Building owners often carry out a 1-for-1 replacement when their equipment reaches the end of their life spans. By not considering life cycle cost, energy and cost savings cannot be maximized. Even if a life cycle approach is taken in making investment decisions, the current procurement contracts may not be able to deliver the expected improvements because:
1) There is no assurance of improved energy performance after the retrofits
2) There is a lack of accountability as different parties are involved in the selection, specification, and the installation of equipment.
3) Performance of the new equipment is not verified and tracked over the long term.
GESP Contracts in Public Sector
Under GreenGov.SG, public sector agencies are to adopt the Guaranteed Energy Savings Performance (GESP) contracting model when undertaking chilled water plant retrofit projects. Under the GESP contracting model, an accredited Energy Services Company (ESCO) is engaged to:
1) Carry out an energy audit and identify energy savings measures
2) Implement the recommended energy savings measures
3) Guarantee the chilled water plant or air-conditioning system efficiency, and the annual energy savings from the implementation of other energy savings measures over the contract term (i.e. typically 5 years)
4) Provide comprehensive maintenance to the retrofitted equipment during the contract term for better accountability
The ESCO is responsible for the entire project from audit to post-implementation monitoring and maintenance. With ESCO guaranteeing the performance of systems, building and facility owners are thereby assured of the guaranteed energy performance savings during the contract term. A permanent monitoring system with specific accuracy requirements is also installed for long term and continuous monitoring of the performance. An overview of what GESP contracting entails can be found here.
Benefits to Public Sector
NEA drives GESP contracting model adoption in Public Sector by advising building owner contractually and sharing technical expertise throughout the contract term.
As of end 2022, 43 public sector buildings have been retrofitted or are undergoing retrofitting using the GESP contracting model for retrofit works. On average, these GESP contracts help building owners save 20% of their total electricity use, which translates to $14.7 million annually for the public sector.