GESP Contracting Model
Guaranteed Energy Savings Performance
GESP Contracting Model
Overview:
• A turnkey project where an accredited Energy Services
Company (ESCO) will:
• carry out an energy audit
• recommend and implement measures
• guarantee system efficiency / annual savings
Initial energy
audit phase
1st Phase
Implementation
of energy savings
measures
2nd Phase
Measurement and
verification
(Declared Chilled-water
Plant Efficiency/ Annual
Guaranteed Savings)
Over the term of contract:
Usually 5 years
GESP Contracting Model
Overview:
Agency’s investment:
Consultancy fee
• Fee for ESCO to carry out
Investment Grade Energy Audit
Contract price
• Total implementation cost of
GESP contract
• Maintenance cost over term
period
ESCO’s offer:
 Declared Chilled-water Plant Efficiency,
DCPE (kWhE/kWhT or kW/RT)
• For chilled-water plant retrofit
 Annual Guaranteed Savings, AGS ($)
• For other energy consuming systems
ESCO is obliged to pay the agency any shortfall in realised savings
GESP Contracting Model
Project Phases:
1st Phase
Consultancy
agreement phase
Energy audit work
DCPE cannot be
achieved
Project ends
DCPE can be
achieved
ESCO is not entitled
to ANY payment
ESCO is paid 50% of
consultancy fee
Agency decides NOT
to enter 2nd Phase
Project ends
Agency decides to
enter 2nd Phase
Development of
GESP contract
ESCO is paid balance 50%
of consultancy fee
GESP Contracting Model
2nd Phase
Project Phases:
GESP Contract
Implementation of
energy saving
measures
Term of Contract:
Usually 5 years
Continuous
monitoring of
actual efficiency
Installation of
permanent
instrumentation for
chilled-water plant
Upon
commissioning
Comprehensive
maintenance (new
equipment)
Non-comprehensive
maintenance (existing
chilled-water plant
equipment)
Annual
reconciliation
report
GESP Contracting Model
Benefits
Conventional Contracting Model
GESP Contracting Model
Lack of accountability
Obliges the ESCO to take accountability
No guarantee in achieving energy
efficiency and savings
Enjoys the DCPE and AGS throughout the
term of the GESP Contract
Defects Liability Period (DLP)
Defects Liability Period (DLP)
1. Excludes preventive maintenance
1. Includes 5-yr preventive maintenance
for (a) equipment supplied under the
contract and (b) existing chiller plant
equipment
2. Includes 1-yr warranty for
equipment and parts supplied
under the contract
3. Excludes continuous monitoring
2. Includes 5-yr warranty for equipment
and parts supplied under the contract
3. Includes continuous monitoring
through permanent instrumentation
GESP Contracting Model
9 agencies (15 buildings) are using GESP contracts to
implement their building retrofits