Enerkidz

AI Quick Summary

Our company takes in charge the energy renovation for the owner of a building. We find external investors for financing the energy renovation. We organize the renovation with retrofitting companies. Final energy users (tenants) of the building pay off the renovation to investors with their reduced energy bills. Our company is paid on commission of the total cost of the renovation 4-8% and 1% annual fee to manage the investments. Project idea description What problem would you like to solve? The problem we solve is the low speed in energy renovation of buildings to fulfill Confederation’s goal 2050. Today there are 2.8 millions of buildings in Switzerland [1]. Only 1% is renovated per year. At this rate it will take 100 years to renovate all the buildings. This rate would be too slow to succeed in energy transition [2]. Building owners have the power to decide whether to renovate their buildings or not. But owners are reluctant to renovate their buildings because of the following reasons:- Return on investments are too long and too low- Missing information and knowledge on what renovations they should do- They have no guarantees on energy savings, CO2 reduction and return on investment- Conflict between tenants and owners => owners are paying the energy renovation but tenants are profiting from energy savings In order to solve this problem our company takes in charge the energy renovation for the owner of the building. We find external investors for financing the energy renovation. We organize the renovation with retrofitting companies. Final energy users (tenants) of the building pay off the renovation to investors with their reduced energy bills. Our company is paid on commission of the total cost of the renovation 4-8% and 1% annual fee to manage the investments. Our company owns the energy contract and is in charge of distributing profit to investors. Example Jacques lives with his family in his apartment in chemin du Mont-Blanc in Chênes-Bougeries, Geneva. In December 2020 Jacques pays for the whole year 3840 CHF for heat and electricity. Jacques is announced that prices with inflation had gone up and that he will pay +30% on his energy bill by the end of 2022 that is to say 3840+1152= 4992 CHF. With our service we organize and finance the energy building renovation. We guarantee to Jacques -15% on his 2020 energy bills. That is 3’840-576 =3'264 CHF/year. This amount will be stable for 25 years so he has no more surprises on prices going up. Prizes of energy are predicted to go up steadily in the future. So on the long-term Jacques could expect an average saving of -30%. That is 28'800 CHF for the whole period. Instead of paying in 2022 +30% he will end up paying -30% each year on his energy bill for 25 years! Because of our building energy renovation the real amount of energy bill of Jacques apartment is 65% lower than is used to be. That is, 3’840-2’496= 1'344 CHF/yr. Our company takes the difference between Jacques’s -15% contracted bill and the « real » bill and give it to investors. That is 3’264-1’344= 1'920 CHF. This amount is paid to investors, which gives back a return on investment of 4-5%. Note on Swiss market of energy contracting Our business model is similar to energy contracting. A study of energy contracting Swiss market points out that market is still young and growth is expected to be moderate to strong with low competition [3]. Moreover the energy prices rising rapidly these last two years constitute a strong driver for our business. Who are the customers and how will they profit from a solution? Our customers are building owners, final energy users (tenants) and investors. Our business concept has loads of advantages:- The tenants are guaranteed a stable prize on energy bills and a reduction on their bills off 15-25%- Building owners don’t have to invest and assume the risk of the renovation- Building value, because of the renovation, increases +15%- External investors profit form 4-5% return on investment with hyper local and concrete renewable investment with CO2 credits. How does your challenge affect energy savings or CO2 emissions? Buildings in Switzerland are responsible for 23,9% of CO2 emissions of Switzerland. That is 10,4 million tonnes CO2/year [1]. In terms of energy the building stock consumes 40% of total energy in Switzerland. This amount corresponds to 90 TWh/yr in which 70% is for heating [4]. The objective of the Confederation is 65 TWh in 2050 for the building stock [4]. This corresponds to a reduction in energy consumption of 28%. This would need an investment of 2.1 billions CHF/year [5]. In a recent study, Kristina Orehounig has evaluated the potential CO2 emissions reduction by retrofitting buildings to be 60-80%[6]. Current status and previous activities What has been tried before? What was not successful? What have you learned? Enron Energy