Interim Report ELENA-2012-038 June 15th 2014 to December 15th 2015

Table of Contents

1 Work Progress ...... 3 1.1 Staff and Recruitment ...... 3 1.2 Secondments ...... 3 1.3 Tender for investment in new energy efficient appliances ...... 4 1.4 Steering Committee ...... 5 1.5 Advisory Group ...... 5 1.6 Task Groups ...... 6 1.7 Cooperation with the Danish ELENA projects...... 6 1.8 Central Region – a new large scale ESCO project ...... 7 1.9 Partner meetings ...... 7 1.10 Innovative Projects ...... 7

2 Lessons learnt ...... 9 2.1 Allocation of technical assistance to street lighting and building projects ... 9 2.2 Technical assistance for small-scale projects ...... 9 2.3 The importance of partner meetings ...... 9 2.4 A holistic way of thinking energy efficiency in buildings ...... 9

3 Identified Problems and Risks for Implementation ...... 10 3.1 Progress in the implementation of investments ...... 10 3.2 Documentation of Implemented Investments ...... 10

4 Contracts for Technical Assistance ...... 11

5 Updated list of Started / Planned Investments ...... 12

6 Current status of the Investment Programme ...... 13 6.1 Main Tasks and Work Programme, cf. the EIB-contract ...... 13 6.2 The Leverage Factor ...... 14

7 Usefull Information ...... 15 7.1 New building regulations ...... 15 7.2 Public Procurement, revision of the area: ...... 15

8 Changes in Work Programme ...... 16 8.1 Open exchange for investments ...... 16 8.2 Conversion of projects ...... 16 8.3 Updated table of expected investments for implementation ...... 17

9 Supporting Documents ...... 18

10 Financial Statement ...... 19

11 Outlook ...... 20

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ANNEX A: Temporary Secondment Plan, Autumn 2015 ANNEX B: Project Status Report ANNEX C: Contracts for Technical Assistance ANNEX D: Started/planned investments ANNEX E: Project Activities in the Work Programme ANNEX F: Supporting documents - F1: Tender documents, Replacement of Appliances, - F2: Energy Report. RH001 – HE Hospital , CDR - F3: Tender documents, Heat Pumps at Lyngparken Senior Center - F4: Quality Control/Client Consultancy document, FA010 - F5: Tender documents, VI003 – VI005. Street lighting luminaires ANNEX G: Financial Statement - G1: Copies of invoices paid for contracts for external assistance

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Interim Report, CeDEPI This report has been prepared in accordance with the contract between the European Investment Bank (EIB) and the (CDR). The purpose is to summarize the 18 months’ project progress between June 15th 2014 and December 15th 2015.

1 WORK PROGRESS This section only covers the period June 15th 2015 to December 15th 2015.

1.1 Staff and Recruitment The Project Department has been subject to changes in September and October 2015. Jesper Buchardt and Ekaterina Harming resigned with termination of their contracts on Sep. 1st and Oct. 1st. The Project Department has been pleased and satisfied with Jesper and Ekaterina, and wish them the best of luck in the future. Jesper will continue at Municipality and Ekaterina at Rambøll A/S.

Hence the Project Department has been looking for new Technical experts. The Secretariat published two job advertisements, seeking specific competences matching the needs within the partnering . Through a successful recruitment process two new HVAC-engineers have been hired starting on No- vember 2nd: Uffe Gaardsvig, MSc. in Architectural Engineering and Jimmie Feld- fos, BSc. in Indoor Climate and Energy. Uffe will be seconded primarily in Silke- borg and and Jimmie primarily in and .

The Secretariat planned an introductory month for the new employees ensuring a smooth and seamless startup in the Project Department. In aid of this Uffe and Jimmie have initially been seconded along with the more experienced staff. 1.2 Secondments The internal staff will be assigned to the municipalities based on the technical competences needed, as well as the geographical distance to the local offices.

The new secondment plan as attached as Annex A.

