Energy Services in The Netherlands“Energy demand, paradoxically, is not driven by a demand forenergy itself, but rather by...
Outline• Introduction: Context and motivation• ESCO Basics• EU and Dutch policy• Current situation• US ESCO study• Conclus...
Context• The EU and thus TheNetherlands face a diminishingfossil fuel supply and risingimports– 7% of EU GDP in 2020 spent...
EUEnergy consumption by sector (MTOE)EU Energy Policy Targets: 20/20/20• A reduction in EU GHGemissions of at least 20%bel...
Why ESCOs ?• The Built environment consumes 40% of EU TPES• ESCOs have as core business to reduce energyconsumption in the...
Research Question• Given that ESCOs can contribute to improving EnergyEfficiency in the built environment, how can the dev...
Playing field7
Methodology• Data sources– Journals (Energy, Energy Policy, etc.)– Laws & directives (Eur-Lex, Rijksoverheid)– Consultancy...
Navigation• Introduction• ESCO Basics: How does it work ?• EU and Dutch policy• Current situation• US ESCO study• Conclusi...
ESCO Basics• The ESCO guarantees energy savings that are the result of its services• The ESCO finances the investments pri...
ESCO Basics• Energy Performance Contracting: For existing buildings only• Typical contract term: 5 – 10 years11
ESCO Basics• Client benefits:• One contractor for allenergy related services• New equipment withoutcapital requirements C...
Financing and Transaction costs• Credit acquired by highest rated party• Transaction costs influenced by– Financial arrang...
Navigation• Introduction• ESCO Basics• EU and Dutch policy: What’s the plan ?• Current situation• US ESCO study• Conclusio...
EU Policy• EU EEP (2007 / 2011): non-binding framework for EU Efficiency policy– ESCOs mentioned as important tool for EE–...
Dutch Policy• Binding targets for 2020– 14% renewables– -16% GHG vs. 2005– Largely to be achieved by emission trading and ...
Dutch Policy• No solid targets for existing buildings– new buildings focus seems inappropriate: declininghousing market an...
Navigation• Introduction• ESCO Basics• EU and Dutch policy• Current situation: Opportunities and practices• US ESCO study•...
Current situation and Potential• Potential annual revenue: € 21 M – € 65 M• Deliver 2% of NL EE targets in services sector...
Barriers and Opportunities• Barriers– Immaturity of market• Trust in EPC concept, Unfamiliarity with TCO• Absence of stand...
Current situation and Potential• Government hasjurisdiction over 46% ofpotential market• Good credit rating• Stable custom...
State Building Service Plans• Improve 2 label steps or tolabel C• New buildings highlyefficient• Rented buildings havemedi...
State Building Service Practices• Focuses on partial improvement– Recommissioning of HVAC equipment (optimisation)• Uses D...
Navigation• Introduction• ESCO Basics• EU and Dutch policy• Current situation• US ESCO study: Is gvt. Focus justified ?• C...
USA Lessons• EE is core businessfor ESCOs• MUSH generatesmost revenue• 84% of revenue frompublic investments• Federal clie...
USA Lessons• FEMP generates“significant” fractionof ESCO federalrevenue• Public investmentsresponsible for 84%of all ESCO ...
Navigation• Introduction• ESCO Basics• EU and Dutch policy• Current situation• US ESCO study• Conclusion• Recommendations27
Conclusion• Opportunities in government buildings• Barriers related to information unavailability andlack of standards• Du...
ConclusionQ: How can we stimulate the development ofan energy services industry in TheNetherlands?A: The Dutch national go...
Navigation• Introduction• ESCO Basics• EU and Dutch policy• Current situation• US ESCO study• Conclusion• Recommendations30
General Recommendations• Develop renovation policy and informationavailability for existing (public) buildings– Database w...
Practical Recommendations• RGD should– Reconsider EE ambitions– Investigate impact of DBFMO practices vs. EPC– Separate en...
Discussion33
• Can you actually compare USA and Dutchbuildings ?– Energy consumption in MJ/m2 primary in 2008was 1243 MJ/m2 for the USA...
