Project Plan Template

<insert Project name>
Version Date: <insert version date>

Status: Draft (ver 0.1)
<insert project
name>
Project Plan Template
September 2011
The Victorian Governments Greener Government
Buildings program aims to deliver considerable
greenhouse gas reductions, water efficiencies and
cost savings to Government by facilitating the
implementation of energy and water efficiency
projects at its existing buildings and infrastructure.
This project plan is based on the PRINCE2 project
management methodology, and details the project
brief, business case, the EPC project approach,
delivery plan, quality plan, communications plan and
risk log.
Use of this project plan is not mandatory as part of
the Greener Government Buildings program, it is

Project approval
Project Role
Sign Off
Name:
Title:
Name:
Title:
Name:
Title:
Signature
Date

Table of Contents
1
Project Brief.....................................................................................................4
1.1
1.2
Background.............................................................................................................. 4
Project Definition...................................................................................................... 5
1.2.1
1.2.2
1.2.3
1.2.4
1.2.5
1.2.6
1.3
1.4
1.5
1.6
Overview of roles..................................................................................................... 8
Business Case.................................................................................................9
3.1
3.2
3.3
Project Funding........................................................................................................ 5
The Panel................................................................................................................ 6
Standard Templates................................................................................................. 6
Project Facilitation Service.......................................................................................6
Project Governance........................................................................................8
2.1
Expected benefits.................................................................................................... 9
Expected costs........................................................................................................ 9
Risks........................................................................................................................ 9
Project Approach..........................................................................................10
4.1
Determine Scope................................................................................................... 11
4.1.1
4.1.2
4.1.3
4.2
4.3
Invitation..........................................................................................................................12
Responses.......................................................................................................................12
Request for Proposal (RFP)...................................................................................12
4.3.1
4.3.2
4.4
4.5
4.6
4.7
4.8
4.9
Minimum requirements....................................................................................................11
Site selection.................................................................................................................... 11
Project solutions...............................................................................................................11
Expressions of Interest (EOI).................................................................................12
4.2.1
4.2.2
Tender evaluation............................................................................................................13
Evaluation criteria............................................................................................................13
Detailed Facility Study (DFS) Agreement...............................................................14

Detailed Facility Study (DFS).................................................................................14
Seek Funding Approval..........................................................................................15
Energy Performance Contract (EPC).....................................................................15
Installation.............................................................................................................. 16
Measurement & Verification (M&V)........................................................................16
4.9.1
4.9.2
4.9.3
4.9.4
4.9.5
4.9.6
5
6
7
Project objectives...............................................................................................................5
Scope Inclusions................................................................................................................5
Scope Exclusions..............................................................................................................5
Assumptions......................................................................................................................5
Constraints.........................................................................................................................5
Dependencies and related activities..................................................................................5
Measurement and Verification Plan.................................................................................17

Collaboration in M&V.......................................................................................................17
M&V options....................................................................................................................18
Baseline adjustment........................................................................................................18
Frequency of M&V...........................................................................................................18
Savings guarantee...........................................................................................................18
Project Delivery plan.....................................................................................18

Quality Plan...................................................................................................19
Stakeholder Analysis and Communication Plan........................................19
7.1
7.2
7.3
7.4
Communication objectives.....................................................................................19
Key Stakeholders................................................................................................... 20
Mediums................................................................................................................ 21
Activity Plan........................................................................................................... 22
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8 Risk Log.........................................................................................................23
9 Appendix A Glossary of Terms.................................................................24
10 Appendix B Measurement & Verification...............................................25
1 Project Brief
1.1 Background
Greener Government Buildings (GGB) is a program administered by the Department of Treasury
and Finance (DTF) which aims to reduce Governments environmental impact and operational
costs by improving the energy and water efficiency of existing government buildings.
The GGB program targets the entire portfolio of existing government facilities across all
departments and agencies. It is forecast that within the programs required seven year payback
period, greenhouse gas emissions across government buildings can be reduced by an estimated
25 per cent.
Under the GGB program, a methodology known as Energy Performance Contracting (EPC) is
used to procure and implement energy efficiency projects, enabling departments and agencies to
deliver on the following mandatory targets.
by 30 June 2012, facilities accounting for at least 20 per cent of a public sector entitys
total energy consumption must be committed to an EPC or equivalent project; and
by 30 June 2018, facilities accounting for at least 90 per cent of a public sector entitys
total energy consumption must be committed to an EPC or equivalent project.
All Victorian government departments have developed Strategic Implementation Plans (SIPs)
outlining how these targets will be met across their properties and those of their portfolio
agencies.
Funding is available for GGB projects in the form of a temporary advance, which is required to be
repaid using the savings delivered by the project. The EPC process involves a savings guarantee
from the service provider, whereby the customer is reimbursed annually for any shortfall. As such,
GGB projects provide a low risk method of implementing and funding projects, minimising impact
on department and agency cashflows.
DTF provides facilitation support to departments and agencies in the scoping, procurement,
implementation and contract management of these projects. A panel of pre-qualified service
providers for EPC services simplifies procurement and standard templates and documentation are
available to streamline the process.
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1.2 Project Definition

