ENERGY EFFICIENCY
OF PUBLIC BUILDINGS
IN THE PREŠOV REGION
ENERGY EFFICIENCY
OF PUBLIC BUILDINGS
IN THE PREŠOV REGION
STRATEGIC PLANNING FOR
SCALING-UP EE IN PSK BUILDINGS
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CONTENTS
Acknowledgements 5
Acronyms and Abbreviations 6
Introduction – The imperative to Improve EE in Public Buildings 7
OVERVIEW OF THE EE REGULATORY FRAMEWORK
IN THE SLOVAK REPUBLIC 11
Legislative Acts and Building Codes 15
FINANCING FOR EE INVESTMENTS IN PUBLIC BUILDINGS 19
Commercial Financing for EE Programs in Public Buildings 20
Lines of Credit and Credit Enhancement Instruments from International Finance
Institutions (IFIs) 21
The Energy Performance Contract (EPC) Act 22
READINESS FACTORS IN THE LOCAL EE MARKET 25
ESCOs in the Slovak Republic 26
Equipment Manufacturers, Suppliers and Installers 27
Slovak Innovation and Energy Agency (SIEA) 27
The Need for a Pilot to Test the EPC Act on Public Buildings 28
Banks and the EPC Act 28
ESCOs and the EPC Act 28
SIEA and the EPC Act 29
The need for a pilot with the public agencies to test the EPC Act 29
STRATEGIC APPROACH TO ENHANCE EE IN PUBLIC BUILDINGS
IN THE PSK 31
Existing Stock of Public Buildings in the PSK 32
Systematic Analysis to Prioritize PSK Investment in Public Buildings 34
Development of the first level of systematic analysis 35
Development of second level systematic analysis 37
Financing Framework for the PSK to Invest in the Energy Efficiency of Public Buildings 40
FINAL CONSIDERATIONS 43
ANNEX A Intensity of energy use in a few different types of facilities and buildings
in the PSK 46
ANNEX B Results from the Energy Modeling of Public Buildings in the PSK 48
Notes 59
FIGURES
FIGURE 1 Reduction in final energy consumption in various market sectors (2014 – 2016) 13
FIGURE 2 Credit line facility to support ESCOs and/or the PSK to finance EE
in public buildings 21
FIGURE 3 Risk sharing facility to support ESCOs to finance EE in public buildings 21
FIGURE 4 Average fuel use in PSK public buildings 33
FIGURE 5 Four-Step Process for Identifying and Prioritizing EE Investments
in Public Buildings 35
FIGURE 6 Energy intensity for classrooms in all schools 36
FIGURE 7 Energy intensity for classrooms in grammar schools (gymnasiums) 36
FIGURE A1 Energy intensity for classrooms in hotel academies 46
FIGURE A2 Energy intensity for classrooms in vocational schools 46
FIGURE A3 Energy intensity for accommodations in all social services facilities 47
FIGURE A4 Energy intensity for accommodations in social services facilities
used 5 days a week 47
FIGURE A5 Energy intensity for accommodations in social services facilities used 24/7 47
TABLES
TABLE 1 Priorities of the Slovak Energy Policy and Energy Efficiency Action Plan 12
TABLE 2 Energy savings in public buildings in 2014–2016 14
TABLE 3 Energy savings targets and the financial resources required in 2017–2019,
with an outlook up to 2020 15
TABLE 4 Estimated annual financial resources required to achieve the energy savings for
2017–2019, with an outlook up to 2020 15
TABLE 5 Global indicator scale for energy classification of buildings - primary energy
in kilowatt-hours /square meters/year 16
TABLE 6 Average duration of ESCO projects 26
TABLE 7 Average capital cost of ESCO projects 26
TABLE 8 Characterization of public buildings in the Prešov Region 32
TABLE 9 Renovation status of the PSK public buildings 33
TABLE 10 Annual energy consumption in the PSK public buildings 33
TABLE 11 Energy intensity in public buildings under the PSK 35
TABLE 12 Energy efficiency measures considered in energy modeling 38
TABLE 13 Results from energy modeling 39
TABLE 14 Financing options for EE in public buildings based on simple payback periods 41
ACKNOWLEDGEMENTS
This report was prepared by a core team comprised of Janina Franco, Anand Subbiah, Milan Macko,
and František Vranay.
The team would like to thank for their support and guidance to the work on the Energy Efficiency
component during the initiative implementation: Paul Kriss, Grzegorz Wolszczak, Vladimír Benč,
and Agnieszka Boratyńska.
The team would like to thank Arup Banerji, David Sislen, Sameer Shukla, Marcel Ionescu-Heroiu,
Fabrizio Zarcone, Martina Bosi, Karen Bazex, and Megan Meyer for the advice and guidance provided
throughout the implementation of the initiative and the elaboration of this report, and Agnieszka
Boratyńska, Barbara Maria Skwarczynska, Nikolinka B. Ivanova, Vessela Radeva Stamboliyska,
and Piotr Ruczyński for their excellent support. Special thanks go to Dmitry Sivaev, who elab-
orated the background study focused on macroeconomic, regional development dynamics, and
challenges in the Slovak Republic, and the Prešov Region.
The team would also like to thank Commissioner Corina Crețu for initiating the Catching-up Regions
Initiative, Deputy Prime Minister of the Slovak Republic for Investments and Informatization,
Richard Raši, and the President of the Prešov Self-governing Region, Milan Majerský, for their
invaluable support, as well as the European Commission’s team for their outstanding engage-
ment and support, especially Erich Unterwurzacher, Andreas von Busch, Bianka Valkovičová, Eva
Wenigová, and Kamila Trojanová.
The team is also indebted to all our counterparts for the support offered and the excellent collabora-
tion throughout, and their passion for developing the Prešov Region and its institutions, especially:
• Deputy Prime Minister’s Office for Investments and Informatization of the Slovak Republic:
Denisa Žiláková, Ladislav Šimko, Eva Zelizňaková, Mária Neuwirthová, and Edita Antoniaková.
• Office of the Prešov Self-governing Region: Jozef Cvoliga, Igor Wzoš, Rudolf Bauer, Dagmar
Olekšáková, Monika Štoffová, Zuzana Salokyová, and especially representatives of the Property
Management Department: Vladimír Grešš, Katarína Imríchová, Vladimír Vaľa, Viktória
Antušová, Erika Gerdová, Anton Repka, Radoslav Juraško, and many others.
• Other key implementation partners: Ján Iľkovič and his team from ENECO, ltd.; Marcel
Lauko, Energy Center Bratislava; several ESCO companies including ENGIE Services
a.s., Spravbytkomfort, a.s. Prešov, Siemens s.r.o., Bratislava; banks: Slovak Guarantee and
Development Bank, Slovenská sporiteľňa, a.s., Všeobecná úverová banka, a.s.; MunSEFF Office
in Bratislava, Róbert Máček and Matej Brestovsky from Enviros, the Technical University
in Košice’s Department of Building Facilities, and many others.
The team is also grateful to the following institutions for their active involvement in the
Catching-up Regions Initiative, and Energy Efficiency component: Ministry of the Environment
of the Slovak Republic; Ministry of the Economy of the Slovak Republic; Ministry of Finance of the
Slovak Republic; Slovak Innovation and Energy Agency (SIEA); and others.
The report was completed in May 2019.
ACRONYMS
AND ABBREVIATIONS
BoF Buildings for the Future
CEB Council of Europe Development Bank
EC European Commission
EBRD European Bank for Reconstruction and Development
EE Energy Efficiency
EEAP Energy Efficiency Action Plans
EED Energy Efficiency Directive
EEEF European Energy Efficiency Fund
EERP European Economic Recovery Program
EIB European Investment Bank
ELENA European Local Energy Assistance
EMS Energy Management System
ENECO Energy Service Company of Prešov
EPC Energy Performance Contract
ESCO Energy Service Company
ESIF European Structural and Investment Funds
EU European Union
GES Guaranteed Energy Savings
GHG Greenhouse Gas
GWh Gigawatt-hour
IFI International Finance Institutions
IPMVP International Performance Measurement and Verification Protocol
IROP Integrated Regional Operational Program
JESSICA Joint European Support for Sustainable Investment in City Areas
MoE Ministry of Economy
MWh Megawatt-hour
MunSEFF Municipal Energy Efficiency Support Instrument
MLEI Mobilization of Local Energy Investments
MoF Ministry of Finance
NZEB Nearly zero-energy building
OP QE Operational Program Quality of Environment
PJ Petajoule
PMD Property Management Department
PSK Prešov Self-governing Region
RRA Regional Roads Administration
SIEA Slovak Innovation and Energy Agency
SlovSEFF Slovak Energy Efficiency Support Program
TJ Terajoules
TWh Terawatt-hour
WB World Bank
6 Energy Efficiency of Public Buildings in the Prešov Region
INTRODUCTION – THE
IMPERATIVE TO IMPROVE EE
IN PUBLIC BUILDINGS
The activity on “Enhancing Energy Efficiency of Public Buildings in the Prešov Region” is designed
to assess the existing regulatory framework and financial alternatives, and recommend strategic
planning options to implement an energy efficiency (EE) program in public buildings in the Prešov
Self-governing Region (PSK). The activity is also designed to assist the PSK in establishing an energy
management unit within the PSK’s Property Management Department (PMD).
This report on “Strategic Planning for Scaling-up EE in PSK Buildings” examines financing mech-
anisms for investment in energy efficiency projects in public buildings in the Slovak Republic, the
readiness of the market participants, such as the Energy Service Companies (ESCOs) and install-
ers, and the supportive legal framework for ESCOs to implement projects in public buildings. The
report provides a systematic process to identify and prioritize EE investment projects, and a finan-
cial framework for undertaking investments in PSK public buildings. The report has been prepared
in close collaboration with the relevant teams from the PSK office, with input from multiple stake-
holders in the Slovak Republic.
This report builds on the earlier task which prepared a “Diagnostic Assessment of the Regulatory
and Institutional Framework to Increase Opportunities for the Implementation of EE in PSK Public
Buildings.” That diagnostic report provided an overview and analysis of the existing EE regulatory
and legal mandates, implementation instruments, regional procurement regulations, and the financ-
ing schemes at the central and regional levels, which are included in the first part of this report.