Table 1: Status, secondments

Emil Mortensen Viborg Municipality Hedensted Municipality Peter Merrild Sørensen Viborg Municipality Uffe Gaardsvig Hedensted Municipality Jimmie Feldfos Randers Municipality Hedensted Municipality

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Jens Munch Casper Randers Municipality Norddjurs Municipality Navid K.T. Jensen Hedensted Municipality

1.3 Tender for investment in new energy efficient appliances Based on a pilot Project in Favrskov Municipality the Secretariat, in cooperation with Favrskov and Hedensted Municipality has been working on a joint tender for replacement of appliances in buildings. The purpose has been to create a com- mon basis for implementing investments in energy efficient appliances with a sound profitability.

Based on an initially expected investment of EUR 0.935 – 1.072 million, the sec- retariat launched two individual EU tenders in October 2015 for Favrskov and Hedensted Municipality respectively. Five local companies were prequalified to bid with three companies prequalified to bid for both tenders.

With technical assistance appointed from the CeDEPI Framework Agreements and from the seconded CeDEPI staff a full set of tender documents, energy au- dits and calculations have been prepared. The two tenders are identical, and hence synergy effects have been achieved. The tender documents have been prepared in close cooperation between the two municipalities as the expenses for technical support have been shared equally.

Upon completion of the tender documents, detailed energy calculations have been performed by the municipalities. The initially planned investments of EUR 0.935 – 1.072 million is now reduced to an expected investment of EUR 0.1 – 0.130 million. This is a significant adjustment, and it is mainly due to the initial energy calculations being too optimistic and uncertain.

The tender is the first of its kind in Denmark, and because of this there has been a lot of counting and finding data in the institutions (kindergartens, schools, sen- ior day care centers etc.) and critical decisions to be made. The tender docu- ments, results and lessons learned will be shared with the other Danish ELENA projects, as well as interested municipalities within CeDEPI.

The time schedule for the project is listed as:

Table 2: Time schedule, Tender for Investments in Energy Efficient Appliances

Tender submission December 2nd 2015 Information meeting December 10th 2015 Deadline for questioning December 15th 2015 Deadline for correction sheet December 22nd 2015 Tender deadline January 12th 2015

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Contract January 26th 2015 Start-up February 22nd 2016 Sub region 1 February 29th 2016 Sub region 2 April 29th 2016 Sub region 3 May 27th 2016 Handover/Completion June 29th 2016

Tender documents and calculations are attached as Annex F1.

1.4 Steering Committee There have been two meetings in the Committee, one in June and one in Octo- ber. In October the Committee decided to make a redistribution of the invest- ments (i.e. resources for technical assistance) from the Open Exchange, men- tioned in the Biannual Progress Report of June 15th 2015 (please see Section 8.1). This was EUR 3,083,109 in total. The Steering Committee finds the current project progress satisfactory.

Next meeting will be in January 2016.

1.5 Advisory Group There have been two meetings in the Advisory Group, one in June and one in October. As a new initiative the Secretariat has extended the meeting to also address specific technical topics relevant to the partners. Most members of the Advisory Group are participating in a number of various knowledge sharing fo- rums as well as the CeDEPI Task Groups. Hence it can be challenging to achieve a satisfactory attendance at the Task Group meetings. The Secretariat hopes the new initiative will ensure a satisfactory attendance at the future meet- ings.

In June The Danish Association of Construction Clients gave a short lec- ture/introduction to the Total Concept (an EU sponsored programme). That is a method to ensure profitable renovation projects with focus on energy savings, operating costs and technical life. The presentation was very interesting and the topic highly relevant is all types of renovation projects in the partnering municipal- ities. In October Silkeborg Municipality presented a case study comparing centralized versus decentralized ventilation. The study included assessments of pros/cons in regard to the two types of solutions as well as all the economical calculations- and evaluations needed for a proper decision making process. This is a highly relevant discussion to all parties. Furthermore Randers Municipality provided a presentation of an Excel-tool for performing various energy and CO2-calculations. The tool takes into account energy saving as well as operating costs and ROI.

The next Advisory Group meeting will be in January 2016.

