Energy performance contracting in France: limitations and effects

electricity consumption, energy efficiency, energy saving, energy savings, housing

Construction is the largest energy-consuming sector in France. According to government estimates, it accounts for 43% of overall final energy consumption and is responsible for 23% of greenhouse gas emissions. Improving energy efficiency in buildings has indeed become a priority, as French and European goals have never been so ambitious in this regard.

France’s declared energy performance contracting goals

Directive 2010/31/EU of the European Parliament and of the Council on the energy performance of buildings (recast of directive 2002/91/EC) laid down broad objectives to be met by member states. The French government wished to pursue this ambitious policy. When the Grenelle 1 Act was adopted in 2009, construction was pinpointed as a priority area in terms of energy efficiency; this act set out a reduction target of 38% in energy consumption in buildings by 2020[1].

In order to reach those goals, the Grenelle 1 Act established an energy performance contracting scheme. The EU defines energy performance contracting as a “contractual arrangement between the beneficiary and the provider of an energy efficiency improvement measure, verified and monitored during the whole term of the contract, where investments (work, supply or service) in that measure are paid for in relation to a contractually agreed level of energy efficiency improvement or other agreed energy performance criterion, such as financial savings”.

The purpose of energy performance contracting is to guarantee lasting results in energy efficiency improvements; under certain conditions, it thus aims at cutting consumption in a given building by at least 20%. This makes it the only instrument that yields guaranteed results.

Contractors guarantee a certain reduction in energy consumption; should the promised results not be achieved, compensation equal to the difference between the guaranteed and the measured reduction levels shall be paid to the client. This tool could therefore play a crucial role in meeting energy consumption reduction targets in buildings; nevertheless, because of its recent inception (2009), it suffers from a number of limitations.

Le Contrat de Performance énergétique : un outil au potentiel insuffisamment encadré

Energy performance contracting is a complex instrument which can take the form of various financial and economic arrangements, depending on the amount of the investment, duration of the project and guaranteed savings.  According to a public report by Olivier Ortega, it is highly unlikely that all projects will be self-financed, i.e. funded solely through the guaranteed energy savings.

Economic obstacles are compounded by definition problems. The EU definition of energy performance contracting was not transposed into French law; this raises issues about the goals and very nature of this instrument, which is often seen as an ill-defined scheme, especially due to the existence of a variety of contracts (“supply and service”, “work and service”, “package deal”). Olivier Ortega therefore suggests a clearer definition: energy performance contracting is “a contractual arrangement between a client and an energy efficiency service provider where investments (work, supply or service) aim at guaranteeing, by way of long-term verification and monitoring, a reduction from a contractually agreed baseline in energy consumption in a building or buildings”.

Moreover, Mr. Ortega thinks that because conditions for its implementation are not detailed enough, energy performance contracting lacks an adequate operational framework to realize its full potential. Creating such a framework should be considered a priority, especially as France claims to be at the forefront of the fight against climate change, with an energy transition bill being discussed in parliament and the Climate Conference to be held in Paris in December 2015. Furthermore, the French Court of Auditors recently reminded the French government of its commitment to renovate public buildings, and the French Energy Efficiency Coalition filed a complaint with the European Commission against France for not fulfilling its energy efficiency pledges.

For more information :

Energy performance contracting guidebook, Ministry of ecology, sustainable development, transportation and housing: http://www.developpement-durable.gouv.fr/Guide-du-contrat-de-performance.html

Report by the Court of Auditors on national building policy, 19 March 2015:

https://www.ccomptes.fr/Publications/Publications/Bilan-de-la-politique-immobiliere-de-l-Etat

Public report on energy performance contracting (March 2011), La Documentation française: http://www.ladocumentationfrancaise.fr/rapports-publics/114000135/index.shtml


[1] Article 5 of Act No 2009-967 adopted on August 3rd 2009 (Grenelle 1 Act)

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