Action plan. Part I General information. Project: FINERPOL. Partner organisation: CEiiA Centre of Engineering and Product Development
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1 European Union European Regional Development Fund Sharing solutions for better regional policies Action plan Part I General information Project: FINERPOL Partner organisation: CEiiA Centre of Engineering and Product Development Country: Portugal NUTS2 region: Northern Region Contact person: Catarina Selada address: catarina.selada@ceiia.com phone number: (+351) Part II Policy context The Action Plan aims to impact: Investment for Growth and Jobs programme European Territorial Cooperation programme Other regional development policy instrument Name of the policy instrument addressed: NORTE Northern Region Operational Programme Investment Priority "Supporting energy efficiency, smart energy management and the use of renewable energy in public infrastructure, including public buildings and the housing sector." 1
2 The Northern Region Operational Programme "NORTE 2020" is directed exclusively to the NUTS II Northern Region of Portugal, with a financial support for the regional development of EUR 3,400 million of Community funds (ERDF and ESF), plus the national counterpart (public and private). In addition to this financial envelope, the Northern Region has access to thematic operational programmes and other financial instruments to achieve the vision of the NORTE 2020 regional development strategy: "In 2020, the Northern Region will be able to generate a level of production of tradable goods and services that will enable the regain of its convergence with the European trajectory, ensuring a sustainable increase in income and employment for its population and promoting economic, social and territorial cohesion". This Action Plan refers to the Priority Axis 3 - "Low Carbon Economy", IP Support energy efficiency, intelligent energy management and the use of renewable energy sources in public infrastructures, namely in public buildings and in the residential sector. This IP has a total ERDF budget of EUR 107,019,526 and includes the following specific objectives: Specific Objective 1: Increase energy efficiency in public local administration infrastructures by supporting the implementation of integrated measures to promote energy efficiency and rationalizing consumption. Specific Objective 2: Increase energy efficiency in the social housing sector by supporting the implementation of integrated measures to promote energy efficiency and rationalizing consumption. By the end of April 2018, three calls for proposals had been opened under the IP two related to EE in local public administration infrastructures (Specific Objective 1), in October 2016 and November 2017, and other related to energy renovation in social housing buildings (Specific Objective 2), in February ,948 projects were approved under NORTE 2020, but only 8, related to energy renovation in social housing buildings, under the IP 4.3. Of the EUR 107,019,526 ERDF planned to be approved under this IP until 2020, only EUR 11,728, were already approved. On one hand, the call for proposals launched for NORTE 2020 IP 4.3 Specific Objective 1, in October 2016, worth EUR 70 million, did not receive applications. In November 2017, a new call was opened. Since this call is still open, there are no results yet. On the other hand, NORTE 2020 IP 4.3 Specific Objective 2, launched in February 2017, received several applications, so the approval process is delayed. 2
3 Part III Details of the actions envisaged The background In an initial phase, CEiiA sought to identify weaknesses inherent to the Policy Instrument "NORTE 2020" IP 4.3 to justify the obtained results. In this aspect, within the Exchange of Experience process of Phase 1 of the FINERPOL project, the local/regional stakeholder meetings were very enlightening. The multidisciplinary group was composed of public and private, local and regional entities (including the Managing Authority of the Operational Programme NORTE2020, who actively participated) and very productive discussions were generated. A wide range of disincentives to investment in EE in buildings was identified, within which, in the scope of the Policy Instrument "NORTE 2020" IP 4.3, the following two were highlighted: a) Counter productivity of the eligibility criteria, focusing on limitations concerning the support of alternative building materials to External Thermal Insulation Composite Systems (ETICS) Standard costs are exclusively defined for ETICS, making it difficult to apply alternative solutions, namely the use of materials and building systems appropriate to specific situations in which ETICS solutions do not work correctly, blocking the adoption of more technically adequate and efficient solutions, in a medium and longterm basis. Financing does not consider the life cycle of building materials and energy-efficient equipment, namely solar