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1.6 Task Groups Site visit, Airmaster A/S, August 19th 2015: Factory visit with the group on installations, at Airmaster A/S that specializes in decentralized ventilation solution. These are being fitted in many schools, be- cause the pupils school days have been lengthened by several hours in 2014 in Denmark and thus increased the demand for mechanical ventilation.

Site visit, Grundfos A/S, September 11th 2015: In September the group on installations had a factory visit to Grundfos pumps. The latest pump (Alpha 3) is very energy efficient, if all the parameters are set correctly. To learn how to maximize energy efficiency with this cheap and versa- tile pump was the topic of the day.

Battery storage of energy 16th September Denmark launched the first battery storage facility where wind energy is stored until the price of electricity has risen to an acceptable level. The CeDEPI Secretariat took part.

Practical Innovation A new governmental institution is trying to promote the spreading of new ideas between public workplaces. The CeDEPI Secretariat thus had an employee from the municipality of , who joined us for a week in September. The outcome was very positive both for Herning and for the Central Denmark Region.

Course, Danfoss A/S, December 8th 2015 The CeDEPI Secretariat invited all members on an exclusive course in central heating techniques and management hereof, both theory and practice.

Planned activities for the first two quarters of 2016: The task group concerning Street Lighting uses a specific tool for calcu- lating quality of light generated from street lamps. An exclusive course is being put on by the CeDEPI Secretariat where ELENA funds are used in compliance with the contract. The aim is to heighten knowledge about the area, to avoid misspending public funds.

Applications for taking part in "Practical Innovation week 2016" where all CeDEPI employees will seek new ideas and inspiration. The places where we will seek internships will range from Government bodies, through offices' that work with developing standardization through to oth- er municipalities in the Region that do not partake in the ELENA project. 1.7 Cooperation with the Danish ELENA projects The Secretariat attended a joint Danish ELENA meeting in in August along with Aa+, CEICAD and EPSD. The agenda was knowledge sharing, shar-

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ing of information about tenders, calculations and other useful information. The Secretariat and CeDEPI will be hosting the next meeting in January 2016.

1.8 Central Denmark Region – a new large scale ESCO project The CDR is adding the Regional Hospital in the city Randers to the CeDEPI pro- ject. The hospital is planning large investments in energy efficiency of the build- ing envelope, as well as in technical installations. The hospital uses the ESCO- model to achieve guaranteed reductions. The CeDEPI project will assist by providing client consultancy and quality control of the material and project proposals from the ESCO-provider.

1.9 Partner meetings The Secretariat has had meetings with all the partners in October and November. The municipalities were paired and the meeting scheduled as joint meetings. This gives an opportunity for knowledge sharing as well the municipalities get to know their colleagues in other municipalities.

As part of the meetings the partners receive a project status report. It consists of a spreadsheet listing the current investment progress (i.e. planned investments, contracted investments and documented investments). Furthermore it lists the resources spent for internal and external technical assistance. For internal ex- perts it states the employee and a number of working weeks. For external ex- perts it states the specific contracts entered. The report gives the partners a clear overview of their progress in CeDEPI and is helpful tool to reach the planning investments. An example (Norddjurs Municipality) of such reports is attached as Annex B.

The next set of partner meetings are scheduled for the spring of 2016 and meet- ings will continue to be on a biannual basis.

1.10 Innovative Projects Small scale first mover street lighting project In Viborg Municipality one of the projects that are being sponsored by funds from the ELENA project is in the small hamlet of Almind. The level and age of the ex- isting street lighting is currently very far from Danish standards. The project involves using the latest LED technologies for lighting and combining this with the most advanced sensor technologies so that the streetlights are dimmed down when there is no traffic (pedestrian, bicycles or motor vehicles), so that the absolute minimum consumption of electricity is achieved, but still giving residents and users a feeling of having adequate lighting and staying within regu- lations. The project also explores ways of using sensor technologies for others purposes, such as sending information to the refuse collection company about requirements for emptying rubbish bins, rather that collecting at set intervals. Further internet is being made available to residents, using streetlight mast as vehicle for transpor- tation.

