FAQ - how the ICP process works for industry, district energy and street lighting

Energy Efficiency

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24 January 2018

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Rod Janssen

The Investor Confidence Project, funded by the European Commission, 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 Europe is designed to change that. Starting with investments in buildings, ICP Europe has now broadened the scope to include industry (large and small), district energy and street lighting.   

How the ICP process works   

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 which covers critical stages throughout the project lifecycle. This documentation is subsequently reviewed by a third party Quality Assurance Provider. 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.    

For example, a potential project in a factory or a district energy system is identified. Someone has to do the necessary calculations to determine the viability. Someone has to be identified to install it (often the same organisation). And some organisation needs to fund it. What this project does is standardise the procedures so that all players gain confidence in the system. The factory owner is happy. The developer/auditor/installer is happy. The financial institution is happy. There is third party monitoring to ensure everything is done correctly.      

Current situation  

Industry: The industry protocols have been prepared and are now being translated. Now the ICP Project Development Specification is being prepared. The PDS provides a clear roadmap for Project Developers to correctly implement each requirement specified in the ICP protocols based on current best practices and available industry resources. It represents the collective project development knowledge of a large team of industry experts and has been designed to allow various stakeholders to develop projects that meet a consistent level of quality and conform to the ICP Protocols.  

Probably starting in March or April, there will be training for ICP will offer trainings to firms willing to become familiar with ICP Protocols, in order to be able to use them in IREE projects. Individuals having taken the Project Developer Training can apply to become part of the ICP Project Developer Network.  Trainings are expected to start by the end of March.   

Meanwhile, we are looking for potential pilot projects in order to test the system.   

District energy: In early January the first technical forum convened and the draft protocol is now being prepared by the ICP technical team. The Protocol is due to be released mid-April. Then training activities will start soon thereafter.        

Street lighting: In early January the first technical forum convened and the draft protocol is now being prepared by the ICP technical team.  The Protocol is due to be released mid-March. Then training activities will start soon thereafter.    

For more information – Frequently Asked Questions  

Our website contains a wealth of information about the entire ICP process.  However, many readers have asked specific questions and we have prepared answers to Frequently Asked Questions.  They cover: introduction to the ICP process, understanding the protocols, what ICP can do for industry, what ICP can do for district energy, what ICP can do for street lighting, what ICP can do for project developers and understanding quality assurance.

Check out the answers below or download them from the ICP website

If you have specific questions, please do not hesitate to contact me at rod.janssen@ee-ip.org

For other related blogs prepared by Energy Efficiency in Industrial Processes on the ICP project, go to the EEIP website or directly to   

FAQ

  1. Introduction to the Process  
  2. Understanding the Protocols
  3. What ICP can do for industry
  4. What ICP can do for District Energy
  5. What ICP can do for Street Lighting
  6. What ICP can do for Project Developers
  7. Understanding Quality Assurance

Introduction to the Process

1. Could you explain the entire ICP process?  

The ICP process is designed to increase the confidence levels of clients, project developers and investors about investing in any specific energy efficiency measure or set of measures.  

The ICP system has a number of components:

  • The core of the ICP methodology is the Energy Performance Protocols that define a standardised road map of best practices for developing and documenting energy retrofits.  They leverage existing and commonly accepted European and national standards in conjunction with ICP specified procedures, and documentation based on the various stages of a project life-cycle to create standardised projects with reliable returns.  
  • The ICP Project Development Specification (PDS) brings the many complex details of an energy efficiency project into focus, providing a clear direction to the entire team with regards to requirements, tools, expectations, and quality management. The Project Development Specification provides a clear roadmap for Project Developers to correctly implement each requirement based on current best practices and available resources.   
  • The ICP Training System combines the use of the ICP Protocols and independent third party verification to create Investor Ready Energy Efficiency™ (IREE) projects that provide investors and building owners with a new level of confidence in project engineering, performance and returns.   
  • The ICP Quality Assurance process implemented by ICP trained and vetted QA Assessors is an integral part of the creation of IREE projects and associated increased confidence by project stakeholders.  For a project to become IREE certified it requires verification by ICP Quality Assurance Assessors, who have been vetted by ICP, to ensure that they possess all necessary qualifications and certifications to provide Quality Assurance for a project developed according to the ICP Energy Performance Protocols.    

