{"id":29142,"date":"2025-07-23T15:52:14","date_gmt":"2025-07-23T13:52:14","guid":{"rendered":"https:\/\/it.andersen.com\/?p=29142"},"modified":"2025-07-29T15:59:14","modified_gmt":"2025-07-29T13:59:14","slug":"energy-performance-contracts-key-tools-for-the-green-transition","status":"publish","type":"post","link":"https:\/\/it.andersen.com\/en\/energy-performance-contracts-key-tools-for-the-green-transition\/","title":{"rendered":"Energy Performance Contracts: key tools for the green transition"},"content":{"rendered":"<p data-start=\"349\" data-end=\"624\">Professionals from Andersen&#8217;s European offices, part of the <strong>Energy Industry Group<\/strong>, have prepared an in-depth analysis of Energy Performance Contracts (\u201cEPCs\u201d), examining their structure, regulatory framework across jurisdictions, objectives, and future application scenarios.<\/p>\n<p data-start=\"626\" data-end=\"987\">In the context of the global energy transition \u2014 initiated, in a symbolic sense, with Barack Obama\u2019s speech at COP21 in 2015, which acknowledged the urgency of the climate crisis \u2014 the European Union has set ambitious targets: a 20% reduction in energy consumption and a 20% share of renewable energy by 2020, later raised to 30% and 27%, respectively, by 2030.<\/p>\n<p data-start=\"989\" data-end=\"1131\">By 2024, renewable sources accounted for 50% of electricity generation in the EU, marking a significant increase from 24.5% the previous year.<\/p>\n<p data-start=\"1133\" data-end=\"1449\">This transition is also transforming the construction sector, pushing it toward increasingly stringent energy-efficiency standards, such as those of nearly Zero-Energy Buildings (nZEB). Integrated energy solutions are therefore gaining relevance and naturally find application within contractual models such as EPCs.<\/p>\n<p data-start=\"1451\" data-end=\"1756\">EPCs offer a strategic response to this challenge, providing integrated services for planning, financing, installing, and monitoring renewable energy systems. This model ensures measurable energy savings, shifting performance risk to the Energy Service Company (\u201cESCO\u201d) under a pay-for-performance scheme.<\/p>\n<h2 data-start=\"1758\" data-end=\"1823\">EU regulatory framework on EPCs: objectives and support tools<\/h2>\n<p data-start=\"1825\" data-end=\"2153\">Adopted in 2019, the European Green Deal introduced climate targets including a 55% reduction in emissions by 2030 and climate neutrality by 2050. The strategy encourages clean energy use, reducing fossil-based electricity generation (from 39% to 29%) while increasing output from renewable sources, particularly wind and solar.<\/p>\n<p data-start=\"2155\" data-end=\"2302\">EPCs are endorsed by several EU directives as tools to improve building efficiency, lower emissions, and stimulate investment in the energy sector.<\/p>\n<p data-start=\"2304\" data-end=\"2323\"><strong data-start=\"2304\" data-end=\"2323\">Key directives:<\/strong><\/p>\n<ul data-start=\"2325\" data-end=\"2690\">\n<li data-start=\"2325\" data-end=\"2433\">\n<p data-start=\"2327\" data-end=\"2433\">Directive 2012\/27\/EU: requires Member States to promote energy efficiency through instruments like EPCs.<\/p>\n<\/li>\n<li data-start=\"2434\" data-end=\"2496\">\n<p data-start=\"2436\" data-end=\"2496\">Directive (EU) 2018\/2001: raises renewable energy targets.<\/p>\n<\/li>\n<li data-start=\"2497\" data-end=\"2580\">\n<p data-start=\"2499\" data-end=\"2580\">Directive (EU) 2018\/844: revises the energy performance of buildings framework.<\/p>\n<\/li>\n<li data-start=\"2581\" data-end=\"2690\">\n<p data-start=\"2583\" data-end=\"2690\">Directives (EU) 2021\/1780 and 2021\/693: strengthen emissions-reduction obligations for the building sector.