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The CeDEPI Project Department has been an integral part of this project via the two seconded employees Emil Mortensen and Peter Merrild Sørensen, who are both part time in Viborg Municipality. The results from the project will be shared with other Danish ELENA projects and the general Smart City movement in Denmark, which is quite comprehensive. Considerable energy savings will be a result, as will reduction in CO2 emissions.

Electrical Cars in Samsø Municipality Samsø Municipality has initiated the implementation of a car sharing system for most of its work related transportation. The new car fleet will consist of electrical cars and highly efficient diesel cars and will be partly funded by savings in millage allowance to the employees. The allowances are expected to be reduced significantly.

The CeDEPI Project Department has been assisting by performing calculations of the potential energy- and CO2-savings. Samsø Municipality will invest approx. EUR 0.230 million in a leasing contract over the coming three years.

Photovoltaics in Samsø Municipality Samsø Municipality is planning three small-scale photo voltaic plants. The plants use a concept of the absorbing elements tracking the sun by a rotational chassis. Three different types are being installed with one model fully rotational vertically as well as horizontally.

The CeDEPI Project Department has been assisting by calculating energy and CO2-savings, as well as assessing the product documentation from the contrac- tor prior to the ordering phase.

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2 LESSONS LEARNT

2.1 Allocation of technical assistance to street lighting and building projects So far the experience from the Investment Programme has showed a slightly lesser demand for technical assistance for street lighting projects compared to building projects.

This is mainly due to the fact that street lighting projects are at a much larger scale, whereas the building projects are typically at much smaller scale. Hence the building projects will require a relative larger amount of resource allocation in the planning, design and tender phase where CeDEPI operate.

In the CeDEPI Project the resources have been allocated only with respect to the amount of investments and not in particular the type of project. Upon the comple- tion of the project in 2017, there will be key figures available to assess whether the allocation of technical assistance to street lighting and building projects should be adjusted. This could be useful in similar future investment projects.

2.2 Technical assistance for small-scale projects All projects have a certain amount of preparatory work, documentation work, energy calculations, tender work etc. Most of the work is identical regardless of the total investment. Hence small-scale projects will have a relatively higher de- mand for technical assistance compared to the larger projects. So far many part- ners have a large quantity of small-scale projects. This is very time consuming and puts pressure on the partners to keep up with the investment progress stated in the EIB contract. Most partners however have large scale projects to “com- pensate” for the small scale projects. The Secretariat is monitoring the progress by each partner closely and is confi- dent in that they will meet the estimated investments. 2.3 The importance of partner meetings Once again the importance of the biannual partner meetings has been made clear. The meetings enhance the cooperation between the CeDEPI Project De- partment and the partners as well as giving the partners a “sense of ownership” to the CeDEPI project. By having joint meetings it furthermore enhances the co- operation between the municipalities – in the same way as the Advisory- and Task Groups does.

2.4 A holistic way of thinking energy efficiency in buildings In Denmark it has been an integrated part of the municipal work plan to work with energy efficiency in buildings. Hence many of the obvious, very profitable and easy investments have already been implemented. The remaining projects are more complex (e.g. main installations, building envelope etc.) which in most cas- es yield projects with a lower profitability. The importance of a holistic way of thinking is well known and is emphasized with the CeDEPI-project.

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3 IDENTIFIED PROBLEMS AND RISKS FOR IMPLEMENTATION

3.1 Progress in the implementation of investments The progress in the implementation of investments has significantly increased in the past 6 months. The partners have had the necessary technical assistance and time for the preparatory work. As stated in the Biannual Report I and II, many of the projects require much preparation, which is very time consuming, especial- ly when dealing with small scale projects. The Secretariat expects the progress in investments to continue in the coming months.

For some partners their investments in CeDEPI correspond to an annual building grant for investments in energy efficiency. Other partners have received one building grant for all the investments in CeDEPI. In both cases the grants are approved by the local City Council. Hence the partners with annual grants are dependent on a continued approval from the City Council to ensure the commit- ment to CeDEPI. This is however a dynamic environment and priorities can change because of influence central government. So far this has not been an issue. However a missing (or reduced) grant might cause the partners to decrease their investments in CeDEPI. If so, the invest- ments will be added to the open exchange and be redistributed to the other part- ners. The Secretariat urges the partners to make detailed schedules of their in- vestments to help the local City Councils to appreciate and recognize the need for investments in energy efficiency.