and photovoltaic panels, heating systems and storage of water with thermal insulation, in particular its maintenance, making it costlier to the municipalities. b) Energy certification in social housing does not translate energy consumption Due to the climatic conditions of the Northern Region, thermal comfort solutions are more relevant than energy efficiency measures. Therefore, emphasis should be placed on passive energy efficiency measures (ex: thermal control, insulation and ventilation). On the other hand, the social neighbourhoods dwelling interior energy expenses are ensured by the residents. Due to their socio-economic conditions, social housing residents have almost null energy costs, as they do not spend money on heating or cooling. Energy renewal actions in these buildings result in theoretical consumption reductions, but not in actual reductions. With the installation of photovoltaic/thermal solar panels, consumption can even increase in less sunny seasons, which results in residents' discontent. Under these conditions, the NORTE 2020 IP 4.3 Specific Objective 2 result indicator Households with improved energy consumption does not adapt to the dwelling interior. In this type of housing, energy certification does not translate energy consumption, and the result indicator "Social housing dwellings with improved energy class" loses relevance. This scenario raises the question of whether the priority should be the increase in EE or the minimization of discomfort, improving living conditions and the residents quality of life. Achieving a high-energy class entails requirements in terms of equipment to be installed, which later involve high maintenance costs for municipalities. 3
4 To identify the actions for reversing this situation, the interregional learning process was essential, enabling the share of experience and good practices between project partners. The following points describe the events and the best practices with more influence for the elaboration of the AP: a) Interregional events Tartu, January 2018 During this event, partners presented their draft Ex-Ante Assessments, allowing the comparison between the different local/regional situations. It was possible to identify some similarities between the gaps identified in the Policy Instruments tackled by CEiiA and Trento. After this meeting, CEiiA and Trento maintained contact for exchange of ideas in the elaboration of the AP. Porto, May 2018 Within the learning camp activity held during this event, partners presented their AP and then gathered in smaller groups to evaluate the different actions proposed. This activity allowed a peer review between CEiiA and Trento. b) Good practices FINERPOL partners identified many examples of financial instruments for EE and RES projects and evaluated them according to criteria developed by the partnership. These included the aim of the FI, who was involved, its financial performance, and impact on reducing carbon emissions. CEiiA selected the Financial Instrument for Urban Rehabilitation and Revitalization (IFRRU 2020) as the practice with greater potential for being replicated in Portugal. IFRRU 2020, created under Portugal 2020, provides EUR 1.4 billion in loans under exceptionally advantageous conditions, compared to those existing in the market, for urban rehabilitation in Portugal. It also provides a guarantee, accessible to companies. IFRRU 2020 stands out for the following reasons: Any type of beneficiary, whether individual or collective, public or private, can apply; The applications are carried out at a branch of the commercial network of any of the four banks selected to operate under IFRRU 2020; Each municipality has an interlocutor, who supports the licensing process; In order to ensure the selection of the best solutions to increase the energy efficiency of the property to be rehabilitated, a qualified expert will carry out the Energy Certification process; Applications are presented at the moment the investor considers most appropriate, with no predetermined phases for submission and decision on applications, or limits on the number of applications; In order to publicize IFRRU 2020 funding opportunities, the IFRRU 2020 Management Structure is participating in a roadmap of public sessions, organized by each Portuguese municipality. 4