2. If an IREE certified project does not live up to expectations, what is my recourse?  

The IREE certification confirms that a project has been developed by an ICP Project Developer according to the ICP Protocols and the certification requires an ICP Quality Assurance Assessor to confirm this.  ICP requires that an appropriate Measurement and Verification plan and Operations and Maintenance plan have been developed and presented at the time of certification. This means that the project has been developed using best practices but ICP cannot be responsible for actual or expected energy savings, which are influenced by many factors outside the control of ICP.  Using ICP ensures you are using best practice but it does not remove the need to carefully select project developers and ensure best practices in on-going Measurement and Verification and Operations and Maintenance are implemented throughout the life of the project.    

3. Is there a minimum investment size to make project viable?  

No, there is no minimum size.     

4. Does ICP support any particular energy efficiency technology?  

No.  ICP is technology neutral.  Projects can be single technology or use multiple technologies.    

5. How can my project idea become an early adopter project?  

At the current time, the Investor Confidence Project is looking for early adopter projects in industry, street lighting and district energy that can test the protocols and system. For information, please contact Quitterie de Rivoyre, ICP Project Manager (Quitterie.derivoyre@eeperformance.org).  

ICP Europe, as a project funded by the European Commission, is giving priority to five countries – Austria, Bulgaria, Germany, Portugal and the United Kingdom – and we have representatives in these countries who are actively driving the programme by convening interested stakeholders and offering project assistance in the use of our tools and resources.  However, we are also interested in pilot projects in other European countries. Do not hesitate to contact us if you think you may have a suitable project.    

6. What do I get if my project becomes an early adopter project?  

We can provide technical assistance and work with your own team or any external project developer to ensure that the project becomes certified.  Once the project is certified we will, with your agreement, publicise the project to our network and wider stakeholder network.     

7. How can I be sure that work undertaken through the ICP process will meet all national standards?

The ICP technical team did a review of all best practice standards throughout the EU and internationally and these are built into the Protocols.  The Protocols are then reviewed for completeness by experts from the Technical Forum.    

8. How do you assure quality through the entire process?  

The ICP Quality Assurance (QA) process implemented by ICP QA Assessors is an integral part of the creation of IREE projects and associated increased confidence by project stakeholders. The ICP System requires every project to be verified by an ICP Quality Assurance Assessor. The Quality Assurance Assessors have been trained and vetted by ICP, to ensure that they possess all necessary qualifications and certifications to provide Quality Assurance for a project developed according to the ICP Protocols. Perhaps the most important facet of this process is that the ICP QA Assessor must be an independent verifier.  This requirement, which eliminates any conflict of interest and ensures objectivity, helps to ensure that IREE-Certified projects are fully ICP compliant.    

9. Will financial institutions accept the assurances given through the ICP process?  

The purpose of the ICP process is to ensure financial institutions are given higher levels of confidence in energy efficiency projects.  We have a large and growing network of investors who support the use of ICP.  We also have insurance companies providing energy efficiency performance insurance which provide lower insurance rates for ICP projects.  Performance insurance is attractive to lenders and investors and can reduce the cost of capital.  

ICP Europe’s Investor Network offers investors a means to promote ICP Europe while connecting with project originators and programme partners.  It can be a source of finance for project developers. Information on the Investor Network is available here: http://europe.eeperformance.org/finding-qualified-deals.html      

10. Will using the ICP process reduce my overall transaction costs?  

The purpose of ICP is to reduce transaction costs and speed up investments in energy efficiency. Experience in the concept in the United States for buildings has shown that transaction costs are definitely reduced.  This can occur in several ways such as removing the need to hire independent engineers to undertake due diligence.  In the case of insurers, the use of ICP can remove the need to pay for an engineering assessment in order to get insurance. However, there cannot be such a guarantee for any individual project.    

11. I am a business owner in Italy. Is this programme available in my country?  

ICP Europe, as a project funded by the European Commission, is giving priority to five countries – Austria, Bulgaria, Germany, Portugal and the United Kingdom – where we have representatives who are actively driving the programme by convening interested stakeholders and offering project assistance in the use of our tools and resources.  However, we are also interested in projects in other European countries and Italy would be most welcome to participate. Do not hesitate to contact us.

