA
CHIETI
PADUA
SAVONA
BERGAMO
VERONA and others
Source: EIB, 2015 Marina Turcati – October 1, 2015
City PA EE RE YEAR
Milan Province Public buildings 2010
Modena
Province and
Local energy
agency
Public buildings,
lighting
PV plants
on public
roofs
2011
Chieti Province
Public buildings,
lighting
2011
Padua
Province and
banking
foundation
Public buildings,
lighting, district
heating
2013
Savona Province
Public build.,
lighting, d.
water supply
systems
PV,
biomass
2014
CEV Verona
Local
municipalities’
consortium
(10%)
Public lighting 2015
Bergamo Province
Public build.,
lighting and
district heating
PV,
biomass
2015

COM AND ELENA IMPLEMENTATION IN ITALY: ACTORS
INVOLVED, MAIN PASSAGES AND SEQUENCE
• provinces’ participation as “supporting
structures” for SEAP preparation by
municipalities
• municipalities’ subscription of the covenant
• submission of an energy efficiency and RE
investment plan to the EIB, in order to obtain a
soft (intermediate) loan for ESCOs being
awarded an EPC contract by the Italian
municipalities/provinces (the loan is granted
through the local banking system)
• based on EIB financing agreement, access
to ELENA technical assistance grant, funded
through the European Commission’s Intelligent
Energy-Europe programme and managed by
EIB, in order to cover project preparation costs
a.
b.
c.

EE SERVICES PROCUREMENT IN ITALY WITHIN COM
AND ELENA FACILITY IMPLEMENTATION
FRAMEWORK
SELECTED
ESCOs
ENERGY
SUPPLIERS
EPC with performance
guarantee
MUNICIPALITIES
FEE
SAVINGS
EIB FUNDS
Selecting financial
intermediaries
FRAMEWORK AGREEMENT BETWEEN
PROVINCE AND DG-TREN
“SUPPORTING STRUCTURE
Public buildings and lighting
energy audits
SUBMISSION OF
REQUEST
FOR FUNDING
ENERGY AUDIT UPDATING
PROCESS (BASELINE)
CONTRACT
FORMATS AND ToR
TENDERS FOR THE ENERGY
REQUALIFICATION OF BUILDINGS
ELENA PROGRAMME-FUNDED ACTIVITIES
Source: ENEA and MISE, 2013
23

 POOL ENGINEERING ADVISED AND SUPPORTED LOCAL ITALIAN PA AUTHORITIES IN
PREPARING and MANAGING TENDERS FOR THE ENERGY REQUALIFICATION OF
BUILDINGS AND PUBLIC LIGHTING
CONSULTANT’S PERSPECTIVE ON EE SERVICES
PROCUREMENT
•technical office member
•administrative office
members (PP)
•accounting and auditing
•external relations office
member
PA ELENA project
implementation unit
procuring EE services
•Technical assistance
•legal and procedural
•economic
Technical consultants
1. Coordination of
municipalities.
2. Supervision of and
cooperation with
external consultants.
1. Management of
tender preparation,
with regard to:
- audit evaluation and
baseline revision
(tender doc);
- financial analysis
(i.e. fee and
marginality);
- contract drafting
and controversies.
2. Working method,
know-how and best
practices transfer
and sharing.
won technical assistance tenders in:
24
2011, Milan – open tender for legal, economic and technical
assistance (temporary consortium)
2013, Chieti – open tender for legal, economic and technical
assistance (temporary consortium)
2014, Padua – indirect source of information (former consortium’s
partner working as Province’s advisor)