EE is an important focal issue in the EU and Slovak energy policies, and as of November 2016,
the EU’s EE Directive includes a 30% target for energy efficiency by 2030, up from 20% in the
EE Directive of 2012. To meet the new target, the EU’s EE Directive now requires member coun-
tries to take measures that include renovating annually at least three percent of the total floor area
of central government-owned buildings to meet the minimum energy performance requirements.
Public buildings are also required to meet new standards for nearly zero-energy buildings (NZEB),
which will require greater use of renewable energy sources. The new EE directive also requires
energy distributors or retail energy sales companies to achieve annual energy savings equivalent
to one and a half percent of their annual energy sales through EE measures.
Given the imperative of energy security to the Slovak Republic, the energy policy supports
self-sufficiency in energy through an optimal energy mix that promotes low-carbon technologies
and domestic renewable energy, and increased efficiency in energy use in all sectors of the econ-
omy. The targets of the energy sector are consistent with the EU targets for reduced greenhouse
gas (GHG) emissions, increased EE, and increased use of renewable energy systems.
7
Improving EE in public buildings in the PSK will help the country meet its commitments under
the energy policy, lead to lower expenditure on energy, more efficient use of public resources, and
lower emissions from the use of fossil fuels. Improved EE in public buildings will also reduce the
consumption of natural gas, which is the primary fuel used for heating public buildings in the PSK,
and help improve energy security for the Slovak Republic, which imports natural gas.
Implementation of EE in public buildings in the PSK will reduce its annual expenditures on fuel, and
permit funds to be used for other infrastructure and economic development activities. A large-scale
EE program will also support economic growth by creating new job opportunities, which is cru-
cial for the economic development of the PSK.
8 Energy Efficiency of Public Buildings in the Prešov Region
OVERVIEW OF THE EE
REGULATORY FRAMEWORK
IN THE SLOVAK REPUBLIC
The Energy Policy of the Slovak Republic defines the goals and objectives of the energy sector
to 2035, with a view to 2050. The Ministry of Economy, which is responsible for the energy sector,
is responsible for preparing and updating it every five years, so that it is consistent with the coun-
try’s national economic strategy, since reliable and competitive energy is critical to achieving sus-
tainable economic growth in the economy.1 The Energy Policy of the Slovak Republic is consistent
with European Union (EU) goals for energy as outlined in the Europe 2020 strategy.
The Slovak energy policy supports self-sufficiency in energy through an optimal energy mix
that promotes low-carbon technologies and domestic renewable energy, and increased efficiency
in energy use in all sectors of the economy. The targets of the energy sector are consistent with
EU targets for reduced greenhouse gas emissions, increased energy efficiency, and increased
use of renewable energy systems. The government has also established Energy Efficiency Action
Plans (EEAPs) that support achieving the energy policy’s priorities for improving energy effi-
ciency (EE) and lowering energy intensity. The key priorities of the Slovak Energy Policy are
listed in Table 1 below.
TABLE 1 Priorities of the Slovak Energy Policy and Energy Efficiency Action Plan
Priorities of the Slovak A functioning and competitive energy market with affordable prices
energy policy
Energy security through an optimal energy resource mix
Improving energy efficiency and lowering energy intensity
Competitiveness and affordability of energy
Diversification of energy sources and the development of low carbon
technologies and renewable energy sources
Priorities for improving Reduce energy intensity to the level of the EU average
EE in the Slovak Republic
Establish a scheme for financing energy efficiency and prepare a financing
plan to implement specific measures
Adopt a robust measurement, monitoring, and evaluation framework for
energy efficiency
Disseminate energy efficiency goals and targets through information and
education campaigns
Introduce intelligent metering systems and create an intelligent help
network, so consumers can make informed decisions about energy use
Implement an effective demand-side management program
Source: Ministry of the Economy of the Slovak Republic, 2017
The Slovak government has prepared four EEAPs to systematically improve energy efficiency. The
EEAP 2017–2019 (with projections for 2020) establishes the following targets for energy savings:
• National indicative energy efficiency target – The Slovak Republic has EE targets for 2020
pegged to both the primary energy consumption and the final energy consumption, as com-
pared to the PRIMES2 2007 reference scenario. A target of 20 percent (191 terrawatt-hours
[TWh] or 686 petajoules [PJ]) for primary energy consumption in 2020, and a target of 31 per-
cent (105 TWh or 387 PJ) for final energy consumption.
12 Energy Efficiency of Public Buildings in the Prešov Region
• Building energy savings target – The Slovak Republic’s target is to annually renovate three
percent of the total floor area of buildings owned and occupied by all public buildings, at least
to a level of the minimum building energy performance requirements. The Slovak Republic’s tar-
get for 2020 is 52.17 gigawatt-hours (GWh) per year (365.19 GWh by 2020).
• Final consumer energy savings target – The Slovak Republic aims to save one and a half
percent of the annual energy sales to customers for each energy supplier. The country’s
target is estimated at 948.75 GWh per year (26,565 GWh or 3,415.5 terajoules (TJ) up to the
year 2020).
The building sector accounted for half the entire energy savings during the previous EEAP period
(2014–2016). The 2017–2019 EEAP attributes this, in part, to the additional financial resources
allocated from three operational programs (OP) in the 2007–2013 programming period.3 The
EE potential from the building sector was also high, reportedly due to the introduction of com-
pulsory energy audits in 2009, and the availability of financing. The EE measures implemented
in the buildings focused primarily on the following: (i) thermal retrofitting of existing buildings
through major or partial renovation; (ii) EE measures in building energy systems (heating, hot
water, lighting, and so on); and (iii) the construction of new low-energy, ultra-low-energy build-
ings, and nearly zeroenergy buildings.
Savings came mainly from building renovations and new efficient buildings in the residential
sector. Thermal retrofitting was undertaken in multifamily residential buildings with support
from the Joint European Support for Sustainable Investment in City Areas (JESSICA) program.4
The State Housing Development Fund received financing from the three operational programs.
Additionally, central government funding of more than €262 million was available for thermal
retrofitting of multifamily buildings. A further €30 million from the central government budget
was allocated in 2016 for the Single-family Building Insulation Support Program. The Slovak govern-
ment’s Living with Energy project, co-funded by the EU and implemented by the Slovak Innovation
and Energy Agency (SIEA) in 2014–2016, supported building renovation and the new efficient con-
struction of buildings. The installation of meters to monitor heat and hot water use, and support
for energy audits and consulting services, also contributed to energy savings in the buildings.
FIGURE 1 Reduction in final energy consumption in various market sectors (2014 – 2016)
5,65%
8,89% Sector: Saving [TJ]
Buildings 5,051.22
7,89%
Industry 2,772.04
Public sector 795.73
50,09% Transport 896.52
27,49%
Appliances 569.77
Total: 10,085.28
Source: EEAP 2017 – 2019 with an Outlook up to 2020, Ministry of the Economy of the Slovak Republic, Bratislava 2017
Overview of the EE Regulatory Framework in the Slovak Republic 13
The reduction in the final energy consumption in public sector buildings over the period 2014–
2016 was based on public sector financing. There are approximately 15,000 public buildings in the
Slovak Republic that are largely neglected in terms of maintenance and major renovation, that may,
therefore, provide considerable potential for energy savings. It is estimated that budgetary sup-
port for EE in public buildings from the central and local governments, contributed to less than
10% of the overall energy saving achieved. Funding from national and international programs,
as well as funds such as the Environmental Fund, Eko-Fund5 and the municipal energy efficiency
support instrument (MunSEFF)6 contributed about 20% to the energy savings achieved. Funding
from own resources and EU funds contributed to the rest of the energy savings achieved. About
€57 million was available from the Operational Program Competitiveness and Economic Growth
2007–2013 to upgrade public lighting systems. Energy services were used to improve building
energy systems and resulted in about 10% savings. Energy savings in public buildings during the
period 2014–2016 are shown in the table below.
TABLE 2 Energy savings in public buildings in 2014–2016
Public Buildings Renovated 2014 2015 2016 Total
in 2014–2016 (GWh/year) (GWh/year) (GWh/year) (GWh/year)
Administration buildings – renovation 0.85 13.88 10.79 25.52
Buildings of schools and school facilities – - 24.68 9.96 34.64
renovation
Hospital buildings – renovation - 15.57 4.67 20.24
TOTAL 0.85 54.13 25.42 80.40
Source: INFOREG information system (2015, 2016, 2017)
Although energy saving in buildings has achieved important results, it has been mostly in the res-
idential sector and much untapped potential remains in the public buildings sector. The EEAP
2017–2019 noted that the main reasons for not meeting the energy savings target for buildings
in 2016 were the lack of public resources for both the application of EE measures and the renova-
tion of the buildings of the state administration’s central bodies, as well as the delay in the imple-
mentation of projects financed by the European Structural and Investment Funds (ESIF).
The SIEA has estimated the potential for energy savings in public buildings to be about 650 TJ by 2019.
It is estimated that to realize these energy savings, about €180 million of financing is needed.
The fourth EEAP expected that, similar to the period 2014–16, own resources of the public facil-
ities would contribute up to 49% of the financing, with operational programs contributing about
42%, and other foreign funds and the national budget together contributing about eight percent.
However, the current government is looking for ways in which energy services can account for
a larger proportion of the financing required for investing in energy efficiency in public buildings.
Table 3 shows the target for energy savings in the primary and final energy consumption in pub-
lic buildings, as well as the financing required, for the periods 2017–2019 and 2017–2020. The
annual financing required for the building sector and the public sector is shown in Table 4. The
average investment intensity for implementing the EE measures in public buildings is estimated
to be €1,176/megawatt-hours (MWh).