Discussion35
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Energy services in the netherlands

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  • Solids, oil, gas (bottom up) / Trillion Cubic Feet
  • Solids, oil, gas (bottom up) / Trillion Cubic Feet
  • Mention relation EU  NL
  • Energy services in the netherlands

    1. 1. Energy Services in The Netherlands“Energy demand, paradoxically, is not driven by a demand forenergy itself, but rather by a demand for energy services”Master’s Graduation Presentation by Joost van BarneveldCurrent status and how to stimulate developmentSteinberger et al., 2009Supervised by Robert Harmsen (UU), Andrew Satchwell (LBL) and Peter Larsen (LBL)
    2. 2. Outline• Introduction: Context and motivation• ESCO Basics• EU and Dutch policy• Current situation• US ESCO study• Conclusion• Recommendations2
    3. 3. Context• The EU and thus TheNetherlands face a diminishingfossil fuel supply and risingimports– 7% of EU GDP in 2020 spent onfuel imports– Dependency on unstablesuppliers• GHG Emissions– EU Commitment to limitglobal warming to < 2°C Naturalgasproduction(trillioncubicfeet)3EU Net imports, (MTOE)
    4. 4. EUEnergy consumption by sector (MTOE)EU Energy Policy Targets: 20/20/20• A reduction in EU GHGemissions of at least 20%below 1990 levels• 20% of EU energyconsumption to come fromrenewable resources• A 20% reduction in primaryenergy use compared toprojected levels, to beachieved by improvingenergy efficiency4
    5. 5. Why ESCOs ?• The Built environment consumes 40% of EU TPES• ESCOs have as core business to reduce energyconsumption in the built environment• The Dutch ESCO market is underdeveloped5
    6. 6. Research Question• Given that ESCOs can contribute to improving EnergyEfficiency in the built environment, how can the developmentof an energy services industry in The Netherlands bestimulated ?6
    7. 7. Playing field7
    8. 8. Methodology• Data sources– Journals (Energy, Energy Policy, etc.)– Laws & directives (Eur-Lex, Rijksoverheid)– Consultancy and statistics offices (IEA, Eurostat, CBS)– LBL Esco Database• Analysis– Barriers, opportunities and incentives– Focused on existing buildings• Conclusion– Based on comparing Dutch and USA analyses8
    9. 9. Navigation• Introduction• ESCO Basics: How does it work ?• EU and Dutch policy• Current situation• US ESCO study• Conclusion• Recommendations9
    10. 10. ESCO Basics• The ESCO guarantees energy savings that are the result of its services• The ESCO finances the investments privately, or arranges financing basedon the guaranteed energy savings• The ESCO’s reward is directly tied to the achieved energy savings10
    11. 11. ESCO Basics• Energy Performance Contracting: For existing buildings only• Typical contract term: 5 – 10 years11
    12. 12. ESCO Basics• Client benefits:• One contractor for allenergy related services• New equipment withoutcapital requirements Client keeps capitalfor core business• Improved comfort, NEBs• Shared Savings duringcontract term• All savings after contractexpires12
    13. 13. Financing and Transaction costs• Credit acquired by highest rated party• Transaction costs influenced by– Financial arrangements, risk division, M&V• EPC available from € 200 k – € 500 k energy bills13
    14. 14. Navigation• Introduction• ESCO Basics• EU and Dutch policy: What’s the plan ?• Current situation• US ESCO study• Conclusion• Recommendations14
    15. 15. EU Policy• EU EEP (2007 / 2011): non-binding framework for EU Efficiency policy– ESCOs mentioned as important tool for EE– Public authorities lead by example– Member states required to draft National EEPs• EPBD (2010/31/EU)– Minimum standards for new and renovated buildings and buildingsinstallations– Minimum requirement: cost effective over the lifetime of the investment• ESD (2006/32/EC and 2011 draft)– Energy audits and labels for all buildings– To be displayed on change of ownership or tenancy– Focuses on availability of energy consumption information– National governments should be launching customer for ESCOs15
    16. 16. Dutch Policy• Binding targets for 2020– 14% renewables– -16% GHG vs. 2005– Largely to be achieved by emission trading and EE• Based on covenants and voluntary agreements– Housing corporations, installers, construction industry• Tax deductions for EE and environmental investments– Reduces investment costs by ~11%• Targeted technologies– Combined Heat and Power (CHP) / Warmte-Kracht Koppeling (WKK)– Thermal Energy Storage (TES) / Warmte-Koude Opslag (WKO)16
