Investor Days 2016

(1)

M A K I N G M O N E Y F L O W – S T R A T E G I E S T O I N C R E A S E E N E R G Y I N V E S T M E N T S I N T H E

E U R O P E A N B U I L D I N G S E C T O R

F E B R U A R Y 2 2 - 2 3

R E P R E S E N T A T I O N O F T H E S T A T E O F N O R T H R H I N E - W E S T P H A L I A T O T H E E U

P A N E L 2 - E M E R G I N G S O L U T I O N S – M A R K E T B E S T - P R A C T I C E S D E V E L O P E D T O R E S P O N D T O I N V E S T O R N E E D S A N D I M P R O V E

D E A L F L O W

M o d e r a t i o n : R ü d i g e r L o h s e ( I E A - E B C A n n e x 6 1 )

A d r i e n B u l l i e r ( E A S M E ) , P a n a m a B a r t h o l o m y ( I n v e s t o r

C o n f i d e n c e P r o j e c t ) , J a n B l e y l ( E n e r g e t i c S o l u t i o n s / I E A - E B C A n n e x 6 1 ) , E l i s e S t e y a e r t ( C l i m a t e A l l i a n c e ) a n d M i g u e l C a s a s ( E n e r g I n v e s t ) f o r

C I T Y n v e s t

(2)

Adrien BULLIER

Senior Project Advisor Intelligent Energy Europe and Horizon 2020 programmes European Commission, Executive Agency for Small and Medium-Sized Enterprises (EASME)

EU support to improving the deal flow on energy efficiency

Intelligent Energy Europe programme

and Horizon 2020 Energy Efficiency call

(3)

2 Financial sector

Project developers

???

Adapted from C. MILIN, ECEEE 2013

Risk-sharing schemes Equity provision Dedicated credit lines

EU structural funds

Intelligent Energy Europe

& Horizon 2020

Benchmark investments Awareness of investors

Organise dialogue Capacity building European Fund for Strategic

investments

Project dvpt assistance Energy performance contracts

Local financing schemes

We’ve got money, but… we’re looking

for projects!

We’ve got projects, but…

we’re looking for money!

Green bonds market forecast at USD 66bn for 2015 (CBI)

“Investment project” for the financial sector:

• technical black box

• standardized product

• cash-flows, IRR, NPV

• predictability of risks

• transaction costs

“Investment project” for many project developers:

• technical design tailored to physical constraints

• state-of-the-art technology

• energy payback times

• “no financing” = “no subsidy”?

Finance and sustainable energy:

filling the gap through EU programmes

(4)

• MLEI / PDA (EASME):

investments of €7-50m

• ELENA EIB: investment

>€30m

• Over 80 projects expected to trigger

• >€4 billion investments in EE/RES

EU Project Development Assistance facilities

EASME projects

EIB ELENA projects

(5)

• Energy performance contracts on public buildings and street lighting:

 Italy: PARIDE (Teramo), MARTE (Marche), 2020TOGETHER (Turin), FESTA (Matera), LEMON (Emilia Romagna), ENERSHIFT (Liguria)

 Spain: Accelerate (Huelva), BEENERGI (Giron)

 Portugal: GLEE AM (Alto Minho)

• Private housing:

 PadovaFIT (IT), PSEE Alsace (FR), Efidistrict (ES)

• Investment funds, citizen financing:

 Cambridge, Oxford (UK)

• Forfaiting fund for EPC on condominiums:

 SUNSHINE (LV)

• District heating:

 GeoKec (HU), Energy4flexibility (NL)

• Complete list: http://ec.europa.eu/energy/intelligent/files/mlei-projects-2011-12.pdf

PDA projects with direct investment opportunities

4

(6)

• EPC facilitation services: developing an EPC pipeline with public authorities

 EESI 2020: Antwerp, Barcelona, Berlin, Dublin, Graz, Prague, Oslo, Sofia or Zagreb

 Streetlight EPC: 10 regions in DE, AT, CZ, HR, PL, UK, SE, SI, FYROM, ES

• SEAF, led by Joule Assets:

 IT based framework for valuation and benchmarking of small-sized projects (EE, RES, demand response)

• TrustEE, led by AEE (AT):

 Investment fund focused on energy efficiency in industrial process heat

Other projects with direct investment opportunities

5

(7)

• Capacity building / development of innovative financing schemes:

 Infinite Solutions: municipal internal performance contracting and home renovation loans in PT, HR, DK, IT, DE, BE, FR, LV

 CITYnvest: building renovation programmes in BE, ES, BG, analysis of best practices

• National sustainable energy financing platforms:

 SEFIPA (Austria), ENERINVEST (Spain), BUILDINTEREST (Netherlands, France, Italy), RESFARM (Spain, renewables)

• Sustainable Energy Investment forums (service contract, starting 2 ^nd semester of 2016)

 Kick-starting a dialogue with the financial sector at national level on sustainable energy finance

 Capacity building on innovative financing and project development

Building capacity and mobilising stakeholders

6

(8)

• Standardisation and improving confidence:

 Transparense: European code of conduct for EPC

 Trust EPC South: certification for EPC on tertiary buildings (IT, ES, FR, HR, GR, PT)

 Investor Confidence Project: standardisation of building retrofits

• Raising awareness of institutional investors

 SEI Metrics (led by 2 Degrees Investing): benchmarking the climate performance of investment portfolios

 ET RISK (led by 2 Degrees Investing): integrating energy transition risk in asset rating methodologies

Structuring the market for energy

efficiency finance

(9)

• EE-22:Project Development Assistance

• EE-24:Making the energy efficiency market investible

• EE-25:Development and roll-out of innovative energy efficiency services

• All information on the energy efficiency call:

bit.ly/1oWPNoX

• We are looking for experts to help us evaluate proposals!

Please register on

http://ec.europa.eu/research/participants/portal/desktop /en/experts/index.html

Next call for proposals: deadline 15 September 2016

8

(10)

For all questions on the Energy efficiency call, please contact:

[email protected]

or contact your National Contact Point:

http://ec.europa.eu/research/participants/portal/desktop/en/support/national_contact

Thanks for your attention

(11)

Increasing capacities in Cities for innovating financing in energy

efficiency

A review of local authority innovative large scale retrofit financing and operational models

February, 2016

Miguel A. Casas – Elise Steyaert

EnergInvest – Climate Alliance

(12)

How to accelerate investments?

No need for reinventing the wheel

Catalyst role for LRA – reflected in current EU directives, but some remaining challenges

The rationale for CITYnvest

Financiers - predictability of risks

- standardization - cash flows (IRR, NPV)

- transaction costs

Local EE projects - capacity constraints (no core

business)

- Bankability mentality - ESA Accounting rules

- bundling needs

(13)

3 1. Analysing successful examples with track records (24 cases) 2. Understanding their business models, key success factors and replicability

3. Wide-scale capacity-building & Testing/implementation in 3 pilot regions (BG, ES, BE)

10 focus countries: mobilizing the whole chain of stakeholders

1. Political commitment: setting targets

2. From plan to bankable project 3. Align the financing and

operational structure (pooling) 5. Sustain/enlarge scope

Impact:

 Building capacities of 650 local authorities, 10 national

representatives and 300 key stakeholders

Impact:

 Mobilise € 73,3 million

 Save 58,6GWh

 1,246 sustainable job created

Approach of CITYnvest

(14)

Analysed 24 existing models that address large scale and deep energy efficiency retrofit programs (including RES) involving public authorities across Europe (11 countries)

• Level of ambition (aimed % of energy reduction, investment intensity, contract duration)?

• Implementation methodology (technically and operationally) used?

• Which operational services are provided to the beneficiaries?

• Which financing schemes have been used?

Provided a benchmark/comparison of the models along the following themes:

• Their operational schemes (Facilitation, Integration and Aggregation)

• Their implementation model (Separate Contractor Based (SCB) and EPC/ESC)

• Their financial schemes (financing by Financial Institutions, by the ESCOs, by the Program Delivery Unit, by Investment Funds, by Citizens)

• Attractiveness and risks

• Impact on public balance sheet, staff requirements, scalability, development maturity, challenges and other

Provided guidance material to support local authorities in their search for financing of their EE and RES programs (Recommendation and Decisions matrix)

What have we done?

(15)

5 Models involving facilitation are mainly financed via Financial Institutions or ESCOs while

models using integration are mainly financed through the Program Delivery Unit (PDU) or

an investment fund.

(16)

The great majority of the models target Perimeter 1 or “standard market practice”, though factor 2

(50% savings) models gain in attention, factor 4 (75% savings) remain marginal.