1.2.1 Project objectives
Implement EPC project(s) at the sites specified in section 1.2.2 to identify, install, measure and
verify all available energy and water efficiency opportunities that fall within an average simple
payback period of seven years.
1.2.2 Scope Inclusions

[In this section, include a brief overview of the buildings/facilities to be included in the overall
project scope]
[Where the project is to be tendered using a sample of sites please include details here. Eg. The
overall scope includes 25 sites, however the Request for Proposal stage will be tendered based
on a sample of 8 sites that are considered representative of the overall scope. The objective of
using a sample of sites for the RFP is to fast-track the tender stage and be more acceptable to the
market]
1.2.3 Scope Exclusions

[In this section, list exclusions (e.g. buildings, parts of the building or certain systems) and provide
the rationale.]
1.2.4 Assumptions
[State any assumptions that the Project Board should be aware of. E.g. Buildings to be excluded
due to potential inclusion in other major projects]
1.2.5 Constraints
[List any constraints (e.g. time, expenditure, resources, technology) within which the project must
operate.]
1.2.6 Dependencies and related activities

[Detail any other projects or Divisions or Groups that this project will impact upon or be impacted
by.]
1.3 Project Funding

A fundamental element of the EPC process is that the savings are contractually guaranteed by the
energy services company. If savings in any year fails to meet the guaranteed savings, the energy
services company is required to reimburse the department or agency undertaking the project to
the degree of the shortfall.
EPC projects under the Greener Government Buildings (GGB) program may therefore be funded
using a temporary repayable advance from the DTF.
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Advance funding applications for EPC projects may be granted by DTF to departments directly or
to departments on behalf on behalf of a public body within their portfolio on the condition that the
loan is repaid over a seven year period following practical completion of the project.
The savings delivered by the EPC project (i.e. reduced energy and water expenditure and
maintenance cost savings) are realised by the department or agency undertaking the project and
can be used to repay the loan. This process effectively renders EPC projects self-funding, and
minimises impacts on department or agency cash flow.
1.4 The Panel

Through a public Expression of Interest process and comprehensive assessment of submissions,
DTF has established a panel of pre-qualified Energy Services Companies (ESCOs) for the GGB
program. Members of the panel have demonstrated required competencies, and in most cases
have previous experience, in delivering EPC projects.
The intention of the panel is to build a streamlined tender process and reduce the administrative
burden for each Victorian government EPC (or equivalent) project. Departments and agencies
wishing to engage in an EPC project are able to tender selectively from the panel for a Request
for Proposal (RFP), bypassing the Expression of Interest process.
Based on the ongoing performance of panel members and changes in industry, the panel may be
updated with additional or removal of suppliers by DTF as required.
Access to information on members of the panel may be obtained from GGB facilitators within DTF,
and online at www.procurement.vic.gov.au.
1.5 Standard Templates

To assist in the tender process, a template for the RFP document is available for use in the select
tender for an EPC project.
In addition, use of standard templates for the Detailed Facility Study (DFS) agreement and EPC
has been agreed between the Victorian government and all members of the Panel (see Section
1.4).
The template RFP document, and the standard DFS and EPC contracts may be obtained from
GGB facilitators within DTF, and online at www.procurement.vic.gov.au.
1.6 Project Facilitation Service

As part of the GGB, all departments and agencies will be supported by a central facilitation
service from DTF for all EPC or equivalent projects. GGB facilitators will be available to assist with
the following:
access to standard tender documentation and contracts;
scoping of potential options for tendering of projects;
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advice and support in the management of tender processes;
advice and support in determining appropriate funding requirements;
advice and support in the implementation of projects;
access to specialist technical and legal advice if required;
access to specialist monitoring and verification advice if required; and
coordination of program results and case studies.
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2 Project Governance
Delegated Approver
e.g. CEO, Board, Minister
Project Control Board

Other Representative
(e.g. facilities, operations,
environment)
Departmental
Representative
Project Sponsor
DTF Facilitator
Project Manager
Sam Burke, Peter Phan
Project Management Team

Project Manager
Facilities Rep 1
Facilities Rep 2
Finance Rep
DTF Facilitator
2.1 Overview of roles

The Delegated Approver should be a senior member of the organisation who either has
delegation to sign the final EPC contract and authorise application for funding based on the
estimated project implementation costs (see section ).
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3 Business Case
3.1 Expected benefits
The scale of the project will be determined through the RFP and DFS stages of the projects (refer
to section 4 for further details) and will be dependent upon the degree of energy and water
savings identified by the service provider that are possible within an average simple payback
period of seven years.
Guaranteed savings delivered by the project will be used to repay the funding over a period of
seven years. Should there be any shortfall in savings delivered by the project (i.e. actual savings
are less than the guaranteed savings), the service provider will be contractually obliged to refund
this amount.
Any savings achieved in excess of the guaranteed savings (i.e. actual savings are greater than
the guaranteed savings), the surplus savings may either be retained, or used to supplement the
agreed temporary advance repayment schedule (i.e. enabling the advance to be repaid over a
shorter period).
Savings delivered by the project after the loan has been repaid will be retained and may be
reallocated towards other agency priorities.
3.2 Expected costs