14 Energy Efficiency of Public Buildings in the Prešov Region
TABLE 3 Energy savings targets and the financial resources required in 2017–2019,
with an outlook up to 2020
2017–2019 2017–2020
Energy Energy Total Energy Energy Total
Sector saving saving financial saving saving financial
(FEC) (PEC) resources (FEC) (PEC) resources
(TJ) (TJ) (EUR (TJ) (TJ) (EUR
thousands) thousands)
Public 1,362 2,132 636,111 1,706 2,670 800,486
buildings
Source: Energy Efficiency Action Plan 2017–2019 with an Outlook up to 2020, Ministry of the Economy of the Slovak
Republic, Bratislava 2017
TABLE 4 Estimated annual financial resources required to achieve the energy
savings for 2017–2019, with an outlook up to 2020
Total estimated financial resources (EUR thousands)
Sector
2017 2018 2019 2020 2017 – 2019 2017 – 2020
Public 179,654 231,834 224,624 164,375 636,111 800,486
buildings
Source: Energy Efficiency Action Plan 2017-2019 with an outlook up to 2020, Ministry of the Economy of the Slovak Republic,
Bratislava 2017
LEGISLATIVE ACTS AND BUILDING CODES
The Slovak Republic has building codes and standards that address energy use in buildings, and
standards for the heating of buildings. Consistent with EU directives, the legislative acts and
building codes have become progressively more stringent and require increased efficiency in the
use of energy. The acts and codes generally apply to new construction, and not to the existing
stock of buildings.
The new EU legislation (the Energy Performance of Buildings Directive) requires all new build-
ings to be nearly zero-energy buildings (NZEBs) by the end of 2020, and all new public buildings
to be NZEBs by 2018, provided they are cost-effective. In compliance with this directive, the Slovak
Republic has also revised its building codes to meet the new energy performance requirements.
The performance specified in the building code for both the new and existing stock of buildings
is the same—to meet the ‘A0’ standard of EE. Recognizing that renovation of the existing build-
ings to meet the new performance standards may be difficult, there is a provision that the exist-
ing buildings need only renovate those measures which are technically feasible and cost-effective.
While cost-effectiveness is defined as a measure that has a payback period of less than 15 years, the
technical feasibility is not defined. Existing buildings could thus use this provision to not under-
take renovations as required by the NZEB regulations.
The table below provides the energy performance standards to be met for different categories
of buildings. Buildings are classified by class, depending on their energy performance. The latest
guidelines, as they relate to NZEBs, will require buildings to meet the energy performance clas-
sified as ‘A0’.
Overview of the EE Regulatory Framework in the Slovak Republic 15
TABLE 5 Global indicator scale for energy classification of buildings - primary energy in kilowatt-hours /
square meters/year
Building
Energy
A0 A1 B C D E F G
Efficiency
Classes
Family houses ≤ 54 55–108 109–216 217–324 325–432 433–540 541–648 > 648
Apartment ≤ 32 33–63 64–126 127–189 190–252 253–315 316–378 > 378
houses
Administrative ≤ 61 62–122 123–255 256–383 384–511 512–639 640–766 > 766
buildings
School ≤ 34 35–68 69–136 137–204 205–272 273–340 341–408 > 408
buildings
and school
facilities
Hospital ≤ 98 99–197 198–393 394–590 591–786 787–982 983–1179 > 1179
buildings
Hotel ≤ 82 83–164 165–328 329–492 493–656 657–820 821–984 > 984
buildings and
restaurants
Sports halls ≤ 46 47–92 93–181 182–272 273–362 363–453 454–543 > 543
and other
sports
buildings
Buildings for ≤ 107 108–213 214–425 426–638 639–850 851–1062 851–1275 > 1275
wholesale and
retail services
Source: Decree no. 364/2012 Coll.
Decree of the Ministry of Transport, Construction and Regional Development of the Slovak Republic implementing Act no. 555/2005 Coll. on Energy
Performance of Buildings and on Amendments and Supplements to Certain Acts, as amended
(as amended by No. 324/2016 Coll.)
The Prešov Region applies all applicable national policies, laws and regulations of the Slovak Republic.
The PSK does not have any additional or specific laws that apply only to the region. An exception
is the public procurement law for which the Prešov Self-governing Region has a directive on the
procedure for the application of Act No. 433/2015 Coll. on public procurement. This regional direc-
tive applies to public procurement below a certain threshold.
16 Energy Efficiency of Public Buildings in the Prešov Region
FINANCING FOR EE
INVESTMENTS IN PUBLIC
BUILDINGS
The Slovak Republic has experienced relatively high economic growth rates in Europe, with the
economy growing by about 4.1 percent in 2018. The gross domestic product (GDP)’s annual growth
rate in the Slovak Republic averaged 3.97 percent from 1996 until 2018,7 which is one of the high-
est in the European Union (EU). Public debt remains low at 50.9 percent of the GDP. The corpo-
rate and retail banking sector in the country has consequently been quite strong, with relatively
high liquidity in the capital markets. The Slovak banking sector consists of 27 financial institu-
tions with banking licenses. Most are universal banks, focused on retail and corporate banking.8
According to the Slovak Banking Association, most Slovak banks are controlled by foreign bank-
ing groups, with only three commercial banks fully controlled by domestic investment groups.
COMMERCIAL FINANCING FOR EE PROGRAMS
IN PUBLIC BUILDINGS
The Slovak banking sector is reported to be concentrated within the hands of three major play-
ers – Slovenska Sporitelna (Erste Bank), VUB Banka (Intesa), and Tatra Banka (Raiffeisen) – which
together control more than 50 percent of the banking assets in the country. The Slovak Guarantee
and Development Bank, a public bank, is the first Eastern European bank to promote the develop-
ment of small and medium enterprises (SMEs), as well as to finance the projects of the municipal-
ities and towns in the country. The National Bank of Slovakia, the country’s central bank, super-
vises financial institutions and banks in the Slovak Republic, and works with the European Central
Bank, as well as other central banks in the Eurozone.
The funding of the Slovak banks is based primarily on the deposits of domestic clients, and retail
loans are reported to dominate in the domestic lending market. Corporate loans are also rising
and are reported to have exhibited a seven percent year-on-year growth rate. The banking asso-
ciation notes that while Slovak banks are profitable, low interest rates have affected interest rate
margins, and income and prospects for banks may be weakening.9
Commercial banks have been involved in the market for financing energy efficiency services in both
the public and private sectors. Banks have provided financing for EE projects to creditworthy cli-
ents following normal lending practice. They apply the same lending principles when financing
either public agencies or ESCOs to undertake EE in public buildings. In addition to the commercial
banks, the Slovak Guarantee and Development Bank also provides loans and guarantees to SMEs,
local communities, and municipalities. It uses domestic resources and foreign credit lines to fund
its operations. This bank could also finance regional governments, although financing is provided
on a per project basis. The amount of financing available in the domestic banking sector could not
be ascertained, since banks have not assessed the market for EE services and the need for financing.
Banks generally have a division that focuses on municipal and public sector financing. For instance,
the VUB Bank noted that it is financing about 600 municipalities and over 3,000 villages and towns
in the country. Although municipalities and public agencies in the Slovak Republic have a limit
of up to 60% debt, most cannot go beyond the 35 to 40% debt levels, which limits their debt capac-
ity. Commercial banks consider municipalities and public agencies a low-risk debtor. Consequently,
20 Energy Efficiency of Public Buildings in the Prešov Region
they are offered lower interest rates and longer tenors in comparison to private firms. For instance,
municipalities are offered debt at under one percent compared to about three and a half percent
for a commercial energy service provider.
Banks also have experience with financing ESCOs. They note that financing for ESCOs is based
on standard bank due diligence processes and practices. Banks would readily finance large ESCOs
such as Siemens or Engie. However, these ESCOs do not typically seek working capital loans.
Smaller ESCOs that may really need financing to expand to additional projects, are likely to reach
a debt ceiling, and may then not be eligible for further financing. Unlike construction firms that
are able to securitize their receivables and refinance projects at a lower cost, there is no experi-
ence with collateralizing ESCO receivables to reduce the debt burden. This approach has not been
tried with ESCO projects, perhaps because EE project loans and receivables are relatively small
compared to large construction projects.
LINES OF CREDIT AND CREDIT ENHANCEMENT
INSTRUMENTS FROM INTERNATIONAL FINANCE
INSTITUTIONS (IFIS)
Some of the large commercial banks, have experience with credit lines with international finance
institutions (IFIs). For instance, the Slovenska Sporitelna, CSOB, and VUB Banka have experience
with credit lines from the European Bank for Reconstruction and Development (EBRD) to finance
EE programs in small and medium industries (SlovSEFF) and in municipalities (MunSEFF). SlovSEFF
provided a grant of up to 20%, which was very attractive to SMEs. The MunSEFF financing facility
was attractive to municipalities, since the program offered loan tenors of 10-15 years, and a 10-15%
grant. Municipalities were able to obtain financing at 40 basis points above London InterBank
Offered Rate (LIBOR), which was very attractive. It is important to note that MunSEFF was largely
used for street lighting projects, which are relatively simple to implement and have low payback
periods. Given this experience, commercial banks are willing to fulfill reporting requirements,
as required by IFIs, and they noted that EBRD had contracted a firm (Enviros) to support banks
and clients. The basic structure of financing for EE projects in public buildings through either
a typical credit line facility to support ESCOs (or public buildings directly), or a risk-sharing facil-
ity to support ESCOs, is illustrated in Figures 2 and 3 below.
FIGURE 2 Credit line facility to support ESCOs and/or the PSK to finance EE in public buildings
FIGURE 3 Risk sharing facility to support ESCOs to finance EE in public buildings
Source: Authors, 2019
Financing for EE Investments in Public Buildings 21
Although there is liquidity in the Slovak capital markets, the situation could change as the EU pulls
back on quantitative easing and interest rates go up, then lines of credit or risk sharing mecha-
nisms could become more attractive to commercial banks. Given the current liquidity in the mar-
ket, commercial banks do not generally need additional financial support lending for EE. However,
in case the situation changes, lines of credit or credit enhancement products are considered use-
ful in helping to lower risk and develop preferential loan products to support EE projects. The
banks’ willingness and interest in participating in programs with IFIs will depend on: the terms
of the financing, any grant component that is included, and the technical assistance being offered,
something that is attractive to both the banks and the borrowers. In the case of EE projects, there
is some concern that: (i) the transaction costs of a guarantee for small EE projects may be too
high; and (ii) the risk of default from the municipalities and public agencies responsible for debt
service is considered low.
