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p2e2 Energy Performance Contracts

by John Herbert

If you own or manage a building, we have good news you can save you money . . .

Energy performance contracting (EPC) is a smart, affordable and increasingly common method to achieve building improvements that save you both energy and money - an most importantly without upfront capital expense.

e2p2 performance contracting better buildings today no upfront costs

Any large building or group of buildings are an ideal candidates for performance contracting, including government buildings, schools, hospitals, hotels, commercial office buildings ,and industrial facilities.

Do you face these problems at your facility?

You have old, obsolete or inefficient energy systems and equipment in your buildings.

You need to make energy system improvements, but there are too many other demands on your time and budget.

You have recurring equipment problems that take up valuable staff time.

If so, here's the good news...

You can implement the energy upgrades you need today, with no up-front capital, and pay later from the resultant energy savings.

Best of all, those savings can be guaranteed. How? Through energy performance contracting (EPC).
performance contracts, p2e2, energy contracts, saving operating cost with ESCO

Here's how it works

Your energy bills are higher than they need to be due to obsolete or aging equipment. By choosing to contract with an energy service company (ESCO) you can put those wasted energy dollars to better use.

An ESCO will recommend cost-effective improvements, work with Kelcroft and you to implement the recommendations you choose, and guarantee that the resulting savings will cover all project costs usually within 7 to 10 year period.

Putting the pieces together:

  • Identify and evaluate energy-saving opportunities;
  • Develop engineering designs and specifications;
  • Manage the project from design to installation to monitoring;
  • Arrange for financing;
  • Train your staff and provide ongoing maintenance services;
  • Guaranteed that savings will cover all project costs;


Performance contracts are not exactly cutting edge science, but what is new is their application for energy saving procurement in Asia. Tried and tested overseas, EPC has attracted growing interest from the private sector.

EPC Barriers & Risk

To good to be true? of course there are risks involved, EPC disadvantages include:

1.  After the signing the contract you are tied to one vendor.

2.  M&V - once the contact is running the results need to be continuously measured and verified (known as M&V).

3.  Any failure to deliver the expected result requires reconciliation to recover shortfall, typically carried out annually.

4.  Poorly formulated contract failing to ensure that energy performance doesn't override your core business.

5.  Inadequate remediation protocol - energy performance contracting is a partnership, where both parties must benefit.

6. Finding the experienced and highly skilled project managers are essential for both the planning and execution phases.

Even wondered how some businesses manage to offer impossibly low cost products? Energy conservation measures is a strategic tool, reducing your energy operating expenses by up to 40%. Passing those savings on to customers beats the competition hands down.

Like any contract, the potential downside can be mitigated by strategic management and careful planning. EPC is a tool, properly applied, it helps businesses create EPC partnerships delivering results that improve your bottomline, giving your business a competitive edge.


Some types of project may also earn carbon credits (CER's) under the CDM protocol or perhaps voluntary CER's, providing an addition income stream.


For further information regarding energy performance contracting partnerships call Mr John Herbert at our Hong Kong office +(852) 2335 9830 or fax +(852) 2335 9862 or email us

Keywords: p2e2, energy contracting, EPC