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Energy performance contract

The energy performance contract is for energy efficiency in government buildings. It aims to reduce operating costs and emissions.

Greener Government Buildings

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

  • lighting upgrades (e.g. LED)
  • heating, ventilation and cooling upgrades (HVAC)
  • solar panels
  • building automation and controls

GGB latest news

As part of 2017/18 budget, the Victorian Government announced it will invest $20 million in the GGB program to target a number of government buildings and infrastructure. This is in addition to the $33 million the Government invested last year.

The Government will use Energy Performance Contracts (EPC) to ensure the best and most efficient solutions are identified, and savings are guaranteed, measured and verified.

In addition to the above, Public Non-Financial Corporations (PNFCs) that have the power to borrow may access loans directly through the Treasury Corporation of Victoria (TCV) for GGB projects. These loans will be made available at the bond rate, excluding the Financial Accommodation Levy (FAL) that is typically applied to their borrowings.

What is an EPC?

An EPC 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 GGB program, the EPC 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. However, EPCs are not suitable for all facilities and are typically only used for large and/or complex buildings, e.g. hospitals, TAFEs, large office buildings, sporting complexes, etc. For smaller sites such as schools, alternative approaches may be preferable.

Alternatives to EPC

In instances where department or agency’s total energy consumption is too small to attract the market to deliver an EPC (usually less than 1 GWh annual electricity consumption), or the building services are relatively simple, an alternative project delivery method to EPC may be considered. In these instances, departments/agencies should contact DTF for further advice.

EPC process

The EPC process under EGB consists of 7 stages as outlined below.

Current and past projects

Since its establishment in 2009, EGB has invested $134 million in upgrades to 389 government buildings. Over 15 years, these projects are estimated to achieve cost savings of $335 million, resulting in a positive net present value of $107 million and the annual avoidance of 134,000 tonnes of greenhouse gas (GHG) emissions (a 5.1 percent saving on total government building emissions). Past and current projects include:

Project Contractor Status GHG Savings
Treasury Office Buildings Johnson Controls Guarantee Period 29%
State-wide LED Traffic Lighting Upgrade Various (not EPC) Complete 70%
Melbourne Sports and Aquatic Centre Total Energy Solutions Guarantee Period 29%
South West TAFE Institute Total Energy Solutions Guarantee Period 30%
Kangan TAFE Institute A.G. Coombs Guarantee Period 15%
Federation Square Siemens Guarantee Period 55%
Grampians Wimmera Mallee Water CarbonetiX Guarantee Period 9%
City of Yarra Ecosave Guarantee Period N/A
Melbourne Cricket Ground Siemens Guarantee Period 19%
Sunraysia TAFE Schneider Guarantee Period 23%
RMIT Bundoora & Brunswick Campuses Honeywell Installing 52%
RMIT City Campus Siemens Installing 34%
Museums Victoria Siemens Installing 66%
East Gippsland Water Ecosave Installing 41%
Public Housing (high-rise) Total Energy Solutions Installing 58%
Metropolitan Fire Brigade Ecosave Guarantee Period 13%
Chisholm Institute Ecosave Guarantee Period 29%
West Gippsland Health Schneider Installing 59%
Holmesglen Institute

Total Energy Solutions

Installing

36%

Austin Health

Honeywell Installing 2%
Melbourne Polytechnic A.G. Coombs Guarantee Period 40%
Peninsula Health FG Advisory Installing

21%

Gordon Institute of TAFE FG Advisory Installing 34%
Freeway LED Lighting Renewal Various (not EPC) Installing

N/A

National Gallery Victoria

Siemens 

Detailed Facility Study 

N/A
Northern Health FG Advisory Detailed Facility Study

N/A

Primary and Secondary Schools Various Contractors Stage 1 Installations N/A

Lead agency: Department of Treasury and Finance
Conditions of use: Non-mandatory
Reference number: GGB-01
Arrangement: Open panel
Start date: 01/09/2010
End date: 30/06/2021

Reviewed 24 July 2019

Primary contact:

Peter Phan (Energy & Environmental Project Manager, Greener Government Buildings) Department of Treasury and Finance

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