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Publications archive - Human settlements
Key departmental publications, e.g. annual reports, budget papers and program guidelines are available in our online archive.
Much of the material listed on these archived web pages has been superseded, or served a particular purpose at a particular time. It may contain references to activities or policies that have no current application. Many archived documents may link to web pages that have moved or no longer exist, or may refer to other documents that are no longer available.
Climate change caused by greenhouse gases is one of the most serious challenges facing our community. Human actions—particularly burning fossil fuels (coal, oil and natural gas) and land clearing—are generating more greenhouse gases. These additional greenhouse gases trap more heat and raise the earth’s surface temperature. This is called the enhanced greenhouse effect—it causes global warming and is changing our climate.
The impacts of climate change will have social, environmental and economic consequences that will affect all communities across the globe.
Greenhouse gas abatement is not just for the big end of town. Climate change will affect all of us and therefore it is to everyone’s benefit to reduce greenhouse gas emissions. Most measures to reduce energy consumption and greenhouse gas emissions will save you money in the long term, increasing profitability. Some measures will even help to improve productivity and the marketability of your business. Reducing greenhouse gas emissions should be seen as an opportunity to provide your business with a strong business advantage.
Would you like to improve the energy efficiency of your business at minimum cost? If your answer is yes - you may want to explore the option of Energy Performance Contracting.
Energy Performance Contracting is an innovative form of contracting, developed to overcome the major barriers to delivering cost-effective energy efficiency. Energy Performance Contracting involves contracting an energy service company (ESCO ) to improve the energy efficiency of your business. The advantage of Energy Performance Contracting is that the contractor will take on the technical risks of any proposed projects and will guarantee a minimum amount of energy savings. The energy and associated cost savings will pay for any capital investment made over time. ESCO s are usually paid a management fee out of any savings made (if there are no savings, there is no payment) and are usually obligated to repay savings shortfalls over the life of the contract. Therefore if the project does not yield the promised energy of cost savings, it is the contractor who will be out of pocket - not your business.
The basic information to assist you in understanding and negotiating an energy performance contract is set out below. More detailed information can be found at the Australasian Energy Performance Contracting Association (AE PCA ) website at www.aepca.asn.au
What is an Energy Performance Contract? The first phase of an energy performance contract involves conducting a detailed audit or an energy-savings opportunity study of your business. A number of actions to improve the energy efficiency of your business will be proposed from the results of the first phase. A technical report is normally provided listing potential energy savings, as well as an implementation plan for the recommended actions and methods for testing what savings are achieved. Following this report, a mutually agreed upon energy performance contract can be drawn up and an agreed action plan can be developed.
When contract payments are performance based, they are normally reviewed and calculated annually based on the contractor’s performance in the preceding year.
Contract length. Contracts are long term propositions usually lasting between four and ten years.
Financing. Projects can be financed in one of three ways:
Business size. Typically energy performance contracting is better suited to energy intensive industries as the savings generated need to cover the costs of the project. However, smaller businesses with older facilities, a number of small operations or those with higher tariffs may also benefit. Appendix 2 of the Australasian Energy Performance Contracting Association (AE PCA ) guidebook, A Best Practice Guide to Energy Performance Contracting, available at http://www.aepca.asn. au/documents/epcguide.pdf provides a checklist that will enable you to assess whether energy performance contracting is suitable for your business.
Contract contents. The contents of energy performance contracts
can vary. Typically, energy performance contracts include information
on the project scope and timeline, contract length, level of savings to
be achieved, verification of savings, details of financing arrangements,
responsibilities, options for termination by either party, equipment
ownership and insurance, dealing with changes to facilities and
operation that might impact on savings, warranties, insurance and
operation and maintenance responsibilities.
Chapter 4 of the Australasian Energy Performance Contracting Association (AEPCA), A Best Practice Guide to Energy
Performance Contracting available at www.aepca.asn.au provides commentary
on the clauses of the National Standard Energy Performance Contract.
Monitoring savings. Perhaps the most important part of any contract is monitoring the energy savings that are made. Comparing utility bills to a baseline set of bills that pre-date the commencement of the project is the most common method used to monitor savings.
Energy performance contractors. Although the energy performance contracting industry is fairly new in Australia, there are already a number of businesses offering energy performance contracts. Many are associated with suppliers or manufacturers of energy efficient products. Energy performance contractors are typically engaged via an expression of interest or tender process. Accredited contractors certified by independent assessors are listed on the Australasian Energy Performance Contracting Association (AEPCA ) web site at www.aepca. asn.au. The accreditation process ensures contractors meet specified technical and financial standards. Using accredited contractors reduces risk and improves the outcome certainty of energy performance projects.
For case study examples on energy performance contracting conducted throughout Australia, listing the sectors, numbers of projects and the cost and savings to business as well as CO 2 reductions also go to the AEPCA website.
Reduced risk. The contractor takes on the risks and costs in the event that energy savings are not achieved.
Improved projects. Energy performance contractors are specialised in the area of energy management, and their projects provide high quality solutions including state-of-the-art products and services.
Added efficiency. Energy and cost savings produced as a result of energy performance contracts are often substantial enough to fund additional energy efficiency projects.
Payment systems. The type of contract undertaken determines how energy
savings are distributed:
| Contract type | Savings not achieved | Savings achieved | Savings exceeded |
| Guaranteed savings | Contractor pays you | You take savings and pay contractor | You take savings and pay contractor (payment may include a bonus) |
| Shared savings | Contractor pays you | You share savings with contractor | You share savings with contractor |
| First-out | Contractor takes loss | Contractor takes savings for term of the contract | You take savings when the contract ends |
| Chauffage and energy supply contracts | Contractor takes loss | Contractor takes savings | Contractor takes savings |