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Energy Performance Contracting (EPC)

The EPC model is based on delivering energy savings compared to a predefined baseline. In the Energy Performance Contracting (EPC) model, an Energy Service Company (ESCO) enters into arrangements with property-owners to improve energy efficiency of their property by implementing various measures. Thus, the application span of Energy Performance Contracting involves the entire building as one incorporated energy-consuming unit. In other words, under an Energy Performance-Contracting (EPC) business model, an Energy Service Company guarantees energy cost savings (also labelled as ‘Negawatt-hours’) in comparison to a historical (or calculated) energy cost baseline. For its services and the savings guarantee, the ESCO receives performance-based remuneration in relation to the savings it achieves. Generally, savings achieved can only be measured indirectly as difference between consumption before and after implementation of the EE and RE measures (relative measurement: savings = baseline – ex post-consumption).

The standard scope of services encompasses the entire building. RET may play a role but with most EPC projects the focus is on the implementation of energy conservation measures. EPC models run under long-term contracts of typically ten years, depending on the payback time of the energy savings measures and the specification of the building owner.

ESCOs can also finance or arrange financing for the operation, and their remuneration is directly linked to demonstrated performance regarding the level of energy savings or energy service.

In conclusion, more than a funding model, an EPC is a programme of practical engineered energy efficiency measures that are implemented in buildings to deliver real energy savings such as HVAC, lighting, controls and building fabric improvements. In addition, to ensure the building is used in the most efficient way, building occupants receive training on energy efficiency practices.

Indeed, when measuring savings through a comparison between a baseline and post-retrofit energy costs, two major difficulties may occur:

  • The baseline itself may be difficult to determine with enough accuracy due to a lack of availability of historic data (e.g. from bills or meters).
  • The determined energy cost baseline is not a constant but subject to changes in climate conditions (e.g. ambient temperatures, solar radiation etc.) and in energy prices. Besides, utilization of the building may change. These changes need to be taken into account when calculating energy cost savings. Especially the changes in utilization may cause considerable difficulties for the ESCO and the facility owner in adjusting the baseline.

EPC business models, after EnPC-INTRANS

The intention is to keep the total energy consumption to a minimum – by way of demand side energy efficiency methods. To ensure promised energy savings have been achieved over the contract duration, a procedure termed “measurement and verification” is used. Adhering to an internationally recognized protocol such as the International Performance Measurement and Verification Protocol (IPMVP), customers can be assured that guaranteed savings have actually been delivered despite changes to the climate, the building and its use over time. The procedure is subject to the EPC contract, regulating the partnership between the ESCO and the customer. The contract regulates general issues such as property rights, usage of the systems and partnership duration. Furthermore, it stipulates the amount and structure of the investment, its implementation, how it is controlled as well as the maintenance of the energy saving measures which have been taken. It particularly determines the extent and distribution of the annual savings.

Variants:

EPC light

The EPC light business model aims at achieving energy savings mainly through optimization and organizational measures with low or no investments in technical equipment. The ESCO acts as an external energy manager taking over the responsibility to operate and optimize the energy related installations (heat boilers, building automation, lighting control). Usually the contract duration is short (2-3 years), since pay-back of high investments on hardware is not necessary. In this model the energy savings are still guaranteed by the ESCO. This model is very interesting for customers with little capacity or few resources for sustainable energy management. The first EPC light pilot project was developed in in Pankow district, in Berlin, Germany, during the guarantEE project.

EPC plus

The EPC plus business model extends the service of the ESCO to comprehensive structural measures on the building shell like insulation or window replacement. These services are usually not part of the classical EPC because of excessively long pay-back periods. The contractual arrangement contains special regulation on financing. Usually the customer has to pay a share of the investment through a grant or by combination of EPC with subsidy programs. EPC plus is very suitable in buildings with high need for renovation. The combination of both structural renovation (EE) and energetic optimization (RET) leads to high energy savings up to 50%. The ESCO can involve a cluster of SMEs, responsible of jointly supplying EE measures and RET services.

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Torrelago district

The renovation of Torrelago district was implemented in the framework of the FP7 funded CITyFiED project (http://www.cityfied.eu/) .

