1. Energy Performance Contracting Energy efficiency improvements in commercial buildings - opportunities and challenges in New Zealand

2. Energy Performance Contracting • Energy Performance Contracting (EPC) is a method of implementing energy efficiency improvements projects based on guaranteed savings • Capital outlay is recovered from energy savings during time of contract • Any shortfall of predicted savings is made up by the contractor • Types of EPC: shared savings or guaranteed savings contract

3. EPC in New Zealand • EPC has first appeared in New Zealand about 20 years ago • Shaky start • Australasian Energy Performance Contracting Association in 1998 • Current EPC - Honeywell NZ with government support

4. Commercial Buildings in NZ • Commercial and industrial buildings account for 8% of total New Zealand energy use • Centre of Advanced Engineering in University of Canterbury has found in 1996 further 20-30% improvements were possible in existing building stock • EECA research suggests productivity gains 5-15%

5. Case Study Building

6. Case Study Building Energy Savings Potential 25% savings = $50000/year 70% savings = $140000/year

7. Barriers to EPC • Lack of interest in the project from building management company (no obvious gain) • No knowledge of energy management (and EPC) among both tenants and building manager • Energy Use Indices hard to find • ESCO numbers limited in NZ • Energy Services Contractors see EPC as costly • Australasian EPC Association focus on Australia only • Promotion by EECA limited to big projects with Honeywell

8. Overseas Experience • EPC in US since conception • Estimated revenues of this industry were $3.6 billions in 2006 • Initiall subsidies helpfull • Active Association • EPC Facilitators

9. Overseas Experience • Gradual move from simple to more comprehensive projects • States policiesallowing longer paybacks • Enron collapse – loss of customer confidence • Energy supply companies still active in EPC but scaled down • Private buildings 18% of projects • Renegotiating Lease Agreements

10. Overseas Experience • Europe main activity federal buildings • 2003 directive on Energy Performance of Buildings • Energy Performance Certificates for all buildings from 2009 • Eurocontract • White Certificates Scheme

11. Overseas Experience • Australia • Association 1998 • Subsidies and policies • Green Lease • Australian Building Greenhouse Rating

12. Stages of EPC Market Development • Government support • Association of EPC companies • Facilitators and M&V • Altered Lease agreements • Market demand development • Energy Performance Certificates for buildings

13. What Is Missing in NZ • ESCO (Energy Services Company) • Association • Government support • Altered lease agreements • Create market demand