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Beschreibg Druckformatvorlage

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Beschreibg Druckformatvorlage

    Fundacja na rzecz Efektywnego Wykorzystania Energii

    Public Procurement of

    Energy Saving Technologies

    in Europe

    (PROST)

Report on the Country Study for Hungary:

    Task 2a Current Public Sector Purchasing, Building,

    and Replacement Practices

    Task 4b PICO Feasibility Study

    January 2002

    Adam Gula (co-ordinator of report)

    Arkadiusz Figórski

PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    1 EXECUTIVE SUMMARY ..............................................................................................................3 1.1 ENERGY EFFICIENCY IN CURRENT PUBLIC SECTOR PURCHASING, BUILDING, AND REPLACEMENT PRACTICES ...................................................................................................................3

    1.2 PUBLIC INTERNAL PERFORMANCE CONTRACTING (PICO) ........................................................4

    2 GENERAL INFORMATION ON THE POLITICAL, LEGAL, AND ECONOMIC

    FRAMEWORK FOR ENERGY-EFFICIENT PUBLIC PURCHASING ...............................................5

    2.1 GENERAL INFORMATION ON PUBLIC ADMINISTRATION SYSTEM .............................................5 2.2 NATIONAL TARGETS FOR ENERGY EFFICIENCY AND/OR CLIMATE PROTECTION IN THE PUBLIC SECTOR.....................................................................................................................................5 2.3 POLICY PROGRAMMES ON ENERGY EFFICIENCY IN PUBLIC INSTITUTIONS..............................6 2.4 CO-OPERATIVE PURCHASING BY PUBLIC INSTITUTIONS ...........................................................9

    2.4 ENERGY MANAGEMENT IN PUBLIC INSTITUTIONS ....................................................................9

    2.5 KEY STATISTICAL DATA ..............................................................................................................9

    2.5.1 Energy Data .........................................................................................................................9

    2.5.2 Product Data ...................................................................................................................... 10

    2.5.3 General Data ..................................................................................................................... 10 2.6 LAWS AND REGULATIONS GOVERNING PRODUCT PURCHASING AND INVESTMENTS BY PUBLIC INSTITUTIONS ......................................................................................................................... 12

    2.6.1 General Laws and Regulations ........................................................................................... 12

    2.6.2 Special Energy Efficiency Regulations for Public Buildings ............................................... 13

    2.6.3 Special Energy Efficiency Regulations for Public Purchasing ............................................ 13

    2.7 ORGANISATION OF AND DECISIONS ON PRODUCT PURCHASING AND BUILDINGS INVESTMENTS IN PUBLIC INSTITUTIONS ........................................................................................... 14

    3 PUBLIC INTERNAL PERFORMANCE CONTRACTING (PICO) ........................................... 17

    3.1 OVERALL CONCLUSIONS ON THE USEFULNESS AND FEASIBILITY OF PICO ........................... 17 4 REFERENCES ............................................................................................................................... 19

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PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    1 Executive Summary

    1.1 Energy Efficiency in Current Public Sector Purchasing, Building,

    and Replacement Practices

    Energy efficiency purchasing in Hungary at present is a rather sporadic or even exceptional fact, unless the cost of energy is a prevailing factor in the new investment. Otherwise, the choice is usually determined by the purchase price of the equipment.

    Where the equipment or a facility is already in place and the related costs of energy are significant, energy efficiency (or rather energy savings translated into money) becomes an issue. The existing mechanism of supporting investments in energy efficiency have led to noticeable progress in reducing energy bills in many cities in Hungary. Still the existing energy saving potential is very large and the existing subsidy resources are far too short to solve the problem countrywide.

    The access to bank loans is limited by the fact that the size of typical energy efficiency investment is usually too small for banks to offer attractive, or acceptable terms. The procurement process itself is rather complicated, time-consuming and requests sufficient knowledge on national legislation. Currently, environmental criteria and energy efficiency issues in public procurement are not explicitly addressed in national legislation, and there is a clear need for guidelines on how environmental considerations and energy efficiency issues can be practically applied in public procurement in the frame of valid legislation and international agreements.

    Several solutions can be contemplated:

    (a) Third Party or ESCo-type financing. The municipalities are still reluctant to enter such agreements because (i) they substantially increase the investment costs, (ii) the understanding of TPF or ESCo mechanisms is still not common, (iii) the ESCo type contracts require specialised legal experience and knowledge the municipalities could rely on, which is not readily available in Hungary yet.

    (b) “Bundling” or “packaging” of small projects of a similar type to decrease the unit transaction costs and make them more attractive to commercial banks.

    (c) establishing energy efficiency revolving funds (PICO).

