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ENERGY MANAGEMENT


TRADITIONAL METHODS ROI, playback period Tender for audit


CONTRACT Energy auditor or consulting engineer


of interest (EIO) Request for


proposal (RFP) Expressions Several responses


Select three tenderers to compete an audit. For small projects a level 1 audit is appropriate. For contracts over $250,000 a level 2 audit is recommended


DETAILED FACILITY STUDY CONTRACT Audit Specification for works


Detailed facility study (DFS)


Select one tender to complete a detailed energy audit. ENERGY SERVICE CONTRACT Financial criteria:


INTEGRATED ENERGY SERVICES MODEL


Tender for contractors, PM CONTRACTS Installation


Periodic monitoring and verification


Figure 1: The Integrated Energy Services process versus traditional methods. Energy costs are rising with projected


forecasts in the order of 30%-50% over the next two years. Identifying these energy efficient opportunities are critical in avoiding the mounting cost pressures that rising energy prices will bring. Energy efficiency is one of the key


initiatives for the abatement of carbon emissions and the transition to the low-carbon economy and legislation is now in place. Businesses are offered numerous opportunities to improve operational and financial performance by mitigating against energy risks including price increases and exposure to a carbon price e.g. carbon tax. Energy efficiency expertise is now part of


a new generation of green skills that form part of the transformation of the Australian labour market and upon which new job opportunities and careers will be built.


Benefits from EPC The Integrated Energy Services process, shown in Figure 1, focuses government effort on developing a whole-of-government protocol and selecting a lead contractor. The government establishes a whole-of-


government protocol for energy efficiency upgrades, including establishing access to capital for energy efficiency upgrades that meet a predetermined return on investment


IFHE DIGEST 2014


The ESCO determines energy savings and may undertake corrective action to ensure that the project meets agency goals


target, typically between 7% and 15% per annum. An agency seeks expressions of interest (EOIs) from energy service companies (ESCOs), covering their competencies and previous experience. The agency selects three ESCOs to


undertake an initial, free assessment of energy efficiency opportunities. The outcome is based on these assessments and the agency then selects the successful ESCO. A guarantee will be provided by the


ESCOs to deliver a certain level of energy savings. If the agency agrees to proceed, the ESCO implements the energy efficiency upgrade and may provide ongoing management of these measures. Alternatively, the ESCO may assist the agency to hire subcontractors to implement the upgrade and help the agency develop a management plan.


Ideally, the contractor and agency form a


close partnership with a shared goal to maximise ongoing energy and cost savings.


The independent third part auditor will


monitor and verify the energy savings made by the project, which provides a level of security of actual performance outcomes to the end customer or agency. There are a number of options within this


type of Integrated Energy Services. The model including EPC programme, has the additional benefit of ongoing maintenance and guaranteed energy saving results with the ESCO underwriting shortfalls in savings if the project does not achieve the agreed objectives. The conceptual challenge is that the


energy savings are calculated as the difference between ‘real’ actual measurements, taken during the post-retrofit period (after the ECMs are installed), and ‘estimated’ values that would have been measured during the post retrofit period if the ECMs had not been installed. The post-retrofit ‘estimated’ values are called the ‘baseline energy’ values and are often referred to, for convenience, as the


‘In general, the principle of EPC management is the process which begins with a feasibility report that outlines key performance factors.’


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Installation


Energy Services Company (ESCO) manages or assists in overseeing installation, including any sub-contractors


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