Energy Performance Contracting can play a key role in ensuring the performance of New Zealand's buildings and large energy-using assets is at an optimum.
What is an Energy Performance Contract?
An Energy Performance Contract (EPC) guarantees the energy performance of installed equipment (typically commercial lighting, HVAC systems etc) for the customer. It does this by allocating performance risk to the service provider (ESCO) through a performance guarantee (with accompanying due processes such as measurement and verification of energy performance). This approach can also provide access to third party capital funding from finance companies, which in turn can be paid off with the energy savings made through the investment.
Because of the performance guarantee, an EPC is a long term partnership between a customer (e.g. University, Hospital, Local Authority, or other commercial building owner) and an energy service company (ESCO).
How Does an EPC Work?
The ESCO (or an independent Energy Auditor) conducts a comprehensive Energy Audit of the facility and identifies improvements to save energy. In consultation with the customer, the ESCO then designs and constructs a project that meets the customer's needs and if necessary arranges the necessary funding. The ESCO guarantees that the improvements will generate energy cost savings to pay for the project over the term of the contract (usually around 10 years).
A Guide for Customers, Model Energy Performance Contract, and Financial Term Sheets
In order to increase the use of this approach, EMANZ has developed an EPC Guide, a Model Energy Performance Contract that may be of use to ESCOs and their customers, and some indicative Financial Term Sheets for various types of financial arrangements. There are available here:
Model Energy Performance Contract (Word, 155 KB)
Financial Term Sheets
Please note, the model contract and finance sheets are provided as a guide only, and under no circumstances should be adopted in the absence of proper legal advicice.
What Is an Energy Service Company (ESCO)?
Not every business is set up to offer - or is capable of offering - energy performance contracts. EPCs can be complex. This is a specialist area requiring technical expertise, financial credentials, and a thorough understanding of the challenges, risks and opportunities that come with this form of business. This is why EMANZ has established this guidelines for customers - what to look for in an ESCO. EMANZ also publishes a list of businesses it believes meet the necessary criteria for delivering energy performance contracts. See these ESCOs here >>
EMANZ would like to thank the following organisations for their support in developing the EPC Guide and Model Contract. Without them we couldn't have done it: