Energy performance contract

This contract aims to reduce operating costs and emissions by gaining energy efficiency in government buildings.

Lead agency: Department of Transport and Planning

Conditions of use: Non-mandatory

Reference number: GGB-01

Arrangement: Open panel

Start date: 01/09/2010

End date: 30/06/2021

Greener Government Buildings

Greener Government Buildings is a program that improves the energy efficiency of existing government buildings to reduce operating costs and greenhouse gas emissions. Energy is saved through a combination of:

  • lighting upgrades (for example LED)
  • heating, ventilation and cooling upgrades (HVAC)
  • solar panels
  • building automation and controls

Site specific solutions are available. 

Latest achievements

Since its establishment in 2009, Greener Government Buildings has facilitated:

  • $300 million in energy efficiency and renewable energy projects across 50 projects
  • achieved annual savings of $50 million
  • rebates over 530,000 tonnes of greenhouse gases per year to avoid over $90 million in capital costs

Over 14 years, Greener Government Buildings has upgraded 580 buildings, reduced government emissions by 16.9% and saved over $200 million.

Planning pipeline 

The following projects are in the planning stage:

  • South West TAFE
  • Metro Trains Melbourne lighting projects
  • Solar power to about 100 primary and secondary schools
  • Energy efficiency and solar in regional health facilities

What is an energy performance contract

Energy performance contract is a process where a contractor is engaged to design, implement, verify and guarantee the savings from an energy efficiency project. This method of delivering energy efficiency upgrades to buildings is considered low risk and is widely accepted around the world.

Under the Greener Government Building program, the energy performance contract aims to achieve a 5-year simple payback period for all projects, i.e. projects must pay for themselves with the savings achieved over 5 years. 

Energy performance contract are not suitable for all facilities and are typically only used for large and/or complex buildings, for example hospitals, TAFEs, large office buildings, and sporting complexes. For smaller sites such as schools, alternative approaches may be preferable.

Alternative arrangements 

An alternative project delivery method may be considered in instances where an Agency's total energy consumption is too small to attract the market to deliver an energy performance contract, such as:

  • less than 1 GWh annual electricity consumption
  • or the building services are relatively simple

Contact the category manager for further advice.

How to set up an energy performance contract

The energy performance contract process has 7 stages:

Current and past projects