Environmental Engineering Reference
In-Depth Information
The PECQ does not directly address these weaknesses in the STO, but suggests
the need to update the ordinance to exploit the immense rooftop area, over 109
million square meters (in 2006), of the existing buildings by encouraging the
installation both ST as well as PV units. It was expressed that the use of ESCOs to
install ST units on existing multi-tenant apartment buildings was explored, but the
small scale of the individual installations is apparently not
nancially attractive to
ESCOs. However, as ST and PV technologies become more mature, prices will
decrease and allow for shorter payback periods. This will help to decrease perceived
risk, both for the installer and the homeowners
'
association. Additionally, a more
innovative ESCO contract could be devised by
nding a way to pool together
various installations of different homeowners
'
associations in order to reach a
desired pro
s new solar
policy should provide a favorable framework for the incorporation of ESCOs in
order to maximize the bene
tability threshold. In any case, it is clear that Barcelona
'
ts for citizens and local businesses.
4.2 Use of the ESCO Model in the Renovation of Public
Buildings
The relevant legislation points out that public administration should be lead-user of
the ESCO model to carry out measures for improving energy ef
ciency. They are
required to communicate their actions and results to citizens and/or companies in
order to encourage the widespread use of the model. The public entity responsible
for energy ef
ciency and conservation projects in government buildings is the
Barcelona Energy Agency (AEB in Catalonian). They have attempted to contract
ESCOs to carry out renovations, but unfortunately, aside from a few education
centers, the Liceu theatre renovation is the only exemplary ESCO project in Bar-
celonian public buildings. According to the AEB representatives interviewed, the
absence of more examples of ESCO projects in the public sector is due to factors of
the following nature:
Administrative: In order to make the necessary payments to the ESCO, the AEB
must deal with two independently managed municipal accounts: the
￿
investment
account
. The payments would be made by the
investment account yet the energy costs savings would be captured by the main-
tenance account. This condition causes a split incentives issue, which prevents
projects from going forward. The recently changed law dictating public pro-
curement rules creates two main problems for ESCO projects. Firstly, the bidding
process is now so long that it creates unusually high transaction costs for the
ESCOs involved. Furthermore, the legal framework allows for collusion among
bidders. For instance, bidding ESCOs enter in a quid pro quo situation by
and the
maintenance account
public projects. After winning the initial round, the selected com-
panies enter into a competitive dialog. If their conditions are not met, then
neither of them follows through. For this reason, many projects are left abandoned.
exchanging
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