SENSEI Project: P4P, Pay for Performance in Europe

SENSEI H2020 Project (P4P Pay for Performance schemes)


Acronym	SENSEI
Start date	01/09/2019	End date:	31/08/2022
Program	H2020	Grant Agreement ID: 847066	View Cordis file card
Subprogram	SC3 – Secure, clean & energy efficiency

SUMMARY

The SENSEI H2020 project will design, test and disseminate an innovative transaction model to enable energy efficiency upgrades to be valorised. The SENSEI model will build on innovative pay-for-performance (P4P) schemes. The project will focus on energy efficiency improvements on buildings which payments are made only after the efficiency improvement.

Resources

Intro

Pay-for-performance (P4P) is a way to achieve significant, larger-scale energy savings in the building stock and attract additional investments and new business models. Although conceptually simple, the EU lacks so far P4P initiatives. SENSEI will apply learnings from the US to the European energy market.

Documents

Sensei public deliverables

Other publications:

Paper – Seven Horizon2020 projects advise EU leaders how to prepare buildings for the energy transition. F. Anagnostopoulos, M. Faber
Paper – A review of deterministic and data-driven methods to quantify energy efficiency savings and to predict retrofitting scenarios in buildings. B. Grillone et al.
Paper – Rebuilding Europe green healthy buildings as economic stimulus. DWS Group

Sensei project leaflet

SENSEI H2020 Project brochure (P4P Pay for Performance schemes)

P4P Examples

Cool Savers Program (California)

Sector: Residential

Plan: Demand-side management

The utility will pay a set $/kWh payment for weather-normalized gross delivered savings at the meter to third-party aggregators for residential savings across their portfolios of projects through comprehensive retrofit, behavioural, and operational interventions.

The aggregator Build It Green (BIG) delivers the Cool Home Savers program on behalf of PG&E, by providing incentives to help customers upgrade to new energy-efficient technology designed to increase comfort and lower monthly energy bills. Customers will save money in three ways:

Up to $1,800 in rebates for new AC units;
Lower monthly energy bills and greater comfort;
Up to $1,000 bonuses for top energy saved after 12 months.

Business Energy Pro (New York)

Sector: Commercial

Plan: Energy Efficiency as grid resource and development of EE services market

NYSERDA and a utility partner will select “Portfolio Managers”, i.e. third-party service providers, who will engage with businesses to implement energy efficiency solutions. Portfolio Managers can achieve energy savings goals by offering a range of energy efficiency improvements over time and by establishing relationships to re-engage with their participating customers. The goal is to increase the likelihood of continued savings, opening new options for testing different approaches and business models.

Energy savings from participating customers will be measured and aggregated on an ongoing basis to calculate the Portfolio Manager’s performance to be compensated by the utility over time (e.g. three years).

After an initial intervention with the customer, Portfolio Managers will have access to the individual customer and aggregated portfolio data, providing analytics and insights into realized savings and opportunities.

Newsletter #2

November 2020

Discover Sensei and P4P in 3 videos
Reports and papers
DWS mention us: Green, healthy buildings as economic stimulus
Did you miss Sensei at EUSEW?
Get engaged in Sensei

Read →

Newsletter #1

March 2020

Sensei in a few words: Energy efficiency innovative financing
First results: Deliverable D4.1
What is P4P?
Examples: Rewarding savings vs. measures
Sister projects

Read →

SENSEI website

INTRODUCTION

The Energy Performance Contracting (EPC) model has been successful in attracting investments in energy efficiency, but mainly for single, large projects. Energy efficiency programs, on the other hand, constitute an alternative path to scaling up the number of buildings that implement energy efficiency interventions, but the practice of rebates and incentives that are paid up front creates a need to rely on deemed energy savings and on complex and costly regulations that hinder innovation.

SENSEI H2020 project will propose a solution to this deadlock. Building on earlier successful experimentation outside of the EU, we will design concepts and business models that will help: (a) generate new sources of benefits that increase the value of an energy retrofit project by enabling the compensation of energy efficiency as an energy resource, and (b) turn the project’s value into an investable asset to attract private financing. The main concept underlying the SENSEI business models is pay-for-performance (P4P), which offers an effective way to engage both energy providers and third-party investorsin energy efficiency. SENSEI will first elaborate P4P schemes for financing energy efficiency that can be implemented across the EU, and then integrate these P4P schemes with the preparation and implementation stages of the EPC model, with the intention of increasing and/or financing the gains in a building’s value that are produced by energy efficiency improvements.

The developed concepts will utilize actual building data and the consortium’s competences to carry out a series of negotiation games among all SENSEI parties – representing all links in the EPC and P4P chain. The project has planned a series of activities to both disseminate the insights from these games and to support stakeholders in using our recommendations with the goal of rolling out the first P4P pilots in the EU.