The Secretariat has a presumption that the investments at the main project at the hospital in Horsens in the CDR might be lower than proposed. This however has not yet been clarified at this stage. The Secretariat will remain attentive to this matter and is confident that other partners, in the case of decrease in invest- ments, will take over by adding additional projects to CeDEPI.

3.2 Documentation of Implemented Investments After a slow start the documentation of investments is running smoothly. The partners are now familiar with the process and have structured documentation routines. The Project Department is proactive and keeps a close follow-up on the specific projects ensuring continuity and a continued smooth documentation process.

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4 CONTRACTS FOR TECHNICAL ASSISTANCE Please see Annex C.

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5 UPDATED LIST OF STARTED / PLANNED INVESTMENTS Please see Annex D.

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6 CURRENT STATUS OF THE INVESTMENT PROGRAMME Figure 1 lists the current investment status in the CeDEPI project.

EUR 35.000.000 Milestone 15.06.2016 EUR 30.000.000

EUR 25.000.000 EUR 22.588.302

EUR 20.000.000 EUR 12.687.998 EUR 15.000.000 Milestone 15.06.2015 EUR 10.000.000

EUR 5.000.000 EUR 981.232 EUR 0 Planned investments Contracted investments Contracted and documented investments

Figure 1: Status, implementation of the investment program

6.1 Main Tasks and Work Programme, cf. the EIB-contract

Table 3: Progress regarding the main tasks in the project

Planned cf. Comments the EIB contract

Selection and description of 55 % The Secretariat assesses the progress regarding building projects buildings projects as satisfactory. Projects of a total of EUR 18.56 million have been planned. Furthermore EUR 6.40 million has been contract- ed. This corresponds to 75.9 % of the total in- vestment in buildings of EUR 32.90 million. Energy audits of street 50 % Street lighting projects of a total of EUR 4.03 lighting million have been planned. Furthermore EUR 6.13 million has been contracted. This corresponds to 40.9 % of the total planned investment in street lighting of EUR 24.87 million. The Secretariat finds this satisfactory, as the planned investments in street lighting have been increased by approx. EUR 4 million due to con- version of building projects in Horsens Municipali- ty. Analysis of public fleet cars 55 % As stated in Section 1.10, Samsø Municipality has implemented a car sharing concept, based on electrical cars. The total investment is approx. EUR 0.157 million. This is the only registered transportation project. The Secretariat does not expect any more pro- jects within this area.

Please see Annex E for status on the work programme c.f. Annex I of the EIB contract.

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6.2 The Leverage Factor

Table 4: The Leverage Factor

1st period – Financial Statement no. 1 EUR 165,632.4 2nd period – Financial Statement no. 2 EUR 281,463.9 3rd period – Financial Statement no. 3 EUR 489,098.4

Total EUR 936,194.7

Contracted investments EUR 12,687,998

Leverage factor, December 15th 13,55 2015

The leverage factor is burdened by a rather large contract for external technical assistance of EUR 143,431 which has not resulted in any particular investments at this stage. This is mainly at the hospital in Horsens, where decision making and funding is time consuming. Subtracting that specific contract the resulting leverage factor would be approx. 16.

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7 USEFULL INFORMATION

7.1 New building regulations Denmark has, as a move to reduce our impact on the Global climate change problems, passed new building regulations (BR15) that will take effect from Jan- uary 1st 2016 with a transition period until June 30th 2016. This will influence the project in that our CeDEPI employees and partners will need to be schooled in the changed legislation. 7.2 Public Procurement, revision of the area: New regulations for public procurement will take effect from January 1st 2016. The Minister of business and growth claims that the new legislation will mean that the country will benefit from more efficient corporation between the public sector and private enterprise, because the law opens up for negotiations on price, before contracts are entered into.