Torrelago district involves 31 private multi-property residential buildings (1488 dwellings) that were constructed in the 1970s–1980s, more than 140,000 m2 and 4000residents involved. Former conditions of the district were very low in terms of efficiency, comfort and costs, which fostered the intervention. Main energy measures implemented at the building scale are buildings external insulation (Composite System-ETICS, ventilated façade), connection to district heating (twelve new heat exchange substations at building level), individual metering to raise users’ awareness.

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Standard envelope insulation – ‘light’

This package consists in the very first step of the thermal insulation of a building and includes the following components:

  • Roof insulation, using either an insulation panel/roll or a spray foam under the roof. External roof insulation is also possible (i.e. built-up roof insulation under waterproofing)
  • Energy efficient windows (double or triple glazing)

 

Without proper insulation, as much as 25 to 30% of the heat in an uninsulated house is lost through the roof, and 10 to 15% through the window. Those two points are usually addressed first (i.e. before the walls – 25 to 35% of losses, and the floor – 10 to 15% of losses) as they are the most easy to deal with and the  most profitable in the short term.  Loft insulation and new windows act as a barrier, slowing the movement of heat out of the building during the winter and into it during the summer.

On its own,this package will not increase the performance of a building sufficiently for this building to become energy-efficient, but it can be complemented at a later stage with additional technologies so as to generate more substantial energy savings.

 

Roof / loft insulation

Materials

Different types of materials can be used for internal and external insulation, either in a roll, panel or spray foam form, each having its own benefits and limitations: wool (glass, rock, sheep or hemp), polyurethane, expanded polystyrene (EPS) or extruded polystyrene (XPS).  The recommended uses are the following:

Techniques

There are two main ways to insulate a loft or a roof: at the joists or at the rafters.

Insulation at the joists (Source: ADEME)

Cold loft insulation at the joists

The insulating material is laid (or sprayed) on the floor of the cold loft.

 

Warm loft insulation at rafter or externally

For the insulation of warm and occupied lofts under a pitched roof, two techniques are available:

Internal insulation

Insulation at the rafters with panels (Source: ADEME)

Loose fill insulation (Source: ADEME)

The internal insulation can be done with semi-rigid panels or rolls, whose layout will depend on the structure of the building frame and the available space.

A loose-fill insulation can also be injected in an air-tight cavity under the roof cover.

External insulation

Insulating from the outside avoid loosing living space but requires to remove the existing covering. Load-bearing panels can be used, or insulation can be added between the rafters and the roof covering, with a roof sarking (i.e. a protective and waterproof second skin under the roof). This last solution requires raising the roof line.

 

Flat roofs insulation

For flat roof, external insulation (“hot roof”) is recommended. Insulating from the inside can cause damage as it will inevitably lead to the formation of condensation. In this case, a rigid insulation is fitted outside, above the existing weatherproofing. This is then covered with a further weatherproofing layer.

 

Energy-efficient windows

Materials

The performance of the windows depends on the glazing and the frame. The level of performance is expressed by the thermal transmittance coefficient Uw. Performant solutions exist with timber, PVC or aluminium (with thermal breaks) frames.

Double glazing

Double glazing is made of two glass layers separated by an air gap. It is more performant than simple glazing and reduces the condensation and heat losses through the windows. The new generation of double glazing includes argon instead of air, as well as a fine transparent layer with low emissivity, usually silver-based: its insulating capacity is 2 to 3 times that of standard double glazing.

Triple glazing

Triple-glazing is made of three layers of glass separated by two layers of argon or krypton and two low-emissivity metallic layers. The Uw value is excellent, however the ligh transmittance can be lower than for a good double-glazing.

 

Techniques

Windows can be changed with two main techniques:

  • By keeping the existing frame: this a simplest option, however the performance and the glazed area are slightly reduced
  • By removing the existing frame: this is the most performant option, however it requires more work and some finishing

As double or triple-glazed windows will be more airtight than the original single-glazed frames, condensation can build up in the building due to the reduced ventilation. If there is not a sufficient level of background ventilation in the room, replacement windows should therefore have trickle vents incorporated into the frame, that let in a small amount of controlled ventilation.

 

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