Due to the structure of an EPC project, the overall projects costs will depend largely on the range
and complexity of solutions identified by the energy services company. Project costs therefore
cannot be accurately determined prior to completion of the DFS.
Indicative project costs will be determined through the RFP audit (to a specified level of accuracy)
and final project costs established following the DFS (refer to Section 4 for further details on the
EPC process).
Under GGB, it is recommended that a project be limited only by the savings achievable within a
seven year payback period. As such, there is no specific restriction upon project costs on the
condition that the payback period is compliant.
3.3 Risks
Refer to Section 8 for the full Risk Log.
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4 Project Approach
The following section provides a detailed guide on how to implement EPC projects under GGB.
For further detail regarding the program, please contact a GGB facilitator at DTF.
Further recommended technical and EPC specific reference material released by the Energy
Efficiency Council includes:
Best Practice Guide to EPC (refer to www.eec.org.au)

Best Practice Guide to M&V (refer to www.eec.org.au)
The standard EPC process is illustrated below:
1.
1. Determine
Determine Scope
Scope
2.
2. Expressions
Expressions of
of Interest
Interest (EOI)
(EOI)
3.
3. Request
Request for
for Proposal
Proposal (RFP)
(RFP)
4.
4. Detailed
Detailed Facility
Facility Study
Study (DFS)
(DFS) Agreement
Agreement
5.
5. Detailed
Detailed Facility
Facility Study
Study
6.
6. Seek
Seek Funding
Funding
7.
7. Energy
Energy Performance
Performance Contract
Contract
8.
8. Installation
Installation
9.
9. Measurement
Measurement &
& Verification
Verification (M&V)
(M&V)
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4.1 Determine Scope

4.1.1 Minimum requirements
EPC projects should aim to maximise energy and water savings within an average simple
payback period of seven years for all existing buildings or infrastructure where agencies directly
pay the utility bills.
4.1.2 Site selection

The EPC process is suitable for single facilities with high energy consumption levels (e.g. greater
than 1 GWh of electricity consumption per annum). Alternatively, smaller facilities may be grouped
together to achieve a sufficiently large scale to be of interest to EPC service providers.
When scoping the EPC project, it is often simplest to include all areas and systems within the
buildings (i.e. all opportunities that can be found within the building). There may be certain
scenarios however, where exclusions are appropriate. For example, at sites that agencies deem
to have a practical life of less than seven years (e.g. a leased facility with five years remaining, or
a building planned for demolition), it may be acceptable to either define a shorter maximum
payback period when tendering (e.g. to payback within the lease term remaining), or defer the
implementation of works at this site until there is a greater opportunity (e.g. the lease renewed for
a longer period, or the tenant moves to a new building).
4.1.3 Project solutions

As part of an EPC project, ESCOs are responsible for identifying, designing, validating, installing,
commissioning and guaranteeing the performance of all technologies implemented. As such,
there is no requirement on the agency to perform audits and design solutions of their own as part
of the EPC project.
ESCOs will propose an overall solution set with a blended payback period that average seven
years, that is, the EPC may include measures with individual payback periods of 12 years, and
others with three years, as long as the overall project payback period is seven years or less it will
be deemed compliant. This methodology can increase the project scope by enabling the inclusion
of solutions that may otherwise fall outside the required payback period, such as cogeneration
and renewable technologies.
While the ESCO will be responsible for identifying all energy and water efficiency solutions that
comply with an average seven year simple payback, the agency is advised to be aware of the
following systems/initiatives that often fall within the project scope:
lighting and lighting control systems;
heating, ventilation and air-conditioning systems;
building automation systems;
water saving opportunities;
power factor correction opportunities; and
demand-side response opportunities, giving agencies the capability to respond to price

signals during periods of peak demand in the National Electricity Market.
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4.2 Expressions of Interest (EOI)

At this stage, a document or invitation which details the scope and opportunities for the EPC will
be distributed to a panel of ESCOs. These ESCOs have been pre-qualified by DTF and have
demonstrated the required competencies, and in most cases, previous experience in delivering
EPC projects. Access to information on members of the panel may be obtained from GGB
facilitators within DTF, or online at:
www.procurement.vic.gov.au/CA2575BA0001417C/pages/energy-performance-contracting
4.2.1 Invitation
The invitation should detail the sites to be retrofitted within the EPC project scope and include:
location and size of sites
associated utility consumptions
relevant existing infrastructure
an indicative timeline for the project
This is to ensure that the invited ESCOs will have sufficient knowledge of the scope before
committing to a tender.
4.2.2 Responses
Upon reviewing the information provided, the ESCO will determine whether they will respond with
an EOI based on their skills, capacity and willingness to commit. These EOIs should be no more
than two pages and address three key criterion:
Willingness to participate
Previous experience in providing energy efficient services at similar facilities
Suitability in the project outlined
The ESCO at this stage may also provide feedback or alterations to the scope to match their
specific needs. These alterations may remove some constraints such as capacity or timeframe
issues, and allow the ESCO to participate in the tender. However, is it up to the agency to decide
whether they would like to alter their scope to allow inclusion of said ESCO.
The agency will then review the EOIs received and select the best three ESCOs to proceed to the
next stage.
4.3 Request for Proposal (RFP)