12. This project is currently in the pilot phase.  When will it be fully available on the market?  

The project continues until May 2019.  We are expecting the market roll-out after that.    

13.  Where can I find out more about ICP?  

Virtually everything about this project can be found on our website: http://europe.eeperformance.org/ 

You can find specific country information (in national languages) here:

14. Who are the different players in the ICP scheme?

For the design and execution of energy efficiency measure using the ICP approach there are important players.  First, there is the client, who can be the asset owner or manager of a facility.  There is the project developer who works with the asset owner or manager to design and implement the energy efficiency measure(s). There is the investor that can be a bank or financial institution, or even a Financial Director in the case of internal financing from a company owning a project.  Finally, there is the Quality Assurance Assessor who independently verifies that the process defined in the ICP Protocol has been followed correctly.    

15. Do you need to involve an ESCO if the goal of ICP is to help owners find investment?

Every project has to have a project developer and this could be an in-house team, external consultant engineers, an equipment vendor or an ESCO.  We are neutral on what type of organisation the project developer is, we are only concerned whether the developer has met the ICP standards or not.  An IREE project has to be developed by an ICP trained and vetted Project Developer.      

16. Who can initiate a project?  

The asset owner/manager or a project developer can initiate the project.    

17. What does it mean to have an IREE project?  

ICP's Investor Ready Energy Efficiency™ (IREE™) is an international certification that ensures best practice, the right professionals and third-party validation are used to deliver high-quality projects that you can bank on.  To become an IREE project it must be developed by an ICP Project Developer and independently quality assured by an ICP Quality Assurance Assessor.      

18. At what stage of the project is the Certification delivered?

Certification is delivered when the project is fully developed and costed and prior to the investment decision.         

19. Can ICP assist me in finding external financing for a project?

ICP can provide indirect support in finding finance for projects. ICP Project Developers are made aware of the Investor Network and we hold events to ensure Project Developers can network with investors and lenders.  Through the network we have successfully connected project developers to investors. Information on the Investor Network is available here: http://europe.eeperformance.org/finding-qualified-deals.html      

20. How much cheaper is the financing of an IREE-Certified project in comparison to a similar non-IREE certified project?

There is no evidence yet to date that financial institutions will give cheaper financing although in the USA some institutions offer either lower rates or lower transaction fees.  However, because of the ICP approach, financial institutions are more confident that the project will be successful and thus are readier to provide needed financing.  In addition, a leading insurer will give IREE-Certified projects lower insurance rates for energy efficiency performance insurance.  

21. Can I use ICP Protocols without going through the certification?

The ICP Protocols can be used separately since these are open source documents. However, they are designed to be used as part of a process that is recognised internationally.   Understanding the Protocols      

Understanding the Protocols

22. How do I know the protocol used for IREE process represents best practice?  

A dedicated Technical Forum is created for each thematic area (industry, district energy and street lighting). The Technical Forum ensures that ICP Europe staff is producing relevant and needed products and services for the European energy efficiency markets.

The Forum does this through:  

  • Providing insight and feedback on draft products in webinar based Forum meetings and informally;
  • Providing local, national and European knowledge on relevant standards, best practices and initiatives that may be relevant to, or interact with, ICP Europe products and tools; and
  • Identifying projects and programmes for piloting of ICP Europe products and services.    

For the Technical Forum for industry, there are approximately 80 members which helps to ensure a broad range of input.    

23.  Is there a protocol targeting specific industrial sectors?  

There are two protocols for industry – complex and targeted.  

1. Complex protocol

Intended for complex industry energy efficiency projects that include:

  • Installation of new technology types or capacities, including new utility generation technologies - for example, major changes to plant configuration requiring controls modifications      
  • Installation of ECMs with variable and/or unpredictable loads - for example, refrigeration plant  

2. Targeted protocol

Intended for targeted industry energy efficiency projects that include:

  • Installation of simple, commonly used technologies - such technologies will usually have consistent and predictable load profiles; for example, lighting retrofits or motor upgrades; projects could include a number of these types of ECMs
  • Installation of ECMs which are like-for-like replacements - for example, direct utility plant replacements for a similar technology type and capacity  

There are no specific industrial sectors that are targeted.    

