Energy Performance
Contracting (EPC)
Vic Government EPCs since 2009
29 projects
covering
745 buildings
saving
37% (average GHG saving)
and
$418 million (net over life)
and
savings are guaranteed
Federation Square EPC
$6.85 million
55% greenhouse gas
saving
Government office buildings EPC
$11.8 million
30% greenhouse gas savings
Melbourne Sports and Aquatic Centre EPC
$4.1 million
31% savings guaranteed
South West TAFE EPC
$1.8m
32% greenhouse gas
saving
Parks Victoria EPC (46 parks)
$2.8 million
28% energy saving
RMIT EPC
$99 million
36% greenhouse gas
saving
Melbourne Cricket Ground EPC
Scope being finalised
Museums Victoria EPC
Scope being finalised
City of Yarra EPC
$3.4 million
45% greenhouse gas
saving
Frequently asked questions
What is an EPC?
An integrated process with a savings guarantee
Request for
Proposal
DFSA
Detailed
Facility
Study
Install
solutions
EPC
M&V
Why EPC? Why not just do it ourselves?
More savings
Guarantee reduces risk
Low risk supports financing
Doesn’t require customer to be an expert
How can anyone guarantee the savings?
Careful application of the M&V protocol:
A.
B.
C.
D.
Data logging systems/equipment
New meters on relevant circuits
Annual site bills
Modelling
EPC measurement & verification
Request
for
Proposal
As per
blue box
in upper
right
corner
DFSA
Detailed
Facility
Study
Install
solutions
M&V
Measurement and
verification of
savings. This text
box not really
necessary, but has
been added to
deliberately make
the page look
overly busy… for
visual effect and
nothing else really.
EPC
Ongoing M&V
reporting:
Initial M&V outline
Some pre-install
(for pricing)
measurements
Post-install measurements
Reporting
Making good
Financial reimbursement
IPMVP Options:
A: Partly measured retrofit isolation
B: Fully measured retrofit isolation
C: Whole of site
D: Simulated Calibration
• Annual M&V
reports
• One off M&V
reports (e.g.
option A
solutions)
Methodology agreed (option, sample, timing & duration)
Baseline agreed
Some measurements taken (e.g. option A ‘before’)
Comprehensive MVP developed
• Annual
commissioni
ng
requirements
Do we have to install everything they
recommend?
No
Do we have to share the savings?
No
Does the ESCO take over our electricity
bills?
No
What about maintenance contracts?
No
Do we lose flexibility in use of our
buildings?
No
Are we big enough?
If you spend over $200K
per year on utilities
How do we pay for it?
1. Cash
2. Debt finance
3. Finance Lease
Doesn’t it cost a lot to measure and verify?
It will cost more if you don’t.
Did you get what you paid for?
How much will an EPC cost? .. and save?
Hypothetical Local Government EPC
Project scope
Civic centres
Aquatic centres
Libraries
Depots
Other facilities
Annual utility
expenditure
= $800,000
37% savings
= $288,000
Capital investment (year 1 debt impact) =
$2 million
Annual operating statement impact =
$153,600
Avoided capital (asset replacement) =
$604,000
What will my chief finance officer think?
They should support this.
Accounting treatment of energy
efficiency investments
For projects funded with cash OR debt where the payback period is less than the investment life.
BALANCE SHEET
–
–
Increased liabilities or less cash
Improved asset value of buildings
zero,
then
+ve
OPERATING STATEMENT
–
–
–
Depreciation expense (~1/15th of investment)
Annual cost savings (~1/7th of investment)
Savings more than double the expense
NET DEBT (liabilities – cash)
–
–
–
–
Increased liabilities or less cash
Increased net debt by value of investment in year 1
Impact reduces to zero over term of the payback period
Positive impact thereafter
+ve
- ve
+ve
for payback term, then
How do I get started?
Call me
Sam Burke 0408 554 413
Further information
www.procurement.vic.gov.au, Select ‘EPC’ under ‘State Purchase Contracts’