Good practice

Finnish municipality improved energy efficiency through ESCO service

Finnish municipality improved energy efficiency through ESCO service
© raland, #175357965, 2019, source: stock.adobe.com
Resources:
Energy
Cost:
High cost
Annual saving:
74000€
Payback time:
4.5 - 6.5 Year(s)
Payback time:
Payback time of about 6.5 years in total, or 4.5 years factoring in the state's energy subsidy and energy savings
Total cost savings:
Estimated annual savings of € 74 000
Premises and operation areas:
Office building
One off investment:
480000€

Looking at the longer-term impact

  • Finnish municipality engaged in an ESCO project to improve the energy efficiency of buildings
  • Oil heating was replaced with pellets and heat recovery was installed in schools
  • Monitoring was performed for five years after the project and demonstrated the concrete savings achieved

Akaa in Finland set out to improve the energy efficiency of its municipal buildings by launching a special project based on the Energy Services Company (ESCO) model.

Over the years, renovation costs on many of the municipality's ageing properties, such as school buildings, health centres, and nursing homes, were mounting. Measures were needed to improve the quality of the indoor environment while modernising the buildings' technical facilities and energy efficiency. So the municipality initiated the ESCO project.

A first step was to select buildings; three schools, and a library. To replace the old oil heating in the schools, they opted for a biomass (pellet) solution, with a device equipped with heat recovery added to one of the schools as a ventilation unit. In the library, electric heaters were replaced by district heating with a similar heat recovery option installed as well. A retirement home was also included in a second phase, but this was not directly linked to the ESCO project. 

The ESCO service model is seen as a cost-effective and energy-efficient way of renovating properties, including potentially expensive heating upgrades.

Key impact

The first phase under ESCO was completed in late 2011 at a cost of around € 480 000 (30 % subsidised), with an estimated annual savings of some € 74 000.  The payback time was estimated at around 6.5 years without the state's energy subsidy. With that support and factoring in the energy savings, the estimated payback time was 4.5 years.

The ESCO specialists contracted for the project monitored energy use and the impacts of the measures undertaken on a monthly basis. Together with the municipality, a quarterly monitoring meeting was held to review energy savings in megawatt-hours and the resulting financial benefits. Monitoring started at the beginning of 2012 and continued for a further five years. This follow-up, using standardised baseline levels calculated from previous years' averages, generated a longer-term overview of the project's impact.

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