PROCURING EE SERVICES: MILAN, CHIETI AND
PADUA EXPERIENCES
MILAN CHIETI PADUA
CoM SIGNING * 2010 2010 2012
ELENA project implementation
period 2010 - 2014 2011 - 2015 2014 - 2016
Project ENERGY EFFICIENT MILAN CHIETI TOWARDS 2020 3L LESS ENERGY, LESS COST, LESS
IMPACT
EE services procurement:
investments expected 90 mln euro (EIB 65) 80 mln euro (EIB 60) 83 mln euro (EIB 62)
Investments made 25.000.000 9.700.000 (so far) n.a.
Stage Tendered Partially tendered To be tendered (ongoing
auditing stage)
Internal organization project implementing unit project implementing unit project implementing unit
Expenditure 1.944.900 1.809.000 1.958.870
Preliminary assessment (audit)
• CARIPLO FOUNDATION
(PREEXISTING);
• 2 ROUNDS FOR MILAN
PROVINCE AND LOCAL
MUNICIPALITIES THROUGH
DIRECT AWARD
331 BUILDINGS IN 47
MUNICIPALITIES
• LOCAL MUNICIPALITIES’ SEAP;
• 1 ROUND FOR 136 BUILDINGS IN
21 LOCAL MUNICIPALITIES
• 2 ROUNDS FOR PUBLIC LIGHTING,
EACH FOR APPROX. 20.000 LIGHT
POLES
• POTENTIAL EXTENSION TO
LANCIANO MUNICIPALITY AND SOME
OF AQUILA PROVINCE
MUNICIPALITIES
• LOCAL MUNICIPALITIES’ SEAP;
• 1 ROUND FOR 57 BUILDINGS
OWNED BY PADUA PROVINCE
• 1 ROUND FOR 103 BUILDINGS
OF MUNICIPALITIES IN PADUA
PROVINCE
Project content
energy renovation of PA
buildings (heating and
other meas.) in small
municipalities (293) and
schools in Milan
municipality (38)
energy renovation of PA
buildings (heating and other
meas.) in small municipalities
in Chieti province and public
lighting EE implementation
energy renovation of
public buildings, public
lighting EE implementation
and EE district heating
development

PADUA EXPERIENCES
MILAN CHIETI PADUA
Local banking
intermediary Mediocredito Mediocredito n.a.
EE services tendering
process
2012
1° tender for 100
buildings and
16 municipalities
in energy renovation
(single lot); (restricted
procedure)
2 tenderers (an Italian-
based multinational
construction-turned-ESCO
company and a
temporary consortium
involving 4 ESCOs);
performance:
• 35% guaranteed
savings (1,3 mln/year);
• 15,7 mln euro invest.
2014
1° tender for 130
buildings and 21
municipalities in
energy renovation
(single lot); (restricted
procedure)
NO tenderers
possible reasons are:
• geography;
• fragmentation;
• relatively low
consumption.
Re-edited 2° tender
with minor changes
(open procedure)
NO tenderers
Expected size of the project is: 646
building in 41 municipalities and
approx. 100.000 light poles in 38
municipalities.
However coordination issues have
emerged; i.e. Rovigo municipality
already tendered autonomously part
of the energy building renovation
services (110 buildings), and several
municipalities might abandon the
project in the coming weeks
• organizational and procedural red
tape;
• provinces’ competences reform.
Critical areas • FINANCE (2011-2013) • PA
• MARKET • PA
Follow up Complaint (2 years) _ _

PADUA EXPERIENCES
MILAN CHIETI PADUA
EE services tendering
process
2012-2013
2° tender for 230
buildings and 31
municipalities in energy
renovation (two lots);
(restricted procedure)
NO tenderers
• lower energy
consumption;
• greater fragmentation.
Re-edited 2° tender with
reduced and simplified
maintenance activities
(some of which have been
taken out); (restricted
procedure)
NO tenderers
2015
2° tender for public lighting
energy efficiency
implementation (approx.
20.000 light poles) in 47
municipalities; (restricted
procedure)
1 tenderer (locally based
ESCOs’ temporary
consortium);
performance:
• 50% guaranteed savings;
• 9,7 mln euro investment
_
Critical areas • PA
• MARKET _ _
Follow up Re-edition and reduction _ _