Services is a typical case of failure in the similar business we are creating. Enron guaranteed a fixed price of energy [7]. The risk was too great for Enron to support. When prices of energy rose, the finale energy consumer always had to pay the same price for energy. So there was no more profitability for Enron. Moreover Enron calculated profitability with expected prices of energy to drop. A good way to solve this problem is by sharing the risk. Profitability of a project has to be calculated considering the price of energy rising. If the price rises more than expected a certain buffer is allowed so our company assumes the risk but past this buffer the final energy consumer has to assume the risk. Another good way to share the risk, is by taking insurance. Cantons or private insurance can assume the risk if profitability is lower than expected. Another problem is that Enron was taking projects without proper audits of the building so expectations in energy savings and profitability were way off. Audits should be done properly for every building. Moreover, the owner of the building should finance audits. This will engage the owner and reduce risks for our business. A case of success similar to our business was the Eithad Dubai Super Esco. From 2014 to 2017 cumulative energy savings went from 4.4 to 194 million KWh [8]. This success shows the potential of our business model. Resources needed What are your planned work packages? How Energy Lab can help you? WP1: Co design and co creation of contract template with key stakeholders Here the goal is to co-create and co design offers with the different stakeholders. The goal is to develop different types of offers with different types of stakeholders. We can then use these offers as models and replicate them with other clients. This will allow in scaling up the process. Step 1 Identify stakeholdersStep 2 Organise meetings and workshopsStep 3 Co-design different types of deal models Step 4 Build partnerships Here Energy lab can help us with contacts with stakeholders. Energy Lab can give a business perspective on how to create these kinds of contract templates. Identified stakeholders: Banque Alternative Suisse, banque Lombard Odier, Swissesco, Office cantonal de l’énergie OCEN, SwissLife and Asloca WP2 : Building map, showcase site and online community The goal here is to build an online building map. This map will give different scenarios of retrofitting for each building in Geneva. Scenarios are classified with parameters of profitability and CO2 emissions. The virtual map allows anyone to click on a building and see the different scenarios for retrofitting. It will be similar to a solar map but for building retrofitting instead of solar panels. Data, models and scenarios will come from the study done by Kristina Orehounig [4].This map will also allow us to have more precise idea of Geneva’s market for our business. On the building map we will implement functionalities of a community platform. Each stakeholder can participate and co-create the retrofitting project for their building online. This will allow to scale up and replicate WP1. These functionalities will allow us to form a strong online community. This platform will also have a showcase website with information about our business. Energy Lab can help us in financing part of this platform WP3: Register the company and starting the first projects First step is to register the company and create the contracts with the associates. The next step will be to conclude the first contracts with a set of clients in order to start our business. Energy Lab can help us with strategic advice on contracts with associates and in financing the lawyer fees for creating the contracts WP4: Stretch the process nationwide and to neighboring countriesRepeat the process nationwide for Switzerland. Then stretch to neighboring countries France, Italy and Germany. Energy Lab can help in similar ways as WP1, WP2 and WP3 References[1] Indicateurs de l’évolution des émissions de gaz à effet de serre en Suisse (1990-2020), OFEV avril 2022[2] Rénover le bilan énergétique: D'abord trier, puis redeveloper, https://www.admin.ch/gov/fr/accueil/documentation/communiques.msg-id-84812.html[3] Monitoring du marché des contrats de performances énergétique en Suisse, Swissesco, novembre 2021[4] Parc immobilier 2050 – Vision OFEN, version 1er mars 2022[5] Besoins en investissement et financement pour la neutralité climatique de la Suisse d’ici 2050, Association Suisse des Banquiers, août 2021[6] Optimal Retrofitting Measures For Residential Buildings At Large Scale: A Multi-Objective Approach, Kristina Orehounig, EMPA, janvier 2019[7] Contracting the Gap: Energy Efficency Investment and Transaction Costs, page.115, Sandra Klinke, Université de Neuchâtel, July 2017[8] Super Esco: an innovative approach to unlock energy efficency potential, Econoler

