The “Proklima”
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“PROKLIMA” - A MODEL FOR COOPERATIVE CLIMATE PROTECTION ON COMMUNITY LEVEL Source: Case study: The “proKlima” partnership contract as a model for cooperative climate protection on community level The “proKlima” is a climate protection fund that was established as a model of cooperative climate protection (global thinking) by combining management interests, consumer needs, and local activities (local acting) in the region of Hanover. The scheme covers an area of about 20,636 square kilometers with about 677,000 residents. Building on extensive activities in the field of Integrated Resource Planning (LCP/IRP) during the mid- 90's, the climate protection fund was founded in June 1998 when the proKlima partnership contract was signed three years after the first outlines were made. The proKlima office also started operating in 1998. The term of contract of partnership proKlima is effective through June 2006, the agreement will automatically renew for successive one year unless terminated. In signing this nation-wide unique partnership contract the Stadtwerke Hannover AG, the City of Hanover and the additional partners agreed on the goal for the proKlima climate protection fund "to support and progress monitoring of measures and third party projects (...) for climate protection, (...) which otherwise would not have been realized or only in scaled-down extent due to a lack of (given) economic efficiency." Design of the proKlima funding scheme The “proKlima” climate protection fund is a private public partnership formed by different local institutions in the Hanover Region. The fund members provide up to 4,5 Mio. Euro annually to support climate protection measures undertaken by their customers and citizens. The capital of Lower Saxony, Hanover, the surrounding towns Langenhagen, Seelze, Laatzen, Ronnenberg, Hemmingen and the local energy supply company Stadtwerke Hannover AG/ enercity are financing the fund. The corporate share amounts 76,7 % of the total budget whereas the public share covers 23,3 %. Thereby, the majority of the fund comes from the Stadtwerke Hannover AG´s previous year's profit and from a newly introduced surcharge for gas paid by all customers. The contribution of the municipal partners such as the city of Hanover, that ranks first among all municipal fund partners, is linked to the annual revenues from the licence fee paid by the utility and is defined as 2,5% of these payments. The fund is supported non-materially and with know-how by the Trade Corporation of Hanover, National Association of Energy Consumers, Consumer Advice Centre Lower Saxony, Citizens Action Group for Environmental Protection, Ruhrgas PLC and Thüga PLC (non-public shareholder of Stadtwerke Hannover AG). All partners signed the contract of partnership "proKlima". From an organizational perspective, three institutions are of relevance: • The proKlima Board of Trustees consists of representatives of Stadtwerke Hannover AG/enercity and of all municipal fund members. • The advisory council is composed of representatives of all partners. Both committees decide together on individual projects and the setting-up of support programs. • The proKlima office decides on plans within the framework of the public support program. It is responsible for management and monitors progress of this climate protection fund. In addition, it cooperates with well-known institutions in conducting studies, impulse programs and innovative projects. The office also participates in local climate protection activities via "networking" with the City of Hanover or the Greater Hanover Regional Association. According to its strategic goals, proKlima supports local climate protection measures, which could not have been implemented without financial aid and for which the applicants are not obliged to pay. Furthermore, the fund aims at mitigating economically unacceptable costs of innovative projects, which are not paid off by reduced energy costs. The proKlima fund addresses energy efficiency and GHG reduction potentials on the local level with special focus on private end-users and public institutions. It aims at enhancing the implementation of measures that are usually hindered through a series of market barriers. Fi ve public support programs have been established in 1998: • Energy-efficient modernization of existing residential buildings (e.g. better insulation, optimized windows, efficient ventilation systems, the use of co-generation, quality control); • Heating energy conservation in new apartment complexes (e.g. ambitious low energy houses, passive house standard ( 15 kWh/m²a), quality control); • Solar water heating; • Photovoltaic - solar generation of electricity. This program is on stand-by since the law Erneuerbare Energien (special support for renewable energies on a national level) has been enacted in March 2000; • Solar energy & climate protection in schools, organizations and public institutions (e.g. solar panels for demonstration, educational material, measures to popularize