On November 16th, Luminus Solutions and the city of Sint-Niklaas presented, in the presence of Energy Minister Tine Van der Straeten, their energy performance contract (EPC) signed early 2022 to the press. Over the next ten years, Sint-Niklaas will achieve a 39% energy saving in nine of its most energy-consuming buildings. In addition to climate goals, Luminus Solutions also considers the comfort requirements of users and the residual value of the buildings. This makes it the largest and most innovative energy performance contract in Flanders. Today, after almost two years of energy-saving investments, the first results can be recorded.
The city of Sint-Niklaas has a portfolio of 156 buildings. To ensure affordability, there’s a need to transition to a clustered service delivery in fewer buildings. The sites retained by the city must be carbon-neutral by 2050. Entering into an energy performance contract for nine major consumers aligns with this vision. Luminus Solutions, the Energy Service Company (ESCO), is tasked with managing the buildings and achieving energy savings, with the city paying an annual fee for these services.
In preparing the contract, the city sought guidance from an external partner, Factor4. All possible data for the buildings were inventoried in great detail. Subsequently, the task was put out to market. Luminus Solutions presented the most attractive proposal in terms of savings and investments. The contract commenced on January 1, 2022, and spans ten years. Valued at 12.3 million euros (including VAT), it applies to two sports halls, two primary schools, the academy, the municipal theater, the STeM museum, the police station, and the welfare house. These are all intensively used buildings where significant investments can be made to improve energy performance. Through the collaboration with Luminus Solutions, the city has additional staff and expertise to effectively manage these buildings.
Residual Value and Comfort
Luminus Solutions is responsible for energy-saving investments, maintenance, adjustment of installed systems, monitoring, and reporting. What’s unique is that the residual value is also considered in the contract. At the end of the contract period, the building’s residual value must be at least equal to its value at the contract’s beginning. This means that the building’s condition should not deteriorate. This allows the ESCO to invest in measures with a payback period longer than 10 years, the contract’s duration. Additionally, comfort requirements are included in the contract. Luminus Solutions cannot simply turn off the heating; they must ensure sufficient comfort for those working or visiting a building. There’s also a strong focus on circularity and rewarding the long lifespan of investments, with detailed agreements ensuring a good collaboration.
Ben Segers, Project Development Manager at Luminus Solutions: “The innovative nature of this EPC project allows us to take an extra step. It’s a vision over a longer period with staggered budgets and, proportionally, a maximum in energy savings. This gives us more room on the one hand to implement measures and on the other hand to provide much higher guarantees to the city.”
The largest investments occur in the initial years to yield immediate returns. In the first two contract years, an investment package of nearly half the contract value has already been realized. For example, in the City Theater, the heating systems and air handling units were renewed, and roof insulation was installed. At the Academy, in addition to the heating systems and air handling units, windows and screens were also renewed. At the STeM museum, the roof was renovated and insulated, and energy is now generated with solar panels. The heating system was renewed, and the lighting and humidity control in the exhibition hall were adjusted. In the Witte Molen sports hall, a new heating system and air handling unit were installed, along with 208 solar panels. The total targeted savings of 39% represent an estimated annual savings of around 1 million euros.
Ecology and Economy
The contract has been in place for almost two years. A preliminary evaluation shows that a 22% electricity saving has already been achieved in the nine buildings, one percent more than initially projected. For gas, the monitoring system will only provide a first picture beginning in 2024. If, at the end of the contract period, the savings exceed the 39% target, Luminus Solutions benefits as well. If the final result is lower than 39%, penalty clauses come into effect, and Luminus Solutions will have to pay fines to the city.
Bart De Bruyne, Alderman for Building in Sint-Niklaas: “The energy performance contract with Luminus Solutions will not only help us achieve climate goals but will also result in an annual saving of around 1 million euros. The notion that ecological measures would only incur costs certainly does not apply here.”
The city of Sint-Niklaas is fully committed to projects and initiatives that are future-ready and prioritize sustainability as an example for other cities and towns. The energy performance contract with Luminus Solutions is a good example of this.