Project Idea Metadata

• Project Idea Name: Enerkidz
• Date: 3/7/2023 1:15:45 PM
• Administrators:
  • Jean VENTURA

Project Idea Description

Project idea description

What problem would you like to solve?

The problem we solve is the low speed in energy renovation of buildings to fulfill Confederation’s goal 2050. Today there are 2.8 millions of buildings in Switzerland [1]. Only 1% is renovated per year. At this rate it will take 100 years to renovate all the buildings. This rate would be too slow to succeed in energy transition [2].

Building owners have the power to decide whether to renovate their buildings or not. But owners are reluctant to renovate their buildings because of the following reasons:

- Return on investments are too long and too low

- Missing information and knowledge on what renovations they should do

- They have no guarantees on energy savings, CO2 reduction and return on investment

- Conflict between tenants and owners => owners are paying the energy renovation but tenants are profiting from energy savings

In order to solve this problem our company takes in charge the energy renovation for the owner of the building. We find external investors for financing the energy renovation. We organize the renovation with retrofitting companies. Final energy users (tenants) of the building pay off the renovation to investors with their reduced energy bills. Our company is paid on commission of the total cost of the renovation 4-8% and 1% annual fee to manage the investments. Our company owns the energy contract and is in charge of distributing profit to investors.

Example

Jacques lives with his family in his apartment in chemin du Mont-Blanc in Chênes-Bougeries, Geneva. In December 2020 Jacques pays for the whole year 3840 CHF for heat and electricity. Jacques is announced that prices with inflation had gone up and that he will pay +30% on his energy bill by the end of 2022 that is to say 3840+1152= 4992 CHF.

With our service we organize and finance the energy building renovation. We guarantee to Jacques -15% on his 2020 energy bills. That is 3’840-576 =3'264 CHF/year. This amount will be stable for 25 years so he has no more surprises on prices going up. Prizes of energy are predicted to go up steadily in the future. So on the long-term Jacques could expect an average saving of -30%. That is 28'800 CHF for the whole period. Instead of paying in 2022 +30% he will end up paying -30% each year on his energy bill for 25 years!

Because of our building energy renovation the real amount of energy bill of Jacques apartment is 65% lower than is used to be. That is, 3’840-2’496= 1'344 CHF/yr. Our company takes the difference between Jacques’s -15% contracted bill and the « real » bill and give it to investors. That is 3’264-1’344= 1'920 CHF. This amount is paid to investors, which gives back a return on investment of 4-5%.

Note on Swiss market of energy contracting

Our business model is similar to energy contracting. A study of energy contracting Swiss market points out that market is still young and growth is expected to be moderate to strong with low competition [3]. Moreover the energy prices rising rapidly these last two years constitute a strong driver for our business.

Who are the customers and how will they profit from a solution?

Our customers are building owners, final energy users (tenants) and investors. Our business concept has loads of advantages:

- The tenants are guaranteed a stable prize on energy bills and a reduction on their bills off 15-25%

- Building owners don’t have to invest and assume the risk of the renovation

- Building value, because of the renovation, increases +15%

- External investors profit form 4-5% return on investment with hyper local and concrete renewable investment with CO2 credits.

How does your challenge affect energy savings or CO2 emissions?

Buildings in Switzerland are responsible for 23,9% of CO2 emissions of Switzerland. That is 10,4 million tonnes CO2/year [1]. In terms of energy the building stock consumes 40% of total energy in Switzerland. This amount corresponds to 90 TWh/yr in which 70% is for heating [4].

The objective of the Confederation is 65 TWh in 2050 for the building stock [4]. This corresponds to a reduction in energy consumption of 28%. This would need an investment of 2.1 billions CHF/year [5]. In a recent study, Kristina Orehounig has evaluated the potential CO2 emissions reduction by retrofitting buildings to be 60-80%[6].

Current status and previous activities

What has been tried before? What was not successful? What have you learned?

