Public Procurement of Energy Efficiency Services

Jas Singh

Description

The current universal concerns about global energy security, competitiveness, and environmental protection make energy efficiency more important than ever. However, realizing large-scale savings has proven a significant challenge due to many barriers. 'Public Procurement of Energy Efficiency Services' looks at a largely untapped energy efficiency market - the public sector. While the efficiency potential in this sector is substantial, the implementation of energy savings programs has been complicated by a number of factors, such as insufficient incentives to lower energy costs, rigid budgeting and procurement procedures, and limited access to financing.
The book looks at energy savings performance contracts (ESPCs) as a means of overcoming some of these barriers. Because public facilities can outsource the full project cycle to a commercial service provider, ESPCs can enable public agencies to solicit technical solutions, mobilize commercial financing, and assign performance risk to third parties, allowing the agency to pay from a project's actual energy savings. The recommendations in this book stem from case studies that identified approaches, models, and specific solutions to ESPC procurement, including budgeting, energy audits, and bid evaluation. Such an approach also offers enormous potential to bundle, finance, and implement energy efficiency projects on a larger scale in the public sector, which can yield further economies of scale.
ESPCs can also serve as an attractive element for fiscal stimulus packages and efforts by governments to 'green' their infrastructure, which can create local jobs, reduce future operating costs, and mitigate their carbon footprint. Lower energy bills, in turn, help to create fiscal space in future years to meet other critical investment priorities. Bundled public sector energy efficiency projects can help stimulate local markets for energy efficiency goods and services and 'lead by example', demonstrating good practices and providing models to the private sector.

Sujets

• Sustainable energy
• Climate change
• Energy conservation
• Greenhouse gas
• Energy efficiency
• Public sector
• Government procurement
• Energy
• Environment
• Urban planning

Informations

• Publié par: world-bank-publications
• Publié le: 17 décembre 2009
• Nombre de lectures: 30
• EAN13: 9780821381021
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

