Introduction

Energy efficiency improvement is one of the pillars of the energy transition. It is considered as one of the most cost-effective ways of addressing the growing demand for energy, climate change mitigation, energy security and increased competitiveness.

Directive 2012/27/EU on energy efficiency defines the term "Energy Performance Contracting" as “a contractual arrangement between the beneficiary and the provider of an energy efficiency improvement measure, verified and monitored during the whole term of the contract, where investments (work, supply or service) in that measure are paid for in relation to a contractually agreed level of energy efficiency improvement or other agreed energy performance criterion, such as financial savings”.

NOTE Sometimes in English the term "Energy Performance Contracting" is used with the same meaning of "Energy Performance Contract" although "contracting" can refer to the process of establishing and delivering an energy performance contract.

The new energy efficiency directive (EU) 2018/2002 highlights that reaching an ambitious energy efficiency target requires barriers to be removed to facilitate investment in energy performance improvement actions (EPIAs). One step in that direction is the clarification provided by Eurostat on how to record energy performance contracts for the public sector in national accounts, which offers opportunities to remove uncertainties and facilitate the use of such contracts.

The lack of broadly accepted best practices or guidelines for Energy Performance Contracts (EPCs) demands the development of a standard specifying the minimum requirements of the contractual agreement that matches the needs of:

• policy makers to provide tools for quality, transparency and effectiveness in EPIAs;
• building owners, public or private organizations and energy service providers to adopt a contractual framework for energy services that provides clear and transparent risk allocation and guaranteed energy efficiency improvement and other agreed energy performance criteria;
• financial institutions and banks to have a reference contractual framework between user and energy service provider that clearly specify value generation (including multiple benefits or co-benefits of energy efficiency improvements) and risk allocation;
• property valuators to help assessing the value of the asset in relation to its energy efficiency and sustainability performance for the project lifetime.

This standard addresses the multiple domains of the EPCs: technical, financial, legal and provides a common framework of methods to integrate the minimum requirements of energy efficiency improvement.

Because an EPC usually has an impact on the risk allocation between the energy service provider, the financial institution and the beneficiary of the energy efficiency improvement services, the requirements have implication on the economic evaluation, legal, fiscal and accounting procedures for both public and private organizations.

This document can be used in conjunction with the following:

• management system standards,
• energy management standards,
• risk management standards,
• asset management standards,
• underwriting procedures of financial institutions (European Bank Authority – EBA),
• international accounting standards (International Financial Reporting Standards - IFRS),
• Eurostat statistical treatment of EPC,
• Environmental Social and Governance (ESG) requirements, or
• Action plan for Sustainable Finance.

The production of renewable energy on site does not necessarily achieve energy efficiency improvement. Even if energy consumption across the boundary decreases, there may be no measurable improvement in energy efficiency related to the energy use as a result of the change.

However, renewable energy production may be a component of an EPC and is therefore considered to be in the scope of this document when combined with an EPIA.

BS EN 17669:2022

Energy Performance Contracts. Minimum requirements

Current

Published:

28 Feb 2023