Enron Energy Services is a typical case of failure in the similar business we are creating. Enron guaranteed a fixed price of energy [7]. The risk was too great for Enron to support. When prices of energy rose, the finale energy consumer always had to pay the same price for energy. So there was no more profitability for Enron. Moreover Enron calculated profitability with expected prices of energy to drop. A good way to solve this problem is by sharing the risk. Profitability of a project has to be calculated considering the price of energy rising. If the price rises more than expected a certain buffer is allowed so our company assumes the risk but past this buffer the final energy consumer has to assume the risk. Another good way to share the risk, is by taking insurance. Cantons or private insurance can assume the risk if profitability is lower than expected.

Another problem is that Enron was taking projects without proper audits of the building so expectations in energy savings and profitability were way off. Audits should be done properly for every building. Moreover, the owner of the building should finance audits. This will engage the owner and reduce risks for our business.

A case of success similar to our business was the Eithad Dubai Super Esco. From 2014 to 2017 cumulative energy savings went from 4.4 to 194 million KWh [8]. This success shows the potential of our business model.

Resources needed

What are your planned work packages? How Energy Lab can help you?

WP1: Co design and co creation of contract template with key stakeholders

Here the goal is to co-create and co design offers with the different stakeholders. The goal is to develop different types of offers with different types of stakeholders. We can then use these offers as models and replicate them with other clients. This will allow in scaling up the process.

Step 1 Identify stakeholders

Step 2 Organise meetings and workshops

Step 3 Co-design different types of deal models

Step 4 Build partnerships

Here Energy lab can help us with contacts with stakeholders. Energy Lab can give a business perspective on how to create these kinds of contract templates.

Identified stakeholders: Banque Alternative Suisse, banque Lombard Odier, Swissesco, Office cantonal de l’énergie OCEN, SwissLife and Asloca

WP2 : Building map, showcase site and online community

The goal here is to build an online building map. This map will give different scenarios of retrofitting for each building in Geneva. Scenarios are classified with parameters of profitability and CO2 emissions. The virtual map allows anyone to click on a building and see the different scenarios for retrofitting. It will be similar to a solar map but for building retrofitting instead of solar panels. Data, models and scenarios will come from the study done by Kristina Orehounig [4].

This map will also allow us to have more precise idea of Geneva’s market for our business. On the building map we will implement functionalities of a community platform. Each stakeholder can participate and co-create the retrofitting project for their building online. This will allow to scale up and replicate WP1. These functionalities will allow us to form a strong online community. This platform will also have a showcase website with information about our business.

Energy Lab can help us in financing part of this platform

WP3: Register the company and starting the first projects

First step is to register the company and create the contracts with the associates. The next step will be to conclude the first contracts with a set of clients in order to start our business.

Energy Lab can help us with strategic advice on contracts with associates and in financing the lawyer fees for creating the contracts

WP4: Stretch the process nationwide and to neighboring countries

Repeat the process nationwide for Switzerland. Then stretch to neighboring countries France, Italy and Germany.

Energy Lab can help in similar ways as WP1, WP2 and WP3

References

[1] Indicateurs de l’évolution des émissions de gaz à effet de serre en Suisse (1990-2020), OFEV avril 2022

[2] Rénover le bilan énergétique: D'abord trier, puis redeveloper, https://www.admin.ch/gov/fr/accueil/documentation/communiques.msg-id-84812.html

[3] Monitoring du marché des contrats de performances énergétique en Suisse, Swissesco, novembre 2021

[4] Parc immobilier 2050 – Vision OFEN, version 1er mars 2022

[5] Besoins en investissement et financement pour la neutralité climatique de la Suisse d’ici 2050, Association Suisse des Banquiers, août 2021

[6] Optimal Retrofitting Measures For Residential Buildings At Large Scale: A Multi-Objective Approach, Kristina Orehounig, EMPA, janvier 2019

[7] Contracting the Gap: Energy Efficency Investment and Transaction Costs, page.115, Sandra Klinke, Université de Neuchâtel, July 2017

[8] Super Esco: an innovative approach to unlock energy efficency potential, Econoler

Our company takes in charge the energy renovation for the owner of a building. We find external investors for financing the energy renovation. We organize the renovation with retrofitting companies. Final energy users (tenants) of the building pay off the renovation to investors with their reduced energy bills. Our company is paid on commission of the total cost of the renovation 4-8% and 1% annual fee to manage the investments.