Energy performance contract

Lead agency: Department of Transport and Planning

Conditions of use: Non-mandatory

Reference number: GGB-01

Arrangement: Open panel

Start date: 1 September 2010

End date: 30 June 2029

Greener Government Buildings

Greener Government Buildings is a program that improves the energy efficiency of existing government buildings to reduce operating costs and greenhouse gas emissions. Energy is saved through a combination of:

lighting upgrades (for example LED)
heating, ventilation and cooling upgrades (HVAC)
solar panels
building automation and controls

Site specific solutions are available.

Latest achievements

Since its establishment in 2009, Greener Government Buildings has facilitated:

$310 million in energy efficiency and renewable energy projects across 53 projects
achieved annual savings of $50 million
rebates over 180,000 tonnes of greenhouse gases per year to avoid over $90 million in capital costs

Over 14 years, Greener Government Buildings has upgraded 600 buildings, reduced government emissions by 16.9% and saved over $240 million.

What is an energy performance contract

Energy performance contract is a process where a contractor is engaged to design, implement, verify and guarantee the savings from an energy efficiency project. This method of delivering energy efficiency upgrades to buildings is considered low risk and is widely accepted around the world.

Under the Greener Government Building program, the energy performance contract aims to achieve a 5-year simple payback period for all projects, i.e. projects must pay for themselves with the savings achieved over 5 years.

An energy performance contract is not suitable for all facilities and is typically only used for large and/or complex buildings, for example hospitals, TAFEs, large office buildings, and sporting complexes. For smaller sites such as schools, alternative approaches may be preferable.

Alternative arrangements

An alternative project delivery method may be considered in instances where an Agency's total energy consumption is too small to attract the market to deliver an energy performance contract, such as:

less than 1 GWh annual electricity consumption
or the building services are relatively simple

Contact the category manager for further advice.

How to set up an energy performance contract

The energy performance contract process has 7 stages:

Complete a project plan using the project plan template and secure pre-approval from a financial delegate with capacity to approve the expected project value.
For access to the project plan, complete the Greener Government Buildings: Document request form.
Complete a project plan using the project plan template and secure pre-approval from a financial delegate with capacity to approve the expected project value.
Complete the project plan in consultation with the Greener Government Building Team to receive advice on the expected contract size, project scope and identify financing options. The project plan should include:
- details of the buildings to be considered for energy/water saving opportunities
- the process to engage with contractors and determine the project scope
- the proposed governance structure, including details of the ‘Project Sponsor’ and ‘Project Manager’ within the Agency
- expected timelines
- constraints and dependencies
- risks
Review the Expression of Interest and select 3 panel providers to take part in a competitive tender called a Request for Proposal.
The selected tenderers will be provided with details of the buildings included in the project, including their annual historical energy consumption, and current utility rates.
Request for Proposal template
For access to the Request for Proposal template, complete the Greener Government Buildings: Document request form.
The Request for Proposal involves competitively auditing a selection of the buildings to identify energy efficiency measures. Tenderers will typically have around 10 weeks to undertake audits, after which they will be required to submit a proposal including details of the recommended energy/water saving solutions, along with proposed costs and savings of each measure.
Consistent with a level 2 energy audit, project costs and savings included in the submissions are expected to be accurate to within 20%.
Once the Request for Proposal submissions have been reviewed, a preferred tenderer (contractor) is selected to proceed to the detailed facility study stage. At this stage, the detailed facility study agreement is negotiated with the contractor.
This contract sets out the terms and conditions under which the contractor will perform the detailed facility study on the buildings. The detailed facility study agreement states that the contractor will be paid a fee (typically 2 to 5% of the eventual contract sum) by the Agency if the Agency decides not to proceed with the proposed works.
Once the terms are set, the contractor will commence the detailed study which will outline the full scope of works, including a fixed quotation for all implementation and ongoing costs, and the level of savings that the contractor will guarantee under an energy performance contract.
The study includes a measurement and verification plan which describes how the contractor will measure and verify the savings.
NOTE: The Detailed Facility Study is not a Detailed Design document and will not provide specifics on how the solutions will be installed. The Detailed Design will occur in the works specification of the Energy Performance Contract
To access the detailed facility study and measurement and verification plan templates, complete the Greener Government Buildings: Document request form.
Complete the energy performance contract following:
- Agency approval of the detailed facility study
- Greener Government Buildings funding approval
The energy performance contract includes:
- full project scope set in the approved detailed facility study
- commissioning procedure
- maintenance schedules
- project costs
- performance guarantee
- measurement and verification plan
For a copy of the energy performance contract, complete the Greener Government Buildings: Document request form.
The first key deliverable is the works specification. The works specification, is described in Schedule 2 of the energy performance contract, should contain any additional information the Agency requires (over and above what was provided in the detailed facility study) in order to give approval for the works to commence.
The level of detail required in a works specification will vary from project to project, and is typically informed by processes and practices of the Agency, and the specifics (e.g. level of perceived risk) of the proposed works.
Typical inclusions within a works specification are design drawings of planned system modifications and installations, project plans, data sheets, details of contractors, and possibly samples of equipment (e.g. lighting).
In instances where the detailed facility study already includes this information, it may be decided between the customer and the contractor to bypass the works specification stage.
During the installation stage, the ESCO may install, or engage subcontractors to install the contracted solutions.
Once solutions are installed and confirmed by the customer, the ‘guarantee period’ begins. Consistent with the details of the agreed minimum viable product, the contractor is required to to demonstrate the actual savings achieved over the guarantee period.
If savings in any year fail to meet the guaranteed savings (as stated in the contract), the contractor is required to reimburse the customer for the shortfall.

Tools and templates

To access the latest version of any GGB tools and document templates please complete the Greener Government Buildings: Document request form.

Panel providers

Updated 3 December 2024

Energy performance contract

On this page

Greener Government Buildings

Latest achievements

What is an energy performance contract

Alternative arrangements

How to set up an energy performance contract

Tools and templates

Panel providers

A.G. Coombs

Conservia

Enman

F.G. Advisory

Schneider

Siemens

Sustainable Focus

Veolia