Global ESCO Network Newsletter - Issue # 1
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 Welcome to this first edition of the Global ESCO newsletter.  The Global ESCO network was launched in 2019 with the vision to be the global driver and inspire government actions for scaling up the contribution of ESCOs to the global response for mitigating the threat of climate change. Being co-managed by the UNEP Copenhagen Climate Centre (UNEP CCC) and the Efficiency Valuation Organization (EVO), the GEN has been built on associating existing National and Regional ESCO Associations and global bodies that are related to ESCO sector development. The GEN has been mindful of reinforcing rather than duplicating associations’ efforts. Since its creation, we have partnered with the most active ESCO associations worldwide and with two regional associations, one in Asia and the other in Europe, making it the organization with the most extensive range of partners in the world field of ESCOs activities.We are pleased to launch this first newsletter edition targeted to all stakeholders in the ESCO business to present the GEN, our activities, and our plans for the future. As we plan to have such a newsletter produced regularly during the year, we also included news about the business from different places worldwide that will undoubtedly interest the ESCO community. We welcome any partners to share information from their part of the world so we can include them in our subsequent editions for the benefit of all. We hope that you will enjoy this first edition. Pierre Langlois Global ESCO Network Co-chairman GEN newsletter editor  Alliance for Energy Efficiency - The Bulgarian ESCO Association The Short Story with Key Moments and Main Takeaways by Kiril Raytchev, M.Sc. Chairman of the Management Board | AEE International EE/ESCO Finance Expert | Econoler kraytchev@econoler.com Alliance for Energy Efficiency (AEE) was established in 2016 by eight companies to promote the advantages of the ESCO business model, improve national ESCO legislation and regulatory framework, and support the development of financial instruments and programs compatible with the ESCO mechanism. The number of members has more than doubled since then, and the AEE has become a center of competence when designing and implementing advanced business models in energy efficiency (EE). Some of the key achievements of the AEE during the years include improvements in the Bulgarian Energy Efficiency Act which enable the guaranteed savings ESCO option, integrate the energy audit into the ESCO service delivery, and open the possibility of blending the financing from the ESCO company with other sources such as those coming from EU programs, grants, and national subsidies. Advancement in ESCO legislation has led to another significant development, favoring the ESCO business model. The AEE, backed up by other EE-related organizations and renowned EE experts, introduced the ESCO as an eligible instrument under the Bulgarian Resilience and Recovery Plan. As a result, the second phase of the renovation of the multiapartment residential sector can be based on ESCO offering, accompanied by up to 80% subsidy. The total financial resource for phase II is BGN 283 million (approx. EUR 145 million). Much more will be needed if the target of renovating 19 million m2 is to be achieved by 2030. With just one exception throughout the years, the ESCO was ignored by EU programs, grants, and national subsidies. Despite significantly better financial indicators demonstrated by ESCO projects compared to EU-financed ones, reaching 30%-40% more effective investments per energy unit saved, public authorities preferred to keep up with the “standard” EE project implementation when it comes to EU program development. Nevertheless, the first breakthrough came after a fruitful collaboration between the National Trust Ecofund (which provides up to 85% subsidy to the public sector) and the AEE – a street lighting renovation project for the benefit of one of the municipalities in Bulgaria was structured on the ESCO model and supported by the fund as a pilot. Another positive development for the ESCO companies is expected to bear fruit in the coming years due to the established partnership with the Bulgarian Decarbonization Fund (BDF) designers. Up to now, the AEE has lobbied successfully to create a dedicated ESCO segment under the BDF that will provide risk-sharing and forfeiting services at levels that will allow the ESCO business model to scale. Hopefully, other supporting services will be developed once the fund is operationalized. Although it took many years for the ESCO to gain a better position in the Bulgarian EE ecosystem, it is the results that start to create a profitable niche for the ESCO companies and make accessible next-generation benefits for the users of EE services that inspire us to continue moving forward. In the case of Bulgaria, it took a tremendous amount of time for partners in the public sector, financial industry, and professional community to recognize the AEE as a reliable and trustworthy partner. AEE’s participation at numerous webinars, training, conferences, and the like, making a case for advanced EE business models such as the ESCO, helped enormously. Overcoming resistance from already well-positioned market players should also be considered. In the near future, it will be of great interest for the AEE and its members to connect with ESCO communities worldwide and exchange know-how, best practices, and communication strategies for the engagement of main market stakeholders. We see our membership in the Global ESCO Network and the European ESCO Code of Conduct as vehicles for achieving that objective and expanding our horizons.  First Meeting of the AEE in 2016  GLOBAL ESCO NETWORK Action Plan 2023 The Global ESCO Network released its Action Plan 2023 on January 31, 2023. This year's plan focuses on various communication and information activities at its core, a series of topical webinars. The GEN also wishes to develop a common ESCO market data framework with IEA and EU JRC. To that effect, the GEN will develop a questionnaire that can be used to streamline existing parallel efforts to gather ESCO market data worldwide. Efforts will also be deployed to develop the GEN's general policy advice for promoting ESCOs. This document will identify central elements of a regulatory framework that should be considered building blocks or parts of a regulatory ecosystem that will make ESCOs thrive. Other activities include the launch of the EPC model contract library, the publication of a regular newsletter, an update of the 2021 regulatory barriers publication, and participation in selected events. Click here to consult the GEN Action Plan 2023 __________________________________________________________
