HORNSBY SHIRE COUNCIL, AUSTRALIA
Program Name
Energy Performance Contract
Municipal Profile
Population: 147,185
Budget: US$49.2 million
Land Area: 510 square kilometers
Economic Activities: small- and medium-sized commercial and industrial businesses, horticulture, agriculture, marine operations
Environmental Expertise: environmental monitoring and reporting, greenhouse gas emissions reduction, energy efficiency, bushland and biodiversity management
Issue Addressed
Energy Efficiency, Water Management
Key Management Concept
Energy performance contracts can assist local governments with limited resources and technical expertise to implement initiatives that will increase municipal energy efficiency, reduce operating costs, and update and improve municipal infrastructure.
Program Goals
The main goals of implementing the energy performance contract (EPC) were to achieve guaranteed and significant reductions in energy and water use and greenhouse gas emissions, as well as improvements in internal management processes to ensure that reductions are sustained over the long term. Additionally, the EPC aimed to raise awareness among municipal staff and Hornsby residents of the benefits of reducing energy and water consumption, achieve a short payback period for the implemented measures (i.e., low cost and high return), and sustain cost savings in energy and water bills.
Program Abstract
Hornsby's Energy Performance Contract (EPC) was a key element of the corporate section of council's Greenhouse Gas Reduction Strategy, an action plan that aims to reduce greenhouse gas emissions resulting from Hornsby Council's own activities by 20% by 2010. The action plan was developed with input from the community and staff members on the municipality's Cities for Climate Protection? (CCP) Committee.
EPC are appropriate for local government and other organizations that have limited resources and technical expertise that wish to implement energy efficiency measures. An EPC is a service delivery method where a multi-disciplinary contractor is engaged to identify and achieve energy and greenhouse reductions. The method is especially suited to implementing several energy efficiency measures, which individually might not be economically viable. The work is paid for over a negotiated period from the resulting savings in energy and water usage. The initial capital cost may be covered by the energy services consultant (ESCO) or another party.
Hornsby has implemented a comprehensive local government EPC involving approximately 250 council maintained building and park sites, including the council chambers, aquatic centers, community centers, libraries, administration buildings, and major sporting fields and parks. The EPC involved a variety of energy and water conservation measures including:
Overall, the EPC has succeeded in improving Hornsby's energy efficiency, which will substantially contribute to the municipality's commitment to reduce its corporate greenhouse gas emissions. As well, the EPC has led to considerable savings in energy, water, and other operating costs, and served to update and improve Hornsby Shire's infrastructure.
The implementation of the EPC is predicted to reduce the Hornsby's energy usage by approximately 20% per year, save 34,200 kiloliters of water per year (a reduction of 19%) and reduce carbon dioxide emissions by approximately 780 tonnes per year (an 18% reduction in emissions).
The implementation of the measures included in the EPC has already achieved several social benefits including improvements in municipal occupational health and safety (i.e., increased comfort levels), and raising awareness of environmental issues and management.
The expected economic benefits of the EPC for the municipality include total cost savings of approximately US$108,000 per year, an internal rate of return of 16.4%, and an opportunity to channel a portion of future operational savings into a Revolving Energy Fund for similar projects.
Financing
The total cost of the EPC was approximately $855,000. Hornsby Shire funded the EPC through an internal loan to cover the initial capital cost of the project and is repaying the loan over seven years from the resulting savings in energy and water bills. Predicted savings are allocated to a Revolving Energy Fund that serves as a storehouse for the funds in order to repay the loan and implement future measures.
Staff
Council staff involved in the project included one dedicated CCP officer and one manager, as well as input from asset and finance managers and coordination with municipal operational staff as required. Hornsby Shire employed external legal advice and an EPC facilitator for technical and procedural advice. The EPC was carried out by a registered ESCO that employed subcontractors to carry out the work.
Lessons Learned
Implementing an EPC by following approaches suggested by EPC associations can be beneficial. Developing and nurturing a strong partnership between the municipality and the ESCO can contribute to the success of the project.
Some initiatives may not be well received because of resistance to change or a perceived reduction in amenity or convenience. Making minor alterations to suit personal preferences (e.g., adjustments of lighting levels) usually fixes the problem, as does altering approaches to satisfy community requests. Increased awareness raising and consultation with community members can produce mutually satisfactory solutions.
Key Publications
Hornsby Shire Council, Environment Division. 2000.
Cities for Climate Protection: HSC Greenhouse Gas Reduction Strategy.
Hornsby Shire Council, Environment and Health Protection Team (Environment Division). 2002.
Milestone 5 - CCP Report.
Hornsby Shire Council, Environment and Health Protection Team (Environment Division). 2003.
Operation Greenhouse: Education Action Plan.
Contact
Rima Lauge-Kristensen, Hornsby Shire Council Environmental Projects Officer (CCP)
PO Box 37
Hornsby NSW 1630
Australia
Tel: +61-2/9847-6545
Fax: +61-2/9847-6929
Email: Edivision@hornsby.nsw.gov.au
Website
www.hornsby.nsw.gov.au
Energy Performance Contract
Municipal Profile
Population: 147,185
Budget: US$49.2 million
Land Area: 510 square kilometers
Economic Activities: small- and medium-sized commercial and industrial businesses, horticulture, agriculture, marine operations
Environmental Expertise: environmental monitoring and reporting, greenhouse gas emissions reduction, energy efficiency, bushland and biodiversity management
Issue Addressed
Energy Efficiency, Water Management
Key Management Concept
Energy performance contracts can assist local governments with limited resources and technical expertise to implement initiatives that will increase municipal energy efficiency, reduce operating costs, and update and improve municipal infrastructure.
