Business models for energy efficiency in buildings

Emerging business
models for energy
efficiency in buildings
Dario Di Santo, FIRE
ECEEE, 3 June 2015

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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 nearly
450 members, FIRE operates under an
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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445 members in 2014, 228 persons
and 217 organizations.
Some members of FIRE:
A2A calore e servizi S.r.l. - ABB S.p.a. - Acea S.p.a. - Albapower S.p.a. -
Anigas - Atlas Copco S.p.a. - Avvenia S.r.l. - AXPO S.p.a. - Banca d’Italia -
Banca Popolare di Sondrio - Bit Energia S.r.l. - Bosh Energy and Building
Solution Italy S.r.l. - Bticino S.p.a. - Burgo Group S.p.a. - Cabot Italiana
S.p.a. - Carraro S.p.a. - Centria S.p.a. - Certiquality S.r.l. - Cofely Italia
S.p.a. - Comau S.p.a. - Comune di Aosta - CONI Servizi S.p.a. - CONSIP
S.p.a. - Consul System S.r.l. - CPL Concordia Soc. Coop - Comitato
Termotecnico Italiano - DNV S.r.l. - ENEL Distribuzione S.p.a. - ENEL
Energia S.p.a. - ENEA - ENI S.p.a. - Fenice S.p.a. - Ferriere Nord S.p.a. -
Fiat Group Automobiles - Fiera Milano S.p.a. - FINCO - FIPER - GSE S.p.a.
- Guerrato S.p.a. - Heinz Italia S.p.a. - Hera S.p.a. - IBM Italia S.p.a. - Intesa
Sanpaolo S.p.a. - Iren Energia e Gas S.p.a. - Isab s.r.l. - Italgas S.p.a. -
Johnson Controls Systems and Services Italy S.r.l. - Lidl Italia s.r.l. -
Manutencoop Facility Management S.p.a. - Mediamarket S.p.a. - M&G
Polimeri Italia - Omron Electronics S.p.a. - Pasta Zara S.p.a. - Pirelli
Industrie Pneumatici S.p.a. - Politecnico di Torino - Provincia di Cremona -
Publiacqua S.p.a. - Rafﬁneria di Milazzo S.c.p.a. - RAI S.p.a. - Rete
Ferroviaria Italiana S.p.a. - Rockwood Italia S.p.a. - Roma TPL S.c.a.r.l. -
Roquette Italia S.p.a. - RSE S.p.a. - Sandoz Industrial Products S.p.a. -
Schneider Electric S.p.a. - Siena Ambiente S.p.a. - Siram S.p.a. -
STMicroelectronics S.p.a. - TIS Innovation Park - Trenitalia S.p.a. -
Turboden S.p.a. - Università Campus Bio-Medico di Roma - Università
Cattolica Sacro Cuore - Università degli studi di Genova - Varem S.p.A. -
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,
Telecom Italia, Unioncamere), universities,
associations, energy agencies and exhibition
organizers.
www.fire-italia.org

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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 obligations for large companies
introduced by the EED directive and the white
certificate scheme.

FIRE’s study on EE in the building sector
The study “Energy efficiency in the building sector: skills, business models and
public private partnerships” aimed to analyze innovative tasks, business models, and
public support to promote energy efficiency in the building sector, linking up with the
development of an industrial policy in line with the Green Growth Strategy, also through
the development of the ESCO model.
The study, which concentrated on the Italian situation, in particular examined:
1. The degree of integration of available technologies, the skills asked for and the skills
necessary to manage this integration, and the interaction between the various players
and the (public and private) parties concerned.
2. The financial, administrative and legal barriers that are obstacles to the massive
dissemination of efficient construction-industry technologies on a larger scale, and
that impede an integrated and holistic approach – instead of the actual fragmented
one – from catching on.
3. The actual implementation of innovative and successful business models to improve
energy efficiency in the public building sector (ESCO, utilities, “green banks”, etc.).
The analysis focused on the Italian situation and resulted in a study structured in ten
chapters.
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Italian building estate
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End user
Number of
buildings
Surface area
(1,000 m2)
Public administration 9,550 16,881
Education 2,025 2,594
Healthcare 508 2,286
Research and development 247 492
Electrical power gas water 129 100
Real estate and construction 128 189
Other 993 956
Total 13,581 23,429
70%
of
building

