Berliner Energieagentur GmbH
WP 2 training session
EPC project development models
Berlin, 2006-02-08
Dipl.Ing. Vollrad Kuhn, Berliner Energieagentur GmbH
Berliner Energieagentur GmbH
EPC project development models
Two different project development models:
• Single-stage procedure (e.g. Energy Saving Guarantee Contract from the Hesse guidelines, guidelines was elaborated from BE/legal experts for Hesse Environmental Ministry, published 2003)
• Two-stage procedure (e.g. Success Guarantee Contract from the dena guidelines, published from German Energy Agency dena for the Federal Ministry of Transport, Building and Urban Affairs 2003)
Berliner Energieagentur GmbH
EPC project development models
Main differences between both models
Single-stage model:
• Bidder as potential contractor has to provide an energy saving guarantee already after performance of the energy rough analysis (including the 1st validation of building data, determination of energy and cost saving potential, concret energy efficiency measures)
• no separate project planning contract, no separate remunaration of the bidders planning costs for rough and fine analysis
• 2nd validation of building data / fine analysis is part of the preparation phase of project implementation phase
Berliner Energieagentur GmbH
EPC project development models
Main differences between both models
two-stage model:• Bidder as potential contractor has to provide also an energy saving guarantee
after performance of the energy rough analysis (including the 1st validation of building data, determination of energy and cost saving potential, calculation of planning costs for fine analysis), but selected Contractor must verify the saving potential and specify his rough analysis results before the project implementation
• Stage 1: Contractor has obligation for fine analysis (detailed 2nd validation of potential energy and cost savings) on basis of separate project planning contract for fine analysis prior to conclusion of EPC contract (or planning contract is part of the whole EPC contract), he can adjust the building data sheets, saving measures
• separate remuneration of the contractors planning costs for fine analysis (if there is a confirmation with rough analysis, but decision against start of the stage 2 by client)
• Stage 2: implementation of energy eficiency measures/performances and success guarantee by the Contractor (if confirmation of rough analysis or seperate decision of the client)
Berliner Energieagentur GmbH
EPC project development models
Course of the negotiation procedure
Phase I: request for submission of a tender and sending of the bidding documentstwo-stage model: requirements for fine analysis are content of the documents
Phase II: negotiation of the tenders (1 – 2 negotiation rounds), negotiation closing
Phase III: review, evaluation and award or cancellation of the negotiation procedure
After award decision, contract conclusion start of project implementation by the Contractor
Two-stage model: Contractor has to start with stage 1 (fine analysis), if the results confirm rough analysis, client can choose from two alternatives
• Order to start with stage 2, fine analysis costs are content of calculated basic remuneration for the EPC services
• Decision against implementation of stage 2 (due to fair reasons by the client), remuneration of contractors fine analysis costs by the client
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Tasks of project development and implementation I
Frame establishing description / communication of the project Checking the data situation
Building selection / definition of targets Energy costs for electricity, heat etc. Using data (operating hours, numbers of pupils etc.) Description of the sites/buildings
Integration of• decision maker / professional departments• approval authorities
step 0:
step 1:
Fixing of• Energy cost-baseline• System request
Project preparation and -development
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Call for tender Announcement with giving kind of project
development model, award procedure Call for expression of interest / prequalification Dispatch of request
Rough analysis / laying of offer Site-visits at the buildings Validation of data Determination of saving guarantee (and planning
costs fine analysis)
Presentation of• model contract (single- ore two-stage model)• assessment criterias
step 2:
step 3:
Offer with• saving guarantee• catalogue with measurements, investment costs• (planning costs and duration of fine analysis)
Tasks of project development and implementation IIcompetition
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Checking the offer / negotiations Condensing the competition step by step Negotiations with max. 3 best bidders Offer comparison with exactly assessment
criterias and with own direction
Contract signature Approval by the authorities Proof of the economy
Benefit amount-analysis integrated• technical-economical analysis• ecological assessment
step 4:
step 5:
Contract includes• rights and responsibilities• cooperation principles• (stage 1: project planning contract, stage 2:
performances and success guarantee)
Tasks of project development and implementation III
competition
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Tasks of project development and implementation IVEnergy saving-guarantee-contract / Project implementation (single-stage
model)Preparation phase
Detailled planning and realisation of the saving measures
inspection End of construction measurements by Contractor Inspection by building owner
Contractor is responsible for• Planning, financing and construction in
coordination with the building owner
step 6:
step 7:
Building owner get• property of the realised facilities
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Tasks of project development and implementation IVEnergy saving-guarantee-contract / fine analysis (two-stage model)
Stage 1: fine analysis Detailed validation of energy and cost savings Verification of the rough analysis energy saving prognosis
Comparison of the results, final decison of the building owner Confirmation of rough analysis: order to start with stage 2 Confirmation of rough analysis: decision against start of stage 2
(due to fair reasons, e.g. changes in utilization) Nonconfirmation: cancellation of project (or other decision by the
building owner, if he is responsible for nonconform.)