(17)

7 The attractiveness of the integrator model is very high (especially if it integrates

financing) but comes along with higher risks for the integrator.

(18)

The success of the models often seem correlated with the existence of a well-functioning Program Delivery Unit, and…

A clear leadership role of the public partner (ambition and willingness to invest)

EPC/ESC implemented models are very fit for perimeter 1 energy efficiency ambition levels (<35% savings), mostly driven by facilitation models

Factor 2 (50% savings) and factor 4 (75% savings) energy efficiency ambition levels are very often “integration” driven, both technically as financially.

High energy efficiency ambition levels (factor 2 and factor 4) do not focus on short to medium pay-back terms

Conclusions

(19)

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 649730.

Thank You

Miguel A. Casas Energinvest

[email protected]

Elise Steyaert Climate Alliance

[email protected]

(20)

Investor Confidence Project

Panama Bartholomy, Europe Director

Investor Days 2016 Brussels

February 23, 2016

(21)

Why are we here?

(22)

(23)

Energy Efficiency – the first fuel for the EU Economy

Top Demand and Supply Drivers of Energy Efficiency Investment:

Standardisation

Clear Business Case

Increased Investor Confidence & Change in Risk Perception

Transaction costs / simplicity

Measurement, Reporting & Verification (MRV) and

Quality Assurance

(24)

Lack of Standardisation = Greater Risk

(25)

(26)

EEFIG Recommendations February 26, 2015

..EU-wide…common set of procedures

and standards for energy efficiency and

building renovation underwriting.

…standards should be “open source” and

establish a common vocabulary across Europe

(27)

ICP Funding

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 649836

The sole responsibility for the content of this presentation lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EASME nor the European Commission are responsible for any use that may be

made of the information contained therein.

European Commission Horizon 2020 Programme

Private Foundations

(28)

What Owners and Investors Want

• Clear and transparent renovation project plan based on industry best practices

• Evidence of the qualification of professionals

• Third-party measurement and verification

• Consistent documentation

• A project label that represents these

components and can

live with the project

(29)

Lack of Standardisation = Greater Risk

(30)

Investor Confidence Project Protocols Standardising the Energy Renovation

BASELINING

• Existing Building

• Drawings

• Weather File

• Energy Usage

• Energy Rates

• Occupancy

SAVINGS

• Model File

• Calibration Data

• Bid Packages

• Certifications

COMMISSION

• Cx Plan

• Cx Authority

• Test Procedures

• Facilities Req.

OPERATIONS

• BMS Points

• Fault Plan

• Maintenance Plan

MEASUREME

• M&V Model

• Regression Model

• Adjustments

• Impact

• Baseline

Adjustments

Cx

(31)

Standardising the Energy Renovation for the Financial Sector

Pre- financing

Term Sheet

Loan Signing

and Draw

Inspection Servicing

(32)

Protocol Building Types

Large

Standard

Targeted

Whole building retrofit, dynamic modeling

Whole building retrofit, no dynamic modeling

Single or limited number

Apartment

Tertiary

(33)

What Owners and Investors Want

• Clear and transparent renovation project plan based on industry best practices

• Evidence of the qualification of professionals

• Third-party measurement and verification

• Consistent documentation

• A project label that represents these

components and can

live with the project

(34)

Investor Ready Energy Efficiency ^TM

Third-Party Verification Project

Development

(35)

IREE™ Workflow - Origination

(36)

IREE™ Workflow – Project Development

(37)

IREE™ Workflow – Certification

(38)

IREE™ Workflow – Investment

(39)

IREE™ Workflow – Performance

(40)

Pan-European Initiative

(41)

Investor Ready Energy Efficiency Project

Best Practices and Standards Certified

Professional Third-Party

Quality Assurance Consistent

Documentation

(42)

ICP Europe Network Members

europe.eeperformance.org/join-icp-

europe

(43)

ICP Investor Network

(44)

(45)

Summing Up

(46)

Timeline

• February

– All six European Protocols done

• March

– Investor Network

• May

– Project Developer and Quality Assurance Training

• June

– First IREE Projects

(47)

Near-Term: Increase Deal-Flow

• Increase Confidence in Savings

• Reduce Transaction Costs

• Streamline Origination Process

• Standardized Performance Data

• Project Finance Underwriting

• Enable Portfolios and Securitization

Long-Term: Market Transformation

(48)