THE ENERGY PERFORMANCE
CONTRACT (EPC) ACT
The Ministry of Finance has been leading the efforts to develop the Energy Performance (EPC)
Act10 so it conforms to Eurostat guidelines.11 For this purpose, it has been working on develop-
ing an EPC model contract that needs to be approved by EUROSTAT. Once the EPC model con-
tract is approved, it will be the first one in Europe to conform to these guidelines. Once approved,
it will be the first one in Europe to conform to these guidelines. The EPC Act is designed to ena-
ble ESCOs to finance and implement EE projects in public buildings and recover costs from guar-
anteed energy savings. Public buildings that have annual energy bills in excess of €50,000, and projects
with a minimum contract period of eight years, are eligible to be implemented under the EPC Act. The
government is incentivizing the use of the EPC for the financing of EE upgrades in public build-
ings and would like public agencies to use debt finance for any other infrastructure investments
that are needed. The EPC model contract is structured to ensure that the public agency does not
assume any debt (as required by Eurostat guidelines). The EPC Act and model contract is designed
to implement only energy-related projects and not to undertake deep building renovation that may
include non-energy related elements. The EU’s EPBD (Energy Performance Building Directive)
has also been amended to require EE measures to be financed from energy savings, and to include
all end uses and fuels in determining the building certificate. These changes will also apply to the
Slovak Republic. The EPC model contract is going through final approvals within the ministries
of the Slovak Republic and is expected to be approved by June 2019.
Payment provisions under the EPC Act . Under the EPC Act, the ESCO will finance and imple-
ment EE measures in public buildings and guarantee energy savings during a defined period. The
beneficiary (the municipality, regional or central government owning the public building) will
make two payments: a partial payment for guaranteed energy savings (GES) towards the investment,
and a payment for reimbursement for services, which will cover non-investment costs, including
any maintenance and operational costs and the profit margin. On an annual basis, the ESCO
will prepare an assessment report that will include any excess or shortfall in savings. In the case
of a shortfall in savings, the ESCO’s entitlement to the payments for GES will be reduced based
on the shortfall, and the ESCO will have to make payments to the beneficiary to make up for the
shortfall. In case of excess savings, the ESCO will be entitled to additional remuneration in the
amount of two-thirds of the excess financial savings. The ESCO will prepare an annual settlement
report that provides the details of all payments made, and will also prepare a final amount of the
payments for GES accordingly.
Financing of the project. Under the provisions of the act, the ESCO will finance the renovation
and provision of services as per the contract with the beneficiary, and may do so with its own
resources, or by financing it. In the case where the ESCO finances the project externally (through
a commercial loan), the beneficiary is required to directly make partial payment toward GES to the
financial institution providing the financing. This assignment of payment by the ESCO to the
22 Energy Efficiency of Public Buildings in the Prešov Region
financial institution (factoring or forfeiture of payment) is not considered a liability on the books
of the public agency, as long as the public agency has: (i) full recourse to any shortfall in savings
guaranteed by the ESCO; (ii) can offset such shortfalls against future payments to the ESCO; and
(iii) shortfall payments are made within a period of one year (as defined in the Eurostat Guide for
EPC of May 5, 2018).
As per the Eurostat guidance, any financing or grant provided by the public agency to the ESCO
to implement the project is considered to be on the balance sheet of the public agency, if the financ-
ing support exceeds 50 percent or more of the capital expenditure to be incurred in the construc-
tion and/or installation of the EPC assets. However, an EU financing (for example a grant or loan)
toward the project is not counted as government financing, and any financing arranged between
the ESCO and the European Investment Bank (EIB), or any other IFI, is considered to be financ-
ing from the private sector.
A year after construction, the ESCO could be allowed to sell the receivables toward partial payment
for GES. This will permit the ESCO to reduce its debt burden and assume additional debt for other
EPC projects. The ESCO would not be able to collateralize the partial repayment for services (say,
20 percent), which would remain at risk, and could serve as a first-loss facility for any risk sharing
instrument to be supported by IFIs. Insurance companies could also insure the ESCO for the per-
formance guarantee. These provisions for financing are still unclear, and will need to be tested.
While the guidance permits the combination of funds from the EPC and ESIF, the business model
has not been tested and could potentially complicate the public procurement process. Given the
provisions of the EPC Act, the financing institution (in case the project is externally financed)
is assured of repayments from the public agency even if the project is terminated.
Key stakeholders have participated in the EPC model contract consultation process, but they are
waiting for the approval and publication of the final version. The IFIs and commercial banks have
had various discussions with the Ministry of Finance and are waiting to examine the financing
and legal framework of the EPC model contract, once it is approved and made public. The ESCO
Association of the Slovak Republic and SIEA have also been involved in the consultations and are
expecting the final published document. For all of them, having a pilot to test the EPC model con-
tract with public entities is fundamental for its success in the public realm.
Financing for EE Investments in Public Buildings 23
READINESS FACTORS
IN THE LOCAL EE MARKET
ESCOS IN THE SLOVAK REPUBLIC
The ESCO Association of the Slovak Republic has 17 members, though only eight companies oper-
ate as ESCOs in the Slovak Republic. This includes large international firms, such as Engie and
Siemens, and smaller domestic ESCOs. Utilities and district heating companies are also keen
to provide ESCO services, but are not presently undertaking projects, since they are not permitted
to finance projects on behalf of beneficiaries. However, the number of ESCOs is expected to grow
as market demand increases in the country.
According to the ESCO Association of the Slovak Republic, ESCOs collectively implement about
30 projects a year, and have the capacity to undertake projects of about a €3-4 million investment
at a time, which translates into about 10 buildings. In terms of the project size, the large ESCOs
would obviously prefer to implement larger projects, and they would also prefer that some bids
be bundled to obtain a project size of 500,000 to 1 million euros. However, some of the smaller
ESCOs, which typically would like to bid on public building projects, would be interested in under-
taking projects of even €10,000. The ESCO association notes that the present loan default rate for
ESCOs is about five percent, which is very nominal and acceptable by bank standards.
The average duration of ESCO projects, and the average capital cost of projects implemented
by ESCOs in the Slovak Republic is as follows:
TABLE 6 Average duration of ESCO TABLE 7 Average capital cost of ESCO
projects projects
Project Duration Percentage of Projects Project Cost Percentage of Projects
Less than 5 years 10% Under $200,000 10%
5-10 years 70% $200,000 - $500,000 40%
11-15 years 20% $500,000 - $1 million 30%
$1 million - $5 million 10%
Over $5 million 10%
Source: IEA, Report on EE in the Slovak Republic (https://www.iea.org/topics/energyefficiency/escos/Slovakia)
EE ESCO contracts have been done in projects with relatively short payback periods that entail
equipment replacement rather that thermal retrofitting, and have mostly not involved public build-
ings. Old public buildings with little maintenance typically require improvements of the build-
ing envelope, indoor ventilation to improve air quality, and other refurbishments that are likely
to entail payback periods well beyond 15 to 20 years. These types of projects have not been attrac-
tive to ESCOs, especially since commercial financing is generally not available for tenors beyond
15 years. ESCOs, therefore, do not finance deep building renovation. Instead, they focus on pro-
jects with relatively short payback periods of about 5 to 10 years, which mainly involve equipment
upgrades. The ESCO association notes that deep building renovation projects would, therefore,
need to be financed by the municipality or public agency, with the ESCO only financing equip-
ment and retrofits directly related to energy savings.
26 Energy Efficiency of Public Buildings in the Prešov Region
Under an ESCO contract, project beneficiaries can use savings from the maintenance and oper-
ational costs (including any saving in human resource costs) in addition to the monetary savings
from reduced energy use, to make payments to the ESCO. This approach provides an additional
revenue stream, which helps the ESCO recover its investment within the tenor of its financing
(for example, about 5 to 10 years).
At present ESCOs can obtain financing for 10 years at an interest rate of 2.5 to 3.5 percent , and
some banks may extend the tenor to 12 years at a higher interest rate. Loan tenors beyond that are
generally not available to ESCOs, except at higher interest rates and with secured loans.
EQUIPMENT MANUFACTURERS, SUPPLIERS AND
INSTALLERS
Buildings for the Future (BoF) is a very large association whose membership is composed of the
associations of manufacturers, installers, ESCOs, the Green Building Council (GBC), and other
manufacturers and suppliers. BoF notes that presently about 100 public buildings in the Slovak
Republic are renovated annually, and the association estimates that an additional five percent
of the public buildings (about 50 buildings) across the Slovak Republic could be refurbished annu-
ally, based on the present capacity of the marketplace.
BoF notes that the PSK has a geographic advantage, since the Prešov and Kośice regions have
a strong base of construction companies. However, if the PSK wants to scale up, it will be impor-
tant to plan a phased approach. If the region wants to renovate between 15 to 20 buildings annually,
it may be challenging to secure enough labor force. Therefore, an effort should be made to follow
a phased approach that could be disseminated around the neighboring regions, especially in the
Košice region. It is also worth considering that, in general, construction firms and installers are
not keen to participate in the public procurement processes, given the time it takes and the cost
of the transactions. To mitigate risks, the strong dissemination of the procurement process within
the market, and even the bundling of public buildings with different lots, may be considered.
SLOVAK INNOVATION
AND ENERGY AGENCY (SIEA)
The SIEA uses ESIF funds to support public agencies to undertake EE projects, performs energy
audits, and provides training to personnel. Starting in 2014, about €300 million has reportedly
been available for project calls, and about €10 million is available in 2019; though much of these
funds have already been programmed for use. SIEA states that the average payback period for ther-
mal retrofit projects was 33 years. The PSK has participated in some of SIEA’s project calls and has
benefited from its support.
SIEA’s regional office in Košice provides advisory support for EE. It could also support the PSK’s tech-
nical staff with energy audits, including training for the PSK staff on conducting audits, interpreting
results, and identifying EE measures. SIEA staff can also inform and train the PSK staff on build-
ing standards to be met when renovations are conducted; especially given the fact that the exist-
ing stock of public buildings are expected to meet class A1 or class A0 standards (although, only
if technically possible and economically feasible, as projects with payback periods under 15 years
are considered feasible). SIEA can also help the PSK prepare building energy certificates. The PSK
would have to apply for a project call to benefit from these advisory services from SIEA. In addi-
tion, SIEA could also support the PSK’s EE program through its lists of certified energy auditors
and qualified installers.
