Hannover:
Least-cost planning in the commercial sector
Hannover:
| |
| Country: | a) Western Europe | ,b) Germany |
| Language: | |
| Type: | Policy, Concept, 1 |
| Area: | City/Town, 100,000 - 1 mill. |
| Actors: | Local government, Economic sector |
| Funding: | Local government |
| Topics: | Business and industry |
| Energy | |
| Information and public participation | |
| Objectives: | Increase public awareness |
| Increase use of clean technology | |
| Reduce energy consumption | |
| Instruments: | Demonstration and pilot project |
| Integrated planning approach | |
| Least cost planning / environmental budgeting |
Since 1992, the Hannover Municipal Utilities have been co-operating with the Institute for Applied Ecology and the Wuppertal Institut on a major least-cost planning case study in the commercial sector in order to test the applicability of this concept. An important aim of the study is to gain basic experience on different steps of implementing demand and supply-oriented measures. The Hannover case is considered to represent an outstanding example of testing the new instrument of least-cost planning and designing Negawatt programmes for the following reasons:
The basic idea of least-cost planning (LCP) is that one should invest in savings as long as, from an economic perspective, the costs are beneath the long-term costs of producing additional electricity. The principle of this integrated resource planning is that equal attention is given to the demand side (i.e. electricity savings potential and developing costs for consumers) and the supply side (i.e. the technologies and costs for producing and distributing electricity). On the one hand the mix of saving and production services will cost the municipal utilities less, and on the other hand it brings about environmental benefits. In Hannover the small consumer and industry sectors are the most important target groups as both sectors use the clean final energies of electricity, district heating and gas to a total of 85%. In addition, their share of electricity is relatively high at 27 - 28% which equates with 55 - 57% of CO2 emissions. Therefore, electricity savings in the commercial sector must be regarded as a considerable contribution to an effective local climate protection strategy as the commercial sector alone has an extraordinary share of 70% of the total electricity consumption.
The Hannover Least-Cost Planning case study is part of a simultaneous Germany-wide LCP project in which ten selected municipal utilities test the applicability of the instruments of integrated resource planning. The studies are funded by the EU (SAVE programme), the German Federal Environmental Agency, and the Economics Ministry of Lower Saxony. The Freiburg-based Institute for Applied Ecology (Öko-Institut) and the Wuppertal Institute for Climate, Environment, and Energy have supported the project with academic advice.
In Hannover, company electricity and heating saving potentials were analysed in depth in six pilot studies. The electricity saving potentials ascertained in the six different sector companies amounted to between 6 - 24%. The pilot projects were directed at individual customers with special contracts and covered the following types of projects: a comprehensive school (public building), an office building (service company), a metal construction company (small/medium-sized company), an electro plating & anodic oxidation shop (small/medium-sized company), a supermarket (small/medium-sized company), and a baking ingredients producer (industrial company). The school project showed an extraordinary result of a savings potential of 67% for electricity and 15% for heating and it became obvious that it could not act as a model for comparable cases.
However, there are a large number of barriers that militate against the exploitation of energy saving potentials which are mainly economic reservations. In principle the potential users name the following arguments against the introduction of LCP:
The Hannover pilot projects have paid tribute to such reservations. The expectations of an amortisation period of between one and three years for investment can be fulfilled by energy service contracting. Contractors are service operations which initially establish the savings potential and then implement the energy savings investment in the customer's company. From the difference between the former high and the new low energy costs the customer pays the contractor until his services have been remunerated, including funding and profit margin. After expiry of the savings contracting contract, and until the end of the technical service life of the energy saving plant, the customer alone benefits from energy cost savings. Energy suppliers in Hannover, who are accustomed to long amortisation periods, are predestined for the contractor role.
