GuarantEE Energy Performance Contracting Policy Recommendations

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The EU project GuarantEE has developped a series of recommendations to be implemented in order to boost the EPC market in Europe.

The guarantEE project fosters the use of Energy Performance Contracting in the public and private sector across Europe. It is funded by the European Union’s Horizon 2020 research and innovation programme and involves 13 partners from across Europe. This report outlines a series of policy recommendations that the partnership feels, if implemented, would help to significantly boost the EPC market in Europe and thus help us reach our climate targets with greater efficiency and speed.

The first recommendation addresses the communication of EPC and dispels the myths often associated with it. The most common misconception of EPC is that it should only be considered if you need external finance for a project. Another misconception is that EPC is only suitable for large, multi-million Euro projects. A third is that EPC projects are significantly more difficult and costly to implement than “traditional” projects. While it is possible to use EPC to source external finance in order to implement very large projects that are complex to both procure and deliver, the results of the guarantEE project show that this is not representative of the current EPC market across Europe. The aggregation of buildings allows for smaller facilities to also be included in EPC projects. The 35 pilot projects of guarantEE show that these misconceptions do not represent the current EPC market across Europe.

For the second recommendation, the guarantEE project proposes that there should be official recognition of the role of the Project Facilitator and the development of training for Project Facilitators at national level, followed by a certification and quality assurance scheme once the market has developed. Project Facilitators are the main initiators of EPC projects and they critically help clients in overcoming their lack of trust in the EPC model and the energy services industry. However, the role of the Project Facilitator is not widely recognised and supported across Europe. This is particularly true for developing markets where the role is sometimes perceived as an additional cost and burden on the project. However, the guarantEE project demonstrates that the role of the Project Facilitator is critical to the overall development and success of the EPC market in Europe. The more mature EPC markets fully recognise this role as an important aspect of the EPC market. This is true for Austria, Germany, Belgium, Czech Republic, Slovakia and Slovenia, where the role is recognised at a national level. These are some of the most developed and active EPC markets in Europe.

The third recommendation proposes that all energy efficiency projects (public and private) should be mandated to include performance guarantees that are measurable and verifiable. It also includes the development of a library of standard energy performance contracts and contract clauses at a national level.

Challenges such as project finance, public procurement, lack of technical know-how and over-reliance on advice from suppliers very often lead to the implementation of small, single-technology projects. As no one is incentivised (technically or financially) to measure the actual energy performance of these projects, achieved energy savings are based entirely on the manufacturers’ and suppliers’ promises. However, if the performance of a measure or group of measures is measured and verified, then the resulting energy cost savings provide a cashflow for the project. These projects can also be grouped together or aggregated to form much larger projects, as the guarantEE project has demonstrated. The need for aggregation has the effect of accelerating the energy efficiency market, thus increasing the number of measures implemented and helping us reach our climate targets more quickly.

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Energy Efficiency/Saving
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EU Financing Initiative