DIRECTIONS IN DEVELOPMENT
Energy and Mining
Public Procurement of
Energy Efficiency Services
Lessons from International Experience
Jas Singh, Dilip R. Limaye,
Brian Henderson, and Xiaoyu ShiPublic Procurement of Energy
Efficiency ServicesPublic Procurement of Energy
Efficiency Services
Lessons from International Experience
Jas Singh
Dilip R. Limaye
Brian Henderson
Xiaoyu Shi© 2010 The International Bank for Reconstruction and Development / The World Bank
1818 H Street NW
Washington DC 20433
Telephone: [phone]
Internet: www.worldbank.org
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All rights reserved
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This volume is a product of the staff of the International Bank for Reconstruction and
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ISBN-13: 978-0-8213-8062-8
eISBN: 978-0-8213-8102-1
DOI: 10.1596/978-0-8213-8062-8
Cover photo: Stan Constantio, The World Bank
Cover design: Quantum Think
Library of Congress Cataloging-in-Publication Data
Public procurement of energy efficiency services : lessons from international experience / Jas Singh
... [et al.].
p. cm.
Includes bibliographical references and index.
ISBN 978-0-8213-8062-8 — ISBN 978-0-8213-8102-1 (electronic)
1. Public contracts—Case studies. 2. Performance contracts—Case studies. 3. Energy conserva-
tion—Case studies. I. Singh, Jas, 1966-
HD3860.P78 2009
352.5'6—dc22
2009027970Contents
Foreword xi
Acknowledgments xv
Abbreviations and Acronyms xvii
Overview 1
PART I International Experience in Public
Procurement of Energy Efficiency Services 11
Chapter 1 Introduction 13
Why Is Energy Efficiency Important? 14
Why Is the Public Sector Important? 14
Why Have Results Been So Disappointing? 15
Objectives 17
Structure 17
Notes 18
References 19
Chapter 2 Energy Efficiency in the Public Sector 21
Energy Use in the Public Sector 21
vvi Contents
Summary of Energy Efficiency Opportunities
by Sector 22
Barriers to Energy Efficiency in the Public Sector 24
Energy Efficiency Programs in the Public Sector 24
World Bank Group Public Sector Energy
Efficiency Portfolio 26
Notes 31
References 31
Chapter 3 Opportunities for Energy Savings Performance
Contracts in the Public Sector 33
What Is an Energy Savings Performance Contract? 33
International Experience with ESPCs and ESPs 38
Why ESPCs Make Sense in the Public Sector 39
Notes 41
References 41
Chapter 4 Main Public Energy Savings Performance
Contract Procurement Models 43
Emerging Models for Public ESPC Procurement 43
Summary of Model Options 55
Notes 55
References 55
Chapter 5 Public Energy Savings Performance Contract
Procurement Steps and Key Issues 57
Overview of the ESPC Process 57
Key Issues Posed by ESPCs in the Public Sector 61
Note 64
References 64
Chapter 6 Key Public Procurement Issues and Options 65
Budgeting 66
The Energy Audit 74
Request for Proposals: The Bidding Documents 81
Bid Evaluation 92
Project Financing 103
Contracting and Measurement and
Verification 113
Notes 125
References 128Contents vii
Chapter 7 Conclusions and Recommendations 131
Designing the Right Procurement Process 132
Recommendations 137
PART II Select Country Case Studies 141
Case Study 1 United States Federal Energy Management
Program 143
Case Study 2 Canada—Federal Buildings Initiative
Program 155
Case Study 3 Energy Performance Contracting in France 165
Case Study 4 Energy Performance Contracting in Germany 173
Case Study 5 Energy Performance Contracting in Japan 195
Case Study 6 Energy Performance Contracting in the
Public Sector in India 203
Appendix 1 World Bank Group Projects with Public Sector
Energy Efficiency Components (2000–09) 215
Appendix 2 Sample of Non–World Bank Projects with
Public Sector Energy Efficiency Components
(2000–09) 221
Index 225
Boxes
2.1 The European Bank for Reconstruction and
Development (EBRD) and the Public Sector 29
3.1 Examples of Different Energy Service Company (ESCO)
Business Models 37
4.1 Indefinite Quantity Contracts (IQC) in Schools in Hungary 47
4.2 Energy Performance Contracting in China 48
4.3 The Belgian Super-ESP—Fedesco 50
4.4 A Utility ESP in Croatia 51
4.5 Berlin Energy Agency and Energy Savings Partnership 53viii Contents
5.1 Procurement Challenges with ESPCs in Brazil 62
6.1 Public Procurement in Mexico 68
6.2 ESPC Budgeting in the United States 71
6.3 Lighting Efficiency Improvements in the Arab Republic
of Egypt 84
6.4 Minimum Savings Requirement in India 85
6.5 Two-Stage Bid Evaluation—an Indian Case 95
6.6 Retrofitting Public Buildings in the Czech Republic 99
6.7 Energy Efficiency Financing in Bulgaria 107
6.8 ESPC Performance Guarantees in Germany 120
6.9 Key Elements of an Measurement and
Verification (M&V) Plan 123
CS 1.1 Awarding a Delivery Order to an Energy Service
Company (ESCO) 147
CS 4.1 Two-Stage Procedure for Energy Performance
Contracts (EPCs) 183
CS 4.2 Comparison of Bids with Internal Solutions 186
Figures
1 Schematic of Typical ESPC Steps and Issues 6
2 Designing a Suitable Procurement Process 9
3.1 ESPC Business Models—Shared and Guaranteed Savings 36
5.1 Schematic of Typical ESPC Procurement Steps
and Key Issues 63
6.1 Options to Address Savings Retention and Institutional
Incentive Issues 70
6.2 Illustrative Options for Initial Energy Audit 79
6.3 Use of Payment Security Mechanism in India 105
6.4 Continuum of Options for ESPC Financing 110
6.5 Commercial Financing with Public Agency as Borrower 111
6.6 Commercial Financing with the ESP as Borrower 112
6.7 Sample of Options for ESPC Performance Provisions 121
CS 3.1 The Four Contract Types 167
CS 4.1 Types of Energy Contracting 174
Tables
1 Typical Barriers and Solutions for Public Sector
Energy Efficiency 2
2 Emerging Models for Public ESPC Procurement 4