Contractor is responsible for• Detailed calculation/estimation of economic
saving potential of the planned efficiency measures including the investment costs
step 6:
step 7:
Building owner get the ownership on the results• If confirmation and decison against stage 2:
remunaration of contractors planning costs
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Tasks of project development and implementation V
Energy saving-guarantee-contract / Project implementation (stage 2 of the two-stage model)
Preparation phase Detailled planning and realisation of the saving measures (from fine analysis)
inspection End of construction measurements by Contractor Inspection by building owner
Contractor is responsible of• Planning, financing and construction in
coordination with the building owner
step 8:
step 9:
Building owner get• property of the realised facilities/plants
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Tasks of project development and implementation V / VI
Energy saving-guarantee-contract (both models)
Main performance phase Begin of the energy management and
-controlling as well as Implementation of user motivation
Expiration of contractual time
Contractor guaranteed• consumption- and cost decrease• operating safety
step 8 (10):
step 9 (11):
Building owner get• Responsibilty of operation• Full advantage of saving
Berliner Energieagentur GmbH
EPC project development models
Comparison of advantages and disadvantages
General: both models models have advantages and disadvantages two-stage modelcurrent opinion of ESCOs is that there are lower risks• the model gives more opportunities for approximation regarding the project goals
and solution approaches between potential client and bidder • the planning costs for fine analysis are covered (remuneration in most cases)• Contractor can try to give objective reasons if the results of fine analysis not
confirm the rough analysis
Single-stage model• Bidder has to make an accurate validation of building energy data in the frame of
rough analysis, that means higher risks (due to uncertainties for calculation of energy saving measures and saving guarantee at this early stage of project development)
• most of the bidders take security premiums in their calculations
Berliner Energieagentur GmbH
EPC project development models
Comparison of advantages and disadvantages (I)
Single-stage procedure Two-stage procedure
application For single buildings and building pools, but rather for not too complex buildings
rather for complex buildings (e.g. large hospitals), estimation of energy saving potential is more difficult
Duration, complexity
Shorter, easier Longer, more complex
Advanta-ges for the client
Client get the promise of guarantees directly with the offer (final guarantees as result of contract negotiations)
Client get better and more accurate building energy data and planning data for energy efficiency measures (content of fine analysis)
Disadvan-tages for the ESCO
Bidder has to make an accurate validation of building energy data in the frame of the rough analysis with high risks (large uncertainties for calculation of energy saving measures, saving guarantee) and without remuneration for his rough analysis costs
Longer procedure, the ESCO can get the remuneration later
Berliner Energieagentur GmbH
EPC project development models
Comparison of advantages and disadvantages (II)
Single-stage procedure Two-stage procedure
Advanta-ges for the ESCO
Shorter procedure, the ESCO can get the remuneration faster after start of main phase of obligation to perform
Lower risks for the ESCO; Contractor has a contractual claim to implement the energy saving measures or to get a remuneration for fine analysis (if there is a confirmation with rough analysis)
Disadvan-tages for the client
security premiums in the calculations of bidders;
After Baseline adjustment in some cases (energy costs determined by the client have been changed) measures to compensate disadvantages to the contractor are necessary
Client get the final confir-mation for the guarantees (promised by bidder with offer) not until fine analysis results (if there is a confir-mation with rough analysis), he has to pay for the fine analysis (confirmation of rough analysis, but decision against EPC by the client)
Berliner Energieagentur GmbH
EPC project development models
Thank you for your attention!