    As far as inclusion of energy efficiency as an important parameter into the public procurement set of rules is concerned, availability of information and good practice examples are very important. The issue has to be publicised to draw the attention of the decision-makers who, otherwise, are overwhelmed by a multitude of problems they are confronted with every day.

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PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    1.2 Public Internal Performance Contracting (PICO) Public internal performance contracting (PICO), is as far as known, not commonly used in Hungary and the experiences are very limited. It is important that the funds available especially in smaller municipalities are very limited for PICO. Many municipalities also lack the personnel, sufficient knowledge and skills to undertake a PICO. Public internal performance contracting may be possible in larger public entities.

    Outsourcing of different services may become more topical in the future and there are several examples in which whole local utilities have been sold and the corresponding services outsourced.

    In Hungary, it has become common for local governments to contract out solid waste disposal, park and street maintenance services, and parking fee collection to private firms on a competitive basis. In some cities, water provision has been contracted out. It is likely that contracting out will increase in the coming years because private firms are often needed in order to obtain the financing necessary for capital improvements, which are necessary to maintain public services.

    It has become standard practice for cities to create one or more municipally owned companies, which are responsible for park, road maintenance, snow clearing, refuse collection, and cemetery services. In turn, some of these services are subcontracted out to private firms.

    Contracting out led to more efficient provision of services and indicated that, because local governments had the option of contracting out, municipally owned service providers operated in a more efficient manner.

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PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    2 General Information on the Political, Legal, and Economic

    Framework for Energy-Efficient Public Purchasing

    2.1 General Information on Public Administration System

    There exist 19 counties (megyek, singular - megye), 22 urban counties (singular - megyei

    varos), and 1 capital city (fovaros)

    Number of towns: 214

    Number of villages: 2,898

2.2 National Targets for Energy Efficiency and/or Climate Protection

    in the Public Sector

    #In the following, we have copied the respective questions from the specs_to_natlteams

    (marked S1 etc.) or from the interview guide (marked I1 etc.) to the subchapters where

    they are supposed to be answered. The questions should be kept in the report#

    Question(s) to be answered in this section:

    S1 Are there national targets for energy efficiency or CO reduction in public institutions (maybe 2

    derived from other environmental targets)? Do such targets exist on other levels of government

    (regional, local)?

    S14 Trends, expected evolution?

    Ahead of EU accession, Hungary has introduced air pollution limits and is reviewing its

    environmental policy in line with the Sixth Environmental Action Plan of the EU. Hungary

    is a signatory state of the United Nations framework Convention on Climate Change

    (UNFCCC) and has committed itself under the Kyoto Protocol to reduce greenhouse gas

    emission by 6% in the time period 2008-2012, with 1985-1987 as baseline period.

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PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    The set-up of the general eco-labelling scheme was established by the government in 1993 and the certification body took up its work in January 1994. In 1997, a law regulating the conditions for awarding the Environmentally Friendly Product label was enacted. There are other regulations on the preferential treatment of environmentally friendly products and their producers. The law on public procurement passed in1995 requires that, all other

    aspects being equal, preference should be given to environmentally friendly products.

    The power of this law is rather limited as it seldom occur that all other condition apart from environmental characteristics of products to be compared are equal. If any references are made to environmental issues at all, the requirement, as a rule, consists in meeting existing environmental regulations and not to go beyond them.

    Another approach to energy efficient purchasing is represented by the efforts made to build up the database of products and services provided by companies with certified energy

    management system (ISO 14 001 or EMAS). Institutions planning to introduce

    environmental management system (EMS) are obliged to give preferences to

    environmentally friendly suppliers. However, EMS is still in a preliminary stage in local government. There are hardly any local governments that have initiated the process on

    introducing EMS. It is expected, that their number will increase with similar intensity as in business sector.

    2.3 Policy Programmes on Energy Efficiency in Public Institutions Question(s) to be answered in this section:

    S2 Is there a national programme on energy efficiency in public institutions in your country? If yes, is it voluntary or compulsory? Is there such a programme on other levels of government (e.g. run by a regional govt., or a co-operation of local governments)?

    S3 Is it on product procurement, or building energy management, or both?

    S4 What does it contain?

    Info?

    Training?

    Benchmarking

    Product databases, best practice databases, etc

    LCC analyses and evaluation?

    Specifications, guidelines, target values

    Laws, regulations, rules

    Financial incentives (purchasing; investments; and institution building) Credit, revolving funds, etc

    Support for performance contracting (rule making, promotion, training) Other

    S5 Who co-ordinates the programme?