As an alternative and supplement to energy service contracting, the experts involved in the Hannover LCP case study designed six electricity savings programmes for the commercial sector. Commercial customers can take advantage of consultancy, bonuses or direct installation in the use group of light savings. Bonus payments by the electricity suppliers were included as they are not meant to subsidise expensive electricity savings technology in order to make it profitable, but to provoke attention and have an underlying psychological effect. A combination of several instruments increases the effect of an electricity saving programme. For several reasons the light saving programme is particularly suitable for commercial tariff customers to make a start in the area of energy saving:
The commercial customer can choose from three alternatives for light saving services. These were modelled on similar programmes in the Rottweil municipal utilities, the Municipal Utilities in Sacramento, California, and a large electric utility in the Northwest of the USA. Surveys reflected the following practices:
Enercity
”Enercity” is the service trademark of the Stadtwerke Hannover AG. It stands for the conscientious use of energy. Enercity is developing into a trademark for savings measures as a practical application of least-cost planning results, offering utilities customers genuine benefits. Enercity offers services in the areas of heating, air conditioning, lighting and electrical equipment.
Under the prevailing good conditions, implementation of the negawatt programmes in the commercial sector and three further programmes in the household and public sector produce a total economic saving of 154 million DM. This is balanced against an economic disadvantage to the municipal utilities (at constant electricity prices) of 242 million DM. Beside the least-cost planning pilot projects and the programmes in the commercial sector the Hannover municipal utility conducted a broadly based programme, in which each household customer of the Hannover Utilities could receive a bonus of 50 DM through purchasing a particular energy savings and / or CFC-free refrigerator or deep freeze.
Bernd Hagenberg from the Hannover utilities points out that in comparison to the American experience with LCP and energy saving programmes the Hannover outcome looks modest. However, the initiation of broadly accepted measures requires a learning process which without any doubt is now underway. Assessing the project’s development from 1996 to 2000, Hagenberg has stated:
”As a result of the upheaval in the German energy market (liberalisation) the boundary conditions for least-cost planning have changed so markedly that we have only been able to pursue our original plans – both in the business and household sectors – in a modified form. This means, for example, operating without secure allocation financing. This development remains dynamic and thus all interested parties should inquire directly on the current state of affairs.”
Landeshauptstadt Hannover und Stadtwerke Hannover AG 1992/93: Energiekonzept Hannover (9 volumes), Hannover
OECD, (ed.) 1995: Urban Energy Handbook. Good Local Practice, Paris
Stadtwerke Hannover AG (ed), 1995: Die LCP-Fallstudie der Stadtwerke Hannover AG (Findings, summary and nine documentation volumes), Institute for Applied Ecology / Wuppertal-Institut, Hannover
Hagenberg, Bernd 1996: Negawatt development in the commercial sector. Results of the LCP case Study, Hanover, in: EA.UE, (ed.), Facing the Challenge. Successful Climate Policies in European Cities, Berlin, pp. 89-99
Personal communication with Bernd Hagenberg, April 2000.
| Name | : | Hagenberg |
| Firstname | : | Bernd |
| Telefon | : | ++49 / 511 / 430 26 86 |
| Telefax | : | ++49 / 511 / 430 26 28 |
| Address | : | Stadtwerke Hannover AG |
| Abt. Energiepolitik und | ||
| Sonderaufgaben | ||
| Postfach 5747 | ||
| D - 30057 Hannover | ||
Hannover is the capital of the federal state Land of Lower Saxony. It covers an area of 204 square kilometres. The wider conurbation of Greater Hannover has some 20 municipalities and a total population of 1.1 million. It covers an area of 2,300 square kilometres which is equal to the size of the small German state of the Saarland.
The City of Hannover has a diverse industrial structure which also includes some big companies like Volkswagen, the tyre company Continental, the battery producer Varta, the stationary producers Geha and Pelikan, and the cakes producer Bahlsen. The total conurbation has a total employment of 540,000 and 350,000 workplaces are located in the City of Hannover itself.
Hannover is also well-known as the host of important exhibitions like the world-wide biggest industrial exhibition, the computer fair CeBit, and many other specialised fairs. In the year 2000 the EXPO 2000 took place in the city.
Project was added at 25.06.1996
Project was changed at 01.03.2001