Are your building's energy costs climbing while essential facility upgrades are delayed due to high upfront capital? This is a common challenge in Hong Kong, where commercial buildings consume 66% of the city's electricity. What if you could achieve significant building energy saving and modernize your systems without an initial investment? This is the transformative power of Energy Performance Contracting (EPC), a proven model Veolia uses to help clients achieve their sustainability and financial goals
What is Energy Performance Contracting (EPC)?
Energy Performance Contracting is a partnership model designed to make energy efficiency upgrades accessible and financially viable. At its core, an Energy Services Company (ESCO) like Veolia implements comprehensive energy-saving projects in your facility. The crucial part? The project is funded by the money you save on energy in the future. You get an immediate upgrade to your facilities, and the realised cost savings are used to pay for the work over an agreed period, which typically ranges from 4 to 10 years.
How Does It Work? The Two Main EPC Models
EPC is not a one-size-fits-all solution. The structure of the contract is tailored to your specific needs. The two most common models are:
1. The Guaranteed Saving Model:
This is the ideal model if you prefer financial certainty. As your ESCO partner, Veolia conducts a thorough energy audit and guarantees a specific level of annual energy savings. You, the building owner, may pay for the project after completion or arrange third-party financing, but you do so with the security of our guarantee. If the savings fall short, we cover the difference, effectively transferring the performance risk from you to us.
2. The Shared Saving Model:
If preserving capital is your top priority, this model is perfect. As the ESCO, Veolia can finance, design, and implement the entire project. We then share the actual, verified energy savings with you at a pre-agreed percentage. This model creates a true partnership where we are both invested in maximizing the project's performance.
The Key Benefits of Taking on EPCs
Adopting an EPC model offers a multitude of advantages that go far beyond simple cost savings:
Immediate Facility Upgrades, No Upfront Capital: Modernize your lighting, HVAC, and other systems now, not later. This improves your building's value and tenant comfort without draining your capital budget.
Transfer of Performance Risk: With guaranteed savings, the risk of the project underperforming is on us, not you.
Global Expertise and Turnkey Service: Veolia handles everything from the initial energy audit and design to installation, maintenance, and verifying the savings. You gain access to our global expertise without needing to build an in-house team.
Reduced Operating & Maintenance (O&M) Costs: Newer, more efficient equipment requires less maintenance and is more reliable, leading to further operational savings.
Positive Environmental Impact: Significantly reduce your building's carbon footprint and contribute to your organization's sustainability goals.
Overcoming the Barriers to Building Energy Saving
We understand that embarking on an Energy Performance Contracting journey can seem complex. In fact, surveys of Hong Kong building owners show that the top concerns are ‘long payback period’ and the 'complexities' of the process. This is understandable, as a study found that over 56% of building owners have no concept of EPC at all.
This is where a partnership with an experienced and globally trusted ESCO like Veolia is essential. Our approach is built on transparency and mutual trust, addressing these challenges head-on.
Unlock Your Building's Potential
The potential for building energy saving in Hong Kong is immense and largely untapped. Consider this: central air-conditioning and lighting alone account for 54% and 14% of a typical office building's electricity use, respectively. Yet, a recent survey revealed that nearly 65% of office buildings have not yet implemented major chiller replacements.
With less than 10% of building owners having ever used an Energy Performance Contracting model, a significant opportunity is being missed. Don't let high upfront costs and technical complexity hold you back from creating a more efficient, sustainable, and cost-effective building.