    S6 If a specific programme, what are the resources (staff, funding/year) available for the programme and the co-ordinator? How is it organised: on the central government level only, or with regional branches?

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PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    S14 Trends, expected evolution?

    Active energy efficiency policies in Hungary started in 1995, when the Government adopted the National Energy Saving and Efficiency Improvement Programme. Part of this programme was the Energy Saving Action Plan (ESAP) of 1996. Major issues addressed by the Programme included: least-cost planning and demand side management, as defined in the Electricity and gas Laws; cost-based energy pricing in order to motivate energy savings; development of a new statistics and information system; introduction of individual metering and regulation in new apartment blocks with district heating supply; implementation of minimum standards for the insulation of new buildings; energy efficiency labelling of household appliances; awareness raising and education on energy savings; improving energy efficiency in municipalities - via the Energy Saving Credit Programme; prioritising energy efficiency in state financed R&D programmes; increasing the use of renewable energy. In the framework of the Energy Saving Credit Programme (ESCP) the total investment cost spent on energy efficiency project was 4.692 billion HUF (? 17.6 million), of which 3.554 billion HUF were preferential credit. So far the ESCP has focused on funding energy saving programmes at municipal level, modernisation of district heating systems and the development of energy service company financing. Main clients of the ESCP are municipalities. So far, the ESCP has funded 326 projects.

    Following the “Energy Policy Concept” of 1993, the Government adopted in 1999 the “Hungarian Energy Policy Principles and the Business Model of the Energy Sector”. The “Business Model” focuses on guidelines for establishing competitive markets for electricity

    and natural gas, price regulation and the organisational and regulatory structure of the electricity and gas industries. Other issues addressed by the Business model are energy conservation and efficiency, renewable energies, district heating and environmental protection.

    The Pilot Panel Programme or Soft Loan System for Panel Reconstruction, established in 1996, makes low-interest funding available for the energy-efficient refurbishment of buildings constructed from pre-fabricated panels, including insulation and heating system modernisation. The interest rate is set below 10%. The budget is approx. 10 million USD. In 1999, a new Energy Saving and Energy Efficiency Action Programme was adopted. This new programme defines energy saving and other targets until 2010 and includes a number of specific actions, in the areas of fund rising, education and awareness rising, research and development, industrial energy audits and energy-related modernisation, energy management in municipalities, least cost planning, energy efficiency in transport, heating system modernisation, promotion of renewable energy sources. The Programme intends to mobilise some 200 billion HUF (? 750 million) of investments, by providing 50 billion HUF (? 187 million) of support over a ten year period. Support is provided either by preferential

    credit (subsidised interest rate) or as non-reimbursable grants.

    The Programme defines the following targets by 2010:

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PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    ? Reduction of energy intensity with 3.5%/year, assuming an annual growth of GDP of

    5%/year and a growth rate of energy consumption of 1.5%/y; ? Saving of 75PJ/y (1.8 Mtoe/y) of primary energy sources; ? Reduction of 50 kt/y of SO and 5 Mt/y of CO emissions; 22

    ? Increase of renewable energy production from the present 28 PJ to 50 PJ/y (1.2 Mtoe/y)

    In parallel to the Energy Saving and Energy Efficiency Action Programme, the UNDP/GEF Public Sector Energy Efficiency Programme aims at helping Hungary to improve energy efficiency in the public sector. The programme seeks to remove barriers to improve energy efficiency in municipal buildings, including schools, hospitals and other public buildings. The main objectives of the programme are: (i) to improve the development of energy efficiency policy, increase awareness and improve co-ordination of energy efficiency policy, (ii) the identification, development and financing of energy efficiency projects in municipalities and (iii) to improve the knowledge base on energy management and energy efficiency technologies. The Energy Centre is the implementing agency of the project, under the authority of the Ministry of Economic Affairs. The Programme also intends to reach out to municipalities and local advice centres and networks. The budget of the Programme is approx. 4.6 million USD.

    Hungary has also introduced thermal insulation standards for new residential buildings, as well as appliance labelling and minimum energy efficiency standards in accordance with EU directives.

    Regulations for thermal insulation of new residential buildings were first introduced in the seventies and updated regularly. According to the Energy Centre, the standard adopted in 1991 complies with the “average European regulation” and is based on heat loss per cubic metre. The Act on the development and protection of the built environment (Act LXXVII. Of 1997) emphasises the importance of thermal insulation in new and renovated buildings. The thermal insulation standards applied for the construction of new buildings are prescribed in the FVM (Ministry of Agriculture and Rural Development) Ministerial Decree 96/1999 (XI. 5.)

