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Energy Performance Contracts

Energy Performance Contracts (EPCs) are attractive to a wide range of organisations as a low risk way of cutting energy use and costs. But whilst EPCs can bring much needed investment into major upgrades of plant and building envelope, EPCs are inherently long, complex and hard to negotiate and transaction costs, especially legal costs, can be high.

Without specialist knowledge of EPC contract negotiation, the potential for committing to a contract that does not optimise benefits to the organisation and does not maximise potential savings is high.

Contracts need to take account of all the changes that could occur over the duration of the contract including variations in energy use, changes in the way that buildings are used and change of ownership. Methods of Measurement and Verification need to be agreed

Before going down the EPC route (it may not even be the right route for your organisation) or before renewing an existing EPC, it is worth getting expert advice.

Our EPC specialists fully understand the practical technical details as well as the contract minutiae, the commercial judgements to be made, the allocation of risks, the incentives of both parties and all the potential pitfalls.

They can unpick the terms of the contract to ensure a balanced approach of risk and reward for the contractor and client and will ensure:

  • Robust development, negotiation and conclusion of a Utilities Management contract
  • Contract transparency
  • Objectives and drivers are met
  • Integrated design methodologies reduce capex and maximise savings
  • On-going management of the contract once it is in place
  • Risk mitigation

Even when a contract is already in place, it is worth reviewing the terms to see whether there is any scope for renegotiation or refinement. We have used our expertise in this area to make considerable savings for many clients.

Significant amounts of money can be saved, or lost, through an EPC. The relatively low cost of appointing a specialist to assist will be quickly recouped through the significant savings that the right contract delivers.

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