Panama Bartholomy +31 681024282

[email protected]

(49)

in co- operation with:

Energetic Solutions

Jan W. Bleyl

Task 16 ”Energy Services”

www.ieadsm.org 16

Investor Confidence Day, 23 Feb. 2016, Brussels

From ‚NWh‘ to Cash Flows:

1. Pre-feasibility and 2. Bankable Life Cycle Analyses of Building ‚Deep Retrofit‘ Projects

Jan W. Bleyl, Energetic Solutions & IEA-DSM Task 16

Economic Pre-Feasibility Check:

Life-Cycle Cost, -Savings & Opportunity Cost

An Economic Approach to

Project Pre-Assessment and Development

Economic Model and Case Study

Taking ‚Deep Retrofit‘ as example

(50)

Goals and questions to be answered

1.  Awareness raising and visualization for building owners:

ð  How much do you currently pay for energy?

ð  And how might energy cost develop (scenarios)?

ð  What if X% (min. – max.) could be saved?

ð  And how much does it cost to wait?

2.  Estimation of life-cycle cost saving potentials

ð  What is the net present value of a future savings cash flow?

ð  How do NPVs compare to investment needs => (co)-financing?

3.  Easy to communicate with decision makers:

No technicalities; figures, little text => Cash flows and KPIs

Ø  Build cash flow scenarios and KPIs with easily accessibly input data to communicate with building owners & decision makers

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000

Energy costs without measures Energy costs with savings Min.

Energy costs with savings Max.

815.670

613.587 0 100.000 200.000 300.000 400.000 500.000 600.000 700.000 800.000 900.000

Sc3 accumulated savings NPV of savings [EUR]

Im pl em en ta tio n o f m ea su re s

Total OPEX [EUR/a]

815.670

613.587 0 100.000 200.000 300.000 400.000 500.000 600.000 700.000 800.000 900.000

Sc3 accumulated savings NPV of savings [EUR]

Source: [Bleyl 2014]

Economic Pre-feasibility check:

Baseline, savings scenario ➯ NPV of Savings-CF

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000

Energy costs without measures Energy costs with savings Min.

Energy costs with savings Max.

815.670

613.587 0 100.000 200.000 300.000 400.000 500.000 600.000 700.000 800.000 900.000

Sc3 accumulated savings NPV of savings [EUR]

Im pl em en ta tio n o f m ea su re s

Total OPEX [EUR/a]

815.670

613.587 0 100.000 200.000 300.000 400.000 500.000 600.000 700.000 800.000 900.000

Sc3 accumulated savings NPV of savings [EUR]

975.000 Invest.

Passive house (Max.)

727.000 Invest.

Low energy (Min.)

=> OpCo Min.: 0,029 - Max.: 0,038 Mio EUR/a

(51)

Summary and discussion

1.   Few data inputs needed for LCC pre-feasibility analyses.

Can be estimates, benchmarks or from detailed assessments 2.  Economic parameters are not given but chosen

(e.g. project term, price development …)

3.  Which of the questions are answered by the pre-feasibility model? What is still missing in your views?

4.  Financial (vs. technical) approach: Which one first?

Suitable to inform and convince building owners?

5.  Opportunitiy cost: It costs to wait!

6.  Modernization/savings is (often) not a stand alone business case => How to factor in multiple / co-benefits?

Investment-grade

Life Cycle Cost & Revenue Analyses

of a Building 'Deep Retrofit' Case

(52)

Case study office building:

Deep Retrofit to Passive House standard

Key figures:

ð  Floor area: 1.680 m ²

ð  Energy cost baseline: 39,000 EUR/a => price developm.: 2%/a (1,5%/a) ð  CAPEX (energy retrofit only): 560,000 EUR (330 EUR/m ² )

Goals and questions to be answered

Detailed technical, economic and financial analyses of a Deep Retrofit business case:

Ø  Economic viability and sensitivity analyses?

Ø  Finance: Reporting, financial engineering, & due diligence Ø  How to communicate with decision makers?