5 The flexibility in the eligibility criteria, together with the simplicity and support given in the application process, and the divulgation made, resulted that in eight months of activity, 682 investment intentions have been registered, amounting to EUR 1,958 million, as well as 103 applications, worth 312 million euros and 18 contracts have been signed, worth EUR 91 million. Even though the selected best practice is related to projects developed in Portugal, the exchange of experience within the partnership of the FINERPOL project has been fundamental for capacity building, promoting a more comprehensive vision of all the financial instruments implemented in other territories. Implementing this AP, CEiiA will promote the restructuring of the tackled Policy Instrument under the period , including policy changes of Type 1 Implementation of new projects and Type 2 Improved governance, by promoting changes in the contents of the calls for proposals, improving the governance model of the PI (eligibility criteria and result indicators), and encouraging new projects using funds from the PI. ACTION 1 - Restructure the eligibility criteria of a forthcoming call for proposals for NORTE 2020 IP Action Within Phase 2 of the FINERPOL project CEiiA will act on the maturation of the NORTE 2020 IP 4.3 eligibility criteria, making the choice of technologies, to be applied in the financed projects, more flexible. By making the eligibility criteria more favourable to the promoters, CEiiA will contribute to the maximization of the application of energy efficiency funds. Within this action, the following activities will be developed: a) Identification of the most effective and efficient technical solutions in the market: The University of Minho is an active member of the local stakeholder group and is currently developing investigation projects in this thematic. Since this entity need help in finding energy renewal projects in the design or implementation phases to quantitatively measuring the effectiveness and efficiency of different adopted technical solutions, in real context, CEiiA will work as a mediator between them and municipalities. b) Production of a position paper reflecting the obtained results: CEiiA will produce a position paper reflecting the background and the results of the investigation conducted in partnership with the University of Minho, including lifecycle cost-effectiveness analysis of different technical solutions and the formulation of different scenarios reflecting their validation within the eligibility criteria of the NORTE 2020 IP
6 c) Presentation of the position paper to the Managing Authority of the Operational Programme NORTE 2020 : CEiiA will arrange a meeting with CCDR-N, the Managing Authority of the Operational Programme, for the presentation of the produced position paper, proving the added value of having wider eligibility criteria and influencing the restructure of a forthcoming call for proposals for NORTE 2020 IP 4.3. d) Monitoring of new applications to the Policy Instrument NORTE 2020 IP 4.3, depleted by the restructure of calls for proposals: In close collaboration with the Managing Authority of the Operational Programme, CEiiA will create a questionnaire, which will be sent to the entities applying for the modified call for proposals, quantifying the extent to which the widening of the eligibility criteria had influence in their application. 2. Players involved CCDR-N, the Managing Authority of the Operational Programme NORTE 2020, will be involved in the entire process of implementing this action. The University of Minho will support CEiiA with knowledge on measurement techniques. The energy renewal projects to be selected will preferably be located in the municipalities of Matosinhos, Porto and Vila Nova de Gaia. CEiiA will produce the position paper and the monitoring questionnaires. 3. Timeframe September to October 2018 Selection of the energy renewal projects to be analysed; November 2018 to March 2019 Measurement of the effectiveness and efficiency of different adopted technical solutions, in real context; April 2019 Production of the position paper reflecting the obtained results; May 2019 Presentation of the position paper to the MA of the OP; June 2019 to March 2020 Monitoring of new applications to the PI NORTE 2020 IP 4.3, depleted by the restructure of calls for proposals. 6
7 ACTION 2 Restructure the result indicators of a forthcoming call for proposals for NORTE 2020 IP 4.3 Specific Objective 2 1. Action CEiiA will produce a position paper to be presented to the MA of the OP NORTE 2020 for the restructuring of the result indicators of a forthcoming call for proposals for NORTE 2020 IP 4.3 Specific Objective 2. Within this action, the following activities will be developed: a) Stakeholder meeting: One stakeholder meeting will be held, aiming to combine technical knowledge, municipal experience and real context experimental data to produce the position paper. Within this action, the most relevant stakeholders are municipalities and the Faculty of Engineering of the University of Porto, with a lot of experience in this thematic. b) Production of the position paper: After collecting the contributions from the stakeholders, CEiiA will produce a position paper for the restructuring of the result indicators of a forthcoming call for proposals for NORTE 2020 IP 4.3 Specific Objective 2. c) Presentation of the position paper to the MA of the OP NORTE 2020 : CEiiA will arrange a meeting with CCDR-N, the Managing Authority of the Operational Programme, for the presentation of the produced position