Energy Performance Contracting

1
Energy Performance Contracting

• Energy efficiency improvements in commercial
  buildings - opportunities and challenges in New
  Zealand

2
Energy Performance Contracting

• Energy Performance Contracting (EPC) is a method
  of implementing energy efficiency improvements
  projects based on guaranteed savings
• Capital outlay is recovered from energy savings
  during time of contract
• Any shortfall of predicted savings is made up by
  the contractor
• Types of EPC shared savings or guaranteed
  savings contract

3
EPC in New Zealand

• EPC has first appeared in New Zealand about 20
  years ago
• Shaky start
• Australasian Energy Performance Contracting
  Association in 1998
• Current EPC - Honeywell NZ with government support

4
Commercial Buildings in NZ

• Commercial and industrial buildings account for
  8 of total New Zealand energy use
• Centre of Advanced Engineering in University of
  Canterbury has found in 1996 further 20-30
  improvements were possible in existing building
  stock
• EECA research suggests productivity gains 5-15

5
Case Study Building
6
Case Study Building Energy Savings Potential
25 savings 50000/year 70 savings
140000/year
7
Barriers to EPC

• Lack of interest in the project from building
  management company (no obvious gain)
• No knowledge of energy management (and EPC) among
  both tenants and building manager
• Energy Use Indices hard to find
• ESCO numbers limited in NZ
• Energy Services Contractors see EPC as costly
• Australasian EPC Association focus on Australia
  only
• Promotion by EECA limited to big projects with
  Honeywell

8
Overseas Experience

• EPC in US since conception
• Estimated revenues of this industry were 3.6
  billions in 2006
• Initiall subsidies helpfull
• Active Association
• EPC Facilitators

9
Overseas Experience

• Gradual move from simple to more comprehensive
  projects
• States policies allowing longer paybacks
• Enron collapse loss of customer confidence
• Energy supply companies still active in EPC but
  scaled down
• Private buildings 18 of projects
• Renegotiating Lease Agreements

10
Overseas Experience

• Europe main activity federal buildings
• 2003 directive on Energy Performance of Buildings
• Energy Performance Certificates for all buildings
  from 2009
• Eurocontract
• White Certificates Scheme

11
Overseas Experience

• Australia
• Association 1998
• Subsidies and policies
• Green Lease
• Australian Building Greenhouse Rating

12
Stages of EPC Market Development

• Government support
• Association of EPC companies
• Facilitators and MV
• Altered Lease agreements
• Market demand development
• Energy Performance Certificates for buildings

13
What Is Missing in NZ

1. ESCO (Energy Services Company)
2. Association
3. Government support
4. Altered lease agreements
5. Create market demand