Flexibility options in Energy performance contracts Training module Flexibility options in Energy performance contracts Add date

1 2 3 3 flexibility options Ordinary termination of the contract Simplified measurement and verification process (M & V) Integration of public funding by the contractor 1 2 3 Add date

Ordinary termination of the contract 1 Problem: Fear of being "locked up" in a long contract, → short contract periods, → limited scope of measures Solution: Additional paragraphs allowing regular termination of the contract, including compensation

1 Such a paragraph should specify Who has the right to terminate the contract; In the majority of cases, a premature termination by the customer will be desired Earliest possible termination date Length of the notice period Compensation for the contracting party. The calculation of compensation should be as simple as possible; the compensation must also be high enough not to promote early termination too easily

1 Compensation elements for the contractor (in case of termination by the customer): The contractor can use all scheduled payments until the regular conclusion of the contract less the costs for maintenance, servicing and energy management. The contractor may demand a lump sum of 10% for the profit loss of the regular contracting instalments until the end of the planned contract term.

Simplified Measurement & Verification Procedures (M & V) 2 Facts: M & V procedures are needed to determine if the EDL has met its performance guarantee At the same time, M & V procedures are complex, costly and conflicting Solutions: Simplified M & V for consumers <30% Limitation on M & V before and after implementation Agreement of arithmetical proof for subsequent periods Measurements in subsequent years only at the request of the client Cost of the measurements bears the privileged

Funding acquisition by the contractor 3 Problem: Subsidies are often "insecure" (budgets are limited, the jury has to decide ...) → it's a high risk to trust in the ESCO offer ESCO applies for subsidies that benefit the customer only → low motivation on the ESCO side

Funding acquisition by the contractor 3 Solution: ESCO is responsible for raising public funds All funds reduce the re-financing share of the customer ESCO receives compensation for successfully received public money

More information on Thank you https://guarantee-project.eu/ https://guarantee-project.eu/epc-facilitators/ https://guarantee-project.eu/knowledgebase/ https://guarantee-project.eu/bestpractice/ 22/02/2019