Public-private partnership for a large scale building retrofit programme

Location: Ljubljana, Slovenia

Population: 279 756

Climate: Oceanic

Duration: 2017 – ongoing [source]

Sector: Buildings

Funding sources: Public-private

City networks: Covenant of Mayors

Savings: 8.25 GWh of energy savings and 3,000 tonnes of carbon dioxide (CO2) emissions cut each year.

Solutions: A Public-private partnership for a large scale building retrofit programme in Ljubljana.

Multiple benefits: Reducing the energy consumption of buildings and being a good financial investment.

Objective – To save emissions, money and to encourage other municipalities to take more ambitious steps towards energy efficiency.

Solutions – Ljubljana is partnering with two private companies, Petrol and Resalta, completing Slovenia’s most extensive energy retrofit contracting project, worth €14.9 million and involving the retrofit of 48 buildings. Over the course of fifteen years, the initiatives pay for themselves and eventually start to generate profit. The private companies will be responsible for all upgrades for that time frame.

Many of the 48 retrofitted buildings are city-owned and include sports facilities, schools, kindergartens, administrative buildings, libraries, and health centres. Replacement of standard lighting with LEDs, modernization of heating and air-conditioning systems (heavily used during cold winters and hot summers), insulation of walls and roofs, and, where possible, switching energy sources from fossil fuels to sustainable energy sources were among the energy-saving interventions. Buildings are directly linked to the private partner’s surveillance centre (at Petrol), allowing for a fast response to any malfunctioning built-in equipment.

Funding – The project required an initial investment of €14.9 million. Realta and Petrol together provided 51% of the funding for the interventions. In contrast, the Ljubljana budget funded the remaining 49%, partly by EU Cohesion funds (only for the completely retrofitted buildings).

Innovation – The city has decided to devote 10% of the additional revenue generated by energy savings (about €50,000 per year) to a program to teach school children about energy conservation and renewable resources. The city hopes that the students will enlighten their parents as well. This approach aims to maximize energy savings while simultaneously funding better services by changing the behaviour of building users. Communicating these sustainability initiatives to building users and more widely around the city will raise local awareness of environmental issues and lead to energy-saving behaviours outside of the buildings in question.

Success factors: 1) In the event of malfunctioning of built-in equipment, the buildings are directly connected to the private partner’s surveillance centre (located at Petrol), allowing for an immediate response, with response times varying based on the type of problem discovered. 2) For the next 15 years, the city will use the financial savings realized due to lower energy consumption to reimburse the companies for their efforts and investments.

Significant outcomes:

• 25 GWh of energy savings per annum;
• 3,000 tonnes of CO2 emissions they will cut each year and a reduction target of 30% by the end of 2020 compared to 2008;
• Positive impact on the local economy because it will employ up to 100 local contractors.
• Resalta, the private partner in this project, has also benefited from it. The company recently received a €12 million loan from the European Investment Bank thanks to its reputation as a successful energy efficiency player (EIB). It also aided the company in obtaining a second, €4.8 million contract from Ljubljana for additional retrofit work;
• The building’s users’ quality of life is improved. All people who use the buildings will benefit from greater comfort.

Synergies with local policies:

• Sustainable Energy and Climate Action Plan (SEACAP). The City of Ljubljana is currently preparing its first SEACAP in the framework of the Covenant of Mayors and is expected to be adopted by 2020;
• Environmental Action Programme 2014–2020 is the city of Ljubljana’s primary strategic and environmental document. Based on the state of the environment, it outlines strategic objectives and essential actions that serve as the foundation for sustainable management. It also indicates a clear direction for the municipality’s spatial, economic, and social development.

Political alignment:

• Slovenia’s Integrated National Energy and Climate Plan encompasses the EU Energy Union’s five dimensions: decarbonization, energy efficiency, energy security, internal energy markets, research, innovation, and competitiveness. Among its key objectives is to improve energy and material efficiency in all sectors [source].

Marketability: Yes.