    According to the District Heating Law, there is regulation concerning metering and accounting requirements for new apartment buildings. The Act XVIII of 1998 on the District Heating Supply prescribes the metering obligation of the suppliers. Depending on the regulations of the local governments, but at latest from 2003 the metering is obligatory. Appliance labels and minimum efficiency standards have been introduced from 1994 onwards in accordance with EU legislation. The Hungarian Standards Institution is responsible for the preparation and application of appliance energy efficiency standards in Hungary. Hungary already applies all of the EU energy efficiency labelling standards for refrigerators, freezers (introduced by the Ministerial Decree 1/1998 IKIM r.), washing machines and clothes dryers (77/1999 and 78/1999 GM r.).

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PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    Hungary has become a member of the International Energy Agency, which means that it

    meets the IEA’s complex requirements in terms of energy policy, regulation, safety and

    environment.

    2.4 Co-operative Purchasing by Public Institutions

    Question(s) to be answered in this section:

    S7 Is there a co-operative purchasing or a common buying-agency - among agencies at one level of

    government? across levels of government? (e.g., national agency provides buying services to

    local governments)?

    S14 Trends, expected evolution?

    Hungary has created a central purchasing organisation with a split responsibility. For

    “common use” purchases, it is responsible to the Prime Minister; for other items, it is

    responsible to the Ministry of the Interior. The Public Procurement Committee, the central

    procurement policy organisation, supported by a Secretariat, reports directly to Parliament.

    2.4 Energy Management in Public Institutions

    Question(s) to be answered in this section:

    S8 Typically, which type of national/ regional/ municipal/ other institutions in your country have an

    energy management unit?

    S14 Trends, expected evolution?

    Regarding the energy management units, the situation in Hungary, as far as we know, is

    similar to those in Poland and Slovakia. Such units do not exist in most of public

    institutions in Hungary, but some of the activities, such as energy monitoring, energy

    conservation measures, are undertaken by investment or organisational departments of the

    municipality (city, county) offices.

    Due to free competition and open market, energy plays more and more important role in

    Hungarian institutions, so energy management units will be surely established in the nearest

    future.

    2.5 Key Statistical Data

    2.5.1 Energy Data

    Question(s) to be answered in this section: Final energy consumption Final energy consumption

    by energy commodity, 1998by end-use sector, 1998S9 Key statistical data

    Energy data: Agriculture firewood 4.5%heat 9.9%Industry 2,1%25.9%Services oil 25.9%electricity 17.7% 15.8%

    coal 6.15Transport Household 19.1%9 natural gas 32.8%40.4%

PROST Public Procurement of Energy Saving Technologies in Europe

    Country study for Task 2a and 4b Poland

    Source: In-depth Review of Energy Efficiency Policies and Programmes of Hungary, Energy Charter Secretariat, 2001

    The household sector is the largest user of final energy (32.8%), followed by industry

    (25.9%), transport (19.1%), services (17.7%) and agriculture (4.5%), (1998). In the 1990-

    1998 period, primary energy intensity has decreased by 17.2%, while final energy intensity

    fell by 15.2%, taking into consideration corrections for climatic conditions and structural changes of GDP.

    In absolute terms, final energy consumption declined by 22% from 20 mtoe in 1990 to 15.6

    mtoe in 1996.

    Electricity production in 1999 amounted at 36.75 billion kWh (1999)

2.5.2 Product Data

    Question(s) to be answered in this section:

    Product data

    - annual appliance sales (to all, to public sector)

    - annual energy use - for each year’s purchase

    - suggested efficiency norm for purchasing

    - energy savings (for public sector only) if all were purchased at that norm (per 1 year of sales -

    Note: need to look at potential after several years of sales and turnover, especially for products

    with longer lifetimes and slower rates of turnover.)

    - “public sector” includes: national, regional and municipal governments, universities, schools, public housing S14 Trends, expected evolution?

    It is very difficult to estimate product data in public institution in Hungary.

    The total value of public procurement in 2000 was Hungarian forints (HUF) 523.6 billion

    ($1.86 billion), a 21 percent increase over 1999.

    The percentage of open tenders was up from 61.7 percent in 1999 to 76.2 percent in 2000.

    Half of the 3,710 tenders in 2000 were awarded to local small and medium enterprises,

    while only four percent went to foreign companies. Seven hundred complaints came before

    the Public Procurement Arbitration Court in 2000, and of these, half were rejected as

    unfounded. In cases where the court found for the petitioner, it either nullified the tender result or levied that totalled HUF 223 million ($750,000) for year 2000.

    2.5.3 General Data

    Question(s) to be answered in this section:

    GDP is estimated to come 65% from services, 30% from industry and 5% from agriculture.

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