Readiness Factors in the Local EE Market 27
THE NEED FOR A PILOT TO TEST THE EPC ACT ON
PUBLIC BUILDINGS
Banks and the EPC Act
The banks have had discussions with the Ministry of Finance on the EPC Act, and although in prin-
ciple they agree to it, they still need to examine the approved act and test its design with public
agencies. Banks are waiting to examine the financing and legal framework of the EPC model con-
tract, once it has been approved and made public. At present, the banks are not clear about the pro-
posed provision in the EPC model contract, which seeks to transfer debt service obligations to the
municipality, in order to lower the debt burden on the ESCO. The debt is not off-balance sheet
and would remain with the ESCO, which could limit the borrowing capacity of smaller ESCOs,
as well as their ability to implement additional projects. The banks would prefer the municipality
or public agency to take debt, since they are more creditworthy than smaller ESCOs, but the EPC
Act is designed to keep the debt off the books of the public agency. The banks are also not sure
if public agencies would be able to retain monetary savings from the EE projects, and would pre-
fer a model where monetary savings from the projects are ring-fenced for debt service.
The banks are not clear on the provisions of the EPC model contract that seek to separate the
EE projects from any construction-related elements of a project, which is generally necessary
in public buildings that need deep renovation. Buildings may have to process separate contracts for
construction and for EE, which may result in a more complex project implementation. Banks note
that tailored financing products may be needed to finance projects under the EPC model contract.
Standardized formats and processes, and bundled projects could help lower the transactions costs.
The EBRD is examining how the EPC Act could be used to support increased lending for EE in pub-
lic facilities, especially since the investment is off-balance sheet for the public agency. For them,
financing could be provided on a limited recourse basis, since the public agency would make debt
payments on behalf of the ESCO. The EBRD is considering the creation of a specific financing
facility to provide support to ESCOs in the Slovak Republic that undertake projects under the EPC
model contract. However, the details on the program are not yet available.
The EBRD is supportive of developing a pilot project in the Prešov Region to test the provisions
of the EPC Act and its model contract. Like the commercial banks, the EBRD would like to see the
development of a standardized framework and process to identify projects, develop baselines, and
undertake monitoring and verification. Developing a pipeline of projects and the bundling of pro-
jects for implementation would also help lower transaction costs and portfolio risk.
ESCOs and the EPC Act
The ESCOs are keen to provide services to the public agencies under the new EPC Act and its
model contract, and the ESCO association has been actively providing its views and input to the
Ministry of Finance. In their view, some provisions of the EPC Act may make the market less
attractive to ESCOs. Specifically, the EPC Act permits repayments to the ESCO only from mone-
tary savings that come from reduced energy, and not from reduced maintenance and operational
costs (as had been the case so far). This could be a limitation, since maintenance of the equipment/
facility would be an obligation of the ESCOs under the EPC Act (facility owners presently pay for
maintenance), and this additional cost may not be adequately or quickly recovered from savings
in energy costs alone. If there is a shortfall in the guaranteed savings, it would further reduce the
revenue stream available to make repayments.
The ESCO association does not expect demand for ESCO services to grow rapidly with the intro-
duction of the EPC model contract, since the municipalities and public agencies do not have the
capacity to develop bid documents for EPC projects. While the regional self-governments, such
as the PSK, may have an advantage, given their size and the resources available to them, all the
28 Energy Efficiency of Public Buildings in the Prešov Region
public agencies would need capacity development to prepare and implement EPC projects. The
EU’s ELENA initiative could support municipalities in developing bid documents, but it would
require the municipality to pay 10% of the costs, and achieve a financing leverage of 1:20, barring
which the municipality is required to repay ELENA for its support. Dedicated funds for capacity
building in EE would thus be preferable.
The ESCO association is thus supportive of a pilot project for buildings in the PSK to test the pro-
visions of the EPC model contract. This support could lead to the development of standardized
processes and template documents, which will be important assets for the public agencies in devel-
oping bid documents.
SIEA and the EPC Act
In support of the EPC Act, the Ministry of Economy has designated SIEA to provide support for
the implementation of the EPC Act. SIEA is presently in discussions on the design of the new
OP, which is intended to support implementation of the EPC Act. SIEA has offered to examine
if the new OP could be used to carve out a framework to provide assistance to the PSK under the
Catching-up Regions (CuR) Initiative, and to support a pilot project to test the provisions of the
EPC Act. SIEA is also considering launching an awareness campaign to promote the provisions
and benefits of the EPC Act. Given the limited funds, the public agencies would need to apply when
SIEA has calls for project support.
The need for a pilot with the public agencies to test the EPC Act
Multiple provisions and requirements of the EPC Act have not been tested, and it remains unclear
how they will actually work in the Slovak Republic. Therefore, it seems desirable to demonstrate
the provisions of the EPC Act and its model contract though a pilot program to improve the energy
performance of public buildings under the PSK. Furthermore, the EPC model itself has not been
tested in the Slovak Republic, or in Europe. Therefore, it too needs to be piloted before the mecha-
nism can be fully understood. The Ministry of Finance, the Ministry of Economy, SIEA, the ESCO
Association of the Slovak Republic, and the banks are all very supportive of piloting a program
in the PSK to test the provisions of the EPC Act. The pilot would also help develop baselines, and
undertake monitoring and verification, and create a standardized framework and process to iden-
tify a pipeline of projects that can potentially be bundled together—all with the aim of testing and
lowering transaction costs and portfolio risk.
Readiness Factors in the Local EE Market 29
STRATEGIC APPROACH TO
ENHANCE EE IN PUBLIC
BUILDINGS IN THE PSK
EXISTING STOCK OF PUBLIC BUILDINGS
IN THE PSK
The PSK owns 133 public facilities which include secondary schools, assisted living facilities (social
services), cultural facilities, buildings of the Regional Roads Administration (RRA), and the admin-
istrative buildings of the PSK.12 The 133 public facilities encompass some 488 public buildings with
most facilities comprising multiple buildings. It should be noted that the PSK operates only two
buildings, namely the administrative buildings of the PSK. The operation and maintenance budget
for the PSK public facilities is not enough to cover expenses, especially in wintertime, when much
of the emergency budget is used to cover increased heating costs. Public buildings and facilities
may be characterized as shown in the following tables below.
TABLE 8 Characterization of public buildings in the Prešov Region
Number Number Floor Area
Facility of Facilities of Buildings (m2) Share of Facilities
Schools 80 239 580,000
1% 1%
Social Services 25 87 91,000 19%
Schools
Cultural Facilities 26 71 73,000 Social services
Road administration 1 89 32,000 Cultural facilities
and maintenance 19% Roads Administration
PSK buildings 1 2 12,000 60% PSK Administration
Total 133 488 788,000
Source: PSK, 2018
The public facilities are managed independently by directors or managers, who coordinate with
the relevant director in the PSK to plan and budget operational and capital improvement projects.
The public schools, social services facilities, and cultural facilities benefit from financial support
from the Slovak central government, with the relevant ministries providing budgetary support, and
the facilities individually managing their energy facilities and paying their utility bills. However,
any increase in energy consumption negatively affects the operational budgets of the facilities.
At times of budgetary shortfalls, the PSK provides incremental financing to cover utility bills; this
generally happens during the winter months, when heating bills can be high.
A relatively small number of public buildings in the PSK have been renovated. Public buildings are
relatively old structures with poor thermal insulation and often outdated energy equipment. This
greatly increases the payback periods, as additional investments are needed that are directly related
to energy efficiency (for example, leaky roofs, humidity issues, structural issues, and so on). For
instance, many of the investments of municipal buildings in the Prešov Region identified under
the EU’s ELENA initiative had payback periods of about 40 to 50 years.
In the PSK, routine maintenance of public buildings is conducted by technicians and equipment
operators within the facilities, and major maintenance and repairs are contracted out to special-
ized firms. The individual public facilities are unable to raise financing for capital improvements,
32 Energy Efficiency of Public Buildings in the Prešov Region
so capital projects are financed by the PSK. The individual facilities also do not have the technical
expertise to undertake energy analysis and to identify opportunities for energy savings. Such anal-
ysis is either undertaken by technical staff in the PSK, or by contractors and equipment suppliers.
TABLE 9 Renovation status of the PSK public buildings
Facility Number of Renovated Public Buildings
Fully Renovated (% renovated) Partial or No Renovation
Schools 38 (16%) 201
Social services 19 (22%) 68
Cultural facilities 10 (14%) 61
Road administration and maintenance 1 (0%) 88
PSK buildings 2 (100%) -
Total 70 (14%) 418
Source: PSK, 2018
The annual energy consumption in public FIGURE 4 Average fuel use in PSK public buildings
buildings over the period 2010 to 2017 is shown
in Table 10 and Figure 4 for each fuel source
in the buildings. Consumption of all fuels
is reported in megawatt-hours (MWh) for con-
sistency, and to enable comparison of per unit Natural Gas
consumption with the new building perfor- Electricity
mance standards. On average, the consump- Coal
tion of natural gas accounts for over 72 percent
Heat
of total fuel consumption, and electricity usage
accounts for about 14 percent (see Figure 4). Source: Authors, 2019
TABLE 10 Annual energy consumption in the PSK public buildings
Type of Fuel Annual Energy Consumption (MWh)
2010 2011 2012 2013 2014 2015 2016 2017 Average
Consumption
Natural gas 61,040 57,627 56,858 53,964 40,560 44,121 46,317 47,805 51,037
Electricity 10,573 10,360 9,919 9,788 9,618 9,836 10,113 10,125 10,041
Solid fuels 1,671 1,861 1,767 1,894 995 1,151 1,322 1,340 1,500
Purchased 7,207 6,610 6,263 5,972 6,735 9,668 9,859 10,246 7,820
heat
Total fuel 80,491 76,458 74,806 71,618 57,908 64,776 67,612 69,517 70,398
consumption
Estimated CO2 16,813 15,900 15,578 14,858 12,031 13,499 14,074 14,489 14,655
emissions (t)
Source: ENECO, PSK, 2018
Energy use information for individual public facilities from utility bills is not collated and data-
based centrally. This makes it difficult to analyze energy bills on a periodic basis and to properly
manage annual budgetary spending on energy consumption. A lot of work was done with the PSK
and the ENECO consulting firm to develop an updated database that would provide initial esti-
mates on energy consumption. If the PSK wants to have a more sustainable approach to energy
management of public facilities, then it should continue to update the database to include key
variables, and it should also request each individual facilities’ manager to report back on their
energy consumption bills.
