Subtask F: Business, Legal and Financial Aspects of Net Zero Energy Master Planning

Subtask F will address three major challenges for the practical implementation of the low energy or NZE resilient community:

 Legal requirements. Planning of an NZE community usually has to account for the legal aspects being defined by national energy requirements and the spatial or urban planning requirements. Currently, national energy requirements focus primarily on the building level. Spatial planning in urban regions does not usually consider specific energy requirements, nor is it likely to raise barriers for the development of NZE communities. The definition and execution of “resilience” concepts, if they exist at all, are not yet well defined, neither for buildings nor for communities. To address these barriers, Subtask F focuses on the following three topics:

  • F1: Collection of relevant legal requirements for the refurbishment of buildings and neighborhoods for each participating country. Evaluation of organizational requirements to facilitate and conduct the EMP process on the project level.  
  • F2: Summary of energy security/resilience requirements to different building types (focusing on mission-critical buildings) and resilience of power and thermal energy supply scenarios, which will be collected based on criteria defined in Subtask A. The data will be collected using industry standards, case studies collected and evaluated in Subtask B, and analysis carried out in Subtask C.
  • F3: Community planning processes. Currently many national legislations on urban and spatial planning are revised to optimize energy requirements to individual buildings and to building clusters with the goal to achieving low energy/ NZE communities. This information, which will be collected under Subtask B using interviews, will be discussed and finalized at experts’ workshops.

Business Models. Business models can help to increase the cost effectiveness and available funding sources of NZE concepts by monetizing energy and non-energy related benefits and values.  Existing utility level business models do not consider NZE community concepts. Subtask F will assess drivers that are necessary to develop, promote, and implement the NZE concept along with associated revenue streams and incentives required for its implementation. In comparison with business models currently used in the planning of “normal” neighborhoods and military installations, business models to be used for planning of NZE resilient communities will be more sophisticated. The architecture for energy generation, distribution, and storage for an NZE resilient community will require a good understanding of energy needs for the whole community and for mission-critical facilities on the daily and annual bases; and a flexible but reliable energy supply with consideration of variations in energy availability and prices. Energy utility business model shall account for:

The implementation of sustainable used renewables on site requires specific knowledge of how to operate and account for the energy balance in and off the grids, including storage and usage of RE-generated power in mobility and other value-added ways that maximize revenues for the NZE community.

The losses that can be avoided by maintaining operation during extreme events. The connection of these short-term avoided losses to long-term revenues in the other categories (e.g., connection between business continuity and resilience).

NZE requires the creation of high flexible energy purchase schemes to make use of available RE and CHP power production and to fill the remaining energy demand; that part of energy production that cannot be used onsite must be distributed in the market under optimal conditions.

Buildings must be modeled and operated as energy hubs that create demands for operational skills far beyond the skillsets associated with “normal utility businesses.”

The accounting of all financial revenues and expenditures generated by and in the NZE community must be conducted under the premise of revenue optimization. This will also require specific operational skills.

The major working areas are:

  • F4: Assessment of legal requirements to utilities and grid companies. Development of NZE    communityrequires a good understanding of how these requirements affect energy generation and storage.
  • F5: Understanding of different services responsible for generation, storage, and distribution of energy from  renewable energy sources and their interaction with companies responsible for large scale HP & CHP.
  • F6: Assessment of risks and identification of de-risking tools for the establishment of NZE public communities.
  • F7: Assessment of revenue and cost streams; definition of measurement and verification methods for each of R&C.

Funding sources. In addition to the limited understating of technical aspects of NZE communities, shortage of funding is the major obstacle for the implementation of this concept. In the public and military sectors, scarce appropriate funding and limited access to bank loans has to be considered as the major financial impediment. In the private sector, e.g., in business parks and housing areas, the lack of experience and performance data combined with the difficulty in estimating technical and financial risks prevent private investors from spending money in NZE projects.

  • F8: Evaluate the existing financing models for the NZE concepts in the public and commercial (housing) sectors with regard to different funding mechanisms (e.g., appropriation funds, grants, 3rd party financing). The analysis of financing models will focus on the single-ownership communities (MOD, Federal estates, universities) and the typical funding sources used in the participating countries such as public, public-private, and private funding sources; bank loans, closed and open funds; or more specific approaches such as Property Assessed Clean Energy (PACE), or utility bill payments (which are used in the United States).

Subtask F deliverables. Subtask F will result in at least one structured example for each participating country of a financial and business model for a public community. Developed business schemes will be performance based and will address bankable benefits beyond the BAU approach (energy savings). The Subtask F team will develop the following contributions to the “Guide for NZE planning in public and military building communities”:

  • Major Legal Frameworks relevant to the implementation of NZE
  • Financing strategies, financial and business models to be incorporated into A “Guide for NZE planning in public and military building communities”  The subtask members will organize workshops geared toward community planners, designers/architects, ESCOs, and utility companies
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