Eurostat EPC Changes

Noel Lawler Consulting Engineers, together with sister company Green Energy Solutions are involved in Energy Performance Contracts (EPC) projects with Dublin City Council. Green Energy Solutions are carrying out energy upgrades in three of Ireland’s largest leisure centres, all of which are based in Dublin. This week, big changes were made to how these projects are dealt with financially as Eurostat announced changes to the guidance notes regarding EPCs. These changes will significantly increase the likelihood of public bodies using EPC contracts and will also pave the way for a stronger market of EPC providers, involving many SMEs.

According to data collected by European PPP Expertise Centre (EPEC), over the last five years 345 new public-private partnership projects concerning energy performance were signed in 16 EU Member States, for the total value of over €65 billion. These numbers are now only set to increase as government bodies and governments in general, can create more opportunities with Local Authorities and Government Agencies as the funding for these projects does not appear as debt on the balance sheet.
The note provides guidance to statisticians regarding the interpretation of certain ESA 2010 provisions – the European System of Accounts – in the case of EPCs, more specifically those EPCs which require an initial capital expenditure to improve the energy efficiency of a facility. EPCs where the energy efficiency is obtained through energy management measures, without any investment in equipment or renewal, are treated as simple service or maintenance contracts. This revised guidance is applied in cases where the EPC-contractor can be considered as the economic owner of the asset.

As Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, and responsible for Eurostat, said: “Europe needs investments. With this guidance, we show how public authorities can invest in full respect of the principles of public accounting, now also in the energy sector. Facilitating investments in energy efficiency measures also has an important social function, as public buildings such as social housing facilities will benefit from it too.” This change may be what the Local Authorities and Government Agencies need if they are to make big financial investments in the local communities and cities of Ireland.

To read more about our success in winning Ireland’s first Publicly Procured EPC Tender, click here.