<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2692\" data-end=\"2716\"><strong data-start=\"2692\" data-end=\"2716\">Support instruments:<\/strong><\/p>\n<ul data-start=\"2718\" data-end=\"2803\">\n<li data-start=\"2718\" data-end=\"2768\">\n<p data-start=\"2720\" data-end=\"2768\">European Fund for Strategic Investments (EFSI)<\/p>\n<\/li>\n<li data-start=\"2769\" data-end=\"2803\">\n<p data-start=\"2771\" data-end=\"2803\">European Investment Bank (EIB)<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"2805\" data-end=\"2925\">These institutions offer financing opportunities, especially for SMEs and public entities developing EPC-based projects.<\/p>\n<h2 data-start=\"2927\" data-end=\"2963\">Italian legal framework for EPCs<\/h2>\n<p data-start=\"2965\" data-end=\"3222\">EPCs entered Italian legislation through the transposition of Directive 2006\/32\/EC, with Legislative Decree No. 115 of 30 May 2008, later amended by Legislative Decree No. 102 of 4 July 2014 (\u201cLegislative Decree 102\u201d), which provides the current definition.<\/p>\n<p data-start=\"3224\" data-end=\"3636\">Though considered atypical contracts under Italian law \u2014 lacking a comprehensive legislative framework \u2014 EPCs are defined in Article 2, paragraph 1, letter n), of Legislative Decree 102. They are agreements between a beneficiary (typically a public body or enterprise) and an energy services provider, aimed at implementing energy-efficiency improvements. Payment is linked to the actual energy savings achieved.<\/p>\n<h2 data-start=\"3638\" data-end=\"3687\">EPC structure and minimum contractual content<\/h2>\n<p data-start=\"3689\" data-end=\"3861\">EPCs can take on various forms and remuneration mechanisms for the ESCO (e.g., guaranteed savings, first-in first-out, or tripartite structures with third-party financing).<\/p>\n<p data-start=\"3863\" data-end=\"3944\">Annex 8 of Legislative Decree 102 outlines mandatory content for EPCs, including:<\/p>\n<ul data-start=\"3946\" data-end=\"4471\">\n<li data-start=\"3946\" data-end=\"4014\">\n<p data-start=\"3948\" data-end=\"4014\">Detailed list of energy-saving measures and\/or expected outcomes<\/p>\n<\/li>\n<li data-start=\"4015\" data-end=\"4057\">\n<p data-start=\"4017\" data-end=\"4057\">Guaranteed savings from implementation<\/p>\n<\/li>\n<li data-start=\"4058\" data-end=\"4093\">\n<p data-start=\"4060\" data-end=\"4093\">Contract duration and key terms<\/p>\n<\/li>\n<li data-start=\"4094\" data-end=\"4124\">\n<p data-start=\"4096\" data-end=\"4124\">Obligations of the parties<\/p>\n<\/li>\n<li data-start=\"4125\" data-end=\"4161\">\n<p data-start=\"4127\" data-end=\"4161\">Timelines for savings assessment<\/p>\n<\/li>\n<li data-start=\"4162\" data-end=\"4206\">\n<p data-start=\"4164\" data-end=\"4206\">Implementation phases and cost estimates<\/p>\n<\/li>\n<li data-start=\"4207\" data-end=\"4250\">\n<p data-start=\"4209\" data-end=\"4250\">Provisions for mid-contract adjustments<\/p>\n<\/li>\n<li data-start=\"4251\" data-end=\"4277\">\n<p data-start=\"4253\" data-end=\"4277\">Financial arrangements<\/p>\n<\/li>\n<li data-start=\"4278\" data-end=\"4321\">\n<p data-start=\"4280\" data-end=\"4321\">Verification and measurement procedures<\/p>\n<\/li>\n<li data-start=\"4322\" data-end=\"4351\">\n<p data-start=\"4324\" data-end=\"4351\">Guarantees, if applicable<\/p>\n<\/li>\n<li data-start=\"4352\" data-end=\"4405\">\n<p data-start=\"4354\" data-end=\"4405\">Provisions on condition changes impacting results<\/p>\n<\/li>\n<li data-start=\"4406\" data-end=\"4471\">\n<p data-start=\"4408\" data-end=\"4471\">Detailed list of obligations and remedies for non-performance<\/p>\n<\/li>\n<\/ul>\n<h2 data-start=\"4473\" data-end=\"4500\">ESCOs under Italian law<\/h2>\n<p data-start=\"4502\" data-end=\"4572\">In EPCs, the service provider is a specialized party known as an ESCO.<\/p>\n<p data-start=\"4574\" data-end=\"4847\">Introduced in Italy by Legislative Decree 115\/2008, ESCOs are entities (individual or legal) providing energy services or efficiency measures to public or private clients. They take on financial risk, as their remuneration depends on the actual energy performance achieved.