24. How are the protocols developed and why should I trust them?  

The core of the ICP methodology are the Energy Performance Protocols that define a standardised road map of best practices for originating energy efficiency measures following the ICP Project Lifecycle. They leverage existing and commonly accepted European and national standards in conjunction with ICP specified procedures and documentation based on the various stages of a project life-cycle to create standardised projects with reliable returns. The Protocols are developed by the ICP technical team, after considerable research into international best practice and experts from many organisations contribute to the development of the protocols through our Technical Forums.    

The Technical Forum ensures that ICP Europe staff is producing relevant and needed products and services for the European energy efficiency markets. The Forum does this through:  

  • Providing insight and feedback on draft products in webinar based Forum meetings and informally;        
  • Providing local, national and European knowledge on relevant standards, best practices and initiatives that may be relevant to, or interact with, ICP Europe products and tools; and         
  • Identifying projects and programmes for piloting of ICP Europe products and services.      

25. Are the protocols for industry, district energy and street lighting all developed the same way?  

The approach used to prepare and review the draft protocols for industry, district energy and street lighting is the same for each sector.  This builds upon the approach we used to develop protocols for building energy efficiency projects.      

26. Will the process include renewable energy or energy storage?  

If these technologies are recommended in the audit process, they can definitely be included.     

What ICP can do for Industry  

27.  I recently had an audit of my facility. How can ICP help me implement the recommendations?  

A good audit report will provide many recommendations for energy efficiency measures to be implemented in your facility.  These range from low cost/no cost measures to more expensive measures, the specific measures will depend on your facility and processes. By having an audit, you have showed an awareness that your facility’s energy performance can be improved but it is not always obvious how much it will cost to undertake these measures. And you may also be concerned whether investing in those measures will actually bring the expected results.  A project developer accredited through ICP will be able to take project proposals through to development using the ICP system which will give you greater confidence in the outcomes.    

28.  I would like to reduce the energy costs in my business. How can ICP help?  

ICP is designed to make it easier to invest in energy efficiency measures. By providing a process that minimises risk, the client, project developer an external financier, or an internal CFO, can all feel good about the reduced risk.    

29. I have an engineering firm that provides energy audits and other related services to industrial customers. What are the advantages of joining this ICP process?  

The benefits of adopting ICP and promoting the IREE approach for engineering companies undertaking energy audits and developing projects are: 

  • IREE provides a repeatable process that aids quality control
  • It can enable a higher level of project approval by giving clients and funders more confidence in the outcomes
  • It increases your ability to connect with finance and insurance without additional cost
  • It is a differentiator which can help you win more projects in a competitive market place -             

30. Is IREE appropriate for SMEs or is it only for large industry?  

The ICP approach is definitely appropriate for SMEs. It is hoped that ultimately SME projects, because of their size, will be bundled together to seek financing from financial institutions.  

What ICP can do for District Energy  

31. What types of projects can be funded for district energy through ICP?  

District heating and cooling projects will mostly be in cities. District energy projects are characterised by heating and/or cooling distributed to a group of buildings from a central energy generation plant. Projects will not include measures inside the residential or commercial building but elements of the system up to the point of entry.  Measures inside the building could be developed using the existing and fully developed IREE system for buildings.

What ICP can do for Street Lighting  

32. What types of street lighting projects can be certified through ICP?  

Street lighting projects are characterised by lamp and/or lighting control improvements in lighting.  They can be publicly or privately owned.  

What ICP can do for Project Developers    

33. How much extra-time does a PD need to comply with the ICP Protocols?

There is no exact measurement of how much more time following the ICP methodology requires from a project developer. However, we think this is a non-issue as: if a project developer is already following state of the art practices and standards, complying with ICP should represent a negligible amount of time. On the contrary, if a project is developed in a way that is far from the best practice presented in the ICP Protocol, then project performance is at risk. In this case the cost of not using ICP is much higher than the cost of time needed to use ICP.  

