II REACHING THE TARGETS Part II details the main elements f the EED, prviding a backgrund fr each f the subject areas, the requirements f the EED and recmmendatins fr effective implementatin and mnitring. Because many subject areas are cvered by mre than ne article, each is treated separately here. Part II starts by reviewing Energy Efficiency Obligatins, then fllws with the public sectr and energy audits, and ends with a discussin f supply side efficiency and demand respnse. Figure 16 Guidebk Overview Map: Reaching targets and bjectives Calitin fr Energy Savings
II.4 Energy efficiency in public prcurement (Article 6) Figure 21 Guidebk Overview Map: Public prcurement II.4.1 Summary Public prcurement can be summarised as the purchase f prducts, services 1, wrks r buildings by a public sectr rganisatin r bdy 2. T ensure transparency, nn-discriminatin, equal treatment f all cmpetitrs and that the best ffer is selected, public administratin has t fllw sme prcedural rules (at EU level, these are established fr MSs in the Public Prcurement Directives 2004/17/EC and 2004/18/EC). In sme cases, general rules may als exist that ensure prducts, services and buildings purchased crrespnd t certain standards, like high energy-efficiency perfrmance rules in the EED. The chice public authrities make when purchasing prducts, services and buildings is an imprtant plicy instrument t prmte energy efficiency and achieve energy savings. Article 6 and Annex III f the EED establish sme requirements fr the public sectr t purchase high perfrming energy-efficiency prducts, services and buildings. Article 6 requires central gvernments 3 t set an example thrugh the purchase f prducts, services and buildings with high energy-efficiency perfrmance insfar that it is cnsistent with cst-effectiveness, ecnmical feasibility, wider sustainability, technical suitability and sufficient cmpetitin. The Article als encurages MSs t apply these public purchase requirements t ther public bdies, including at the reginal and lcal levels. 1 Fr definitins f public cntracts, public supply cntracts and public service cntracts see Article 1.2 f the Public Prcurement Directive (2004/18/EC). 2 Article 6 and Annex III f the EED d nt mentin the purchase f wrk. Therefre, it is nt discussed further in this dcument. Purchase f buildings, althugh cvered by the EED, is nt part f the public prcurement directives 2004/17/EC and 2004/18/EC. 3 Central gvernment is defined in Article 2.9 f the EED as all administrative departments whse cmpetence extends ver the whle territry f a Member State." Calitin fr Energy Savings 2
Annex III prvides mre details n what shuld be cnsidered as high energy-efficiency perfrmance fr sme prducts, as well as in the case f services and buildings. It seems that fr prducts nt cvered by Annex III, energy-efficiency perfrmance wuld nt be mandatry, althugh MSs are free t request it, as this chapter shws. Tw elements related t energy-efficiency perfrmance criteria and the public sectr shuld be underlined: Energy-efficiency perfrmance requirements applied by the public sectr set an example fr the private sectr. If private cmpanies als apply energy efficiency criteria when purchasing prducts, services and buildings, at the end imprtant energy savings can be achieved. By setting public prcurement requirements crrectly, the gvernment can act as a launching custmer, driving innvatin in energy efficiency design. As the EED public prcurement prvisins d nt capture all the ptential benefits, ne must keep in mind that MSs can g beynd the EED requirements. The Calitin recmmends the fllwing measures regarding public prcurement: Descriptin, preferably in law, f additinal criteria referring t energy efficiency in public prcurement in a sufficient level f detail t avid misunderstandings in their implementatin; Guidance, preferably in law, n stages f public prcurement prcedure at which energy efficiency shuld be assessed; All levels f administratin (at natinal, reginal and lcal level) t apply energy efficiency public prcurement requirements; and MSs t apply standards higher than requested under the EED public prcurement prvisins, including requesting high energy-efficiency perfrmance fr prducts nt cvered by Annex III. Please nte that an agreement n the refrm f the Public Prcurement Directives was reached by the