Vlaams Energiebedrijf

Regional Energy Services Company Vlaams Energiebedrijf - VEB

Program Authority:

Flemish Region

Program Delivery Unit :

Vlaams Energiebedrijf NV

Summary

The “Vlaams Energiebedrijf NV” (VEB), a Flemish External Independent Agency under the form of a Publicly owned Limited Company, was incorporated by the Flemish Government in 2012. VEB's existence and incorporation has been highly driven by the political situation in Belgium since 2009 (e.g. transfer of federal competences to the regions) and is the result of certain Flemish political parties' desire to create a Flemish alternative to the existing incumbent energy company in Belgium.

VEB’s purpose from the beginning was to facilitate, deliver and coordinate energy services to realise energy efficiencies in public buildings, to facilitate or be a player in the electricity (green and/or decentralised production) and gas market (cogenerating) or the electricity and gas delivery market and to facilitate or be a player in the market of Green Certificates and Cogeneration Certificates.

Since the incorporation the scope of its ambition and activities has been changing and today the VEB’s focus is on being a Central Purchasing body for energy, on facilitation of Energy Efficiency investments of the Flemish public institutions both central as local.

As a central purchasing body it targets 30% share of the Flemish public institutes and has the ambition to generate, after 3 years, 40M€ yearly energy savings with these targeted Flemish authorities.

As to its energy efficiency programme the VEB is targeting 1200 Flemish public buildings with a current energy baseline of 100M €. The VEB aims at achieving 25% energy savings from energy efficiency measures, or €25M of yearly savings.

VEB went really operational in the course of 2014 and today it counts about 60 customers for group purchasing of energy (about 8% of the market) and it reached for the 1st quarter of 2015 annualised savings of 12M € (9,8M € energy and 2,2M € admin/billing expenses), or 20% savings on the energy bill.

Recently VEB managed to successfully complete the tender of a building energy efficiency project (Energy and Maintenance Performance Contracting (EMPC model) and was in the process of tendering 2 other projects.

Documents

Vlaams Energiebedrijf FR [1]

Vlaams Energiebedrijf EN [2]

Vlaams Energiebedrijf ES [3]

Vlaams Energiebedrijf BG [4]

Overview

Ownership:

Public [5]

Implementation Model:

Energy Performance Contracting (EPC) [6]

Operating Services:

Marketing [7]

Aggregation [8]

Facilitation [9]

Assessment [10]

Type of Project:

Energy Efficiency (building retrofits) [11]

Ambition/Targets:

Up to 35% reduction of energy consumption [12]

Benificiaries:

Public Sector [13]

Funding Vehicle:

Financial Institutions [14]

ESCOs [15]

Property Owner [16]

Financial Instruments:

Equity/Own funds [17]

Loans [18]

EPC financing [19]

Scalability of the Model:

High [20]

Development Maturity:

Growth [21]

Financing Model

Model Description

How does it work?

Energy Supply programme

Flemish public sector organisations interested in decreasing their energy bill can adhere to VEB as Central Purchasing Body for the Flemish authorities without having to go through a public tendering process.
The VEB becomes the energy supplier of the Flemish public organisation once the existing energy delivery contracts have been transferred to the VEB. It will buy or produce energy and will charge it at cost to its public customers.

Energy efficiency programme

Flemish public sector organisations interested in achieving energy savings through Energy and Maintenance Performance Contracting (EMPC) can apply for the services of the VEB.
The VEB, in its role as facilitator, will then support the organisation through the whole process from baseline definition and analysis up to the tendering of the project and contract negotiation. The VEB can also support the organisation during the implementation phase and operations.
Through the application of standardised quotes and contracts the VEB guarantees its customers shortened lead times.
The chosen ESCO installs the energy efficiency measures or, if applicable, carries out the retrofit works and delivers the service. During an agreed period of time, often around 10 years, the building owner or public organisation uses part or all of the energy savings to remunerate the ESCO for its services and the upfront investment. After the contract period the public organisation has the full benefit of the energy savings.
Funding of the investments under this model is being secured in a rather classical way through own funding or by borrowing (e.g. loans) taken either by the ESCO or by the public authority.
VEB is offering its services to the Flemish authorities and other authorities in Flanders at cost as it is not the intention to generate profits at the legal entity level.

Organization and Partnerships

Vlaamse Gewest (Flemish Region): program owner and political initiator, control of VEB through PMV (Flemish Region is sole shareholder of PMV).

Participatiemaatschappij Vlaanderen (PMV): Is an investment company and majority shareholder of VEB since May 2015. Has taken over the role of investor of the VEB since 2015.

Vlaams Energiebedrijf (VEB): developed the staff, procedures, tools and services for the program. Offers the program delivery unit services: marketing and promotion, project facilitation, aggregation and energy services provision.

