Experience of energy performance contracting in Hong Kong

Davies, Hilary; Chan, E. K.

doi:10.1108/02632770110390694

Cited by 36 publications

(20 citation statements)

References 5 publications

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“…In Hong Kong, partnering arrangements have been applied to six civil contracts and eight electrical and mechanical system installation contracts (Bayliss, 2002). There is consensus that partnering has made the job better through improved relationships and reduced costs, both in Hong Kong and in other countries (Bresnen and Marshall, 2000b;Davey et al, 2001;Davies and Chan, 2001;Gilleard and Kamshim, 2001;Kwan and Ofori, 2001). For major joint venture projects, the cost incurred to establish the partnering arrangement mainly includes the direct cost of a partnering workshop and the hiring of a facilitator and supporting staff.…”

Section: Partnership In Building Energy Performance Contractingmentioning

confidence: 98%

Partnership in building energy performance contracting

Yik¹,

Lee²

2004

Building Research & Information

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Building energy performance contracting is a business strategy to assist building owners overcome the financial barriers for improving the energy performance of their buildings. In return for the investments made into the energy-saving measures, the energy service contractors would share with the building owners the energy cost saving. Although the contractual arrangement is meant to create a win-win situation, disappointments could arise due to mismatches between the expected and actual outcomes. From a micro-economics viewpoint, the key factors contributing to the failure of a building energy performance contract are reviewed. To solve the commonly encountered problems in building energy performance contracting, it is proposed the conventional performance contract is replaced with a partnership formed jointly by the building owner and the energy service contractor, with the latter assuming the role of the performance contractor. This would unite the goals of the two parties and cultivate genuine cooperation between them. The key features for this new contractual arrangement are described along with how this arrangement could resolve typical energy performance contracting problems.La contractualisation des performances e´nerge´tiques d'un bâ timent est une strate´gie commerciale qui vise à aider les proprie´taires de bâ timents à surmonter les obstacles financiers lorsqu'il s'agit d'ame´liorer les performances e´nerge´tiques de bâ timents. En retour pour les investissements consentis dans des mesures d'e´conomie d'e´nergie, les contractants des services e´nerge´tiques partageraient avec les proprie´taires des bâ timents les e´conomies re´alise´es sur le coû t de l'e´nergie. Bien que les dispositions contractuelles aient pour objectif de cre´er une situation satisfaisante pour toutes les parties, le manque de corre´lation entre les re´sultats attendus et les re´sultats re´els risque de de´cevoir. Se plaçant dans une perspective micro-e´conomique, cet article e´tudie les principaux facteurs qui contribuent à l'e´chec d'un contrat portant sur les performances e´nerge´tiques d'un bâ timent. Pour re´soudre les problè mes les plus courants en matiè re de contractualisation des performances e´nerge´tiques d'un bâ timent, on propose de remplacer le contrat de performances classique par un partenariat regroupant le propriétaire du bâ timent et le contractant des services e´nerge´tiques, ce dernier e´tant contractuellement responsable des performances. Les objectifs des deux parties seraient ainsi réunis et une ve´ritable coope´ration pourrait s'instaurer entre elles. L'auteur de´crit les principales caracte´ristiques de ces nouvelles mesures contractuelles et explique comment ces dispositions pourraient permettre de re´soudre les problè mes courants de contractualisation des performances e´nerge´tiques.

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Section: Partnership In Building Energy Performance Contractingmentioning

confidence: 98%

Partnership in building energy performance contracting

Yik¹,

Lee²

2004

Building Research & Information

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“…In office buildings, the energy costs are often dwarfed by the initial investment cost or the rent of the premises (Davies and Chan, 2001). Often, even the most profitable energy improvement measures, remain unimplemented.…”

Section: Introductionmentioning

confidence: 99%

The potential effect of end‐users on energy conservation in office buildings

Junnila¹

2007

Facilities

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Purpose -The purpose of the study is to estimate the potential of end-user effect on energy conservation in office buildings. The study quantifies the energy conservation potential and estimates the current level of energy management in four banking organisations in the Nordic countries. Design/methodology/approach -The multiple case study employs quantitative scenario analysis for estimating the energy conservation potential of office equipment and lighting, and uses a qualitative model for estimating the current level of end-user energy management in the organisations. Findings -The study found that noticeable potential for energy conservation exists in the end-user energy consumption. The tested scenarios significantly decreased the yearly electricity consumption of office equipment, for some 70 per cent, from 21 kWh per m 2 to 6 kWh per m 2 . The electricity consumption of lighting was also noticeably improved, for some 30 per cent, from 38 kWh per m 2 to 27 kWh per m 2 , equalling a 29 per cent reduction there. Altogether, the identified savings equal an improvement of roughly 20 per cent in the overall electricity consumption of the organisations. At the same time, the evaluation of current energy management showed that the management practices implemented represent only a rather modest level of end-user energy management.Research limitations/implications -The multiple case study focused on four Nordic countries and banking organisations only. As the banking sector tends to be more conservative than some other industries, the results are not necessary valid in all industries. The simulation tools used, especially for lighting, only give estimation of the "best case" type of situation for tested scenarios, in which it is assumed that all end-users would start to behave according to the scenario. Practical implications -This study implies clearly that end-user-energy-management services are needed in FM. Although the user behaviour is more challenging to manage than pure technology, it can be quite profitable. For example, in the studied organisations, the savings found in end-user energy would equal yearly profits of roughly 1.7 million e, i.e. some 20 per cent of the overall electricity budgets of the companies. Originality/value -Most of the quantitative energy conservation studies in the offices have concentrated so far on new constructions and building system improvements. This study quantifies the potential influence of good facilities management with the end-user activation on the energy efficiency of office buildings.

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“…Payback periods are likely to be shorter in private sector projects than in public due to the shorter tenure of property. This significantly limits the range of ECMs that can be considered (Davies & Chan, 2001;Goldman et al, 2005;Heo, Augenbroe, & Choudhary, 2011).…”

Section: Introductionmentioning

confidence: 95%

Financial viability of school retrofit projects for clients and ESCOs

Fennell

Ruyssevelt

Smith

2016

Building Research & Information

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The energy performance contracting market is potentially substantial but very little work has been undertaken to understand the characteristics of successful projects. This study uses a probabilistic analysis of four hypothetical projects in the UK schools sector under the 2014 policy regime, combined with qualitative interviews with practitioners, to explore the conditions for a viable project. It finds that the proposed approach has the potential to allow more detailed exploration of project structures and scope for creating greater understanding of likely returns and the factors affecting them. Evidence is found that the use of deterministic risk screening techniques such as simple payback results in viable opportunities being overlooked. The risk profiles for clients and contractors (energy service companies -ESCOs) are not symmetrical and they will each find different projects more attractive. The results suggest that greater consideration needs to be given to the precise risk allocation between client and contractor to ensure that likely returns are properly understood. This study demonstrates a method for exploring project characteristics that can be used to understand their impacts on the financial returns for clients and contractors.

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Experience of energy performance contracting in Hong Kong

Cited by 36 publications

References 5 publications

Partnership in building energy performance contracting

Partnership in building energy performance contracting

The potential effect of end‐users on energy conservation in office buildings

Financial viability of school retrofit projects for clients and ESCOs

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