Other applications:

Ø  Economic and technical project management and risk asessment over life cycle => e.g. sensitive parameters Ø  ESCos: Proposal calculation

Ø  Support policy design, e.g. subsidy or funding demand

(53)

Baseline-, revenue development of heat energy savings (84 EUR/MWh, 2%/a)

0 10.000 20.000 30.000 40.000 50.000 60.000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 remaining costs

revenues Investor/ESCo revenues customers baseline

EU R /a

baseline + revenue development heat savings

Totals over project cycle:

- baseline: 1,23 Mio EUR - revenues customers: 0,05 Mio EUR - revenues Investor/ESCo: 1 Mio EUR - remaining costs: 0,19 Mio EUR

Spec. revenue-, cost structure developm.;

MWh heat savings/a; LCoH

0 50 100 150 200 250 300 350

0 20 40 60 80 100 120 140 160

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

M W h/a

EU R /M W h

Specific costs + revenue development MWh/year heat savings + LCoH-Savings

Specific revenues Investor/ESCo specific production costs CAPEX specific production costs OPEX heating savings

Levelized cost of heat savings (LCoH) incl. subsidies: 69,4 EUR/MWh

Levelized cost of heat savings (LCoH) without subsidies: 75,4 EUR/MWh

(54)

Cash Flow table

unit cumulative average (mean) 1 2 3 4 5 6 7

investment

equity capital EUR 82.165 - 82.165 0 0 0 0 0 0

investment costs EUR 547.765 - 547.765 0 0 0 0 0 0

subsidies/construction cost grants EUR 54.776 - 54.776 0 0 0 0 0 0

loan disbursement EUR 410.824 - 410.824 0 0 0 0 0 0

interest + principal payment (debt capital) EUR 548.621 18.287 10.271 14.679 27.628 27.186 26.744 26.302 25.861

loan repayment EUR 410.824 13.694 0 4.417 17.670 17.670 17.670 17.670 17.670

interest on debt capital EUR 137.797 4.593 10.271 10.261 9.958 9.516 9.074 8.632 8.191

sum of sales revenues from regular operation EUR 1.054.128 35.138 0 14.381 29.338 29.925 30.523 29.658 30.251

electricity savings EUR 57.567 1.919 0 752 1.533 1.564 1.595 1.627 1.660

heating savings EUR 996.561 33.219 0 13.630 27.804 28.360 28.928 28.031 28.592

water savings EUR 0 0 0 0 0 0 0 0 0

heat sale EUR 0 0 0 0 0 0 0 0 0

cooling sales EUR 0 0 0 0 0 0 0 0 0

sale of electricity to customers EUR 0 0 0 0 0 0 0 0 0

sale of electricity to electric supply companies EUR 0 0 0 0 0 0 0 0 0

misc. revenues EUR 0 0 0 0 0 0 0 0 0

sum of costs from regular operation EUR 190.211 6.340 15.000 1.800 3.635 3.671 3.708 3.745 3.782

purchasing of final energy EUR 0 0 0 0 0 0 0 0 0

internal staff costs EUR 79.856 2.662 15.000 914 1.854 1.882 1.910 1.939 1.968

misc. operating costs (external) EUR 110.355 3.678 0 886 1.781 1.789 1.797 1.806 1.814

misc. costs EUR 0 0 0 0 0 0 0 0 0

project cash-flow (P-CF) EUR 370.929 12.364 -507.988 12.581 25.703 26.253 26.815 25.913 26.469

equity cash-flow (E-CF) EUR 233.132 7.771 -107.435 -2.097 -1.925 -932 71 -389 608

cumulative project cash-flow EUR - - -507.988 -495.407 -469.704 -443.451 -416.635 -390.722 -364.253

cumulative equity cash-flow EUR - - -107.435 -109.533 -111.458 -112.390 -112.318 -112.707 -112.099

Cash Flow Available for Debt Service EUR 863.917 28.797 -15.000 12.581 25.703 26.253 26.815 25.913 26.469

Debt Service Coverage Ratio - - - -1,5 0,9 0,9 1,0 1,0 1,0 1,0

Net Project-, Equity- & Debt- Cash Flows;

annual profit (annual, cummulative)

-600.000 -500.000 -400.000 -300.000 -200.000 -100.000 0 100.000 200.000 300.000 400.000 500.000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

EUR

net cash flows (annual and cumulative) + annual profit

Annual profit (EBT) project cash-flow (P-CF) equity cash-flow (E-CF) debt cash flow cumulative equity cash-flow cumulative project cash-flow

key figures:

- IRR: P-CF: 3,7%, E-CF: 5,2%

- NPV: P-CF: 0,06 Mio. EUR, E-CF: 0,02 Mio. EUR

- PBT: P-CF: 19,4 years, E-CF: 21,9 years

(55)