<\/p>\n<h2 data-start=\"4849\" data-end=\"4871\">Public sector EPCs<\/h2>\n<p data-start=\"4873\" data-end=\"5001\">EPCs are increasingly used in the public sector, particularly for energy upgrades of schools, hospitals, and military buildings.<\/p>\n<h3 data-start=\"5003\" data-end=\"5323\">School renovation in Milan<\/h3>\n<p data-start=\"5003\" data-end=\"5323\">The Municipality of Milan launched a program involving over 100 schools through EPCs. Measures include thermal insulation, window replacement, heating system upgrades, and LED lighting. Estimated energy savings range from 30% to 40%, with significant environmental and economic benefits.<\/p>\n<h3 data-start=\"5325\" data-end=\"5563\">Healthcare buildings<\/h3>\n<p data-start=\"5325\" data-end=\"5563\">Padua University Hospital implemented EPCs for several buildings, introducing cogeneration systems, energy monitoring, and HVAC upgrades. Estimated savings exceed 35%, with the ESCO bearing all investment costs.<\/p>\n<h3 data-start=\"5565\" data-end=\"5806\">Ministry of Defence<\/h3>\n<p data-start=\"5565\" data-end=\"5806\">The Ministry adopted EPCs to upgrade military bases in Piedmont and Lazio, installing photovoltaic systems, improving building insulation, and implementing smart energy management, reducing both costs and emissions.<\/p>\n<h3 data-start=\"5808\" data-end=\"5871\">EPCs in the private sector: the Plenitude-Marelli agreement<\/h3>\n<p data-start=\"5873\" data-end=\"6304\">In the private sector, a noteworthy example is the partnership between Plenitude (a subsidiary of ENI S.p.A.) and Marelli (an international automotive component supplier). Through EPCs, the two companies launched photovoltaic projects at three facilities \u2014 in Melfi, Sulmona, and Turin \u2014 with a combined capacity of 5.4 MWp. The contract model allows Marelli to procure renewable energy at a fixed cost, without upfront investment.<\/p>\n<h3 data-start=\"6306\" data-end=\"6361\">2024 Budget Law: tax incentives for EPC investments<\/h3>\n<p data-start=\"6363\" data-end=\"6482\">Italy\u2019s 2024 Budget Law (Law No. 207 of 30 December 2024) introduced tax incentives for projects implemented via ESCOs.<\/p>\n<p data-start=\"6484\" data-end=\"6744\">Specifically, when a company invests through an EPC that ensures at least a 3% reduction in energy consumption for production facilities or 5% for specific processes, this reduction is automatically recognized \u2014 with no need for further technical verification.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Professionals from Andersen&#8217;s European offices, part of the Energy Industry Group, have prepared an in-depth analysis of Energy Performance Contracts (\u201cEPCs\u201d), examining their structure, regulatory framework across jurisdictions, objectives, and future application scenarios. In the context of the global energy transition \u2014 initiated, in a symbolic sense, with Barack Obama\u2019s speech at COP21 in 2015, [&hellip;]<\/p>\n","protected":false},"author":125,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50],"tags":[],"_links":{"self":[{"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/posts\/29142"}],"collection":[{"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/users\/125"}],"replies":[{"embeddable":true,"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/comments?post=29142"}],"version-history":[{"count":1,"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/posts\/29142\/revisions"}],"predecessor-version":[{"id":29143,"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/posts\/29142\/revisions\/29143"}],"wp:attachment":[{"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/media?parent=29142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/categories?post=29142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/it.andersen.com\/en\/wp-json\/wp\/v2\/tags?post=29142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}