Energy Performance Contracts
Street Lighting Pilot Project
in Cyprus
Anthi Charalambous
Director
Cyprus Energy Agency (CEA)
Dr Venizelos Efthymiou
Executive Manager Networks
Electricity Authority of Cyprus (EAC)
1
Few words about the Cyprus
Energy Agency
The Cyprus Energy Agency was established in 2009 with the
support of the European Commission through the Intelligent
Energy Europe programme and the Cyprus Union of
Communities
Promotion of
Renewables
Promotion of
energy efficiency
Promotion
of sustainable
transport
Local Sustainable
Energy Planning
2
Introduction
• The European Union has focused interest on security of
energy supply, energy reserves, environmental protection,
competitiveness of European economy and the local/regional
development20-20-20 targets
• Nowadays, approximately 50% of the energy needs of
member states is covered by imported energy. In Cyprus this
percentage is 96%.
• The energy consumption in member states is increasing
approximately 1-2% every year. This trend will increase CO2
emissions estimated to be 18% by 2030 (compared to 1990)!
3
Electricity generation forecast for Cyprus
The Economic problems in Cyprus have affected the electricity
consumption. It is forecasted that growth is expected after 2016 and this is
going to be lower than before
4
Green Paper: Lighting the Future
• Based on the “Green Paper: Lighting the Future,
accelerating the deployment of innovative lighting
technologies, COM (2011) 889”, the European
Commission recognizes the large amount of energy
spent on lighting at EU level, which amounts to 14%
of total energy consumption in the EU.
• Proposes the creation of several initiatives to
develop a policy on the subject of lighting to increase
energy efficiency in street lighting.
• The "Green Paper” reveals that several studies
predict that SSL (Solid State Lighting) will account for
more than 70% of Europe's general lighting market
by 2020.
5
Energy Efficiency Directive
• The recent Directive on Energy Efficiency
2012/27/EU, requires (by decision of the Member
State) from energy distribution utilities to achieve
cumulative annual savings in final energy use equal
to at least 1.5% per year, from 2014 to 2020.
6
Existing situation in street lighting
Local Authorities
Owner of 25% of the
SL supports
Purchase of electrical
energy & maintenance
Responsible for street
lighting
Utility company
DSO
Maintenance contract
Owner of 75% of pole
supports
7
Existing situation in street lighting
• The electricity consumption of street lighting is not
more than 2% of the total national electricity
consumption,
• It is a priority for local authorities who pay annually a
significant amount (5-10%) of their annual budget for
energy and maintenance needs of street lighting.
• 16 Local Authorities of Cyprus are pushing hard for
LED adoption. The total consumption of electricity
for street lighting in the 16 Local Authorities in 2011
was 28.868.713 kWh at a cost of € 5.815.919.
8
Local Authorities Commitments
• "Covenant of Mayors“:
commitment to exceed the EU
objective to reduce CO2 emissions
by 20% by 2020.
(www.eumayors.eu)
• "Pact of Islands“:
Local authorities have introduced
the island’s political obligation to
help achieve sustainability goals of
the European Union for the year
2020.
(www.islepact.eu).
9
Local Authorities Commitments
• Local authorities from Cyprus that have signed either
the "Covenant of Mayors" or the "Pact of Islands" or
both, have developed in collaboration with the
Cyprus Energy Agency, Sustainable Energy Action
Plans to implement measures to achieve the EU
sustainability goals of 2020.
• The most important measure included in the action
plans of local authorities is the upgrading of the
street lighting with a two-fold target:
 to save energy and hence reduce carbon emissions,
 reduce their energy costs.
