Energy Performance Contracting (EPC) – helping commercial building operators achieve carbon and energy reduction targets


With mounting public pressure and increasing legislation placed on large businesses to reduce their carbon footprints Energy Performance Contracting (EPC) is fast gaining traction as a viable financial instrument to fund and fast track large scale energy improvement projects.

“Aging buildings in both the public and private sector, either through fabric or design, waste significant amounts of money.  Typically, 46% of an organisation’s operating costs is spent on energy and utilities with approximately 33% of that expended on wasted energy,” commented Mark McLoughlin, Siemens Industries and Markets.

EPCs are appealing as they are sold on the premise of zero-upfront costs and the savings made on energy consumption can be offset by the cost of installing any conservation measures.  “Limited access to funds or expertise can often stifle projects at an early stage and any mechanism that unlocks the cash reserves to help organisations’ meet their efficiency, sustainability and infrastructure targets is massively welcome,” continued McLoughlin.

McLoughlin: “Energy costs are also forecast to rise over the coming years and anything organisations can do to reduce usage will have a positive impact on finances.  EPCs are an efficient capital and cashflow tool; preserving valuable capital for core business assets and other priorities.”

A comprehensive audit of an organisation’s power consumption is undertaken to provide the insight to help develop, design, build and, if necessary, finance modernisation projects to cut energy consumption and improve efficiency.  Analytics help to develop a robust business case for the EPC outlining the conservation measures, costs and quantifiable savings and energy consumption expected.  To date Siemens has helped multiple global organisations reduce their carbon emissions and provided them with the newest technologies and expertise across the entire spectrum of energy management.  Improvements include HVAC and lighting management, renewable or storage energy opportunities, retrofit and upgrade/replacement, smart IoT deployments to energy purchasing strategies and water efficiency measures.  While mostly found in the public sector i.e. education, healthcare, etc EPCs are also deployed in retail, industrial, commercial building, airports and other sectors.

“The UK is already legally bound by the Climate Change Act to reduce emissions 80% by 2050 and large UK businesses bear a responsibility to meet some of that ambition.  EPCs will help the environment and deliver world-class sustainable environments built for future generations,” concluded McLoughlin.

EPC in action:  Hvidovre Hospital in Denmark reduces its heat consumption by 41 percent and electricity usage by 23 percent through an EPC programme.

Officially opened in March 1976, Hvidovre Hospital in the Danish city of Hvidovre was built between 1968 and 1979.  Comprised four main buildings each three stories high Hvidovre is one of Denmark’s largest hospitals with more than 40,000 patients admitted each year.

Siemens conducted a power consumption analysis of the 245,000 m2 hospital and identified measures to reduce its energy consumption and CO2 emissions.  With hospitals operational 24/7 there was significant scope for major energy efficiency upgrades.  Close cooperation with clinical staff enabled the project to be executed without major disruption to the day-to-day care of patients.

The measures implemented at Hvidovre included expanding the photovoltaic system, installing geothermal storage systems and wind turbines, and modernising the building management system.

This EPC project is the largest of its kind in Denmark with Siemens financing the costs in advance over a payback period of ten years for the hospital.  Improvement measures included: replacement of existing air handling units, installation of 14,770 LED light tubes, replacement of pumps, and migration of the existing building management system to Desigo CC™ building management platform with 4,500 I/O and 409 Total Room Automation (TRA) controllers.  The project also included renewable energy from five wind turbines, 1,500 kW of photovoltaics and borehole thermal energy storage (BTES).

The hospital has reduced heat consumption by 41 percent and electricity usage by 23 percent with an overall energy saving of 33 percent.  The EPC project has helped Hvidovre Hospital make genuine progress towards achieving its environmental goals over a short period of time and has improved a world class healthcare facility.

EPC in action:  Museums Victoria, Australia achieves a 31.6 percent reduction in utility costs, reduces its water usage by 6 percent and cuts emissions by 35 percent via EPC improvement programme

Museums Victoria is the largest public museum organisation to adopt the Victorian Government’s Greener Government Building programme (GGB).  It spans six sites: Melbourne Museum, Immigration Museum, Scienceworks Museum, Royal Exhibition Building, Moreland Annexe and the Simcock Avenue storage facilities, each with a unique set of efficiency optimisation requirements.

Siemens was selected to undertake a detailed facility study of the museum’s entire real estate pool.  The goal was to significantly reduce operating costs and emissions by implementing energy and water efficiency retrofits in government-owned buildings.

Siemens’ improvement proposal offered the best outcomes for Museums Victoria in terms of maximising project value and energy savings within the required seven-year simple payback period.  HVAC, lighting and water efficiency improvement measures are being implemented over 15 months and financed with Energy Performance Contracting.

Efficiency improvements included Desigo CC™ building management platform at Melbourne Museum, Demand Flow™ chilled water system optimisation at Melbourne Museum, lighting upgrades across all six sites, chiller replacement at the Immigration Museum, HVAC control optimisation strategies, water efficiency upgrades across all sites, cogeneration system and subject to approval: the implementation of Navigator – the cloud-based energy and sustainability platform that monitors all buildings.

The projected 31.6 percent utility cost reduction exceeded the initial 20 percent target, water usage was down by 6 percent and emissions cut by 35 percent.

For further information on the Building Technologies Division, please see

Siemens AG (Berlin and Munich) is a global technology powerhouse that has stood for engineering excellence, innovation, quality, reliability and internationality for 170 years. The company is active around the globe, focusing on the areas of electrification, automation and digitalization. One of the world’s largest producers of energy-efficient, resource-saving technologies, Siemens is a leading supplier of efficient power generation and power transmission solutions and a pioneer in infrastructure solutions as well as automation, drive and software solutions for industry. With its publicly listed subsidiary Siemens Healthineers AG, the company is also a leading provider of medical imaging equipment – such as computed tomography and magnetic resonance imaging systems – and a leader in laboratory diagnostics as well as clinical IT. In fiscal 2017, which ended on September 30, 2017, Siemens generated revenue of €83.0 billion and net income of €6.2 billion. At the end of September 2017, the company had around 377,000 employees worldwide. Further information is available on the Internet at


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BDC 305 Jun 2023