Eurpean Parliament, Eurpean Cmmissin and Cuncil in September 2013. Because the Eurpean Parliament has nt yet held its final plenary vte n the agreement (scheduled fr the end f 2013), nly later editins f the Guidebk will reflect the updated legislatin. II.4.2 Backgrund Public prcurement rules cncern purchase f prducts, services, wrks and buildings 4 by the public sectr. In 2009, the public sectr spent ver 2,200 billin n gds, services and wrks arund 19% f EU GDP 5. Much f this is spent in sectrs with high envirnmental impacts, such as transprt, buildings and fd. At EU level Public Prcurement Directives, 2004/17/EC and 2004/18/EC ( PP Directives ) 6 establish rules fr MSs f hw t purchase (prcedures fr the public sectr t fllw when purchasing), while what t purchase (i.e. additinal cnditins fr cmpliance fr purchased prducts, services and buildings such as prducts Useful prvisins f Public Prcurement Directive 2004/18/EC Technical specificatins: Annex VI.1(a) and (b) Award f cntracts: Article 44.1 Exclusin and selectin criteria: Articles 45 52 Award/evaluatin criteria: Article 53 4 See ftnte 29 n previus page. 5 Eurpean Cmmissin Staff Wrking Paper, Impact assessment accmpanying the dcument. Prpsal fr a Directive f the Eurpean Parliament and f the Cuncil n Public Prcurement and the Prpsal fr a Directive f the Eurpean Parliament and f the Cuncil n prcurement by entities perating in the water, energy, transprt and pstal sectrs, 20.12.2011, SEC(2011) 1585 final, p. 11. 6 In December 2011 the Eurpean Cmmissin adpted prpsals fr the revisin f PP Directives 2004/17/EC and 2004/18/EC (COM(2011)895 final and COM(2011)896 final). The legislative prcess is nging. Calitin fr Energy Savings 3
energy-efficiency perfrmance) is described in sectral legislatin like the EED. The rules established in the PP Directives list the steps f the prcedure that must be fllwed fr purchases ver a certain value depending n the type f cntract 7. A cntracting authrity must first establish the technical specificatins fr a public cntract that it will award thrugh the public prcurement prcess. Technical specificatins define the characteristics required f a prduct r a service, thereby allwing ptential cntractrs t prepare an ffer that meets the needs f the cntracting authrity. Fllwing the receipt f ffers, the suitability f the ecnmic peratrs is cnsidered (falling under exclusin criteria, ecnmic and financial standing, prfessinal and technical knwledge r ability). The winning ffer is either the cheapest ffer r the highest scring ffer fllwing evaluatin against a range f criteria that the authrity has established. Althugh the PP Directives 2004/17/EC and 2004/18/EC d nt apply t building cntracts 8, it is suppsed that in these cases MSs fllw similar rules. II.4.3 EED prvisins Prvisins in the EED address a specific aspect f public prcurement: energy efficiency standards applied t prducts, services (in particular cncerning new prducts fr activities carried ut within a service cntract) and buildings purchased. The link between PP Directives and the EED is very strng. T be effective, energy efficiency standards must be applied at the right stage f the public prcurement prcedure. The main public prcurement requirements f the EED are as fllws: Accrding t Article 6, prducts, services and buildings purchased by central gvernments (thugh MSs shuld als encurage ther public bdies t purchase such prducts) shuld be f high energy-efficiency perfrmance; Annex III prvides details n what is t be cnsidered the high energy-efficiency perfrmance fr sme particular prducts as well as in the case f services and buildings: the highest energy efficiency class pssible under the Energy Labelling Directive (2010/30/EU) cnsidering the need t ensure sufficient cmpetitin; cmpliance with Ecdesign benchmarks 9 fr sme new prducts under the Ecdesign Directive (2009/125/EU), prvided that the specific prduct is nt cvered by the rules f the Energy Labelling Directive; cmpliance with energy efficiency requirements as demanding as thse f the EU- US Energy Star Agreement; cmpliance with the criterin f the highest fuel energy efficiency class as defined in the Regulatin n the labelling f tyres (1222/2009) with respect t fuel efficiency and ther essential parameters; purchase by service prviders fr the purpse f prviding the service under the service