Program Goals
The main goals of implementing the energy performance contract (EPC) were to achieve guaranteed and significant reductions in energy and water use and greenhouse gas emissions, as well as improvements in internal management processes to ensure that reductions are sustained over the long term. Additionally, the EPC aimed to raise awareness among municipal staff and Hornsby residents of the benefits of reducing energy and water consumption, achieve a short payback period for the implemented measures (i.e., low cost and high return), and sustain cost savings in energy and water bills.
Program Abstract
Hornsby's Energy Performance Contract (EPC) was a key element of the corporate section of council's Greenhouse Gas Reduction Strategy, an action plan that aims to reduce greenhouse gas emissions resulting from Hornsby Council's own activities by 20% by 2010. The action plan was developed with input from the community and staff members on the municipality's Cities for Climate Protection? (CCP) Committee.
EPC are appropriate for local government and other organizations that have limited resources and technical expertise that wish to implement energy efficiency measures. An EPC is a service delivery method where a multi-disciplinary contractor is engaged to identify and achieve energy and greenhouse reductions. The method is especially suited to implementing several energy efficiency measures, which individually might not be economically viable. The work is paid for over a negotiated period from the resulting savings in energy and water usage. The initial capital cost may be covered by the energy services consultant (ESCO) or another party.
Hornsby has implemented a comprehensive local government EPC involving approximately 250 council maintained building and park sites, including the council chambers, aquatic centers, community centers, libraries, administration buildings, and major sporting fields and parks. The EPC involved a variety of energy and water conservation measures including:
- modifying air conditioning systems for optimum performance,
- upgrading light fixtures to more efficient luminaires,
- installing lighting controls,
- installing power factor correction equipment to reduce demand charges,
- adopting photovoltaic systems for renewable energy generation,
- using solar and high efficiency gas boiler systems for efficient water heating at aquatic centers,
- implementing water conservation systems for buildings and parks,
- collecting and storing rainwater to reduce the use of potable water for park irrigation.
Hornsby followed an EPC implementation process, outlined below, recommended by the Australasian Energy Performance Contract Association.
- An EPC Facilitator was appointed (March 2001) to act as an advisor and an evaluation team was formed to prepare tender documents and evaluate proposals.
- A public call for expressions of interest was issued to ESCOs for proposals to provide an EPC.
- Three ESCOs were selected and asked to submit proposals outlining solutions for achieving savings and a financial strategy.
- A single ESCO was selected to carry out a Detailed Facility Study that ultimately formed the EPC (August 2001).
- The contract was negotiated in consultation with city asset managers in February 2002, and the majority of measures were implemented by November 2002.
Overall, the EPC has succeeded in improving Hornsby's energy efficiency, which will substantially contribute to the municipality's commitment to reduce its corporate greenhouse gas emissions. As well, the EPC has led to considerable savings in energy, water, and other operating costs, and served to update and improve Hornsby Shire's infrastructure.
The implementation of the EPC is predicted to reduce the Hornsby's energy usage by approximately 20% per year, save 34,200 kiloliters of water per year (a reduction of 19%) and reduce carbon dioxide emissions by approximately 780 tonnes per year (an 18% reduction in emissions).
The implementation of the measures included in the EPC has already achieved several social benefits including improvements in municipal occupational health and safety (i.e., increased comfort levels), and raising awareness of environmental issues and management.
The expected economic benefits of the EPC for the municipality include total cost savings of approximately US$108,000 per year, an internal rate of return of 16.4%, and an opportunity to channel a portion of future operational savings into a Revolving Energy Fund for similar projects.
Financing
The total cost of the EPC was approximately $855,000. Hornsby Shire funded the EPC through an internal loan to cover the initial capital cost of the project and is repaying the loan over seven years from the resulting savings in energy and water bills. Predicted savings are allocated to a Revolving Energy Fund that serves as a storehouse for the funds in order to repay the loan and implement future measures.
Staff
Council staff involved in the project included one dedicated CCP officer and one manager, as well as input from asset and finance managers and coordination with municipal operational staff as required. Hornsby Shire employed external legal advice and an EPC facilitator for technical and procedural advice. The EPC was carried out by a registered ESCO that employed subcontractors to carry out the work.
Lessons Learned
Implementing an EPC by following approaches suggested by EPC associations can be beneficial. Developing and nurturing a strong partnership between the municipality and the ESCO can contribute to the success of the project.
Some initiatives may not be well received because of resistance to change or a perceived reduction in amenity or convenience. Making minor alterations to suit personal preferences (e.g., adjustments of lighting levels) usually fixes the problem, as does altering approaches to satisfy community requests. Increased awareness raising and consultation with community members can produce mutually satisfactory solutions.
Key Publications
Hornsby Shire Council, Environment Division. 2000.
Cities for Climate Protection: HSC Greenhouse Gas Reduction Strategy.
Hornsby Shire Council, Environment and Health Protection Team (Environment Division). 2002.
Milestone 5 - CCP Report.
Hornsby Shire Council, Environment and Health Protection Team (Environment Division). 2003.
Operation Greenhouse: Education Action Plan.
Contact
Rima Lauge-Kristensen, Hornsby Shire Council Environmental Projects Officer (CCP)
PO Box 37
Hornsby NSW 1630
Australia
Tel: +61-2/9847-6545
Fax: +61-2/9847-6929
Email: Edivision@hornsby.nsw.gov.au
Website
www.hornsby.nsw.gov.au
