Legal Compliance with Directives

Beyond Bricks

A report on a new proposed business plan in the field of renewable energy 2013 Strategy Builders Consulting Inc. 2/5/2013 Introduction Sustainable development and renewable energy are among the most talked about topics at the moment. Renewable energy is the concept that the think tanks are throwing their weight behind, and the same is true for the European Union (EU, henceforth) The business model that we are going to propose, deals with promoting renewable energy resources, and has a lot of other elements to it, which are all in compliance with the vision that the EU has in place.

The existing real estate agency in question is functional in both the residential as well industrial sectors. As a result of your operations, you have a strong and commendable network in place, which can be utilised in furthering our recommended business model. According to the ‘Energy 20:20’ vision of the EU, every new building must comply with renewable energy standards, set by regulations. The existing and old buildings will also have to modify their installations to meet the new requirements.

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Considering that improving energy efficiency is high on importance for the EU, and for the entire developed world, we anticipate that the authorities are going to be fairly stringent on the issue of compliance of the said regulations. In approximately 7-9 years from today, it is going to be mandatory for buildings to meet the new set of criteria. Since we are still some distance away from the 2020 milestone, there is a fair chance of exploiting the time and reaping benefits. The Concept We propose to set up a model, wherein we facilitate installation as well as replacement of efficient and renewable energy components.

We will have to tie up with providers of renewable energy sources and provide their services and products to our customers, who buy property from us. This service will also include our previous customers who would be looking to replace their current electricity system with renewable energy. In addition to promoting and facilitating use of renewable energy, we also propose to set up a carbon capture and storage unit and mechanism for our industrial installations. We will form alliances with small scale providers of these mechanisms and provide their services and goods to our customers.

In addition to the task of acting as an intermediary, we also propose to employ and train a team of technicians, who will provide maintenance and after sales services to the customers. For this maintenance team, we will hire young, unemployed people from lower sections of the economy, who will be trained by our energy providing partners, and this initiative will hence, help in improving their societal placement. We also propose to tie up with an energy efficiency certification agency, so that our customers can easily obtain certifications.

Rationale behind the concept The Commission says that EU must embrace renewable sources, not only to slow the climate changes but also because the EU's reliance on imported gas that is set to increase from 57% currently to 84% by 2030, and on imported oil from 82% to 93%. Hence the EU sets the goal of 1. Increasing renewable energy's share of the market to 20% by 2020, from around 8. 5% today. 2. Energy consumption is to be cut by 20% by 2020 through improved energy efficiency compared to 1990 levels.

Green house gas emissions are to be cut by 20% by 2020 compared with 1990 levels. The commission says states aid can legitimately be used to promote emissions cuts and increase take-up of renewables, so long as it does not breach EU competition rules. The commission has come up with new proposals for the EU to co-finance national and local schemes to promote energy-efficient housing. The EU will help member states install double glazing, wall insulation and solar panels in housing, especially targeting low-income households. The customers

The target group of customers for this business will be our own existing and new customers. Evidently, since renewable sources of energy are more expensive when compared to their non renewable counterparts, there might be an initial reluctance from the customers, to shell additional Euros. To educate them about the benefits of cleaner energy, their carbon footprint, as well as the impending EU regulations, we propose to have an “Energy Consultant”, who will lay out plans, a cost-benefit analysis and answer any questions that the customers might have.

The existing customers will actually be a more vital part of this proposed business model, because they will be the ones who will be replacing their existing electricity systems into renewable sources, and they will form a bigger proportion of the revenue pool, because their numbers will exceed the number of new buildings coming up. The new business concept will have to be communicated to the existing customers using our contact database, and then the consultant/s will be functional in bringing them onboard with the new ideas.

Scope of the Model

Target Market France’s real estate environment is in perpetual change from the classical renting to owner/occupant system and the trend is visible from the 1960’s to date whereby 45% of the people rented v/s 42 % owned to 38 % (renting) and 57% (ownership). The renting environment is currently made of 54 % of private sector housing and 46 % of social housing. Furthermore, out of the 9. 8 million private sector residences for rental purposes, 4. 5 million are HLM (habitation a loyer modere) or project housing.

With these housing projects housing most of the poor populations, the costs of energy by legacy providers such as EDF is high and hence the costs of electricity and heating is an additional burden. The available housing is also relatively old (40%) of private rental properties built before 1948 and the needs for upgrading these properties to comply with EU regulation is tremendous. 60% of the rental property is also located in metropolis of 100000+ inhabitants with most of the rural housing being privately owned.

The remote locations have lesser choices in terms of energy providers as the small scale providers are only present on part of the territory. The lack of competition drives prices high and slows the implementation of cleaner energy. As for the low income housing projects, most of them were built between 1950-1970 (50%) and due to high density and low maintenance, they require even more urgent upgrades to both comply with regulation and help the government in its housing policy making.

