Contracting for Federal Government Properties
Solar energy system
(Source: Federal Government / Bienert)
- Definition
- Objective
- Project participants
- Detailed information
- Energy efficiency performance contracting
- Energy supply contracting
- Project development
As part of its climate change programme, the federal government decided in October 2000 to reduce CO2 emissions from government properties by 30 percent as against 1990 by 2010.
In order to meet this voluntary commitment with innovative solutions but without additional budgetary appropriations, the pilot project "Energy Contracting for Federal Government Properties" was called into being in 2002.
Definition
Contracting involves a formal service agreement between the building owner and a specialised energy service provider, or contractor. The professional energy service provider plans, finances and implements measures to conserve energy or to improve the energy supply.
This contractor is also responsible for managing, maintaining and regularly optimising the installed systems for a period of time stipulated in the contract. The investment and operational risks are assumed by the contractor.
Expenditures are refinanced by a share of the saved energy costs (energy reduction contracting) or by remuneration for the supplied heating, cooling electricity or other form of energy (energy supply contracting).
Contracting is suitable for properties with energy savings potential where the investments do not exceed this potential.
Objective
The project aims to improve the energy efficiency of as many federal government properties as possible, to fully tap the existing energy conservation potential, to reduce carbon emissions and to cut costs.
With the pilot project "Energy Contracting for Federal Government Properties", the German government hopes to identify approaches which can serve as models for other territorial authorities.
Project participants
Project participants include
- the German Energy Agency (dena),
- the state construction authorities employed by the federal government,
- the Federal Office for Building and Regional Planning and
- the German government.
Detailed information
The project involves two different types of contracting:
- Energy efficiency contracting, performance contracting or (energy) savings contracting
- Energy supply contracting, plant contracting or useful energy supply
Energy efficiency performance contracting
In the case of energy efficiency performance contracting, a specific reduction in energy consumption is agreed by contract with the energy service provider (contractor). The required investments, for example for
- control systems
- improving existing heating, ventilation and air-conditioning systems
- replacing lighting installations, etc.
must be amortised entirely from the savings actually achieved.
The contractor is required to achieve a minimum savings in energy consumption/energy costs based on an energy savings guarantee. Remuneration is in direct proportion to the savings achieved. The contractor bears the entire commercial risk for the savings-based planning, functionality and optimal management of the technical systems.
Structural work on the building shell requires a modification of the energy efficiency contract. Thermal insulation work on the building shell requires higher investment costs than can be covered by conventional energy performance contracting. This alternative requires additional financing from the building owner.
Energy supply contracting
Energy supply contracting is a particularly good option when heat generation systems require upgrading. With this type of contracting, the contractor plans, builds, finances and manages the heating systems and sells the generated products. Expenditure is refinanced with remuneration - a set amount for the entire contract period - for the media supplied (heat, hot water, cooling, et cetera).
Once it has been completely refinanced, the plant becomes the property of the contracting client. One requirement of this form of contracting is the inclusion of a proprietary specification in the energy contract, according to which the contracting client leases a part of the property and equipment to the contractor while retaining ownership thereof.
Project development
The German Energy Agency (dena) is responsible for the execution and control of the project. The Federal Ministry of Transport, Building and Urban Development is responsible for financial and technical support.
The first step was to clarify the budgetary handling of contracting models and settle questions of public procurement and contract legislation. Following this, sample contracts and texts for the invitation of tenders were prepared and published in an energy efficiency contracting guide (3rd edition, October 2003, reprinted with amendments in December 2004).
At the same time, a database was created with the help of the state construction authorities and the Federal Office for Building and Regional Planning. This database was used to select properties eligible for energy contracting projects.
The successful implementation of the 40 energy contracting projects currently in operation or specifically planned will result in the following potential savings:
- Energy cost savings guaranteeapproximately 3.4 million euros / net (-23 percent)
- Immediate reduction of the burden on the federal budgetapproximately 630,000 euros / net
- Guaranteed investmentsapproximately 16 million euros / net
- Reduction of CO2 emissionsapproximately 18,000 tonnes per year (-24 percent)
In addition to the initiation of further contracting projects and the management of invitations of tender, priorities in 2006 will include support of the construction and main performance phases of the contracting projects as well as the evaluation and documentation of project findings.
Supplementary guidelines for energy supply contracting are currently being prepared.