EXPERIENCE WITH INTRODUCING EED RULES FOR PUBLIC PROCUREMENT Irena Križ Šelendić Head of Service Ministry of Construction and Physical Planning Croatia Kiev 19 May 2016

ARTICLE 6 EED PURCHASING BY PUBLIC BODIES MS shall ensure that central governments and other public bodies at regional and local levels, purchase only products, services and buildings with high energy-efficiency performance insofar as that is consistent with cost-effectiveness, economical feasibility, wider sustainability and technical suitability MS shall encourage public bodies, when tendering service contracts with significant energy content, to assess the possibility of concluding long- term energy performance contracts that provide long-term energy savings

PUBLIC PROCUREMENT ACT Pursuant to Article 82 of the Public Procurement Act, the criteria for bid selection in the public procurement procedure are: 1. THE ECONOMICALLY MOST FAVOURABLE BID or 2.THE LOWEST PRICE If the economically most advantageous tender is selected the criteria may be: quality |price |technical merit | cost-effectiveness | environmental characteristics |running costs | aesthetic and functional characteristics |etc.

PROGRAMME OF ENERGY RENOVATION OF PUBLIC SECTOR BUILDINGS 2014 – 2015 The Government of the Republic of Croatia adopted on 31 October 2013 the Programme of energy renovation of public sector buildings for the period 2014 – 2015 Program goals: →To contract and completely renovate 200 public sector buildings – approx m 2 of heated floor area →To reduce energy consumption in refurbished buildings for % (ca. 150 kWh/m 2 per year) →To reduce CO 2 emission by approx t per year →To mobilise investments amounting to approx. 400 mil. kn (≈ 53. mil € ) →To boost energy services market (ESCo)

PROGRAMME OF ENERGY RENOVATION OF PUBLIC SECTOR BUILDINGS 2014 – 2015 Program goals: →Fulfillment of requirements in accordance with the Article 5 of EED to renovate 3% of total floor area (heated and/or cooled) of buildings owned and used by central government each year Photo by Marko Vrdoljak. This photo is the property of The Zagreb Tourist Board.

PARTICIPANTS IN THE PROGRAMME Adopted Program 6 Croatian Government Ministry of Construction and Physical Planning Developed Program and monitors implementation Agency for Transactions and Mediation in Immovable Properties Implements the Programme and signs contracts on energy performance Environmental Protection and Energy Efficiency Fund Provides funds for co-financing Energy Service Client (ESC) Building owner/user submits application of the building for the Programme Energy Service Provider (ESP) Carries out energy renovation LEGAL FRAMEWORK : Energy Efficiency Act │Building Act │ Public Procurement Act │Regulation on Contracting and Implementation Energy Service in the Public Sector

BASIC SETTINGS AND CHARACTERISTICS OF THE PROGRAM ESC orders ESP provides the energy service ESP commits to achieve verifiable savings in energy and water by implementing EE measures Energy efficiency measures imply: I.Preparation of project documentation II.Energy renovation of the building (construction works, incorporation of equipment and materials, ) III.Monitoring and investment maintenance of all building elements and incorporated equipment that underwent energy renovation Programme promotes integreted renovation concept that includes upgrades to the buildings envelope, heating /cooling system, water heating system, ventilation, lighting and water supply. Building construction measures that address the building envelope are mandatory !

BASIC SETTINGS AND CHARACTERISTICS OF THE PROGRAMME ESP invests and takes technical and economic risk so ESC does not have any additional costs ESC commits to ensure payment of the energy service fee to ESP during the contract period Payment of services is based on verifiable savings Energy savings are proven by the Design The service fee shall not exceed the savings!

PROGRAMME STEPS 1.Application for the building – ESC submits to Agency the Form for owners containing basic data on the building and the Approval-consent to Agency for carrying out renovation 2.Energy audit - Agency conducts preliminary analysis of the fulfilment of the requirements under the Programme. In case that certification has not been carried out, Agency orders the energy audit and EC and / or project assignment 3.Cost effectiveness analysis - Agency compares data from the energy audit with data from EMS (Energy Management Information System), analyses the cost effectiveness and passes a decision on initiating the public procurement procedure 4. Public procurement - Agency establishes the bidding conditions, develops the bidding documentation, conducts a public procurement and chooses the best bid according to the criterion of Economically most favourable bid

CHOOSING THE ECONOMICALLY MOST FAVOURABLE BID BIDS SCORING No.SCORING CRITERION MAXIMUM NUMBER OF POINTS 1 Decrease in energy consumption [%]40 2 Net present value of energy service fee - NPV of fee [kn] 20 3 Portion of renewable energy sources [%]15 4 Profitability of investments [kn / kWh]15 5 Automatization of energy consumption measurement 5 6 Price of the bid [kn]5

PROGRAMME STEPS 5.Contracting - ESC, ESP and Agency conclude an EPC. The duration of the contract is up to 14 years 6.Design - ESP must prepare the project documentation (the Design) that has to encompass and elaborate all the measures aimed at achieving savings, and prove the achievement of all values from the bid 7.Project Verification - ESP submits the Design to the Expert Commission appointed by the Agency. The Expert Commission verifies Design compliance with regulations of the Republic of Croatia and verify whether the Design proves the values from the bid 8.Financing – ESP may use loans of commercial banks or of CBRD

PROGRAMME STEPS 9.Co-financing of the Programme - ECO found co-finance with grant funds 40% of eligible costs to the ESC (in line with ECO fund rules) 10.Renovation – ESP is required to carry out energy renovation on building in compliance with verified design. Agency supervises Works through the expert supervision selected by a public procurement 11.Takeover of works – completion of Renovation - upon completion of energy renovatio the final report is signed by the supervising engineer and the new EC is issued. ESC, ESP and Agency sign a Protocol on takeover of works. and define the end date of renovation works 12.Monitoring and control of savings– during the entire period of EPC, ESP shall carry out measures of monitoring and control of savings (training of users, regular check- up of the savings, investment maintenance of building elements and incorporated equipment that underwent energy renovation)

PROGRAMME IMPLEMENTATION CONTRACTED EPC to be signedPPP in progress No. 18 EPC5 EPC6 PPP Area m m m 2 Energy savings kWh/y kWh/y  Contract value (including VAT) Kn ( €) Kn ( €) Kn (estimated value without VAT) Buildings

BEST PRACTICE Clinical Hospital Centre Split - site Križine Area : m 2 Contract value: Kn including VAT Energy savings : kWh / year

THANK YOU FOR YOUR ATTENTION Irena Križ Šelendić M.C.E. Head of Service Directorate for construction and energy efficienc in the building sector Ministy of Construction and Physical Planing Zagreb, Croatia Tel: Cell: Web: Photo by Marko Vrdoljak. This photo is the property of The Zagreb Tourist Board.