    17. 17. Dutch Policy• No solid targets for existing buildings– new buildings focus seems inappropriate: declininghousing market and 16% vacancy in offices market– No renovations target• 56% of EE targets in residences and offices1740%16%7%19%19%Origin of NL EEAP 2011 Energy SavingsResidentialTertiaryIndustry/SMEtransportAgriculture
    18. 18. Navigation• Introduction• ESCO Basics• EU and Dutch policy• Current situation: Opportunities and practices• US ESCO study• Conclusion• Recommendations18
    19. 19. Current situation and Potential• Potential annual revenue: € 21 M – € 65 M• Deliver 2% of NL EE targets in services sector annually• ES Suppliers focusing on new buildings and CHP, TES• Virtually no ESCOs present– < 20 pure ESCOs– Revenue < € 4 M in 201019
    20. 20. Barriers and Opportunities• Barriers– Immaturity of market• Trust in EPC concept, Unfamiliarity with TCO• Absence of standards for contracts and financing– Unstable policy environment– Limited capital availability• Opportunities– Government committed to exemplary role inbuilding EE and launching customer combinedwith large potential20
    21. 21. Current situation and Potential• Government hasjurisdiction over 46% ofpotential market• Good credit rating• Stable customer• Single biggest client 16%13%9%35%17%6%4% EducationHealthcareRetailOffices (commercial)Offices (Gvt.)warehousesother21
    22. 22. State Building Service Plans• Improve 2 label steps or tolabel C• New buildings highlyefficient• Rented buildings havemediocre score• 16% EE improvement overtotal portolio• Owned/rented = 0.622• Energy labels:– G corresponds to 1970’sstandards– A nearly energy neutral– A++: energy generator>33%
    23. 23. State Building Service Practices• Focuses on partial improvement– Recommissioning of HVAC equipment (optimisation)• Uses DBFMO Performance contracting– Design, Build, Finance, Maintain, Operate– Most suited for new buildings– Broad range of services, not primarily focused on EE– Implemented by ad-hoc consortia23• Damages ESCOopportunity:– Package profitabilitydeclines– Random parties reduceoptions for specialization
    24. 24. Navigation• Introduction• ESCO Basics• EU and Dutch policy• Current situation• US ESCO study: Is gvt. Focus justified ?• Conclusion• Recommendations24
    25. 25. USA Lessons• EE is core businessfor ESCOs• MUSH generatesmost revenue• 84% of revenue frompublic investments• Federal client issingle greatest client25
    26. 26. USA Lessons• FEMP generates“significant” fractionof ESCO federalrevenue• Public investmentsresponsible for 84%of all ESCO revenue262 49121518212427300510152025302006 2007 2008 2009 2010 2011 2012 2013 2014 2015EEImprovement(%)FEMP Existing buildings EE targets
    27. 27. Navigation• Introduction• ESCO Basics• EU and Dutch policy• Current situation• US ESCO study• Conclusion• Recommendations27
    28. 28. Conclusion• Opportunities in government buildings• Barriers related to information unavailability andlack of standards• Dutch Government:– Misdirects policy towards new buildings– Can influence 46% of potential ESCO market– Comitted to exemplary role and launching customer• US Escos– receive 84% of revenue from public investments28
    29. 29. ConclusionQ: How can we stimulate the development ofan energy services industry in TheNetherlands?A: The Dutch national government shoulddevelop long term consistent policy thatrequires building managers under theirdirect or indirect jurisdiction to pro-actively consider having their buildingsserviced by energy service companies.29
    30. 30. Navigation• Introduction• ESCO Basics• EU and Dutch policy• Current situation• US ESCO study• Conclusion• Recommendations30
    31. 31. General Recommendations• Develop renovation policy and informationavailability for existing (public) buildings– Database with floorspace, building types andenergy performance• Initiate stakeholder platform– With the state as client and policy maker– Financial institutions, ESCOs and contractors– Disseminate best practices, knowledge, standards31
    32. 32. Practical Recommendations• RGD should– Reconsider EE ambitions– Investigate impact of DBFMO practices vs. EPC– Separate energy contracting from DBFMO• Alleviates ad-hoc problematic• Stimulates ESCO development• Establishes knowledge on EPC– Valuable for stakeholder platform– Rollout to lower governments and MUSH32
    33. 33. Discussion33
    34. 34. • Can you actually compare USA and Dutchbuildings ?– Energy consumption in MJ/m2 primary in 2008was 1243 MJ/m2 for the USA commercial sectorand 1238 MJ/m2 for the Dutch– Data is hard to compare:• Non-overlapping sectors• Primary vs. Delivered energy• Data is hard to getDiscussion34
    35. 35. Discussion35

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