PADUA EXPERIENCES
MILAN CHIETI PADUA
Local banking
intermediary Mediocredito 2010 2012
EE services
tendering process
2014
3° tender for 38 schools in
Milan municipality in
energy renovation (single lot),
benefiting from a 500.000
euro grant coming from
EXPO for CO2 emissions
reduction; (restricted
procedure)
1 tenderer (medium-sized
ESCO)
performance:
• 35% guaranteed
savings;
• 5,4 mln euro investment
2015
3° tender for lighting
energy efficiency
implementation (approx.
20.000 light poles divided
into 2 10.000 lots);
(restricted procedure)
requirements:
• 25% guaranteed
savings;
• 2.5 mln euro investment
_
Critical areas _ _ _
Follow up _ _ _

BARRIERS ENCOUNTERED AND ROOM FOR IMPROVEMENT
29

EE PROCUREMENT IN THE EUROPEAN UNION: BARRIERS MET
IN THE PRACTICE OF EE SERVICES PROCUREMENT AT
LOCAL LEVEL (PREMISE)
LIMITED
INVESTMENTS
LIMITED
INVESTMENTS
…WITH MORE PROJECTS
MORE KNOWLEDGE
EIB
EU
Commission Others
Institutional framework
and organization:
lack of PA capacity,
lack of qualified
consultants, low level of
communication
Market failures: energy costs
relatively low compared to other
costs, information failure, principal-
agent
Consumers and end-users: lack of
awareness, lack of trust, complexity
and hassle; end-user diversity
Financial issues: high level of initial
investment, biased financial
perceptions, lack of knowledge,
resources and capacity,
transaction costs (average size of
investments), dependency on
grants
Institutions, stakeholders, capacity:
institutional and legal frameworks, split
incentives, knowledge and capacity
Financial and economic
context: austerity and
reluctance in
committing to large
investments, limited
knowledge of financial
tools and opportunities
Buildings and measures: stifling
innovation, complex administration,
deep renovation, risk management
Regulatory framework: insufficient
or lax reg., wrong incentives,
unclear labelling, frequent
changes, lack of
enforcement/supervision
Finance: access to capital, risk
exposure, payback periods, size,
standardized measurement
OUTLINE OF THE SITUATION, BUT…
BARRIERSCLASSIFICATION
30

EE PROCUREMENT IN THE EUROPEAN UNION: BARRIERS AND
ROOM FOR IMPROVEMENT, BASED ON THE ITALIAN
EXPERIENCE (CASE STUDY)
INSTITUTIONS
(players)
Coordination and
knowledge
transfer
Choice of
stakeholders
Alternative,
emerging
stakeholders (L.
89/2014)
INSTITUTIONS
(organization)
Scale
Time,
accountability,
complexity, and
cost issues
Impact of the
legal framework
Different
assignment of
tasks, greater
role of
consultants,
legal framework
pre. evaluation
FINANCE
Leveraging and
knowledge
transfer
Bank rating and
economic
conjuncture
Timing, conditions
More effective
communication,
direct
involvement
MARKET
Increased and
qualified demand
Bundling issues vs.
firms coordination
Ex-post analysis
(business
sustainability
check)
STRENGHTS BARRIERS ENCOUNTERED POSSIBLE
ADJUSTMENTS

INSTITUTIONS (PLAYERS)
CHOICE OF STAKEHOLDERS
(Milan, Chieti and Padua)
INSTITUTIONS (ORGANIZATION)
TIME, ACCOUNTABILITY,
COMPLEXITY, COST ISSUES
32