FRANCE Law of March 30, 2023, aimed at opening up third-party financing to the State, its public institutions, and local authorities to promote energy renovation work. This new law proposes to experiment for five years with a system that derogates from the law of public procurement to massively increase the energy renovation of public buildings. The aim is to remove the barriers to investment that result from the high cost of renovation work and to promote the achievement of the objectives of reducing the energy consumption of public buildings by at least 40% in 2030, 50% in 2040, and 60% in 2050, compared to 2010, as provided for in the 2018 law known as "ÉLAN.” Achieving these goals requires "colossal" investments estimated between 400 and 500 billion euros. 400 million square meters of public housing stock (300 million square meters for communities) must be renovated. The planned exemptions authorize the State, its public institutions, local authorities, and inter-municipalities to make exceptional use of deferred payment for work within the framework of energy performance contracts (EPC) in the form of a global performance contract for the renovation of one or more of their buildings. EPCs, created by the Grenelle 1 law of 2009, are still not widely used by public purchasers, despite their guaranteed results. Over the past 15 years, only 380 EPCs have been signed, representing an annual average of 25 EPCs. This is why, in order to increase the number of such contracts, the law introduces a legal tool authorizing public contractors to defer payment for the work, with the initial financial investment resting with a third-party financer. This device will allow public actors to partially finance their energy renovation works thanks to the future energy savings they will generate. The device only aims to delegate the work, not the management of the building. It is not a model of public-private partnerships (PPP). The French Senate amended the original text before its adoption, in particular, to encourage local synergies by allowing the public establishments of inter-municipal cooperation (EPCI) and energy unions to take charge of the work. They have also strengthened the monitoring and evaluation of the experiment, given the additional costs that third-party financing entails for public purchasers. The government will have to submit a mid-term report to Parliament on the contracts concluded and a final report six months before the end of the experiment. Full legislative text (in French) __________________________________________________________
SPAIN
Energy Saving Certificates System On January 24, 2023, the Council of Ministers approved a Royal Decree regulating the Energy Saving Certificates (CAE) system, a new tool to achieve the energy savings targets committed to the EU flexibly and more efficiently. The Certificates will create a new marketplace that will make it easier for energy traders to meet their savings obligations, benefit consumers, and boost employment, productivity, and business competitiveness. It will also help fulfill other measures envisaged in the Plan Más Seguridad Energética (Plan +SE). The certificates system is expected to:
More details (in Spanish) __________________________________________________________
GLOBAL M&V for Energy Performance Contract - A Glance at a New IPMVP Application Guide
This upcoming IPMVP application guide will provide additional information to the facility owner or industrial facility manager who wants to implement an energy performance contract (EPC) involving guaranteed savings by an energy services company (ESCo). Several problems or issues may arise during the normal process of negotiating and implementing an EPC. A solid measurement and verification (M&V) process is critical to limiting some of those issues. The most important of these have been selected and are addressed in this application guide. This application guide is written to be adapted to several EPC contexts, recognizing that local regulations or financing terms to which the facility owner is subject could limit decision-making ability among the recommendations presented in this application guide. The IPMVP sub-committee responsible for developing this guide selected nine topics covered and explained in detail. Recommendations are formulated with an M&V perspective and primarily for facility owners to improve their understanding of the EPC environment and M&V importance, avoiding mistakes related to contract negotiation and management.
Visit the EVO website for more information on M&V 
Insights to the
International Energy Efficiency Financing Protocol (IEEFP) presented by Denis Tanguay Executive Director Efficiency Valuation Organization April 25, 2023 - 9:30 (EST) Credit and loan officers in banks and other financial institutions are not energy efficiency specialists. The International Energy Efficiency Financing Protocol (IEEFP) provides concepts and guidelines to help them assess financing opportunities for energy efficiency projects. It focuses on the key elements needed to evaluate and provide attractive loans to facility owners, ESCOs, and other potential developers and implementers of energy efficiency projects. The presentation will highlight the main components of the IEEFP, its scope, and its role in educating credit and loan officers on the intricacies, benefits, and risks of energy efficiency projects.
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