cntract f prducts cmplying with all f the abve mentined requirements; and 7 Fr the exact threshlds, see Article 7 f the PP Directive 2004/18/EC and Article 16 f the PP Directive 2004/17/EC. See als Article 9.1 f the PP Directive 2004/18/EC and Article 17 f the PP Directive 2004/17/EC ( The calculatin f the estimated value f a public cntract shall be based n the ttal amunt payable, net f VAT, as estimated by the cntracting authrity. This calculatin shall take accunt f the estimated ttal amunt, including any frm f ptin and any renewals f the cntract. Where the cntracting authrity prvides fr prizes r payments t candidates r tenderers it shall take them int accunt when calculating the estimated value f the cntract. ). 8 Fr a definitin f a building cntract, see Article 101.1 f the EU Financial Regulatin 966/2012 and Article 121.1 f the Cmmissin Delegated Regulatin 1268/2012. 9 Indicative benchmarks are included in annexes t implementing measures and indicate the best available technlgy n the market fr a regulated prduct at the time f entry int frce f the implementing measure. These are nt t be cnfused with the ecdesign minimum efficiency requirements. Calitin fr Energy Savings 4
purchasing r making new rental agreements 10 nly fr buildings which cmply with the minimum efficiency requirements that the MS has set under the EPBD (see chapter II.3). As stated in Article 9.1(b) f the EPBD, all new buildings ccupied and wned by public authrities after 31 December 2018 must be nearly zer-energy. High energy-efficiency perfrmance is thus defined fr many prducts and fr buildings in EED Annex III by a reference t standards established by EU energy efficiency law. When a prduct is nt defined in EU laws mentined in Annex III, a high energy-efficiency perfrmance criterin culd apply nly if an MS decides t apply measures mre stringent than the EED requirements 11. In such a case, having natinal ambitius standards f what high energy-efficiency perfrmance is wuld be very helpful. The EED bligatin t purchase prducts with high energy-efficiency perfrmance is als subject t additinal cnditins f cst-effectiveness, ecnmical feasibility, wider sustainability, technical suitability and sufficient cmpetitin. These terms are nt defined in the EED s it is extremely imprtant that they are described at natinal level with a sufficient level f detail t avid any misinterpretatin. The main elements which shuld be underlined are: cst-effectiveness: cmprising the up-frnt price f a prduct, peratinal csts f its use and indirect csts, such the csts f treatment f any health impact caused by carbn dixide emitted by the electricity used by the prduct ver its lifetime. Csteffectiveness shuld always prevail ver ecnmical feasibility; ecnmical feasibility: cncerns the financial ability t purchase a mre energy efficient prduct. Natinal authrities have t plan their investments in advance in rder t purchase a quality energy efficient prduct that is inexpensive t use and lw-cst fr sciety; wider sustainability: a cntradictin between high energy-efficiency perfrmance and ther envirnmental criteria (fr example, the txicity f a prduct) is pssible; hwever, there might be a risk f an abusive use f this criterin allwing the avidance f applying the high energy-efficiency requirement; technical suitability: a purchased prduct shuld functin with the equipment already in use. Any cntradictin between the technical suitability and energy efficiency must be treated cautiusly t avid abusive use f this criterin; and sufficient cmpetitin: cntracting authrities d nt have t desist frm seeking ambitius levels f perfrmance merely because there are few cntractrs able t supply such prducts, as case law f the EU Curt f Justice shws 12. Article 6 and Annex III f the EED give flexibility t MSs as t the exact implementatin f its requirements. Therefre, Guidance is needed fr additinal cnditins nt defined in the EED t avid misinterpretatin. Mst imprtantly, the EED requirements (including the nes n public prcurement) are minimum requirements, meaning MSs may maintain r intrduce mre stringent measures as lng as they are cmpatible with EU law (Article 1.2). Applying mre stringent energy-efficiency perfrmance requirements (fr example requiring high energy-efficiency perfrmance f prducts nt cvered by Annex III) culd be f interest t MSs. This prvisin culd allw them t achieve much mre than savings in the public sectr by setting an example fr and encuraging the private sectr t save energy thrugh its purchases. MSs culd end up btaining imprtant savings twards meeting the verall 20% energy savings target. 