In the news:
Training to be credentialed as a project developer for industrial energy efficiency and energy supply under the Investor Confidence Project will be held on September 11th. For more information and free registration to training, go here.
District energy (DE) is defined as a system of energy generation plant and distribution infrastructure that supplies heat and/or chilled water and electricity to a number of domestic or non-domestic buildings and end customers. The scale of DE networks can range from small clusters of buildings, such as within a housing development, to major city-wide schemes. They may be served by multiple energy sources with high temperature transition pipelines and lower temperature distribution networks and can be developed in numerous phases.
District energy can have a wide variety of owners. There are different models ranging from a single owner to multiple owners. For many schemes, the ownership of the cogeneration plant is separate from the heat using part. In many cases, it is the public sector at various levels but the private sector also plays a big role.
District energy and financing
Unsurprisingly, district energy requires a long-term financial commitment that fits poorly with a focus on short-term returns on investment. Benefits to the community include avoided costs of energy through the use of surplus and wasted heat energy, and reduced investment in individual household or building heating equipment. District energy networks, heat-only boiler stations, and cogeneration plants require high initial capital expenditure and financing. This means that arranging financing can be extremely difficult. ICP is designed to help that process – the relationship between the asset owner and the project developer – as will be shown below.
One of the major barriers identified in investing in district energy / energy supply and industrial energy efficiency is the lack of standardisation of the process. The process is essentially the interaction between the asset owner/manager and the project developer (an energy service company, an installation or engineering company).
There are many factors and related barriers that influence decisions and action. The Investor Confidence Project is there to remove many of the complications and risks in improving your company’s energy performance. It ensures that the process of choosing what to do, how to do it and how to finance it is standardised, giving you assurance. It can help senior management better understand energy efficiency from a strategic perspective because it does remove risk.
For district energy the Investor Confidence Project focuses on improving the energy performance of existing systems with, undoubtedly, some exceptions sprinkled in as the approach is tried and tested with pilot projects. The scope includes district energy infrastructure upgrades, such as energy centre plant replacement and pipework insulation upgrades.
Training for project developers
On September 11th, the Investor Confidence Project Europe will be holding training for project developers involved in district energy. You can register here fro free.
Since I write on it regularly, readers will know about the ICP process. Just to remind you, the concept of the Investor Confidence Project is simple to understand. The protocols set out requirements for an investment package to be submitted by a project developer that covers critical stages throughout the project lifecycle. A third-party Quality Assurance Provider subsequently reviews this documentation. Compliant projects are awarded the Investor Ready Energy Efficiency™ certification. This process enables standardised project performance underwriting, leading to better data on performance, and a more efficient marketplace with less duplicative engineering and lower transaction costs. The result should be an increase in deal flow and a more transparent and efficient market.
There are three main parties involved in the process: the asset owner/manager (public or private), the project developer (often an energy service company or an engineering company) and the financial institutions that are available to invest. To make it work, the project developer is key because he/she is normally the link amongst all three. More importantly, it is the project developer who holds the golden key: he or she knows about the ICP protocols and knows how to use them. The project developer can explain it to the asset owner/manager and can explain how the protocol will form the key element in their relationship leading to an implemented measure that is financed.
The protocol that can be used for district energy projects (and industry) – ICP Industry and Energy Supply Protocol” – will soon be available on the ICP website. The industry protocols are already available here.
In order to become an ICP Project Developer or ICP Quality Assurance Assessor, you need to meet programme requirements. Following the two-hour online training course, we will add you to the ICP project developer network once you have met certain requirements. Details are available here.
You can register for the training here.
ICP was brought to Europe to develop a system to give confidence to all active stakeholders. There are still concerns that investing in energy efficiency is risky. ICP is designed to change that. ICP started with investments in buildings and is now broadening the scope to include industry, district energy and street lighting through a two-year project funded by the European Commission.
To be a success in the market place following the two-year start-up phase, ICP needs to build its foundation – you who are heavily involved in district energy through project development. There is a need for more project developers so that asset owners can feel more comfortable. There is need for a critical mass of trained and credentialed project developers to make the system work. The benefits are that, once fully in place in your country and throughout Europe, this will lead to more work. The whole purpose is to get more investment in energy conservation measures to meet many of our economic and social objectives. And it is also important to meet your own corporate or individual objectives: reducing costs, improving competitiveness, providing health benefits, and much more ICP is but one way but it is an important step.
So, please consider taking the upcoming training. There will be more opportunities in the upcoming months, but the sooner you do, the better.
Do not forget...
For more information about ICP and the upcoming training, please contact me, Rod Janssen, at firstname.lastname@example.org.
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