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8 CHANGES IN WORK PROGRAMME

8.1 Open exchange for investments As stated in the Biannual Report of June 15th 2015 an Open Exchange for part- ners with excess investments has been created. In October 2015 the Steering Committee reallocated these investments to partners, based on recommenda- tions from the Secretariat:

Samsø Municipality – EUR 0.268 million

Horsens Municipality – EUR 1.34 million

Central Denmark Region – RAA Randers – EUR 1.47 million

The updated expected total investment for each partner is stated in section 8.3. The investments are transferred from Randers Municipality and include re- sources for technical external assistance only. Randers Municipality will retain its consultants from the CeDEPI Project Department, and will only be deducted in the resources available for external assistance. The CDR, Samsø- and will take over the own funding corresponding to the additional in- vestments.

8.2 Conversion of projects Favrskov Municipality Favrskov is converting EUR 0.134 – 0.200 million from building projects to street lighting projects

Horsens Municipality Horsens is converting all initially planned building projects to street lighting pro- jects. This is mainly due to a preliminary analysis concluding that the initially planned investments in heat pumps are unprofitable. Furthermore there is much uncertainty concerning some large district heating projects in the future. Such project may make any other projects within the timeframe of the CeDEPI project inappropriate.

Norddjurs Municipality Norddjurs is planning to convert an additional investment of EUR 0.402 million from building projects to street lighting projects. This is mainly due to reduced funding for building projects in 2016. The municipality still views the investment target of EUR 4.048 million as valid.

Samsø Municipality Samsø is converting its street lighting project to a larger transportation project regarding electrical cars. As stated in section 8.1 the municipality is upgrading its commitments in CeDEPI by adding a number of small photovoltaics projects as well as a project on build- ing envelope.

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8.3 Updated table of expected investments for implementation

Table 5: Expected investments for implementation

Street lighting and Partner Buildings Comments electrical cars Favrskov Municipality EUR 1,474,579 EUR 134,000 - Hedensted Municipality EUR 5,992,359 EUR 200,000 - EUR 2,171,582 - -

EUR 2,975,871 + Please see sec- Horsens Municipality - EUR 1,340,482 tion 8.1 Please see sec- Norddjurs Municipality EUR 1,621,984 EUR 2,426,273 tion 8.2 Please see sec- Randers Municipality EUR 2,004,962 EUR 5,502,560 tion 8.1 Ringkøbing-Skjern EUR 2,010,724 - - Municipality Please see sec- Samsø EUR 271,979 EUR 156,975 tion 8.1 and 8.2 Silkeborg Municipality EUR 6,434,316 - - EUR 2,412,869 EUR 1,876,676 - Viborg Municipality - EUR 10,254,692 - EUR 7,028,150 Please see sec- CDR - + EUR 1,474,530 tion 8.1 Total EUR 32,898,034 EUR 24,867,529 - The “open ex- All excess invest- - - ments have been change” allocated.

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9 SUPPORTING DOCUMENTS Selected supporting documents are attached (in Danish only) as an insight to the preparatory work in some of the CeDEPI projects. Please see Annex F.

Tender documents HD051 – Replacement of Appliances, Hedensted Municipality

Energy Report. RH001 – HE Hospital Horsens, CDR.

Tender documents SD001 – Heat Pumps at Lyngparken Senior Center, Syddjurs Municipality

Quality Control/Client Consultancy document, FA010. Energy renovation of a day care center.

Tender documents, VI003 – VI005. Replacement of Street lighting lumi- naires.

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10 FINANCIAL STATEMENT Please see Annex G.

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11 OUTLOOK By the next report the project will be entering the wind down phase. This means that all partners should have planned in detail how to invest the remaining funds, and it will become clear whether the CeDEPI project will reach the expected aims and reductions.

To clarify this the Secretariat will:

Ask the partners to submit detailed plans of investments. Continue to monitor and store the documented reductions in CO2 emis- sions. Collect documentation of investments held by the partners Monitor project progress in general. Continue to reinforce collaboration between municipalities Encourage knowledge sharing as a natural activity between the munici- palities of best practice cases. Work with CeDEPI employees to prepare them for jobs after the end of the project period.

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