1. Energy Performance Contracting (EPC)

2. Vic Government EPCs since 2009 29 projects covering 745 buildings saving 37% (average GHG saving) and $418 million (net over life) and savings are guaranteed

3. Federation Square EPC $6.85 million 55% greenhouse gas saving

4. $11.8 million 30% greenhouse gas savings Government office buildings EPC

5. $4.1 million 31% savings guaranteed Melbourne Sports and Aquatic Centre EPC

6. $1.8m 32% greenhouse gas saving South West TAFE EPC

7. $2.8 million 28% energy saving Parks Victoria EPC (46 parks)

8. RMIT EPC $99 million 36% greenhouse gas saving

9. Scope being finalised Melbourne Cricket Ground EPC

10. Scope being finalised Museums Victoria EPC

11. $3.4 million 45% greenhouse gas saving City of Yarra EPC

12. Frequently asked questions

13. What is an EPC?

14. An integrated process with a savings guarantee Request for Proposal Detailed Facility Study Install solutions M&V EPCDFSA

15. Why EPC? Why not just do it ourselves?

16. More savings Guarantee reduces risk Low risk supports financing Doesn’t require customer to be an expert

17. How can anyone guarantee the savings?

18. Careful application of the M&V protocol: A.Data logging systems/equipment B.New meters on relevant circuits C.Annual site bills D.Modelling

19. As per blue box in upper right corner Measurement and verification of savings. This text box not really necessary, but has been added to deliberately make the page look overly busy… for visual effect and nothing else really. EPC measurement & verification Request for Proposal Detailed Facility Study Install solutions M&V Initial M&V outline (for pricing) Methodology agreed (option, sample, timing & duration) Baseline agreed Some measurements taken (e.g. option A ‘before’) Comprehensive MVP developed Some pre-install measurements Post-install measurements Reporting Making good Financial reimbursement EPCDFSA IPMVP Options: A: Partly measured retrofit isolation B: Fully measured retrofit isolation C: Whole of site D: Simulated Calibration Ongoing M&V reporting: Annual M&V reports One off M&V reports (e.g. option A solutions) Annual commissioni ng requirements

20. Do we have to install everything they recommend?

21. No

22. Do we have to share the savings?

23. No

24. Does the ESCO take over our electricity bills?

25. No

26. What about maintenance contracts?

27. No

28. Do we lose flexibility in use of our buildings?

29. No

30. Are we big enough?

31. If you spend over $200K per year on utilities

32. How do we pay for it?

33. 1.Cash 2.Debt finance 3.Finance Lease

34. Doesn’t it cost a lot to measure and verify?

35. It will cost more if you don’t.

36. Did you get what you paid for?

37. How much will an EPC cost?.. and save?

38. Hypothetical Local Government EPC Project scope Civic centres Aquatic centres Libraries Depots Other facilities Annual utility expenditure = $800,000 37% savings = $288,000 $2 million $153,600 $604,000 Capital investment (year 1 debt impact) = Annual operating statement impact = Avoided capital (asset replacement) =

39. What will my chief finance officer think?

40. They should support this.

41. Accounting treatment of energy efficiency investments For projects funded with cash OR debt where the payback period is less than the investment life. BALANCE SHEET –Increased liabilities or less cash –Improved asset value of buildings OPERATING STATEMENT –Depreciation expense (~1/15 th of investment) –Annual cost savings (~1/7 th of investment) –Savings more than double the expense NET DEBT (liabilities – cash) –Increased liabilities or less cash –Increased net debt by value of investment in year 1 –Impact reduces to zero over term of the payback period –Positive impact thereafter zero, then +ve +ve - ve for payback term, then +ve

42. How do I get started?

43. Call me Sam Burke 0408 554 413

44. Further information www.procurement.vic.gov.auwww.procurement.vic.gov.au, Select ‘EPC’ under ‘State Purchase Contracts’