In reality, time also always depend on the complexity and level of investment of the projects, but we don't yet have enough data to provide high certainty answers to this.      

34.  What is the vetting process for project developers under ICP?

Being part of the ICP Project Developer Network designates that a project developer (ESCO, Engineering firm, facility manager, asset owner, etc.) is qualified to develop Investor Ready Energy Efficiency™ (IREE)  projects that comply with the ICP Energy Performance Protocols.  The ICP Project Developer allows asset owners, investors, and programme administrators to have confidence that the ICP Protocols will be appropriately applied by qualified professionals to originate quality projects producing consistent returns.  

Compliance with the admission requirements will be reviewed on a case-by-case basis. In order to become an ICP PD, firms must:

  • Retain, either on staff or under contract, an individual who has completed the ICP Project Developer training and either:
    • Is a licensed Professional Engineer under a nationally recognised scheme which is relevant to energy in buildings (e.g. Chartered Mechanical Engineer); or
    • Has an engineering or science degree, and a nationally or internationally recognised certification, which is relevant to energy in buildings (e.g. CMVP certification, EPBD energy assessor certification) - these qualifications will be reviewed on a case by case basis.
  • Provide evidence of a minimum of 5 years’ relevant project development experience for those individuals attending the training, which spans the entire lifecycle of the ICP process;
  • Project Developers must provide a minimum of 3 references from past projects 
  • Maintain Professional Indemnity / Errors and Omissions insurance or equivalent policy.    

35. Is ICP usable throughout Europe?  

Yes.  The ICP Protocols have been developed to be used in all EU countries plus Norway and Switzerland.  They are available in the following languages: English, German, Portuguese and Bulgarian.  

Understanding quality assurance  

36. What are the advantages of my becoming a Quality Assurance Assessor under ICP? How do I do it?

Becoming a Quality Assurance Assessor under ICP makes you stand out in the market as you will be able to review and certify IREE projects, which will not be the case of your competitors. IREE-Certified projects are high-quality projects that we hope will get better visibility in the market and better financing terms.

Being a Quality Assurance Assessor under ICP gives you access to the network of ICP Project Developers and so to potential clients.  

In order to become a Quality Assurance Assessor, you need to apply through the europe.eeperformance.org website.    

37.  What qualifications do you require for quality assurance position?  

QA Assessors will have been approved under the ICP approach.  

QA Assessors are required to have verifiable relevant experience of at least three years in performing third-party technical quality assurance reviews. This should include experience reviewing work performed by other firms regarding baseline development, savings calculations, commissioning, operations, maintenance and monitoring, and M&V.    

38. Following training for ICP project developer and quality assurance person, is there an exam for certification? How long can a firm be an ICP Project Developer or ICP Quality Assurance Assessor?  

There is an on-line exam following the Quality Assurance training.  Revalidation will be based on a three-year renewal cycle. The PD must either:

  1. Complete one project development/certification in this period, and thus automatically qualify for renewal; or
  2. Provide evidence of relevant continued professional development activity (for example, attending conferences, attending courses, producing papers) - these would be validated on a case-by-case basis.    

39. Is the ICP Quality Assurance Assessor an individual or the company?  

After an individual has completed the training and has been confirmed as qualified to be an ICP Quality Assurance Assessor (QAA), the company will be part of ICP’s network of ICP Quality Assurance Assessors.    

40. Do you provide trainings especially linked to a project or can you train a larger audience?

The trainings are for project developers and for quality assurance providers. There is the possibility of individualised training for large organisations with early adopter projects.    

41. Who confirms an individual is qualified to be an ICP Quality Assurance Assessor?

The ICP project partner VERCO delivers confirmation upon review of application and provided the individual has taken the Quality Assurance Assessor training.    

42. Who pays for the Certification?

At the current time, the European Commission funds the project and all costs are borne by the project. However, the project does not pay for the time spent by the project developer.    

43. How much do the Quality Assurance Services cost?

There is no cost during the execution of the Horizon 2020 project funded by the European Commission. When the project is rolled out in the market following the completion of the Horizon 2020 project, market conditions will determine what the costs will be.

About the Author

Rod Janssen is the President of Energy Efficiency in Industrial Processes (EEIP).