During the RFP stage, an RFP document will need to be prepared by the agency describing how
the tender will be conducted and assessed. A standard RFP document is available from DTF for
use as a template.
Service providers will be required to prepare a document which details the proposed energy
solutions, including costs and savings estimates. This process will involve the ESCOs to
competitively audit the buildings to identify energy and water conservation measures to the
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standard of a level two energy audit (AS/NZS3598:2000) that are understood to be

approximations to 20 per cent accuracy.
The number of sites audited at the RFP stage will depend on the size of the overall portfolio of
buildings considered in the EPC. For large or complex projects involving multiple or
geographically distant facilities, it is often beneficial to simplify this step and limit the RFP to a
reduced scale, with the understanding that the full scope of opportunity be reinstated at the next
step (the DFS). In these instances it will be important for the customer to select a sample that is
closely representative of the project in its entirety (e.g. if the greater project involves two types of
facilities such as hospitals and office buildings, at least one of each type of these buildings should
be included in the RFP stage).
4.3.1 Tender evaluation

Agencies should look to proposals that maximise the scope of annual greenhouse gas and
water savings within an average seven year simple payback period.
This principle aims to ensure greater environmental benefits from the EPC project, and greater
financial savings delivered to the agency.
To maximise savings, agencies should ensure that tenderers offering lower payback periods are
not given advantage over tenderers with longer (but still compliant) payback periods. To illustrate,
please consider the following scenario:
Example Scenario:
Responding to a tender specifying a seven year payback period, the following responses are
received:
Tenderer A proposes a project costing $7 million, with guaranteed annual savings of

$1 million, 30 per cent energy saving, and seven year overall project payback; and
tenderer B proposes a project costing $4 million, with guaranteed annual savings of

$600 000, 20 per cent energy saving, and 6.7 year overall project payback.
Despite Tenderer A having a higher payback period than Tenderer B (seven years compared to
6.7), Tenderer As proposal should be selected as the larger project with higher annual savings will
deliver greater outcomes.
4.3.2 Evaluation criteria

While tender evaluation criteria may be determined and weighted by each agency, it is
recommended that criteria and weightings reflect the intent of the GGB program. That is,
weightings should emphasise:
reduction of greenhouse gas emissions; and
reduction in water consumption.
Value for money in a GGB project is controlled by the requirement of a seven year simple
payback period and the financial guarantees from the EPC process. When assessing the financial
returns of the project, the required maximum seven year payback period should be used as a
hurdle rate, with which the tenderer is either compliant or non-compliant.
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Other evaluation criteria should include those that target the quality of delivery, service, and
performance of installations, such as:
compliance with specifications and proposed contracts;
DFS offering;
operations, maintenance and training offering;
methodology; and
expertise in electrical, mechanical, water and other technical disciplines.
4.4 Detailed Facility Study (DFS) Agreement

After assessing the submitted RFPs, the preferred service provider will be notified of their
success, and a DFS agreement is negotiated. The DFS agreement is essentially an agreement
that the ESCO will perform a DFS, which will include proposals to:
identify energy (and related) cost saving measures;
define the scope of work to be undertaken;
identify the costs, to investment grade level, for the implementation of the scope;
identify performance levels (including estimated savings levels) and guarantees by the
ESCO; and
identify Measurement & Verification methods to ensure savings are demonstrated over
the life of the project.
An important aspect of the DFS is to establish the conditions of the project to ensure flexibility as
well as scope.
4.5 Detailed Facility Study (DFS)

