Energy Efficiency and Financial Advantages

In a bid to combat climate change and reduce energy costs, the Climate Protection and Energy Agency of the State (KEA-BW) is encouraging municipalities to consider energy-efficient contracting, regardless of their special funds. This approach, which has been hailed as a historic step by Frank Mentrup, President of the Baden-Württemberg Municipal Association, offers a promising solution for cash-strapped local authorities.

One such municipality that has already embraced this approach is Obernhausen-Rheinhausen in the Karlsruhe district. The town undertook an extensive energy-efficient renovation of a school, sports hall, and swimming pool, investing over 5.5 million euros. The project, which costs 670,000 euros and runs over eight years, has resulted in a 70% reduction in energy costs for the buildings over a 15-year period.

Energy supply contracting, a key component of this approach, involves concluding a contract for the supply of electricity and heat, usually in connection with a new heating system. For a project to be profitable, energy-saving contracting should have heat and electricity costs of at least 100,000 euros per year. However, smaller municipalities need not worry, as Anders Berg, responsible for the Contracting area at the KEA-BW since mid-2022, affirms that contracting is suitable for both large and small municipalities.

The KEA-BW offers a free initial consultation for municipalities funded by the state, a network of consulting firms, and sample contracts. These consulting firms, which specifically support municipal contract projects, include specialized local and regional consultants experienced in public sector contracts, energy transition, and sustainability initiatives.

The city of Brackenheim in the Heilbronn district is another example of a municipality benefiting from energy-saving contracting. By renovating its street lighting, the city was able to reduce its annual energy costs by around 95,650 euros and significantly decrease its total electricity consumption.

Contract duration depends on the measures and their costs. A municipality retaining 20% of funds from energy savings if it wants to benefit from savings beforehand can extend the contract term. After the end of the contract period, the municipality benefits from the full energy savings and the new facilities.

The financial situation of many municipalities is as dire as it has been since 1990, with a record deficit of 24.8 billion euros recorded last year by the Federal Statistical Office. The Municipal Climate Protection Congress, taking place on June 5 in Waiblingen (Rems-Murr district), will focus on financing the energy transition, climate-neutral municipal administration, and the implementation of the energy and heat transition. This event is expected to provide valuable insights and solutions for municipalities looking to adopt sustainable and cost-effective practices.