10 Fr buildings, Annex III widens the scpe f Article 6 and mentins rental agreements in additin t purchases. 11 Purchase f these prducts wuld als be subject t additinal criteria described further in this chapter. 12 Case C-513/99, Cncrdia Bus Finland Oy Ab, frmerly Stagecach Finland Oy Ab v Helsingin kaupunki and HKL- Bussiliikenne, [2002] ECR I-07213, paragraph 85. Calitin fr Energy Savings 5
II.4.4 Recmmendatins Gd practice recmmendatins 1. Encurage MSs t describe, preferably in law, additinal criteria referring t energy efficiency in public prcurement in a sufficient level f detail t avid misunderstandings in their implementatin. Transpsitin f the EED public prcurement prvisins shuld be dne in a way which wuld help t avid misunderstandings abut certain terms, in particular additinal criteria (see chapter abve), r the way and at what stage energy efficiency criteria shuld be implemented in the prcurement prcedures (see belw). 2. Encurage MSs t prvide guidance, preferably in law, n stages f public prcurement prcedure at which energy efficiency shuld be assessed. A cntracting authrity shall determine Annex III energy efficiency requirements prir t drafting the technical specificatins. These culd be minimum requirements if energy efficiency requirements are als assessed at the award stage. At the stage f technical specificatins, a cntracting authrity shuld als assess whether the energy-efficiency perfrmance requirements are cnsistent with the additinal cnditins f Article 6 and Annex III (csteffectiveness, technical suitability, etc.). In additin, energy efficiency culd be included at the award stage, when the cntracting authrity has pted t evaluate ffers n the basis f the mst ecnmically advantageus tender (nly the price is taken int accunt when assessment is based n the lwest price). There are tw pssible ways f ding this: Awarding higher scres t better energy perfrming prducts within a given energyefficiency perfrmance class (sme A prducts can perfrm better than thers) where the minimum requirements specify an energy-efficiency perfrmance class. Submitted ffers shuld include a technical fiche as prvided by the Energy Labelling Directive; r Awarding higher scres t prducts with better energy efficiency than the minimum requested by a cntracting authrity in technical specificatins. These rules shuld als apply in relatin t new prducts purchased by service prviders fr prviding the services. MSs culd apply requirements higher than the minimum requested under the EED already at the stage f Technical Specificatins. 3. Ask all levels f natinal administratin, including at reginal and lcal level, t apply energy efficiency public prcurement requirements. 4. Encurage MSs t apply standards higher than requested under the EED public prcurement prvisins, including requesting high energy-efficiency perfrmance fr prducts nt cvered by Annex III. Calitin fr Energy Savings 6
Gd practices in practice The Municipality f Rtterdam (Netherlands) identified the need t make cst, resurce and energy savings in its 2 billin wrth f real estate. It als had high CO 2 reductin targets. Public swimming pls were identified as key facilities fr ptential imprvement. Rtterdam had the additinal bjective f imprving the swimming cnditins fr users. Due t the uncertainty regarding the ptential f energy savings, an Energy Perfrmance Cntract (EPC) was awarded using the cmpetitive dialgue prcedure. In 2010, as a pilt initiative, the City f Rtterdam tendered a ten-year EPC cvering nine pls with payments based n actual energy savings delivered (this apprach reflects austerity measures and the cmmitment t reduce CO 2 emissins by 50%). The award f the cntract was based n the energy savings ffered by the bidders and n the maintenance csts. The cntract invlved guaranteed energy savings, building cnditins (maintenance) and imprvement in user cmfrt, all subject t penalties. The cntractr guaranteed annual energy savings f 34% and was subject t a financial bnus fr energy savings ver 34% each year and penalties if savings are nt achieved. Calitin fr Energy Savings 7