Once the DFS agreement has been signed, the service provider will perform the DFS
essentially an audit of the customers facilities equivalent to a Level three energy audit under
AS/NZS3598:2000.
The general purpose of a DFS is to give the customer an indication of the possible extent of
savings that may be achieved in an EPC, and what level of savings the EPC service provider is
prepared to guarantee. In order to achieve the maximum benefit from a DFS, the customer is
encouraged to work collaboratively to build a long term partnership with the EPC service provider,
providing any reasonable information where required and ensuring that this is accurate.
It is important for the DFS and each subsequent phase of the project that the EPC service
provider is afforded reasonable access to the facilities. What constitutes reasonable access will
be determined by the nature of each organisation, and should be established in advance to satisfy
the requirements of both parties.
Careful consideration should be afforded to each of the proposed works as outlined by the EPC
service provider, ensuring that they pass a fit for purpose test for the requirements of each site.
For example, while light fittings installed with timer controls may guarantee an amount of annual
savings, it may be appropriate only for a site that has constant occupancy times (i.e. a library),
and is not fit for the purposes of a site where occupancy varies (i.e. an operating theatre).
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When the DFS is concluded, the customer can assess the recommendations, negotiate any
changes, and decide whether to implement the proposed works. It should be noted that the 20
per cent allowable margin of error for the RFP submission does not apply to the DFS submission,
which has no allowed error. The stipulated costs and benefits from the DFS form the basis for a
performance guarantee from the EPC service provider.
The EPC service provider will on completion of the DFS be entitled to fair payment for conducting
the DFS. The conditions of payment to the ESCO depend on whether the criteria of the study are
met. If the DFS adequately meets the pre-determined criteria, then:
1. if the decision is to implement the works, the DFS fee may be rolled into the overall
project cost and included as part of the Energy Performance Contract; and
2. if the decision is to not implement the works, the ESCO will be paid a fee for conducting
the DFS.
If the DFS does not meet the pre-determined criteria as stated in the DFS agreement, then the
agency is not obliged to pay anything.
4.6 Seek Funding Approval

EPC projects under the GGB program may be financed completely or in part using a temporary
repayable advance from the DTF, or alternatively through finance from the ESCO.
In instances where DTF funding is available, the department must make the advance application
to DTF on behalf of the portfolio agency. In these cases, it is recommended that the agency
undertaking the project establish a separate agreement with their department prior to the
department making the advance application to DTF.
A departmental application for a temporary repayable advance is required to be signed by the
Secretary or Chief Financial Officer and may be lodged as a request letter to the Deputy
Secretary of the Budget and Financial Management division within DTF.
DTF will assess applications and respond to the department within 20 days of receipt.
Alternatively, ESCO financing governs that the agency enters into an energy management service
agreement for the duration of the required payback period (e.g. 7 years). This service agreement
is executed as part of the overarching EPC, and governs that the agency pays a lump sum fee
(typically in monthly instalments) for the energy saving improvements, and the ESCO guarantees
that energy cost savings will equal or exceed this payment.
Under the ESCO financing model, the details for the service agreement will be agreed with the
ESCO on a project by project basis.
4.7 Energy Performance Contract (EPC)

The DFS forms a technical basis on which an EPC is negotiated. Negotiations on an EPC include
such issues as:
the included scope, as described and analysed in the DFS;
any scope exclusions, or inclusions not specified in the DFS;
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changes to work as described or analysed in the DFS;
if there is additional work not described or analysed in the DFS;
changes to the measurement and verification plan (MVP);
maintenance issues (e.g. who will take responsibility, level of service, timing);
commissioning issues and performance criteria for Energy Conservation Measure (ECM)
acceptance certificates;
training requirements and schedule; and
the estimated budget and installation timing implications of the above decisions.
In order to streamline the process, the scope of works included in the EPC should remain
reasonably consistent with that which was agreed in the DFS. If the scope of works changes from
the final DFS, details of the proposed changes should be to a level of detail consistent with a
DFS. The agency will need to carefully review any new documents produced, including:
ECM purchase price and disbursement plan;
equipment specifications (i.e. plans, engineering designs, drawings); and
equipment performance requirements.
Once the terms and conditions are agreed and negotiations are successful, the EPC will be
signed, and implementation of the proposed works may begin.
4.8 Installation
During the installation, the ESCO may itself install, or engage subcontractors to install the ECMs.
It is important for the project manager to take reasonable steps to minimise the impact of any
works to normal operations within the facility, including:
works implemented outside of normal operating hours wherever possible;
all contractors to be inducted and to follow processes required by facility manager(s); and
head contractor be required to address any major issues within an appropriate timeframe.
4.9 Measurement & Verification (M&V)

Measurement & Verification (M&V) of each ECMs performance is an important step in maximising
savings returns on the agencys investment the Energy Efficiency Council has shown M&V to
improve energy saving results by 20-30 per cent over projects with no M&V.
M&V involves utilising a set of methods and processes, defined as part of the International
Performance Measurement & Verification Protocol (IPMVP), to quantify real energy savings from
installed ECMs, which can then be compared to the EPC service providers savings guarantee.
M&V procedures are additional to the existing functions of facility and energy managers in energy
monitoring and reporting, and are focussed on the impacts of specific ECMs.
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4.9.1 Measurement and Verification Plan

A critical part of the M&V phase is the establishment of a Measurement and Verification Plan
(MVP) in the works specification, and sets out procedures to determine the actual energy savings
from installed ECMs. In partnership with the EPC service provider, an MVP agreement should
include the following in detail:
baseline energy consumption and conditions of operation for existing systems prior to
introduction of ECMs (an important step to identify and evaluate change in any baseline
adjustments at a later date);
a tracking and reporting method to capture the changes to the assumed post-installation
conditions;
method of determining energy savings - generally using the following simplified formula:
Energy savings = Baseyear Energy Consumption Baseline Adjustment 1 - Post ECM Energy
Consumption
details of key assumptions for determining baseline, including consideration of significant

variables and current and future unknowns (i.e. weather, occupancy level);
description of ECMs and intended results;
formulae and procedures for determining post ECM installation energy consumption
(including specification of M&V Options see Appendix B);
procedures for performing the statistical validation and the level of accuracy of results to
be achieved for the entire analysis, or at least key components;
specification of equipment and procedures used to collect, measure or obtain results;
method and format of reporting results to the agency;
schedule of reporting to the agency;
process and conditions under which the agency must notify the ESCO of changes to the
facility (i.e. occupancy change, added equipment); and
agreement on a representative and accurate method in baseline adjustment (see