Strategic Approach to Enhance EE in Public Buildings in the PSK 33
From the aggregated database, the following information can be extracted:
• The main energy use is for space heating. The fuel sources include natural gas, some biomass,
and purchased heat (from the local district heating companies).
• The main EE opportunities are not in fuel switching, but in the use of more efficient equip-
ment and thermal insulation.
• Although energy use in heating has increased, most schools do not fully heat all areas to an opti-
mal temperature, in order to keep energy expenditures low.
• Unlike public schools, social services facilities are fully heated throughout the heating sea-
son and use significant amounts of hot water, since they care for the elderly population, and
sometimes include health and nursing services. Three-quarters of the energy consumption
is for space and water heating. Electricity usage accounts for about 23% of the total energy
consumption.
• The cultural facilities are diverse, ranging from museums, to theaters and a planetarium.
Therefore, energy use varies significantly, depending on the function and hours of opera-
tion. Energy consumption tends to be lower in these facilities, and most of it (about 60%)
is for heating.
• Regional Roads Administration facilities vary in their function and the hours of operation
(including offices, workshops, maintenance facilities, storage facilities, and staff changing
rooms). However, about 87 percent of their energy consumption is for heating.
• PSK administration buildings use energy for space heating, lighting and office equipment. The
main administrative building is connected to the local district heating network, and the sec-
ond building is heated with a gas-based heating system. Both buildings have been renovated.
Some limitations of the database became apparent, when it was used to analyze energy use in var-
ious buildings in the PSK. The energy intensity of individual buildings within a public facility var-
ied widely, and it provided no usable information which could help identify facilities and buildings
that could be prioritized for investments in EE measures. While some of the information in the
database is yet to be verified and validated, the preparation of the database is an important step
in the process of undertaking the systematic analysis of public buildings.
SYSTEMATIC ANALYSIS TO PRIORITIZE PSK
INVESTMENT IN PUBLIC BUILDINGS
The PSK would benefit from a systematic analysis of its stock of public buildings to identify and
prioritize investment opportunities to implement EE measures. A four-step process is suggested
for the PSK to identify and prioritize EE projects and investments in public buildings (see Figure 5).
Step 1: Development of a longlist of projects. Use the database of public buildings to conduct
a statistical analysis to identify buildings with high energy consumption that should be exam-
ined further, and to develop a longlist of projects. The analysis should be based on such key vari-
ables as energy intensity, age of building, usage characteristics, and so on.
Step 2: Development of a shortlist of projects. Use the Excel-based building energy model to ana-
lyze opportunities for energy savings in buildings included in the project longlist. The assessment
includes evaluation of different EE measures with actual installation cost information, to provide
the economic rate of return and payback periods. The outcome of the analysis is the preparation
of a shortlist of buildings that should be prioritized for investment.
Step 3: Identify top priority investments projects. Data and information for buildings on the short-
list is validated with site visits, review of records, and preliminary or walk-through energy audits.
34 Energy Efficiency of Public Buildings in the Prešov Region
Step 4: Preparation of bid documents. Energy audits and feasibility studies may be conducted
for the final shortlist of projects, followed by the preparation of bid documents for tendering the
projects for implementation.
FIGURE 5 Four-Step Process for Identifying and Prioritizing EE Investments in Public Buildings
Step 1 Step 2 Step 3 Step 4
Longlist—Preliminary Shortlist—based on Top priority—verifications Preparation of feasibility
identification of projects energy modeling based on site visit studies/bid
based on improved assessment documentation
energy database for tender
Source: Authors, 2019
Development of the first level of systematic analysis
The first level of analysis included the incorporation of additional categorization fields to be able
to obtain more granular data, to be able to then identify a longlist of investments. The database
was modified with additional fields to subcategorize public buildings based on the type of facility
and the building usage. For instance, schools are further categorized by the type of school (voca-
tional, grammar school, hotel management, and others) and the usage of building (classroom, din-
ing facilities, gymnasium, and so on). These additional subfields in the database have helped bet-
ter categorize buildings, and understand and compare energy use in such facilities.
Having a better categorization of the buildings will reduce variations in energy intensity and
strengthen the first level database. The wide variations in energy intensity in all the different sec-
tors indicate either that energy use is being allocated to buildings which do not use much energy,
or that the data is poorly recorded. The problem is compounded by the fact that, generally, there
is only a single metering point in a given facility. As a result, it is difficult to allocate energy use
across the various buildings. This made it quite difficult to prioritize and identify a shortlist
of buildings. The tables below illustrate the wide variation levels found in all sectors without
using the updated database.
TABLE 11 Energy intensity in public buildings under the PSK
Schools Intensity of Energy Use Range of Energy Intensity Energy Intensity to
(average age: 47 years) (individual buildings) Meet A1 Standarda
2014 2017 2017
Energy used for heating 56 69 8–940+ < 28
(kWh/m2/yr)
Electricity use (kWh/m2/yr) 9.7 9.7 1–1,000 <9
Social services Intensity of Energy Use Range of Energy Intensity (individual Energy Intensity to
(average age: 73 years) buildings) Meet A1 Standard
2014 2017 2017
Energy used for heating 118 131 49–1,000+ < 35
(kWh/m2/yr)
Electricity use (kWh/m2/yr) 28 30 1–450+ < 16
a As per EU directives, renovated public buildings will have to meet A0 standards, provided it is technically and financially feasible.
Meeting A1 standards is more feasible.
Strategic Approach to Enhance EE in Public Buildings in the PSK 35
Cultural facilities Intensity of Energy Use Range of Energy Intensity (individual Energy Intensity to
(average age: 35 years) buildings) Meet A1 Standard
2014 2017 2017
Energy used for heating 27 44 22–196+ < 28
(kWh/m2/yr)
Electricity use (kWh/m2/yr) 13 17 1–288+ < 15
Regional Road Intensity of Energy Use Range of Energy Intensity (individual Energy Intensity to
Administration buildings) Meet A1 Standard
2014 2017 2017
Energy used for heating 27 44 13–580+ < 28
(kWh/m2/yr)
Electricity use (kWh/m2/yr) 13 17 3–1,100+ < 15
Source: Authors, 2019
FIGURE 6 Energy intensity for classrooms in all schools To illustrate the problem with the variations
in intensity of the energy use in buildings,
Figure 6 shows the intensity of energy used
in just classrooms (it excludes other build-
ings in a school facility) and the mean across
all schools under the PSK. Intensity of energy
use varies from about 13 to 127 kilowatt- hours/
square meter/year. The mean for this data set
is about 60 kWh/m2/yr., and the standard devi-
ation is about 20 kWh/m2/yr. This dataset does
not help identify schools which should be exam-
ined further to assess the potential for energy
efficiency.
More meaningful information can be used
Source: Authors, 2019 after updating the database to be able to pri-
oritize investments. Figure 7 illustrates the
FIGURE 7 Energy intensity for classrooms in grammar schools intensity of energy used in the classrooms
(gymnasiums) of just the grammar schools (gymnasiums),
and the mean based on the updated database.
The intensity of energy use varies from about
34 to 90 kWh/m2/yr.. The mean for this data
set is about 62 kWh/m2/yr., and the standard
deviation is about 14 kWh/m2/yr. This dataset
provides more meaningful information, which
can be used to identify grammar schools that
should be examined further to assess their
potential for EE. For instance, the five schools
with energy intensity above 80 kWh/m2/yr.
could be included in the longlist of projects
and could be analyzed further using the level
two assessment (that is, the building energy
model). Similarly, the schools with energy
Source: Authors, 2019 intensity closer to 40 kWh/m2/yr. could also
be examined further to understand why they are more efficient. Similar analysis for other types
of schools – vocational schools, hotel academies, technical schools, nursing/medical schools, and
others – can be used to create a longlist of all the school facilities in the PSK that could be exam-
ined further. Annex A provides graphs for a few different types of school buildings and social
service facilities.
36 Energy Efficiency of Public Buildings in the Prešov Region
Despite showing significant potential for EE improvements, much depends on the cost and finan-
cial feasibility of the retrofit project. Judging by the energy intensity in 2017, and the energy perfor-
mance standards to be met by buildings to obtain just the class A1 level, there is significant poten-
tial for improvement in EE. A more systematic and detailed second level analysis (see next section)
of the potential to implement EE measures would be needed. This analysis should be based on the
actual potential to reduce energy use, taking into account the building characteristics, and the
detailed costs of materials and labor, to implement the EE measures. This would indicate the eco-
nomic rate of return and the payback period.
Development of second level systematic analysis
The building energy model
A building energy model has been developed, in collaboration with a technical expert from the
Košice Technical University’s Department of Building Energy Use and Department of Building
Facilities, to conduct a detailed analysis of the opportunities to improve the energy performance
of buildings. The Excel-based model has been developed specifically for the climatic and labor
conditions in the Prešov Region, and was done in collaboration with the PSK staff in the Property
Management Department and energy experts from ENECO.
The energy model has three principal components:
Component 1: Energy demand for heating
Component 2: Energy demand for other facilities – air conditioning, lighting, hot water
Component 3: Data on fuels and energy use (actual billing information), emissions from fuel
use, material and labor costs of energy efficiency measures, and so on
The model estimates the actual heat demand for heating and hot water, and the energy demand
for lighting and air-conditioning. Energy demand is estimated for both the base case established
on existing building characteristics, including any installed thermal insulation. Any variations
in the estimated energy from actual demand, based on energy bills, are reconciled with addi-
tional information from the building. For instance, there could be differences between the energy
purchase and the energy use; although electricity and gas used in a building is consistent with
metered energy use during that period, the usage of other fuels, such as coal and pellets, may not
coincide with the billing period.
The energy demand for heating, post installation of thermal insulation and heat source replacement
as per building codes, is then estimated, to reassess the energy demand and energy use in space
heating. Energy use in other building energy systems is also estimated, based on various energy
efficiency measures that can be installed. EE measures to be implemented are based on their abil-
ity to improve building energy performance and meet class A1 performance standards for each
energy subsystem (that is, class A1 for heating, hot water, lighting, and so on).
