Energy Performance Contracting for public buildings
The Romanian Association for Promoting Energy Efficiency (ARPEE), established in 2012, has as overall scope the mobilization of its members' resources and competences to actively participate in the creation of measures necessary to enhance the uptake of energy efficiency in Romania. ARPEE's members represent a yearly total turnover over 6.7 billion Euros (equivalent of 5% of Romania's GDP) and more then 25,000 jobs.
The Association builds upon 3 pillars: energy strategy and policies, energy efficiency for residential and municipal buildings and energy efficiency in industrial processes. Members represent different backgrounds and domains, but share the common goal of enhancing the energy efficiency in Romania. Companies that comprise the association are Adrem Invest, Elcomex, ENGIE, General Electric, OMV Petrom, TIAB, Vimetco Alro, Thermaflex and Veolia.
ARPEE is a member of European Federation of Intelligent Energy Efficiency Services (EFIEES) and was the first professional association in Romania to sign the European Code of Conduct for Energy Performance Contracting, also being in charge for its administration in Romania.
According to the Energy Efficiency Directive (2012/27/EU), "Energy Performance Contracting" means "a contractual arrangement between the beneficiary and the provider of an energy efficiency improvement measure, verified and monitored during the whole term of the contract, where investments (work, supply or service) in that measure are paid for in relation to a contractually agreed level of energy efficiency improvement or other agreed energy performance criterion, such as financial savings."
An "EPC provider" means an "energy services provider" who "delivers energy services in the form of EPC".
In short, EPC provides a contractual solution attractive to both Client (private or public authorities) and a private company called Energy Service Company (ESCO). Under Energy Performance Contracts, an ESCO funds and carries out energy efficiency projects, like the thermal/electrical rehabilitation of buildings, performs its energy management including operation and maintenance, and offers the Client Guaranteed Performances..
Energy efficiency in Romania could benefit from the support of competent authorities in shaping a policy framework that allows and stimulates the development of an energy efficiency services market (e.g. the establishment of a functional Energy Efficiency Fund). Policies should focus also on generating more awareness about the benefits, while public sector investments in energy efficient solutions could set a good example on the Romanian market.
Along with actions to be taken at EUlevel, like the EPC being promoted in the EED and EPBD,in the use of Regional Funds (EU rules), Romania needs to take concrete steps domestically in this sense: develop and promote EPC model contracts in the public sector with the open consultation of all relevant stakeholders, allowing EPCs to be used as a contractual instrument for European funding (e.g. Regional Operational Program).
The energy-efficiency services market faces several regulatory and non-regulatory barriers in Romania as:
- Lack of awareness and information mechanisms;
- Insufficient personnel with technical know-how on energy efficiency
- Lack of targeted financing instruments such as guarantees and low interest loans (long term) enabling affordable financing and use of available money;
- Lack of incentives in legislation/regulation to improve energy efficiency (lack of dynamic pricing for end consumers, inadequate regulation to stimulate energy efficiency in networks);
- Untargeted subsidies for end consumers in the energy sector hampers the incentives for improving energy efficiency;
- Rules on public procurement (split tenders hindering overall contracts);
- Interpretations of accounting rules ("Manual on Government Deficit and Debt – Implementation of ESA 2010") on public debt and deficit for energy efficiency investments under EPC.
Concerted action at EU level is needed to find an adequate solution for the barrier imposed by Eurostat′s accounting rules so that the EPC can be utilized. Only by overcoming these obstacles Romania can improve the rate and quality of its residential sector (block of flats), as well as public buildings' renovation, and tap into the huge potential of energy savings.
As consequence of all these barriers, the rate and quality of residential sector (block of flats) as well as public buildings' renovation remains low and energy savings untapped in spite of its attractiveness for Energy Services Companies (ESCO).