stock
made
before

1976,
without
energy

requirements
12
Mln
of

residen@al
buildings,

3.5
Mln
housing
units

in
the
service

sector
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del 2000 (l’eccezione del 2010 è dovuta a un effetto “rimbalzo” dopo la forte contrazione
del 2009).
Il confronto 2011-2000 mostra una consistente riduzione dei consumi del settore
industriale (-23%) e un significativo aumento di quelli relativi agli usi civili (+15%), mentre i
consumi degli altri settori hanno registrato variazioni di entità trascurabile.
Figura 2 - Impieghi finali di energia per settore, anno 2011 - Totale 134,9 Mtep
Fonte: elaborazione ENEA su dati MSE
24,2%
31,5%
34,4%
2,2%
5,1% 2,5% Industria
Trasporti
Usi civili
Agricoltura
Usi non energetici
Bunkeraggi
Final energy consumption
Industry
Transport
Civil sector
Agricolture
Non energy
uses
Bunkers
Final

consump@on

in
2011:
135

Mtoe
Building for office use only

Energy efficiency incentives in Italy
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White certificates
Tax deductions 50% e 65%
RES incentives
(D.M. 6 luglio 2012)
Heat account
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

Barriers
1) Economic barriers
2) Lack of awareness and know-how
3) Energy is not core business
4) Qualification of market operators
5) Supply chain not adequately developed
6) Integration difficulties and complexity
7) Legislation and standards
8) Access to incentive schemes
9) Financing
10) Public sector barriers
9

End uses, technologies, business models
10

Market segmentation/consumption
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Market segmentation/
Description of consumption
Prevalence of
heat or
electrical
consumption
Load factor
Complexity
of plants
Impact of
energy
expenses on
operating
expenses
Absolute
value of
energy costs
justifying
manger
Knowledge of
consumption
and
performance
Dispersed buildings Thermal Low Low Low No Yes/ no
Single-family residences Thermal Low Low Low No No
Multi-family residences Thermal Low Low Low No No
Timesharing condominiums Thermal Low Low Low Yes/no No
Private housings Thermal Low Low Medium Yes No
Public housing Thermal Low Low Medium No No
Dispersed services sector Electrical Medium Medium Medium No Yes
Large services-sector buildings Electrical High High High/medium Yes Yes
Territorial infrastructures Electrical High Medium Low Yes Yes
Buildings occupied by local P.A. Thermal Medium Low Low No No/yes
Buildings occupied by central P.A. Thermal Medium Low Low No No/yes
Primary and secondary schools Thermal Low Low Low No No/yes
Health Thermal High High High Yes Yes
University Thermal Medium High High Yes Yes

Market segmentation/decision making
12
Market segmentation/
Decision-making
capacity
Congruence
between the
interests of
the users and
the owners
Presence of
skilled
energy
managers
Decision
taken
considering
energy
efficiency
Who can
provide
technical and
organisationa
l support?
Access to
tax credit
Use of
energy
global
service for
O&M
Possibility to
stipulate an
EPC contract
for the
energy
supply
Dispersed buildings Yes No
Yes (fiscal
deductions)
Craftsman Yes No No
Single-family residences Yes No
Yes (fiscal
deductions)
Craftsman Yes No No
Multi-family residences Yes No
Yes (fiscal
deductions)
Professional Yes No No
Condominiums No/Yes Yes/No No
Professional,
ESCO
Yes/No Yes No/Yes
Private housings Yes/No No/Yes Yes/No
Professional,
ESCO
Yes Yes No
Public housing Yes/No Yes Yes/No ESCO No Yes No
Dispersed services sector No/Yes Yes Yes Professional Yes Yes/No No/Yes
Large services sector
buildings
Yes Yes Yes
Professional
ESCO
No Yes No/Yes
Territorial infrastructures Yes Yes Yes
Professional
ESCO
No Yes No/Yes
Buildings occupied by local
P.A.
No Yes No
Professional
ESCO
No Yes No/Yes
Buildings occupied by
central P.A.
No No No
Professional
ESCO
No Yes No/Yes
Primary and secondary
schools
No Yes Yes/No ESCO No Yes No/Yes
Health Yes/No Yes Yes
Professional
ESCO
No Yes No/Yes
University No/Yes Yes Yes ESCO No Yes No/Yes

Market segmentation/technology
13
Market
segmentation/
Technologies
Meters
Home
automat
ion
Fixtures
and
doors
Free
cooling
and
ventilation
CHP
Lightnin
g
Biomass
Heat
pump
Insulati
on
Conden
sing
boilers
Shading
glazed
walls
Dispersed buildings Yes Yes Yes Yes Yes/No Yes Yes Yes Yes Yes Yes
Single-family
residences
Yes Yes Yes Yes Yes/No Yes Yes Yes Yes Yes Yes
Multi-family
residences
Yes Yes Yes Yes Yes/No Yes Yes Yes Yes Yes Yes
Timesharing
condominiums
Yes Yes Yes No No/Yes No No No No Yes Yes
Private housings Yes Yes Yes No No/Yes Yes Yes Yes Yes Yes Yes
Public housing Yes Yes Yes No No Yes Yes No Yes No Yes
Dispersed services
sector
Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Large services-sector
buildings
Yes Yes No/Yes Yes Yes Yes No Yes No Yes Yes
Territorial
infrastructures
No/Yes Yes No/Yes Yes Yes Yes No Yes No Yes Yes
local P.A.
No/Yes Yes Yes Yes No Yes No No No Yes Yes
the central P.A.
No/Yes Yes Yes Yes No Yes No No No Yes Yes
Primary and
secondary schools
Yes Yes Yes Yes/No No Yes/No Yes/No No No Yes/No Yes
Health No/Yes Yes Yes Yes Yes Yes No Yes/No Yes Yes Yes
University Yes Yes Yes Yes Yes Yes No Yes/No No Yes Yes