The building energy model enables the generation of building certificates that are consistent with
the building energy codes in the country. The model’s components are the same as the energy
codes and performance standards in the Slovak Republic, and therefore could be used, so that
the PSK has baseline energy demand certificates in each energy subsystem of their public build-
ing portfolio. These certificates could be updated based on the estimated energy demand and use,
after the energy efficiency measures have been implemented.
Technical and financial analysis is conducted for each of the EE measures considered in the model.
Emissions of CO2 from energy used in the building is also estimated, based on fuels used in each
energy subsystem.
Strategic Approach to Enhance EE in Public Buildings in the PSK 37
Second level assessment of the PSK buildings based on the use of the building
energy model
Six buildings were identified in the first level of analysis and were selected for further analy-
sis using the building energy model. The buildings included four school facilities, including one
vocational school, and two social facilities, including a health center for the elderly, all with high
energy consumption.
To ensure that the information assessed was correct, the six selected buildings were visited by the
technical experts from the university, ENECO and the PSK to verify and validate the information
in the energy database. Additional information needed for energy modeling was also gathered
from the facilities. For each of the energy efficiency measures proposed, the energy use, invest-
ment costs, operating costs, payback period, and environmental impacts were estimated in the
energy model. The energy efficiency measures shown in the table below have been considered
in the energy modeling.
TABLE 12 Energy efficiency measures considered in energy modeling
Subcomponent EE Measure
Building envelop Thermal insulation: for wall, floor, roof, ceilings, and other building openings
Heating system Replacement of the heat source (boiler) and related modification to the boiler room
Replacement of the heat source (boiler) alone
Hydraulic regulation of heat distribution system
Optimization of heating distribution system
Hot water system Replacement of the hot water heating system
Change the fuel used for heating water
Installation of a solar hot water system
Optimization of the hot water distribution system
Hot water accumulation
Lighting Replacement of existing lights by LED lighting
Source: Authors, 2019
Energy savings, investment and payback period. The results from the modeling of six public build-
ings under the PSK is provided in Table 13. The alternative scenarios in each facility (A, B, and
so on) represent the different energy efficiency measures included in the analysis. For instance,
in the case of the grammar school in Poprad, scenario A includes replacement of the heating and
lighting systems, and scenario B includes insulation of the walls and ceiling. The overall invest-
ment under scenario A is €39,649, and the payback period is about 20 years. Under scenario B, the
investment is €112,353, and the payback period is 22 years. The payback period is more than 15 years
for each of the energy efficiency packages selected for the different buildings. Many EE measures
were changed and tested, to try and discover the optimal result in terms of shorter payback peri-
ods, but the modeling resulted in long payback periods. The long payback periods are consist-
ent with what was found by SIEA, with an average payback period of 33 years for public buildings.
The total investment for the entire portfolio of six buildings, considering only measures that have
lower payback periods, is €857,137.
Detailed results from the energy modeling of the various measures in each of the above consid-
ered public buildings is provided in Annex B.
38 Energy Efficiency of Public Buildings in the Prešov Region
TABLE 13 Results from energy modeling
Source: Authors, 2019
Key takeaways from the results of energy modeling
The modeling of energy efficiency measures in the six selected buildings with the highest energy
consumption potential indicated that the simple payback period, in all cases, for all measures,
is above 15 years. Some of the principal conclusions from the energy modeling are:
• It is not possible to meet A1 building performance standards within a 15-year payback period.
• Thermal insulation of buildings is expensive, and the investment has a simple payback period
of 30 to 58 years. This is principally because changes to the building envelope are expensive
to implement, especially when little maintenance has been done, and thus require invest-
ments beyond energy efficiency measures and public facilities like schools and cultural facil-
ities are underheated.
• Buildings that use electricity as a fuel for space heating or heating hot water are good can-
didates for fuel switching to gas, or the use of heat pumps and solar systems, where possible.
Strategic Approach to Enhance EE in Public Buildings in the PSK 39
• In cases where a building uses coal or wood as a fuel for space and water heating, the payback
period for replacing the system with a new fuel source is not cost-effective. Only replacement
with a more efficient system is recommended.
Replacement of lighting systems with LED is recommended, but it is expensive, given the
cost of replacement of the lamps, fixtures, cabling, sensors, and the increased lighting needed
to meet the lighting norm. The cost assumption was thus €8/square meter, which is aligned
with other similar lighting retrofits.
• The Property Management Department (PMD) at the PSK needs to continue doing level two
assessments to complete about 12 buildings (social services or schools) with the most energy
savings potential, and ensure that there is not a mix of energy efficiency packages that have
a 15-year payback period. This will be important in identifying potential projects for blended
finance (EPC and grant funding).
FINANCING FRAMEWORK FOR THE PSK TO
INVEST IN THE ENERGY EFFICIENCY OF PUBLIC
BUILDINGS
Given the deferred maintenance, most of the public buildings of the PSK will have long payback peri-
ods for energy efficiency investments. Therefore, the formulation of a suitable financing framework
for this work will need to address this reality. As much as the PMD worked with ENECO and the
University of Košice on assessing alternatives for EE measures in the modeling tool, the payback
periods were still 15 to 28 years in the six buildings assessed. These payback periods go beyond the
15 years tenor that is usually the maximum time provided by commercial financing. Thus, alter-
natives need to be identified that will build a blended financing framework that offers lower pay-
back periods that are closer to 15 years for such buildings.
The PSK has three main options for financing EE projects in public buildings, which will need
to be revisited in order to address the issue of the long pay back periods of the investments. One
option is for the PSK to publicly finance the project from the annual PSK budget, as the annual
budget includes provisions for capital expenditures for renovation. However, there are many other
pressing needs for the use of the PSK budget, and a clear strategy to prioritize the EE investments
would be needed. Another alternative is for the PSK to finance the EE projects with commercial
financing from banks, where it could probably obtain financing rates close to 0.5 percent. However,
despite not reaching its official debt limit, the PSK has reached its internal debt limit, and it would
be very unlikely to increase it for EE investments. It is important to note that the PSK is undergo-
ing other sector reforms for which the administration would be more willing to increase its debt
capacity. The central government’s public policy on the EPC Act is also meant to reduce debt lev-
els of the municipalities and public agencies for EE investments. To that end, the government has
worked on the development of the EPC model contract, which is expected to be approved in June
2019, and could provide financing for ESCOs, without counting it as debt to the public agencies.
The PSK needs to find a strategy to make the EPC Act work for the group of projects with payback
periods closer to 15 years, to see how it can tap into these resources for the group of public build-
ings with longer payback periods. A proposed strategy based on the actual long payback periods
is presented below.
The long payback period for implementing EE measures in the PSK buildings implies that it may
not be possible to implement such measures through the EPC Act alone. While the EPC Act does
not limit the time period of the contract, commercial bank financing is unlikely to be available for
tenors longer than 15 years. An option for financing projects with long payback periods is to blend
financing under the EPC with grant financing from ESIF or other EU funds. As per Eurostat guide-
lines,13 any grant financing from EU funds provided to the project is permitted. In contract, the pro-
vision of GoSk funds as grants to co-finance the project will make the entire investment an addi-
tional debt on the books of the public agency, which is something to be avoided when working
within the framework of the EPC Act.
40 Energy Efficiency of Public Buildings in the Prešov Region
TABLE 14 Financing options for EE in public buildings based on simple payback periods
15–22 Years 22–35 Years 35 Years
Description Blended finance between the EPC Act Project financed by the PSK’s Project financed by the PSK’s own
and the PSK’s own resources to bring own resources resources
down the payback period to 15 years
Financing • Mezzanine financing • Public finance • Public finance
• Support from EU funds (OP and • Support from EU funds (OP and • Support from EU funds (OP and
structural funds) structural funds) structural funds)
• Option to refinance after the project is
operational
• Preferential financial products from
the EBRD/EIB for lines of credit or risk
sharing mechanism
Rationale This option shifts the financing burden Projects with payback periods of Projects with payback periods
and the performance risk to the ESCO above 22 years do not generally above 35 years would not qualify
and is well suited for a regional or qualify for commercial bank for any kind of commercial
local government. The EPC Act does financing (or it would be at high financing and should be financed
not place an upper boundary on the interest rates). with public finance of EU-based
payback period or the term of the Grant funds from EU vehicles grants.
EPC contract. However, commercial and GoSK are best set aside for Given the long payback periods, the
financing is typically provided for implementing projects with PMD should assess the social and
tenors under 15 years. these long payback periods. economic feasibility of maintaining
Blended finance combining ESCO the buildings use, as perhaps it may
financing with some grant and/ cost more than the PSK is willing or
or commercial financing could be able to commit for the EE retrofit.
considered (within the guidelines of
the EPC Act) to help bring the payback
period down to 15 years.
Source: Authors, 2019
The PSK has not directly contracted ESCOs to implement EE in public buildings and is keen
to pilot a project under the proposed EPC model contract. But the feasibility of this option needs
to be tested, and the personnel in the Property Management Department (PMD) of the PSK, need
to be trained to implement projects under the EPC Act.
As for the EE projects with payback periods above 22 years, these should be financed by the PSK
budget alone. Projects with these extensive payback periods would not qualify for a commercial
loan, and in the cases where they do, they would have very high interest rates. These projects will
most likely include building envelope insulation, which is costly, as many of the buildings have
not had adequate maintenance since they were originally built. This has an impact on the cost
of the investment, and a long return on investment periods; as SIEA indicated, the average pay-
back period for public buildings is 33 years in the Slovak Republic. The PSK would need to identify
a set of buildings with higher energy saving, as well as the social and economic co-benefits of the
investment, in order to prioritize the buildings where the investments could be done.
In the case of payback periods beyond 35 years, although these can be financed using the PSK’s own
resources, a deeper social and economic assessment of the costs and benefits of doing the EE ret-
rofit should be done. The investment may cost more than the PSK is willing or able to provide for
the EE project. It may well be that the use of the building can be changed so as to use it more
cost-effectively, and thereby avoid locking in investments for the next three decades. Although
this is a broader question on the structure for operating and maintaining public buildings assets
in the PSK, it is an important question to ask to ensure the cost-efficient use of public resources.
