What is an Energy review service?
Navigating energy obligations and targets within Facility Management Contracts can be complex, especially for organisations involved in PFI Project Agreements and Carbon Energy Fund Project Agreements. With utilities representing a significant variable cost to many organisations, it is important that where utilities are captured in service level specifications within FM contracts, that the procuring party can demonstrate that value for money is being achieved.
Our Energy review and contract management services ensure your organisation achieves value for money and optimal energy performance by providing expert guidance and support.
We have considerable experience in managing the energy obligations within PFI Project Agreements and Carbon Energy Fund Project Agreements and our expertise spans across various types of contracts and sectors, including Healthcare PFI Contracts, BSF Schools PFI Contracts, and Carbon Energy Fund Project Agreements.
Below are some of the typical energy provisions within PFI and PFI type contracts that your organisation may be working with.
Energy Provisions in Healthcare PFI contracts
Within standard form PFI contracts, the energy obligations tend to be two-fold:
Building Thermal Efficiency
- Establishing that the building, when fully commissioned, is delivering against the design thermal efficiency – a process that is normally assessed some two years after the contract operational commencement date.
- Establish annual Energy Year targets and monitoring actual against these targets. The Energy Target process requires the calculation of ‘Baseload’ and ‘Slope’ constants, which themselves are recalculated every five years. There is also a requirement for heating degree day information. Depending on energy performance relative to +-3% of target, parties can be exposed to painshare or gainshare.
Unlocking Energy Efficiency and Value for the Public Sector
Our Energy Review Service untangles complexities of energy obligations in PFI Project Agreements and Carbon Energy Fund Project Agreements, ensuring optimal energy performance and value for money. By expertly managing provisions like Building Thermal Efficiency and Energy Targets, we drive energy efficiency, reduce costs, and balance potential painshare or gainshare outcomes in your favour.
Energy Provisions in BSF Schools PFI Contracts
- First year energy targets are prescribed by the Schedule 6 – Annual Utility Services Consumption Targets. The targets remain valid for three years (the first Utility Period).
- Following the first Utility Period, new targets are calculated for the next three years on the basis of:
- Consumption within the first Utility Period
- Carbon emission ratings associated with the new targets
- Contribution from renewables and requirement to achieve a carbon dioxide emissions target of 25.8 kg per square metre.
- This is repeated for the duration of the Contract.
- Over or under achievement of the target by more than 10% results in the equivalent of a 50:50 painshare and gainshare split of the cost/savings.
- Underachievement of separate renewables targets can lead to a separate adjustment to a separate credit to the Authority – the Disallowed Non-Renewable Usage (DNRU)
Carbon Energy Fund Project Agreements
Typically, such agreements, which are similar in structure to PFI Agreements are structured to provide the contracting Authority with Guaranteed Savings which are determined at the outset of the contract and are indexed-linked for the 15 year duration of the Agreement.
The quarterly service payment can be adjusted for Service Credits which are applied for qualifying Unavailability Deductions or Performance Deductions which are incurred for Unavailability and failure to achieve a range of performance standards.
Get in touch with us today to find out how we can support you to undertake an energy review on your contract.
Energy reviews in PFI contracts are assessments conducted to ensure the energy obligations are met. They focus on the building’s thermal efficiency and annual energy targets.
Energy reviews are crucial to ensure optimal energy performance, value for money, and adherence to environmental targets. They can result in significant savings and improved sustainability.
Energy targets in PFI contracts are typically assessed annually, while the building’s thermal efficiency is evaluated approximately two years after the operational commencement date.
If energy performance deviates by more than ±3% from the target, the parties can be exposed to painshare or gainshare provisions, leading to potential financial implications
Expert contract management services, like ours, perform energy reviews. They have the experience and understanding to effectively manage the energy obligations within PFI contracts.