ESCO Energy Savings Contracts. EPC Energy Performance Contracts. VVSG Ostend - 16 May Wouter Geldhof Partner, Energy Law, Stibbe

Transcription

1 ESCO Energy Savings Contracts EPC Energy Performance Contracts VVSG Ostend - 16 May 2013 Wouter Geldhof Partner, Energy Law, Stibbe

2 Overview I. INTRODUCTION BACKGROUND II. III. IV. THE CONCEPT PRINCIPAL OBLIGATIONS OF THE ESCO PRINCIPAL OBLIGATIONS OF THE CLIENT V. IMPLEMENTATION VI. VII. VIII. IX. ENERGY SAVINGS GUARANTEE PAYMENT TO ESCO TRANSFER OF TITLE AND RISK, ACCEPTANCE, GUARANTEE LIABILITY X. MISCELLANEOUS 1

3 I. Introduction background Climate change Europe: Binding obligations for renewables and emission reductions Indicative obligations for energy efficiency role for ESCO s New buildings renovations vs. existing buildings renovation of 3% of public buildings Biggest potential in energy savings (+ local jobs) 2

4 II. The concept Shift energy savings projects from investment budget to operational costs: Upfront investment by third party (or bank) Pay-back through savings on energy bill 3

5 II. The concept ESCO: energy service company / energy savings company Energy performance contract (EPC): contractual arrangement of an energy efficiency improvement measure, where investments in that measure are paid for in relation to a contractually agreed level of energy efficiency improvement 4

6 III. Principal obligations of the ESCO Energy savings measures Study potential costs, measures Works (implement) Services (education, maintenance) Pre-finance works Guarantee energy savings 5

7 IV. Principal obligations of the client Assist Contractor regarding approvals, permits, etc. Access to site + data Data forms Comply with usage manual Leave installations Contractor unchanged Alert Contractor about changes in use Pay 6

8 V. Implementation Phase 1 Detailed analysis (term + penalty): verification-confirmation of rough energy savings potential of rough analysis => final savings expectations If final savings expectations > potential expectations of rough analysis => phase 2, unless client s right of refusal against penalty If final savings expectations < potential expectations of rough analysis => any party may refuse start of phase 2 without any payment due 7

9 V. Implementation Phase 2 Permits etc.: client vs. contractor Energy savings measures - general: Quality Energy management and monitoring system Energy savings measures execution: Contractor s margin of discretion regarding requests client to amend measures in agreed programme Client s injunction right for savings measures mentioned in rough analysis Client s right to veto (illegal measures, measures conflicting with third party s rights, nonconfirmation by contractor of quality standards, ) 8

10 VI. Energy savings guarantee Baseline: baseline period baseline energy costs Right for ESCO to amend the contract if baseline calculation deviates more than 5% of estimation + material effect on ESCO s obligations Energy savings guarantee: % of baseline energy costs and fix amount in. 9

11 VI. Energy savings guarantee (ctd.) Non-corrected annual energy cost (in ) is corrected: (No) correction based on energy prices Correction based on climate change (annual average temperature Gt of baseline period) Changes in use by client O&M or modernisation of building by client negatively affecting energy performance 10

12 VI. Energy savings guarantee (ctd.) Baseline energy cost ( ) Corrected annual energy cost ( ) = Actual energy saving Energy saving guarantee ( ) = Result of the period 11

13 VII. Payment of ESCO If energy savings guarantee is met (result period = 0): payment of annual base fee (Bimensual, trimestrial, ) advances (80% of annual base fee) Failure to achieve energy savings guarantee (result period < 0): reduction of annual base fee (can be negative!) transfer malus to following year make up Excess energy savings: bonus 12

14 VIII. Transfer of title and risk, acceptance, guarantee Title: incorporation Risk: acceptance Contractor invites client for acceptance after works: check of sheets and investment volume Guarantee for defects of components during savings guarantee 13

15 IX. Liability Limitation of ESCO s liability under energy savings guarantee to repayment as provided above No liability under savings guarantee if: non compliance with manual / changes in use, no maintenance contract, No restriction for other damages Insurances to be taken out by contractor: CAR, civil liability, labour accidents 14

16 X. Miscellaneous Bank guarantee by ESCO (eg. 5 % of total energy savings guarantee) Conflicts: experts for technical issues Licence for monitoring system Confidentiality Severability No waiver Publicity Applicable law and jurisdiction clause 15

17 Conclusion Q & A Thank you for your attention! CONTACT Wouter Geldhof wouter.geldhof@stibbe.com