Yarra's Energy Performance Contract

Tuesday 19 December 2017

Richmond Town Hall Solar

Using an international protocol, Yarra has just completed the measurement and verification of the first 2 years of the innovative 10 year Energy Performance Contract (EPC). 

Initiated in 2014, this major Council project aims to reduce Councils greenhouse gas emissions by over 2,000 tCO2e per annum and pay off the capital expenditure in less than ten years by reducing Council’s energy and maintenance related costs by over $270,000 per annum. 

What is an Energy Performance Contract? 

An EPC is a unique way to retrofit buildings for environmental and financial benefits by using a large-scale turnkey project, made up of many actions, and providing a guaranteed return on investment. 

Yarra’s EPC project was supported by a Federal Government grant and built on the existing State Government’s Greener Government Buildings program.

Yarra was the first Victorian local government to implement a holistic EPC, setting an example in reducing greenhouse gas emissions, which have since been adopted by other Victorian Councils.  

How is it different?

Yarra has a proud history of being a leader in environmental action and carbon management. With many significant energy improvements already completed, including numerous solar installations and energy efficient retrofits, finding new reductions through an EPC was ambitious and challenging. 

The contract took a holistic approach to implementing energy conservation measures to reduce energy and water consumption; whilst also seeking cost savings from improvements in the operation and maintenance of equipment across Council buildings. 

The EPC sought companies vying to fit as much CO2 reduction as possible within an assigned financial Payback Period. The Payback Period is the time it takes to pay off the capital expenditure from the annual energy and other project savings, set by Yarra Council as 10 years. 

EPC’s are a unique building retrofit mechanism because the retrofit company provide a financial guarantee that the proposed energy savings will be met annually – or else the difference is reimbursed, reducing the risk to Council. 

How did the first two years of the EPC go?

In 2013 Ecosave Pty Ltd was engaged to design and implement the energy upgrades on 18 Council buildings, at a cost of $3million (which included a $411k Grant from Federal Government).  All works are now complete and all savings for years 1 and 2 (of ten) have been measured and verified as accurate against the international Protocol. 

The results for years 1 & 2 are:

  • Average of 1,925 tCO2e reduction. This equates taking nearly 600 cars off the road, or emissions of over 200 Yarra homes.
  • Average savings of $218,151 per annum.
  • Project underperformed against the energy savings guarantee and Council will receive reimbursement to cover year 1 and 2 savings shortfall.
  • The project payback period is as expected, at 9.7 years.
  • Project financial returns are expected to increase as electricity and gas tariffs rise, improving Council's financial outcome and reducing Council’s payback period. 

Contact Council to find out more about our EPC. 



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