10
Local Authorities Commitments
through SEAP implementation
Α/Α
1
2
3
LOCAL AUTHORITY
STROVOLOS
LARNACA
LEFKOSIA
CoM
√
√
√
PoI
√
√
4
LAKATAMIA
5
6
PARALIMNI
ARADIPPOU
7
AGLANTZIA
8
ENGOMI
√
9
10
11
AGIOS ATHANASIOS
LATSIA
IDALION
√
√
12
YERI
√
13
ERGATES
√
14
POLIS CHRYSOCHOU
√
15
LEFKARA
16
PSIMOLOFOU
√
√
√
√
√
√
√
√
√
√
11
Local Authorities Commitments
SEAP
Agios Athanasios
Aradippou
Dali
Ergates
Geri
Lakatamia
Larnaca
Latsia
Lefkara
Paralimni
Polis Chrysochou
Strovolos
Psimolofou
Aglantzia
Engomi
Lefkosia
TOTAL
EXPECTED CO2
REDUCTION
[ton/year]
18,649
35,068
14,492
5,202
14,070
57,381
105,475
29,445
1,503
34,916
6,762
105,950
2,735
43,475
15,110
40,200
530,433
CO2 Emission in
baseline year
[ton/year]
104,155
146,093
67,945
21,077
60,871
215,611
421,489
155,822
6,339
199,001
27,658
493,083
11,664
178,357
160,148
372,072
2,641,385
CO2 Emission in
2020 [ton/year]
Reduction of CO2
Emission [%]
83,744
116,676
53,169
16,862
47,939
168,210
337,378
122,092
4,412
158,277
21,753
394,952
9,167
143,513
121,039
291,000
2,090,185
20%
20%
22%
20%
21%
22%
20%
22%
30%
20%
21%
20%
21%
20%
24%
22%
21%
12
Existing situation in street lighting
S/L EXPENDITURES 2011
1 200 000,00
1 000 000,00
€
800 000,00
600 000,00
400 000,00
200 000,00
0,00
13
Existing situation in street lighting
7 000 000,00 €
29 000 000
6 000 000,00 €
Mean annual consumption
increase: 3%
28 500 000
5 000 000,00 €
28 000 000
27 500 000
kWh
4 000 000,00 €
Mean annual expenditure
increase 9,7%
3 000 000,00 €
27 000 000
S/L expenditures
2 000 000,00 €
26 500 000
1 000 000,00 €
- €
S/L consumption
26 000 000
2008
2009
2010
2011
14
Existing situation in street lighting
kWh average cost
0,25 €
0,20 €
Mean annual cost
increase kWh: 6,5%
0,15 €
All the costs of the tariff have
been included
0,10 €
0,05 €
- €
2008
2009
2010
2011
15
Existing situation in street lighting
Total number of lamps
Mean annual energy
consumption rate increase
kWh: 3,8%
60 000
58 000
56 000
54 000
52 000
50 000
48 000
2008
2009
2010
2011
juin-12
This rate differs between the
developed and less developed areas as
regards the construction.
For instance this rate for developing
areas of Psimolofou and Idalion is
11,1% while for more developed areas
of Nicosia and Larnaca just 1,1%.
2%
7%
7%
13%
Other
HPS50W
HPS70W
HPS lamps: 98% of total
HPS150W
71%
HPS250W
16
Expected results
Summary of the action
• Total number of light fixtures to be replaced: 63.000
• Types of new light fixtures to be installed:
 13% LED 30W - 72% LED 40W - 8% LED 80W - 7% LED 130W
•
•
•
•
•
•
•
Cost of purchase: €15.900.000
Labour Cost of replacement : €700.000
Expected energy saving per year: 48% (12-18 GWh)
Expected CO2 reduction per year: 10.500-15.700 tones
Cost reduction due to CO2 allowances per year €15.000 - €20.000
Elimination of maintenance cost per year €160.000 - €220.000
Cost reduction for street lighting electricity purchase per year:
€3.000.000 - €5.000.000
* Το εύρος εξοικονομήσεων περιγράφει τις εξοικονομήσεις στις αρχές τις περιόδου (2014) και στο τέλος (2025)
17
HARD WORK
Project idea
Money box (Banks)
Studies
18
EU Instruments to finance projects
19
Flexible instrument covering a
range of projects
20
eeef
• The European Energy Efficiency Fund (EEE-F) was created to
assist investments in order to save energy, increase energy
efficiency and promote renewable energy sources, especially
in urban areas, to achieve at least 20% energy savings and
reduction greenhouse gas emissions / carbon dioxide
(GHG/CO2).
• The Fund offers a broad range of financial products such as
loans, guarantees, technical assistance or participation in
local, regional level to promote sustainable energy
investments.
