The building sector represents approximately 44% of final energy consumption in France. As part of the priority given to improving the energy efficiency of its building stock, the government has implemented various solutions, including the energy performance contract (EPC)which mainly targets public and private companies. The energy CPE aims to reduce energy consumption and CO emissions2, with an obligation of results to be achieved. But who is affected? How does this contract work? How to set it up? Focus on the energy CPE.
What is the energy CPE?
An Energy Performance Contract (EPC) is an agreement established between a contracting authority and an operator, which sets energy efficiency objectives. In other words, the operator undertakes, through the contract, to achieve effective energy savings for the beneficiary of the works. These energy savings are quantified over a period defined in advance.
The EPC first appears in the European directives of 2006 and 2012, which aim to regulate the energy efficiency of buildings (RT 2012). It was then integrated into the Grenelle 1 law of 2009, which defines the main orientations of the government in terms of energy and ecological transition.
The advantages of the Energy Performance Contract?
The guarantee of energy performance
The Energy Performance Contract (EPC) is distinguished by its firm commitment to achieving the objectives set, thus offering a solid guarantee of results. This assures the recipient that their investments will produce the expected results and that their budget will be well managed.
In addition, the energy CPE can include a stimulating bonus-malus system, with attractive rewards or severe financial penalties depending on the achievement or non-achievement of energy performance objectives.
A simplified process
The Energy Performance Contract (EPC) offers a dynamic and regulated solution, designed to maximize energy savings through a comprehensive approach:
- An all-in-one contract that covers various areas, such as renovation works, management of energy sources, design, construction, operation and maintenance, tailored to your specific needs.
- A quick and efficient implementation that allows you to observe the results without delay.
A quick return on investment
The financial structure of the energy CPEs is reinforced by the special advantages linked to theEnergy Savings Certificates (CEE). In addition, it can benefit from the innovative approach of "global cost and competitive dialogue".
This approach makes it possible to define performance objectives in collaboration with the operator, thus ensuring an optimized and beneficial project for all parties involved.
A decarbonization approach
The CPE allows you to:
- Reduce energy consumption and CO emissions2.
- Adopting a greener energy approach byconnecting to a sustainable heat network, installing a heat pump, using biomass, and many other solutions.
3 types of CPE energy contract
There are three types of energy CPE depending on investments and budgetary constraints:
- CPE Services: This type of contract focuses on the supply, operation and maintenance of energy production and consumption equipment and systems, as well as energy consumption optimization and management systems. It is suitable for poorly insulated buildings and allows energy savings of 10 to 20%.
- CPE System: This contract covers the design, execution of work onthe heating system, as well as optimization actions to improve energy performance. It allows energy savings of 20 to 50%.
- Global CPEs: This form of contract combines the characteristics of the two previous ones. It includes work on the envelope of the existing building, such as the thermal insulation of walls, attics and floors, as well as the replacement of joinery.
Obtaining and concluding a CPE
There are several options for obtaining an energy CPE:
- Private Contract: This applies to housing, industrial or tertiary sites managed by private entities. It may or may not include investment financing.
- Global Public Performance Market (MPGP): This type of contract is used in the context of public orders, in particular by local or regional authorities.
- Partnership Market: This option offers various possibilities such as pre-financing, design-build, operation-maintenance, as well as services related to the buyer's public service mission. It is mainly used for construction projects or major renovations.
Most energy CPEs are entered into through calls for tenders issued by local or regional authorities. Energy efficiency companies generally bid for these calls for tenders within the framework of public contracts.
Steps in the implementation of an energy CPE
To set up an Energy Performance Contract (EPC), several steps and a precise methodology must be followed. Here they are :
- The contracting authority, whether it is a community, a lessor or an owner, must contact an energy services company specializing in improving the energy performance of buildings.
- The selected company carries out an assessment of the reference situation. This may include an in-depth energy audit to accurately diagnose needs and establish a list of works in order of priority and budget value. The building's annual energy bills can also be used as indicators to determine the baseline situation.
- An action plan is drawn up in the energy CPE in order to clearly define the energy performance objectives to be achieved. The work carried out must reduce the building's energy consumption by at least 20% over a minimum period of 5 years. The action plan also includes a budget for the works, which allows the project owner to seek funding (Energy Savings Certificates, ADEME subsidies, etc.) to cover part of the investments.
- The energy performance objectives of the CPE must be associated with an Energy Performance Guarantee (EPG). This is a key element of the contract, because it implies an obligation of results. A bonus-penalty system is set up depending on whether or not the objectives have been achieved. Thus, the contract holder benefits from the guarantee that the objectives of the energy CPE will be achieved. If this is not the case, the energy services company must indemnify the contracting authority by paying it compensation equivalent to or greater than 66% of the additional cost incurred.
- Once the contracts have been drawn up, the energy efficiency company hires the craftsmen to carry out the planned work. At the end of the renovation, monitoring of energy consumption is put in place to measure the impacts and check whether the GPE has been reached.
The price and financing of an energy CPE
The cost of an energy performance contract varies according to the specific needs of the contracting authority. It is generally determined by two key elements:
- Energy bills: these represent the final energy consumption over a given period.
- Energy renovation works and/or optimization services aimed at improving the energy performance of building equipment or systems.
These elements combined form the overall cost of the EPC energy project. The actions taken to improve energy performance have a direct impact on the cost of energy, thanks to the energy savings guaranteed in the contract.
The financing of a CPE can be achieved in three ways:
- Self-financing: This involves covering the cost of the work thanks to the energy savings made. However, self-financing can be difficult to achieve, since energy savingslarger may require larger investments.
- Third-party financing: The energy efficiency company can propose a global offer including financing. This funding can come from aid schemes such as Energy Savings Certificates (ESC), subsidized loans, subsidies, etc.
- Third-party investment: In this case, the energy efficiency company assumes the cost of the energy CPE and is reimbursed for its initial investment in the form of rents.
The choice of financing method will depend on the specifics of the project and the preferences of the client.
And after ? Use renewable energy solutions provided by the energy CPE. Indeed, the energy performance objectives of buildings within the framework of an EPC involve a certain number of action plans for the consumption of green energies.
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