Appendix B) to capture changes to the facility.
4.9.2 Collaboration in M&V

To ensure confidence in the M&V information presented, DTF recommends that the agency
engage closely with the ESCO to understand the procedures and methods of calculation
conducted for M&V.
It is also important for the agency to provide, where necessary, data such as monthly energy bills,
occupancy (i.e. average daily admittance, occupied beds (hospitals), occupied days (schools),
occupied area (leased space), production data and changes in use (see Appendix B - Baseline
Adjustment) to assist the ESCO in the M&V process.
Baseline adjustment is used to capture facility changes post ECM installation that could increase or decrease the baseline
energy usage and is outside the control of the ESCO (see Baseline Adjustment below).
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4.9.3 M&V options

There are four standard options as set out in IPMVP and recognised by the Energy Efficiency
Council to measure and verify the actual performance of installed ECMs (See Appendix A). It is
important to note that the most simple, focused, representative and accurate option be chosen to
minimise time and cost spent on M&V.
4.9.4 Baseline adjustment

Every facility will undergo numerous changes during the life of an EPC project - approximately
seven years. Baseline adjustments correct for any changes in energy use between the base year
and the performance periods caused by unexpected material changes to the facilitys use or
operation. These adjustments then form a new baseline to which the actual performance after
installation may be compared.
See Appendix A for more information.
4.9.5 Frequency of M&V

M&V is an active and on-going process, occurring on an annual basis for the term of the contract,
which is generally equivalent in length to the payback period for the project (i.e. the point at which
accumulated annual savings match the initial capital costs).
However, the balance between a need for performance verification and ongoing cost may vary
over time depending on the level of realised savings and the agencys confidence in the ECMs
ongoing performance. The agency has the option to notify the EPC service provider to discontinue
M&V of an installed ECM if it is deemed that the ongoing reporting costs outweigh the benefits of
continued M&V. Such a decision on the part of the agency should only follow a risk management
analysis, as once M&V is discontinued, the EPC service provider will no longer be obligated under
the EPC agreement to guarantee a level of savings to the agency.
4.9.6 Savings guarantee

Every year for the term of the contract, an M&V report is submitted by the ESCO to the agency,
stipulating actual savings achieved. If savings in any year fails to meet the guaranteed savings (as
stated in the EPC), the ESCO may negotiate to change, replace, remove, alter or add to any
equipment or procedures introduced as part of the project in order to achieve its guaranteed
savings commitment, otherwise the ESCO is required to reimburse the agency to the degree of
the shortfall.
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5 Project Delivery plan

The project delivery will be dependent upon the outcomes of the tender (RFP) and the DFS. A
works plan is required to be developed by the EPC service provider within 30 days of the
execution of the EPC. This works plan will provide all required details on scheduling of installation
works, commissioning, communications and other relevant procedures.
6 Quality Plan
Project savings are required to be guaranteed by the EPC service provider and meet an average
simple payback period of seven years; and subsequent to project implementation, monitoring and
verification (as per International Performance Measurement and Verification Protocol) of project
savings will be performed by the service provider on an annual basis for the term of the contract
(8 years). Any shortfalls in the annual savings are required to be reimbursed by the service
provider (e.g. savings guaranteed).
7 Stakeholder Analysis and

Communication Plan
7.1 Communication objectives
It is the intention of the department or agency undertaking the project to actively engage all
stakeholders as listed in Table 7.2 from project inception to ensure all relevant project issues and
risks are identified and addressed.
More broadly, this project demonstrates leadership in action on climate change and environmental
sustainability within and external to Government, and thus presents outstanding opportunities for
all stakeholders to further communicate the wider social, environmental, and economic benefits
arising from the project.
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7.2 Key Stakeholders

Stakeholder
Current Snapshot
(Needs, expectations, issues)
Role and Desired Mindset
Communications
Approach
Principle Contact
Senior Management
Project Control Board
Building Occupants
Facility Managers
On-site Maintenance
Contractor
Department (which
oversees the agency
undertaking the
project)
Department of
Treasury and Finance
Owners of the Greener Government

Buildings Program.
DTF are responsible for

managing and reporting whole of
government targets and providing
facilitation and administration
support to all projects.
DTF facilitators to be
invited to project
meetings and utilised
as required
Sam Burke
Etc..
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7.3 Mediums
Medium
Activity
Target Stakeholder
Strategic Intent
(H/M/L)
Meeting, forums
and events keep
informed, engaged
and test strategy
direction
Web keep
informed and
updated
Publications
keep informed and
updated
Ministerial and
executive
communications
keep informed
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7.4 Activity Plan