• http://www.eeef.eu/financing-terms.html
21
eeef
• The Technical Assistance (TA) supports stakeholders to
implement viable investment projects to finance energy
saving (technical assistance) up to 90% by the European
Commission.
• Eligible costs are those necessary for the preparation,
implementation and financing of the investment
program. This TA can be provided, for example, feasibility
and market studies, for carrying out energy audits,
engineering design fees, preparing tenders etc.
22
Contract Economic Model
proposed
CEA is the beneficiary of
receiving the TA
TA Financing 90%
Loan
Loan payback
23
Technical Assistance (TA) Facility
attached to eeef
Selection
process
After you have spent 1 minute to create your
account, you have to be ready to fill in the data
requested for the online questionnaire!
• For the Street Lighting Project we spent 8
months to prepare the preliminary study and
collect the necessary political and other
approvals
• In July 2012 the preliminary online application
was submitted
24
Technical Assistance (TA) Facility
attached to eeef
Selection
process
The investment advisor sends the full TA
application if the preliminary application is
approved
The investment advisor may request info related
with TA
The Beneficiary (CEA)
had to provide total cost,
contribution to 2020 targets
And other info
requested in the TA doc
The Deutsche Bank
performs the eligibility checks
Investment size at least 20 times
The TA request, other instruments,
10% co-financing etc
Approval
under
conditions
European
Commission
Decision
25
Failure to secure the support of eeef
• Although the partnership (CEA+16 Mayors /
Communities + DSO as ESCO) agreed on all
issues of the project the financial support
from eeef did not materialize due to high
interest rate from the site of the bankers. This
was attributed to the bad economic situation
in Cyprus.
• The partners are not giving in however, and
our decision is to include project financing in
the tender procedure.
26
Street Lighting Pilot Project
Steps to follow
•
•
•
•
•
•
•
•
•
•
•
•
•
Preliminary study and securing of formal approvals of all partners
Comprehensive study on the street lighting situation
Mapping of existing street lights (using GIS)
Market research of available technologies
Evaluation of results
Scenarios for replacement of existing lights
Feasibility study/analysis
Evaluation of results/selection of the best scenario
Implementation schedule
Terms of reference
Tender
Evaluation of the tenders and award
Project execution
27
Street Lighting Pilot Project
Type
Height
Distance between
luminance
Width of the road
Choose the most
appropriate
28
Street Lighting Pilot Project
Black spots in avenues
Black spots in avenues
29
Street Lighting Pilot Project
Black spots in urban areas
30
Street Lighting Pilot Project
Insufficient lighting in
urban areas
Insufficient lighting in
urban areas
31
Street Lighting Pilot Project
Best result
32
Expected results
12 000 000
Annual Energy cost (€)
10 000 000
8 000 000
6 000 000
4 000 000
2 000 000
2014
2016
Baseline scenario
2018
2020
2022
2024
Energy Efficiency scenario
33
Expected results
12 000 000
Annual Energy cost (€)
10 000 000
8 000 000
6 000 000
4 000 000
2 000 000
2014
2016
Baseline scenario
2018
2020
2022
2024
Energy Efficiency scenario
34
*Example of illustration only
Expected results
Energy Saving Contract
1st option
Short term contract
12 000 000
Annual Energy cost (€)
10 000 000
8 000 000
6 000 000
4 000 000
2 000 000
2014
2016
Baseline scenario
2018
2020
2022
2024
Energy Efficiency scenario
35
*Example of illustration only
Expected results
Energy Saving Contract
2nd option
Long term contract
12 000 000
Annual Energy cost (€)
10 000 000
8 000 000
6 000 000
4 000 000
2 000 000
2014
2016
Baseline scenario
2018
2020
2022
2024
Energy Efficiency scenario
36
Thank you for your attention
MAKING A FUTURE TOGETHER WITH ENERGY EFFICIENCY
Electricity Authority of Cyprus
11 Amfipoleos, 2025 Nicosia
www.eac.com.cy
Cyprus Energy Agency
10-12 Lefkonos, 1011 Lefkosia
Tel. 22667716, 22667726
Fax. 22667736
Info@cea.org.cy
www.cea.org.cy
37