Beneficiaries

Beneficiaries:

Flemish authorities

Local authorities

Operational Support:

Projects facilitation through the project delivery unit

Financial Support:

Projects facilitation costs charged at cost

Program Delivery Unit

VEB is the program delivery unit of the Flemish Region’s energy savings and rational energy consumption programme. It is a Flemish External Independent Agency under the form of a Publicly owned Limited Company participated by the PMV –Participatiemaatschappij Vlaanderen (a Flemish investment company owned by the Flemish Region).

Currently the unit operates mainly as a Central Purchasing Body for energy (electricity and gas) for the Flemish authorities though it is also licensed to deliver to other regional authorities. VEB buys energy (100% green electricity and gas) in the short term market (spot market) and sells it to the Flemish government and public institutions. This includes sourcing, administrative tasks such as billing and customer contact.

On energy efficiency projects the unit acts in the first place as programme marketer and facilitator.

It has mainly 2 objectives:

Make Flemish Region buildings more energy efficient through facilitation of energy efficiency projects by inventorying the energy consumption in Flemish public buildings and by enabling the rational use of energy through EPC contracting and pooling of buildings
Deliver (cheaper) energy to the Flemish authorities through group purchasing (Central Purchase Body model)

VEB got an initial paid-in equity of 50M€.

Currently VEB has 16 staff of whom the vast majority is dedicated to operating the central purchasing of energy function. Yearly operating costs for energy efficiency are currently rather low as VEB is in its early stage of facilitation of energy efficiency in public buildings. It recently managed to successfully tender its first EPC/ESCO project for its customer OPZC Rekem (Psychiatric centre).

Program Delivery Unit Box

Legal Structure:

Extern verzelfstandigd agentschap in de vorm van een Naamloze Vennootschap (Flemish External Independent Agency under the form of a Publicly owned Limited Company)

Equity:

50 000 000.00€

Shareholders:

PMV - Participatiemaatschappij Vlaanderen

Staff Requirements:

More than 10 full time employee [22]

Operational Costs:

Less than 10 million EUR [23]

Impact on Public Balance Sheet:

High [24]

Financial Details

Funding Mechanism

Delivery Unit Funding:

VEB has been funded by the shareholders (Flemish Region) and has currently 50M € equity.

Projects Funding:

Projects are mostly being funded by the beneficiaries own funds or possibly by the ESCOs.

Results

VEB shows the following results as of May 2015:

Energy supply:

March 2015: delivery volume of 800GWh ( 385 GWh electricity and 415 GWh gas) to 57 customers (CPB-model) or 8% of total market.

May 2015: savings of € 12M in 2015 (9,8M € energy and 2,2M € admin/billing expenses), or 20% savings on energy bill

Energy efficiency:

VEB has one building energy efficiency project with OPZC Rekem (Psychiatric centre) successfully tendered based on the EMPC model. Currently it is in the process of tendering 2 other projects (De Vlaamse Opera (Flemish Opera) and BLOSO Gent (Regional Sports administration of Flemish authorities).

Contacts

Vlaams EnergieBedrijf

Tour & Taxis
Koninklijk Pakhuis 301 (4e verd.)
Havenlaan 86C
1000 Brussel

Telephone:

+32 2 421 32 00

E-Mail:

info@vlaamsenergiebedrijf.eu [25]

Website:

http://www.vlaamsenergiebedrijf.eu [26]

Sources

http://www.vlaamsenergiebedrijf.eu/ [27]
Crabbé Sven, Het Vlaams EnergieBedrijf. Drie pijlers, één focus, 03 February 2015
Goessens Inge, Energie aanpak eigen gebouwen: zelf doen? Energieprestatiecontract? , 07 May 2015
Gryffroy Andries, Het Vlaams EnergieBedrijf. Drie pijlers, één focus, Project ESCO Limburg 2020, 28 March 2014
Advies Machtiging oprichting Vlaams Energiebedrijf, published by Sociaal-Economische raad van Vlaanderen, 26 January 2011
Annual Accounts 2013, Jaarrekening 2013 Vlaams Energiebedrijf
Annual Accounts 2014, Jaarrekening 2014 Vlaams Energiebedrijf
Corporate Governance Charter, Vlaams Energiebedrijf, Meeting of the Board of Directors, 10 August 2012
Decreet houdende machtiging tot oprichting van het privaatrechtelijk vormgegeven extern verzelfstandigd agentschap NV Vlaams Energiebedrijf, Belgian Official Gazette, 10 August 2011
Energielevering Vlaams EnergieBedrijf: resultaten 1e kwartaal 2015 en vooruitzichten 2016, published by Vlaams EnergieBedrijf, 2015
Energierapport januari 2015, published by Vlaams EnergieBedrijf, 2015
Gedachtewisseling over het businessplan van het Vlaams Energiebedrijf, published by Flemish Parliament, 07 June 2013
Vlaams Energiebedrijf probeert doorstart te maken, article published in De Tijd, 09 May 2014