Timeline/
Key Date
Activity
Approval of Project Plan
Stakeholders
Details
Responsibilities
Including approval to
tender and delegation to
sign DFS agreement
Approval from financial delegate

(e.g. board, CEO, Minister)
based on forecast contract size.
Request for Proposal
Project Manager
+ 8 to 12 weeks
Proposal Submitted
ESCO
+ 3 weeks
DFS Agreement signed
[Agency delegate] / ESCO /

Board
+ 12 to 20
weeks
DFS Submitted
ESCO
+ 2 weeks
Project Implementation Approval
Project Control Board / Board
+ 1 week
Funding Application Lodged
Project Manager / Department
+ 6 weeks
Funding Approval
DTF
+ 2 weeks
EPC Signed
[Agency delegate] / ESCO
+ 4 weeks
Works Specification Submitted
ESCO
TBA
Works Specification Approved
Project Manager
TBA
Works begin
ESCO
+6 months or
more
Practical Completion of Works
ESCO / Project Manager
Practical compl.
Guarantee Period Commences
N.A.
Annually
Monitoring and Verification Report
ESCO / Project Manager
326896860.doc.3
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Status

8 Risk Log
#
Author & Date
Description
Likelihood
Impact
(H/M/L)
(H/M/L)
Risk
Rating
(H/M/L)
Proximity
Countermeasures
(when likely
to occur?)
(Treatment: to prevent, reduce,

transfer, contingency, accept)
Owner
SB
Annual project savings not

achieved installations unable
to realise guaranteed savings
M/H
Annually
EPC process followed to ensure

savings are monitored, verified and
guaranteed by service provide, utilising
expertise of DTF facilitator(s)
Energy
services
company
(ESCo)
SB
Annual project savings not

achieved - Energy services
company
Unknown
Inclusion of a Bank Guarantee in the

Energy Performance Contract. EPC
Building
owner/
operator
M/H
During
installation /
work
Potentially disruptive works to be

implemented outside of work hours
Building
owner/
operator
Status
entering insolvency
3
SB
Major disruption to operations

of facility
All contractors to be inducted and to

follow processes required by facility
manager(s).
Head contractor required to address
any major issues within an appropriate
timeframe
SB
Maintenance costs incurred to

address latent site defects and
unsafe conditions
Low Risk
Medium Risk
Medium/High Risk
High Risk
During
installation
and DFS
Targeted hazmat audit before works.

Contract allows for impacted works to
be stopped.
Building
owner/
operator
M/H
H
326896860.doc.3
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Department of Treasury & Finance
9 Appendix A Glossary of Terms

DTF
Department of Treasury and Finance
GGB
Greener Government Buildings
EPC
Energy Performance Contract
ESCO Energy Services Company

RFP
Request for Proposal
DFS
Detailed Facility Study
ECM
Energy Conservation Measure
M&V
Measurement and Verification
MVP
Measurement and Verification Plan
IPMVP International Performance Measurement and Verification Protocol
24
10 Appendix B Measurement &

Verification
There are four generic M&V options as outlined in the International Performance Measurement &
Verification Protocol (IPMVP), and are summarised in the table below.
IPMVP
Option A:
Partially Measured
Retrofit isolation
Option B:
Retrofit Isolation
Option C:
Whole Facility
(Building)
Option D:
Calibrated
Simulation
How Savings Are Calculated
Common Use
Engineering calculations using short

term of continuous post-retrofit
measurements and stipulations
For a single ECM where the performance

of the ECM can be measured but it may be
best to stipulate its operation.
Engineering calculations using short

term or continuous measurements
For a single ECM where the performance

and operations of the ECM should be
measured.
Analysis of whole facility of building

utility meter or sub-meter data,
available continuously, using
techniques from simple comparison to
regression analysis
For a single ECM or multiple ECMs with or

without energy interactions within a whole
facility or building. Energy use is measured
by utility meters for at least 12 months of
the base year and continuously throughout
the post-retrofit period.
Energy use simulation, calibrated with

hourly or monthly utility billing data
and/or end0use metering
For single ECM or multiple ECMs with or

without energy interactions within a whole
building but where no base year data are
available. Post-retrofit measurements are
used to calibrate the simulation model.
Base year energy use and demand are
generated by the simulations model.
Note: Adaptation of Table on page 22 of the IPMVP Vol. 1, Overview of M&V Options
Option A- Partially Measured Retrofit Isolation