Market players
14
Large-scale retailers
This line of business grew the most. Good results in terms of lighting and the labelling of
household appliances. The theme of stand-by and of induction cookers still hardly covered.
Installers and micro
companies distributed
over the territory
Although the 55 % and 65 % tax deductions stimulated knowledge of the basic technologies
and a minimum level of training, but the low average skill level of these operators is the
main handicap of this line of business. A line of business that is furthermore essential for
residential users.
Engineering firms/
professional
Incentives have stimulated growth in this area also. the growth however is still insufficient
when considering that it is necessary to know how to plan operations for new buildings and
to retrofit existing buildings in an holistic manner, integrating envelopes and systems.
Inadequate skill levels and remuneration regulations that favour traditional professional over
innovative professionals are the main restraint for growth in this category.
Construction companies
and building renovation
firms
Building legislation and regulations increasingly steer traditional building sector operators
towards energy efficiency, also taking advantage of available incentives. The skill level is not
however adequate, nor is the mentality of many manufacturers who cling to the schemes
used a few decades ago.
ESCOs
They are implicated by several players, but they are in general a long way from meeting
market needs, mainly due to the lack of capital and their very recent foundation, aspects that
limit recourse to third-party financing, the most sought after characteristics in this current
market.
Electricity and gas
suppliers
These parties were the last to move, therefore their fundamental limit is the lack of know-
how, together with the difficulty in training networks of commercial accounts used to sell
much simpler products.. Wagering on simple sales agreements with technical partners has
not always turned out to be a successful proposal. The first structured development plans,
which could be effective for SMEs also, are just beginning in this sphere.
Banks and funds
The limited size of energy efficiency investments, their complexity and the characteristics of
the supply operators render the development of easily accessible financial packages
complicated. Although several players had perceived the potential of this market by intuition,
the focus on photovoltaic-plant driven by the incentives in the last years has diverted the
interest in energy efficiency, determining a delay in the development of the know-how
required to participate in this business.

Case studies
3 of the 15 case studies are summarized hereafter
Condomini Intelligenti, Are Liguria. www.condominiintelligenti.it
Energy upgrading of private residential buildings in the province for Genoa, subject to
energy diagnosis in collaboration with condominium tenants and administrators and
subsequent comparison with the energy performance certificate present in the Liguria
region's data bank. Opportunity to attract ESCOs and low rate loans by local bank.
Enel Energia. www.enelenergia.it
Energy suppliers are attempting to develop business models that seek to provide
energy-efficiency services together with energy sales. Enel Energia initiated a vigorous
activity targeting all the sectors. In the residential sector in particular, turnkey solutions
are proposed with third-party financing.
Habitech, Technological District of Trentino. www.habitech.it
Habitech, the technological district for energy and the environment, was founded in
2006 in the Autonomous Province of Trento, with the objective of developing a network
of companies and a supply chain specialized in sustainable buildings, in the production
from renewable energy sources, and in energy efficiency. The district had implemented
various initiatives both in the public and in the private sector.
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Proposals
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To establish an
optimal framework it is
important to use well
the available resources
It is advisable to invest to:
diffuse information campaigns to increase the awareness;
diffuse energy audits, data monitoring, and energy
management systems, which favor the establishment of
performance indicators (EnPI) and the implementation of
energy efficiency projects, and are the basis for EPC
contracts TPF;
promote training of market players, crucial in particular
for households and SMEs, and the role of the energy
managers;
diffuse a system of adequate on-site controls for
buildings’ energy performance certification, incentives,
compliance with the design specifications, etc.;
maintain a stable framework of rules capable of
stimulating the retrofit of existing buildings;
consider incentives for building renovation that remain
connected to the property, in order to overcome the
problem of landlord-tenant;
promote tools that help EPC contracts (model contracts,
cooperation among public authorities and market players,
energy audit models, M&V protocols, certification of
market players, guarantee fund, etc.);
promote the start-up of new business models suited for
small scale projects.

Thank you!
www.facebook.com/FIREenergy.manager
www.linkedin.com/company/fire-federazione-
italiana-per-l'uso-razionale-dell'energia
www.twitter.com/FIRE_ita
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