By pairing up with smaller scale energy providers across the board from wind power harvesters like Planete Oui to solar energy providers like Direct Energy, we are creating a partnership with smaller scale EU based energy producers (as opposed to EDF) and we are encouraging competition, hence lowering costs for customers. Besides, this partnership can lead to training of young unemployed people in the housing projects in electrical engineering/maintenance, hence contributing to fight unemployment. Besides, he youth know their neighborhood needs better and by outsourcing routine maintenance, the energy providers can save a lot in terms of travel costs for their maintenance teams. The Suppliers: Our role in this business model will be that of a facilitator, a middle-man of sorts. We will bring about the connection between renewable energy providers and willing buyers. We will focus on producers of wind power and solar power. We wish to focus on the smaller players in the market, because not only will in promote them, it will potentially increase competition in the energy market in France, where EDF is the largest supplier now.

It will also be easier logistically for us to tie up with smaller producers. Our alliance will be based on a commission based system, where we will receive a commission based on the business volume from the producers, as we will be functional in enhancing their reach, network and business. Minimum Compliance Requirements: The states are obliged to comply with the above methodology in order to achieve cost-optimal levels. The level of these requirements is reviewed every 5 years.

When setting requirements, Member States may differentiate between new and existing buildings and between different categories of buildings. New buildings shall comply with these requirements and undergo a feasibility study before construction starts, looking at the installation of renewable energy supply systems, heat pumps, district or block heating or cooling systems and cogeneration systems. When undergoing major renovation, existing buildings shall have their energy performance upgraded so that they also satisfy the minimum requirements.

When new, replaced or upgraded technical building systems such as heating systems, hot water systems, air-conditioning systems and large ventilation systems are installed, they shall also comply with the energy performance requirements. Building elements that form part of the building envelope and have a significant impact on the energy performance of that envelope (for example, window frames) shall also meet the minimum energy performance requirements when they are replaced or retrofitted, with a view to achieving cost-optimal levels. Calculating energy performance:

At the national or regional level, the buildings are evaluated by a methodology for calculating the energy performance which takes into account certain elements, specifically:

•  The thermal characteristics of a building (thermal capacity, insulation, etc. );
•  heating insulation and hot water supply;
• the air-conditioning installation;
•  the built-in lighting installation
• Indoor climatic conditions The Finance Our research and analysis shows us that the initial start-up investment in the business will be € 5 million. Out of this sum, we already have € 1 million at our disposal.

Out of the rest, we propose to send an application to the EU, with a request for funding under the EEPR or European Energy Programme for Recovery. We expect the EU to fund between 20% – 50% ( 1 mn – 2. 5 mn Euros ) of our project, and the rest will be sourced from angel investors and bank loans. The EEPR funds projects in three main areas of the energy sector:

• Gas and electricity infrastructures
• Off-shore wind energy
• Carbon capture and storage This Regulation also establishes a financial instrument the aim of which is to support initiatives related to energy efficiency and renewable energy.

The programme finances interconnection projects with a number of objectives, out of which, our business model complies with the following objectives:

• Diversification of sources of energy and supplies
• Optimisation of the capacity of the energy network and the integration of the internal energy marke
• Developmentof the network
• Connection of renewable energy sources In addition to these objectives, our model also includes carbon capture and storage, and this should facilitate the funding of our project, because it ticks a lot of check boxes on the EU list.

Our project is aligned with the 2020 vision of the EU, The new concept goes beyond the classical real estate agent business, as it promotes clean energy use, it promotes SMEs, and it also increases employment among unemployed youth also. Appendix: Objective: Nearly zero-energy buildings By 31 December 2020, all new buildings shall be nearly zero-energy consumption buildings. New buildings occupied and owned by public authorities shall comply with the same criteria by 31 December 2018.

The Commission encourages increasing the numbers of this type of building by putting in place national plans, which include:

• The Member State’s application in practice of the definition of nearly zero-energy buildings;
• The intermediate targets for improving the energy performance of new buildings by 2015;
• The information on the policies and financial measures adopted to encourage improving the energy performance of buildings. Financial incentives and market barriers Member States shall draw up a list of the existing and potential instruments used to promote improvements in the energy performance of buildings.

This list is to be updated every three years.

References

1. http://news. bbc. co. uk/2/hi/europe/7765094. stm
2. http://europa. eu/legislation_summaries/energy/energy_efficiency/en0021_en. htm
3. http://eur-lex. europa. eu/LexUriServ/LexUriServ. do? uri=OJ:L:2010:153:0013:0035:EN:PDF
4. http://europa. eu/legislation_summaries/environment/sustainable_development/l28075_en. htm
5. http://ec. europa. eu/clima/policies/g-gas/index_en. htm
6. http://en. wikipedia. org/wiki/%C3%89lectricit%C3%A9_de_France
7. http://europa. eu/legislation_summaries/energy/energy_efficiency/l27021_en. htm
8. http://www. territoires. gouv. fr/spip. php? article1173

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