the use of solar energy etc.); In 2012 the support programs additionally contains: • CHP-Support program (combined heat and power) • Support for Non-Residential buildings (retrofitting and newly built) In addition, individual projects and promotion measures are funded each year, for example: • Investment measures (e.g. hydroelectric power station, various photovoltaic-projects); • Development and research (e.g. scientific research to passive house standard); • Former Development of the Energie Pass (low energy consumption certificate); • Educational measures (e.g. qualification in the field of solar-marketing, energy -coaching in social institutions); • Promotional and advisory measures (e.g. support of campaigns dealing with solar energy, CHP, and insulating for existing houses); • proKlima is a regional partner for KfW energy counseling (KfW-supported energy counselings for small and middle-sized companies • built up an regional energy counseling offer “electricity savings” for households Within the funding structure all project proposal are assessed with regard to the following criteria for supporting individual projects or establishing programs: • CO2-efficiency (US$/ ton of avoided CO2); • Overall reduction of CO2; • Multiplier effects; • Introduction of new technologies for climate protection to the market. Actual achievements and results are monitored and evaluated on a annual basis and published in annual progress reports. The financial structure of the funds is controlled and certified every year through independent certification bodies. The proKlima fund could generate a significant response among the target groups, triggering an increasing number of applications (1804 proposals in 2001, 1015 in 2000). The impact mechanism relies on two core elements: • On the one hand, proKlima provide economic incentives to private consumers and public bodies to engage in climate protection measures. Hereby it affects the objective pros and cons of the alternative, and, in addition, triggers the subjective perception of pros and cons of the participants; • At the other hand, proKlima initiated widespread marketing campaigns in order to promote the scheme and its key message of local climate protection. It contributed to increase the knowledge about already available, market-proof options as well as on innovative approaches to reduce energy consumption and GHG emissions. Moreover, proKlima supports innovative ideas and provided the ground for testing new concepts and innovations. At least in the long-run, therefore, the scheme contributed to enlarge the set of options. The efficiency of the proKlima scheme can be judged with regard to the specific costs of GHG abatement induced by the funds. This aspect is one key assessment criteria for selecting project proposal. Referring to the - still limited - quantitative database of the first years' results it can be estimated that specific abatement cost rank about 23 Euro per t of avoided CO2 emission. Especially with regard to the numerous other ecological, economic and non-monetary benefits of the measures this can be considered a positive result. Besides reduced energy consumption and GHG emissions the measures undertaken induce manifold other environmental effects such as water savings, reduction of local air pollution, greening of settlements, etc. Furthermore, the initiative fosters qualification and innovation of industry and trade within the region, e.g. in the case of building constructors, installers, etc. Conclusions • The proKlima fund is unique and exemplary in Germany and Europe due to the involvement of all essential local stakeholders (including the local energy supply company). All partners are bound to the partnership contract on a co-operative basis but show a strong commitment to secure the funding even in times of tight budgets. • With regard to the Stadtwerke Hanover AG the case illustrates the opportunities of a local utility to take up responsibility for an efficient use of its product "energy" and to investigate new business models in the area of energy services while supporting sustainable development within the region. • The initiative starts from a strong commitment of public actors to advance towards more energy efficiency and climate protection in the Hanover region. This impulse was the necessary precondition for the establishment of the public-private–partnership that builds on voluntary commitment and involvement of stakeholders from the region. • Due to its uniqueness proKlima has gained recognition in Germany as well as in neighboring countries. A transfer of the approach, however, has not yet been taken place although the model is replicable. • The proKlima partnership contract demonstrates how – under the conditions of a deregulated market – the economic interests of the local energy providers, public interests and consumer’s interests are united in order to support effectively climate protection. Given a comparable motivation and political commitment, therefore, a successful application in other countries appears to be feasible. .