IMPACT OF THE LEGAL FRAMEWORK
33

IMPACT OF THE LEGAL
FRAMEWORK
(Chieti and Padua)
FINANCE
BANK RATING, TIMING AND
CONDITIONS
34

MARKET
TENDERERS’ PROFILE
• 66% tenders for Milan and about 50% for Chieti (ongoing 3rd tender) have
received offers
• 2 out of 3 tenders have been awarded to temporary consortiums
• tenderers’ identikit:
NATION COMPANY TURNOVER LOCATION
Italian Multiutility (construction company) 400 – 450 mln euro (2013)
CENTER ITALY
Emilia-Romagna
(operating abroad)
Italo – British ESCO and CFC (energy trader) 100 – 150 mln euro (2013)
NORTH ITALY
Lombardy
Italian ESCO (equipment manufacturer) 50 – 100 mln euro (2013)
NORTH ITALY
Lombardy
Italian
Equipment manufacturer controlled by
an Italian ESCO (energy trader)
< 50 mln euro
(2013)
NORTH ITALY
Lombardy
Italian
ESCO (engineering company) controlled
by an Italian financial holding
< 50 mln euro (2013)
CENTER ITALY
Lazio
Italian ESCO (construction company) < 50 mln euro (2013)
SOUTH ITALY
Abruzzo
Italian
ESCO (equipment manufacturer)
controlled by an Italian construction,
real estate and TLC group
100 – 150 mln euro (2013)
NORTH ITALY
Veneto
Italian ESCO 350 – 400 mln euro (2013)
NORTH ITALY
Trentino Alto Adige
(operating abroad)
35

EE PROCUREMENT IN THE EUROPEAN UNION: BARRIERS
AND ROOM FOR IMPROVEMENT, BASED ON THE ITALIAN
INSTITUTIONS
•Different stakeholders
(i.e. local PA consortium
and central buying
units according to the
L. 89/2014) to be
addressed?
• Better division of labour
and continuity
(increased role for
consultants) ?
FINANCE
•Well-timed involvement
of financial operators
and promotion of
partnerships ?
MARKET
•Can some PPPs
operate at loss?
• Economic operators’
coordination (collusion)
vs. bundling issues:
need for an ex-post
analysis
POSSIBLE ADJUSTMENTS
EARLY INVOLVEMENT AND CONSULTATION OF BENEFICIARIES AND INTERMEDIARIES
THROUGHOUT THE ENTIRE PROGRAMME CYCLE. CAREFUL CHOICE OF
STAKEHOLDERS. GREATER ATTENTION TO THE LOCAL/NATIONAL CONTEXT.
36

MAIN SOURCES OF INFORMATION
(ENGLISH AND ITALIAN):
 CoM website: http://www.covenantofmayors.eu/Funding-Instruments,87.html
 EIB website: http://www.eib.org/products/advising/elena/index.htm
 Interviews with Pool Engineering S.r.l. and SINLOC S.p.A. engineering and project finance staff
 Singh, J., Limaye, D. R., Henderson, B., Shi X., Public Procurement of Energy Efficiency Services , The World Bank, 2010
 Weaver, R. K., “Target Compliance: The Final Frontier of Policy Implementation”, Issues in Governance Studies, n. 27,
09/2009, Brookings
 Di Santo, D., Tommasetti, G., Venturini, V., et al., “Energy efficiency in the building sector: skills, business models and
public private partnerships”, ENEL Foundation Working Paper, 13/2014
 Bullier, A., Milin, C., “Alternative financing schemes for energy efficiency in buildings, ECEEE Summer Study proceedings,
2013
 Rezessy, S., Bertoldi, P., “Financing energy efficiency: forging the link between financing and project implementation”,
JRC of the European Commission, ISPRA, 2010
 Zabot, S., Di Santo, D., Guida ai contratti di prestazione energetica (EPC) negli edifici pubblici, ENEA – Agenzia nazionale
per l’energia Report RdS/2013/150
 Di Santo, D., Le ESCO, l’EPC e l’FTT, FIRE – Federazione Italiana per l’uso razionale dell’energia, 2005
 Guertler, P., Royston, S., Wade, J., “Financing energy efficiency in buildings: an international review of best practice and
innovation”, ACE report to ADEME, June 2013
 EU Commission, “Financial support for energy efficiency buildings”, Consultation Paper, 2012
 EU Commission DG Energy, Technical Guidance. Financing the energy renovation of buildings with Cohesion Policy
funding, Final Report, 2014
 Hinrichs-Rahlwes, R., Sustainable Energy Policies for Europe: Towards 100% Renewable Energy (Sustainable Energy
Developments), CRC Press, 2013
 VV.AA., Energy Efficiency Finance, The World Bank / IFC / MIGA, 2010
37

THANK YOU FOR
YOUR ATTENTION.
marina.turcati@pooleng.it

ELENA assistance case study - Pool Engineering S.r.l

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