Strategic Approach to Enhance EE in Public Buildings in the PSK 41
FINAL CONSIDERATIONS
This report reviews the options for implementing energy efficiency measures in PSK public build-
ings. For this review, the key considerations of the national and regional regulatory energy and
energy efficiency framework were assessed. The readiness of the key stakeholders and implemen-
tation partners, such as the commercial banks, IFIs, ESCOs, and the manufacturers and equip-
ment installers, was gauged. Finally, a review of the existing portfolio of public buildings, and their
financing potential for energy efficiency measures, was done.
The government is developing an EPC model contract designed for ESCOs to finance and imple-
ment EE projects in public buildings and recover costs from guaranteed energy savings. The model
contract is expected to be approved in June 2019 and is structured to enable the public agency not
to incur any debt. It would finance only energy-related investments, without deep building ren-
ovation that may include non-energy related elements. To enhance energy reduction and com-
ply with Slovak national energy saving targets, the act is supposed to enable the public agencies
to keep debt off its books, and thus use this tool, instead of increasing their debt levels to finance
EE in public buildings.
There is uncertainty from key stakeholders about how exactly the provisions of the EPC Act and
its model contract would work for the public agencies. The EPC Act seeks to separate EE projects
from any construction-related elements of a project, which is generally necessary in public build-
ings which need deep renovation. Buildings may have to process separate contracts for construction
and for EE, which may result in a more complex project implementation. The repayments scheme
has now changed, and while before monetary savings from reduced energy and from operation
and maintenance could be used to pay ESCOs, now only the former is allowed. Moreover, under
the EPC Act, ESCOs would have the obligation of the maintenance of the equipment and facility.
Any guaranteed energy saving shortfall would further reduce the revenue stream available to make
a repayment. Lack of capacity in the municipalities and public agencies to develop EPC bids has
also been identified as a key limitation, and support would be needed to prepare and assess audits,
and to identify the EE measures and building standards needed to meet class A1 or A0 standards.
The PSK buildings with higher energy potential could be used as a pilot to test the implementation
of the EPC Act and its model contract in public buildings. The pilot could also be an opportunity
to clarify implementation procedures that could serve as an example to scale up the EPC Act in the
public sector. Commercial banks, the ESCO Association of the Slovak Republic, BoF, and SIEA are
all supportive of developing a pilot project using a few select PSK public buildings with the high-
est potential to test the EPC Act. This is the first EPC model contract complying with Eurostat
guidelines, and the model for public agencies has not been tested anywhere else in Europe. It needs
to be piloted so that the mechanism can be fully understood to ensure that it works with the pub-
lic agencies in the Slovak Republic. The EPC pilot could help develop a standardized framework
and process, with standardized form, monitoring and verification protocols, benchmarking, and
a clear process to identify a pipeline of projects that could potentially be bundled, all with the aim
of testing the model and lowering transaction costs. The EPC pilot could also help identify spe-
cific tailored financial products that may be needed for risk mitigation purposes.
A systematic approach to identify and prioritize energy efficiency projects in public buildings in the
PSK has been proposed. This approach should be complemented by the development of an energy
management system within the PSK’s Property Management Department that, among others,
establishes clear energy reduction targets and reporting protocols for each individual public facil-
ity manager, and a systematic way to prioritize the investments in EE in public buildings. For the
44 Energy Efficiency of Public Buildings in the Prešov Region
latter, a three-stage proposal was developed to identify a longlist of projects, EE measure modeling
to define a shortlist of projects, and the verification of the EE projects for the shortlisted buildings
through site visits or energy audits. For the first stage assessment, the PSK will use a comprehensive
database to first create a longlist of projects based on the statistical analysis of energy intensity and
other building characteristics, as appropriate. The second stage would entail the use of the build-
ing energy model developed under this activity to identify energy efficiency measures, the invest-
ment needed and its economic rate of return, the payback period, as well as to compile a short-
list of projects. The shortlist of projects would then be examined in detail through site visits and
energy audits, if necessary. The outcome of this analysis would subsequently be used to prepare
bid documents and to invite service providers to implement projects.
An investment framework is proposed to finance projects with different payback periods, and
a blended finance approach is proposed for EE projects to bring payback periods down to 15 years,
to be able to benefit from the EPC Act. The assessment using the building energy model indicated
that EE projects will generally have payback periods longer than 15 years. It is recommended that
a blended finance approach be taken, whereby EU grant financing is used to bring down the pay-
back period to 15 years so that a contract with an ESCO can be used for implementation under
the EPC Act. EE Projects with payback periods longer than 22 years are proposed to be financed
directly by the PSK with its own budget funds.
However, for projects with payback periods longer than 35 years, a broader discussion needs to take
place on what is the most cost-effective way to manage the PSK’s public buildings assets. Many
buildings are past their useful life, due to deferred maintenance, and would cost more than the PSK
is willing or able to commit to its renovation. Therefore, a social and economic assessment of the
cost-effectiveness of undergoing the EE retrofit, as compared with, for example, building a new
facility meeting class A0 standards or changing the buildings use, should take place. What will
be important for this discussion is for the PSK’s Property Management Unit to have an updated
record of all assets, in order to strategically evaluate them. This record should include: property
ownership; operation costs, including the energy consumption level; and legal status. With more
and better information, the PMU can make informed decisions aligned with the goals of the
PSK’s leadership.
Final Considerations 45
ANNEX A
INTENSITY OF ENERGY USE IN A FEW
DIFFERENT TYPES OF FACILITIES AND
BUILDINGS IN THE PSK
The graphs below illustrate energy intensity in specific types of buildings within a facility. Data for schools and social
services facilities under the PSK is illustrated.
FIGURE A1 Energy intensity for classrooms in hotel academies
FIGURE A2 Energy intensity for classrooms in vocational schools
Source: Authors, 2019
46 Energy Efficiency of Public Buildings in the Prešov Region
FIGURE A3 Energy intensity for accommodations in all social services facilities
FIGURE A4 Energy intensity for accommodations in social services facilities used 5 days a week
FIGURE A5 Energy intensity for accommodations in social services facilities used 24/7
Source: Authors, 2019
47
ANNEX B
RESULTS FROM THE ENERGY
MODELING OF PUBLIC BUILDINGS
IN THE PSK
48 Energy Efficiency of Public Buildings in the Prešov Region
Results from the analysis of SZS, grammar school, Poprad (scenario A)
49
50
Results from the analysis of SZS, grammar school, Poprad (scenario B)
Energy Efficiency of Public Buildings in the Prešov Region
Results from the analysis of DSS, Hanusovce, 24/7 social services facility (scenario A)
51
52
Results from the analysis of DSS, Hanusovce, 24/7 social services facility (scenario B)
Energy Efficiency of Public Buildings in the Prešov Region
Results from the analysis of DSS, Hanusovce, 24/7 social services facility (scenario C)
53
Results from the analysis of SPS SNINA, grammar school
54 Energy Efficiency of Public Buildings in the Prešov Region
Results from the analysis of SOS PORAD, vocational school with dormitory
55
56
Results from the analysis of OA STARA LUBOVNA, grammar school
Energy Efficiency of Public Buildings in the Prešov Region
Results from the analysis of DSS BREZOVICKA, 24/7 social services facility
57
NOTES
1. https://www.mhsr.sk/energetika/energeticka-politika 9. According to the World Economic Forum’s Global Compe-
2. PRIMES is a partial equilibrium model of the EU energy titiveness Report 2017-2018, Slovakia has the third soundest
system providing projections for the medium and long term banking sector in the Euro area.
starting from 2010 and running up to 2030 with results for 1 0. The Government of the Slovak Republic has enacted Act
every fifth year. 4/2019 Amendment to the EE Act for public buildings.
3. Regional Operational Program, the Operational Program 1 1. Eurostat provides additional methodological guidance docu-
Bratislava Region, and the Operational Program Competiti- mentation on the accounting rules for the EDP statistics and
veness and Economic Growth. the GFS complementing or interpreting of the general rules
4. Joint European Support for Sustainable Investment in City of ESA 2010. Guidance notes are released under the respon-
Areas - an initiative of the European Commission develo- sibility of Eurostat, after the consultations with EU Member
ped in cooperation with the European Investment Bank States. In May 2018, the document A Guide to the Statistical
(EIB) and the Council of Europe Development Bank (CEB). Treatment of Energy Performance Contracts was published.
It supports sustainable urban development and regeneration More information at: https://ec.europa.eu/eurostat/docu-
through financial engineering mechanisms. ments/1015035/8885635/guide_to_statistical_treatment_of_
epcs_en.pdf/f74b474b-8778-41a9-9978-8f4fe8548ab1
5. Eko-Fund was founded by the Slovak Gas Industry (SPP)
in 2007 with an aim to promote and protect the environ- 1 2. The administrative buildings of the town and municipalities
ment, support efficient energy use, and support dissemina- are not owned by the PSK. Elementary and middle schools,
tion and awareness of information. as well as other public buildings owned by the towns and
municipalities, are not included in the table.
6. The European Bank for Reconstruction and Development
(EBRD) established a credit line to support EE in Slovak 3. Eurostat provides additional methodological guidance docu-
1
municipalities called MunSEFF. MunSEFF is a municipal mentation on the accounting rules for the EDP statistics, and
instrument to finance sustainable energy investments. The the GFS complementing or interpreting of the general rules
facility provides financing of energy efficiency and renewable of ESA 2010. Guidance notes are released under the respon-
energy investment opportunities channeled through local sibility of Eurostat, after the consultations with EU Member
banks. The credit line is supported by a technical assistance States. In May 2018, the document A Guide to the Statistical
package that helps sub-borrowers prepare loan applications, Treatment of Energy Performance Contracts was published.
and educates local bank officers in sustainable energy invest- More information at: https://ec.europa.eu/eurostat/docu-
ment opportunities and credit appraisal methods. ments/1015035/8885635/guide_to_statistical_treatment_of_
epcs_en.pdf/f74b474b-8778-41a9-9978-8f4fe8548ab1.
7. https://tradingeconomics.com/slovakia/gdp-growth-annual.
8. Slovak banking Association (https://www.ebf.eu/slovakia/).
58 Energy Efficiency of Public Buildings in the Prešov Region