Summary and key figures

project cash-flow equity cash-flow

years EUR

EUR - 82.165

EUR - 410.824

% 2,9% (WACC) 4,5% (equity interest rate)

EUR 59.847 17.930

% 3,7% 5,2%

years 19,4 21,9

years 17,1 7,8

- 1,3 -

internal rate of return (IRR)

payback period (static) Loan Life Cover Ratio invested debt capital interest rate for discounting key figures from cash flow

invested equity

net present value

payback period (dynamic)

project duration 30,0

total investment 562.765

Profit & Loss figure

0 10.000 20.000 30.000 40.000 50.000 60.000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

EUR profits and losses

revenues from savings capitalized internally produced assets activated construction grants internal staff costs

depreciations interest costs

misc. costs

(56)

Debt Services; Cash Flow Available for Debt Service; Debt Service- & Loan Life Cover Ratios

-2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 2,5

-15.000 -5.000 5.000 15.000 25.000 35.000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 EUR Debt Services, Cash Flow Available for Debt Service (CFADS) and Debt Service Cover

Ratio (DSCR)

principal payments interest payment Cash Flow Available for Debt Service Debt Service Coverage Ratio

key figures:

- effective interest rate debt capital: 2,53 % - loan sum: 0,41 Mio.EUR

- interest sum: 0,14 Mio.EUR - Loan Life Cover Ratio: 1,3 - minimal DSCR: -1,5

Financing:

Debt services and remaining obligations

0 50.000 100.000 150.000 200.000 250.000 300.000 350.000 400.000 450.000

0 5.000 10.000 15.000 20.000 25.000 30.000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 EUR Debt Services and Remaining Obligations

key figures:

- effective interest rate debt capital: 2,53 % - loan sum: 0,41 Mio.EUR

- interest sum: 0,14 Mio.EUR

- maximum debt: 0,4 Mio. EUR

- maximum debt in year: 1

(57)

Sensitivity analyses project IRR

0%

1%

2%

3%

4%

5%

6%

7%

70% 80% 90% 100% 110% 120% 130%

int er na l r at e of re tur n pr oje ct c as h f low

change in comparison to the initial value

sensitivity analysis energy saving projects IRR

investment costs (CAPEX) subsidies/construction cost grants

operating costs (OPEX) project duration saving revenues

price increase factor baseline equity interest rate

WACC

So ur ce : [B le yl 2 01 6]

Sensitivity analyses project NPV

-200.000 -150.000 -100.000 -50.000 0 50.000 100.000 150.000 200.000 250.000 300.000

70% 80% 90% 100% 110% 120% 130%

ne t pr es ent v alue e quit y c as h f low

change in comparison to the initial value

sensitivity analysis energy saving projects NPV

investment costs (CAPEX) subsidies/construction cost grants

interest on debt capital operating costs (OPEX) project duration saving revenues price increase factor baseline

So ur ce : [B le yl 2 01 6]

(58)

Summary and conclusions

Ø   Cost structure: High CAPEX, low OPEX shares Ø  Project-Cash flow: 20+ years payback, IRR: 2-4%,

Equity-Cash flow: 20+ years payback, IRR: 4-6%

Ø  Low cost of financing needed: Debt: 2,5%, equity <5%

Ø  High sensitivity of CAPEX, project duration, price development scenario

Ø  Cash flow risks are low: Savings cash flows are very steady

Ø  Levelized cost of heat savings (LCoH): 70-75 EUR/MWh Ø  Long-term perspectives needed: 25-30 years

=> dynamic Life Cycles Cost & revenue assessment

Outlook and discussion

=> Challenges and opportunities

Ø  Is Deep retrofit a stand alone business case?

Ø  Or an opportunity to (substantially) co-finance investments?

Ø  How to factor in 'Multiple Benefits'?

Ø  How to do 25-30 years contracts (regulatory, business risk …)?

Ø  Investors appetite for Deep retrofit projects?

Ø  ... your questions and remarks?

(59)

in co- operation with:

Energetic Solutions

Jan W. Bleyl

Task 16 ”Energy Services”

www.ieadsm.org 16

Thank you!

Questions and remarks welcome!

What can we do together?

Get in touch:

Jan W. Bleyl, Energetic Solutions & IEA-DSM Task 16

Phone: +43 650 7992820, [email protected]