paper, influencing the restructuring of the result indicators of a forthcoming call for proposals for NORTE 2020 IP 4.3 Specific Objective 2. d) Monitoring of new applications to the PI NORTE 2020 IP 4.3 Specific Objective 2, depleted by the restructure of the result indicators: The influence of this action, traduced in new applications to the PI NORTE 2020 IP 4.3 Specific Objective 2, will be monitored using the questionnaire proposed for the monitoring of action Players involved CCDR-N, the Managing Authority of the Operational Programme NORTE 2020, will be involved in the entire process of implementing this action. CEiiA will produce the position paper based on contributions from the municipalities constituting the local stakeholder group of the FINERPOL project and the Faculty of Engineering of the University of Porto. 3. Timeframe October Stakeholder meeting; November 2018 to April Production of the position paper; May Presentation of the position paper to the MA of the OP NORTE 2020 ; 7
8 June 2019 to March Monitoring of new applications to the PI NORTE 2020 IP 4.3 Specific Objective 2, depleted by the restructure of the result indicators. ACTION 3 Encourage applications for NORTE 2020 IP 4.3 Specific Objective 1 1. Action Taking as a sample the municipalities of Matosinhos, Porto and Vila Nova de Gaia, CEiiA will develop a set of activities, encouraging applications for NORTE 2020 IP 4.3 Specific Objective 1, as follows: a) Assessment of application intentions within the call currently open under NORTE 2020 IP 4.3 Specific Objective 1: CEiiA will organize one meeting with these municipalities to assess whether they have applied or count on applying to the currently open call for proposals for energy efficiency projects in public local administration infrastructures. If no intention to do so is revealed, the motives will be identified. b) Development of a database to systematically collect energy data on local public administration infrastructures: This tool will help the envisaged municipalities to keep control of the actual status of their buildings in terms of energy consumption and to better evaluate the benefits that can come from implementing energy efficiency projects. CEiiA will create the database and then organize specific events aimed at introducing it to the municipalities and explaining them the advantages of its implementation. c) Widespread of the projects approved under NORTE 2020 IP 4.3 Specific Objective 1: CEiiA will develop a digital platform to facilitate the widespread of projects approved under NORTE 2020 IP 4.3 Specific Objective 1 in the envisaged municipalities. d) Monitoring of new applications to the PI NORTE 2020 IP 4.3 Specific Objective 1, depleted by the creation of the database and digital platform: The influence of these new tools will be monitored using the questionnaire proposed for the monitoring of action 1, applied to the three envisaged municipalities. e) Production of a position paper reflecting the obtained results: CEiiA will produce a position paper reflecting the background and the results of the methodology applied to the envisaged municipalities. f) Presentation of the position paper to the MA of the OP NORTE 2020 : CEiiA will arrange a meeting with CCDR-N, the Managing Authority of the Operational Programme, for the presentation of the produced position paper, tackling the implementation of the applied methodology in the 8
9 remaining municipalities of the Northern Region of Portugal and the coupling of the new digital platform with the existing platform dedicated to the OP. The OP has a dedicated platform, in which public access to the approved projects is allowed. However, the details of the projects are presented in excel format and there is no reference to results obtained in terms of energy efficiency. With the platform to be created, CEiiA will promote public access to more information, in a more appealing format, encouraging the replication of this type of projects. 2. Players involved CCDR-N, the Managing Authority of the Operational Programme NORTE 2020, will be involved in the entire process of implementing this action. This methodology will be applied to the municipalities of Matosinhos, Porto and Vila Nova de Gaia. CEiiA will create the database and digital platform. 3. Timeframe September Assessment of application intentions within the call currently open under NORTE 2020 IP 4.3 Specific Objective 1; October 2018 to March 2019 Development of the database and digital platform; April 2019 Presentation of the database to the envisaged municipalities; May 2019 to January 2020 Monitoring of new applications to the PI NORTE 2020 IP 4.3 Specific Objective 1, depleted by the creation of the database and digital platform; February Production of a position paper reflecting the obtained results; March Presentation of the position paper to the MA of the OP NORTE 2020 Date: 31/07/2018 Signature: 9
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