Option A is mainly intended for non-complex ECMs and involves short term measurements before and after
installation. Post installation performance data is measured temporarily, using a representative sample size
where there are numerous standard components in an ECM; this data is then used in an engineering or
statistical analysis to estimate the annual consumption.
This method typically applies to specific components (such as lighting retrofits, lighting controls, constant
load motors) where performance and thus energy consumption does not vary significantly from the
nameplate value, and so output is largely dependant on usage patterns.
Using Option A is often the least expensive option, although it should be noted that the accuracy of Option A
is usually inversely proportional to the complexity of the ECM. For example: Option A will be reasonably
accurate for lighting retrofits due to their simplicity but will be less accurate for a complex ECM such as a
chiller, which has a greater range of operating regimes, higher number of assumptions and variables that are
not easily accounted for without conducting a longer-term measurement.
Use of Option A should be supported by annual commissioning of the installation for the life of the
project. This ensures that the installations proper functionality where there is no measurement of its
performance.
25
Option B Retrofit Isolation

Option B is mainly intended for individual ECMs of significant size - those with expected savings of up to 20
per cent of the total facility energy use - where performance and operation is expected to vary.
Measurements should be specifically targeted (i.e. with separate metering) for the ECM and conducted
continuously over the performance period.
This method typically applies to single equipment replacements (such as a HVAC chiller/ boiler), where a
large number of variables necessitate continuous measurement for a degree of accuracy in actual energy
consumption that engineering estimates cannot reliably achieve.
Savings created by most ECMs and all end-use technologies may be determined with Option B, but the
degree of difficulty and associated costs increases as measurement complexity increases. Option B
therefore presents results that are typically more accurate than Option A, especially in cases where
operations vary significantly, but with greater cost to the customer.
Option C Whole Facility

Option C is intended for projects where savings are expected to be large enough to be differentiated from the
random or unexplained energy variations that are normally found at the whole-facility level. It involves the
use of continuous measurement techniques (from utility meters or whole building sub-meters and/or
regression modelling) to determine energy savings for the total site, facility or building.
Option C presents an added difficulty in determining savings as whole building measurements do not isolate
the drivers behind any variances in overall energy consumption the expected levels, this is complicated
further given the inevitable changes in the facility during the performance period. Hence accounting for nonECM changes affecting measured post-retrofit energy use is the major challenge.
Option D Calibrated Simulation

Option D uses computer simulation software to predict facility energy use for the baseyear and/or postretrofit period. As it is a simulation, results are based heavily on the assumptions and parameters of the
model, as such are limited in their accuracy to estimate the actual consumption of more complex ECMs.
Option D may be considered:
26
to assess the performance of all ECMs in a facility. assess just the performance of an individual
equipment, subsystem or system within a facility;
when the baseyear data does not exist or are unavailable;
when the post-retrofit measurement data is unavailable;
where the impact of non-ECM factors cant be quantified with sufficient accuracy and confidence to
estimate Baseline Adjustments (see below);
when the expected savings are not large enough to be separated from variations in the facilitys
utility meter data; and
when the savings for individual ECMs have to be determined but the Option A or B isolation
approach is too difficult or costly.
Selecting an Option
As the customer is required to pay for the costs for M&V, there needs to be consideration of a number of
factors when selecting the savings determination approach; time, complexity, cost and credibility of the
savings outcomes. An underlying goal for the customer in M&V planning should therefore be to incur no
more cost than necessary to receive performance data from the ESCO with a sufficient level of accuracy,
consistency and verifiability.
It is recommended here that the customer encourage the ESCO to take a balanced M&V approach. A
balanced approach incorporates cost benefit considerations and aims to minimise complexity and effort,
while ensuring the accuracy and validity of data and leaves flexibility for continuous change in the facility
environment. By selecting a retrofit isolation method, using one or a combination of Options A, B or D to
analyse each installed ECM, the ongoing M&V analysis may target each ECM individually and is thus
independent of the changes around it. For example: New lighting ECMs are installed across a floor at a
hospital, if new energy intensive medical equipment is installed, performance measurement of the ECMs
using Option A will not be affected by the change. Using Option C however will require further analysis and
cost to isolate the change from the ECMs performance.
Option C is the most complex and costly of the four options, and so it is recommended that the customer
carefully assess other options prior to conducting an Option C M&V. Where it is not feasible or practical to
isolate the effects of each individual ECM, Options C and/or D may be used.
As a general rule of thumb, both the IPMVP 1997 and IPMVP 2001 (March 2002) Volume 1 quotes that
typically:
It would be expected that the average annual savings determination costs do not exceed more than about 10
per cent of the average annual savings being assessed.
Baseline Adjustment
Every facility will over the performance period of an EPC experience some level of unforeseeable, routine
and non-routine change in its operation compared to the baseyear (the year in which the baseline energy
consumption is taken). Baseline adjustments correct for any changes in energy use between the baseyear
and the performance periods caused by unexpected material changes to the facilitys use or operation.
Baseline adjustment is available to the ESCO so that they are not disadvantaged in achieving their savings
guarantee by any unforseen changes outside their control. It also increases the acceptability and correctness
of reported savings by incorporating baseline changes.
It is important for the customer to regularly check energy and water records for any irregularities and keep
the ESCO informed about any planned or unplanned changes to the facility that may cause a baseline
adjustment, this includes:
Seasonal weather changes

Physical changes to facilities - renovations, extensions, additions, or closures
Changes in usage, occupancy, hours of operation, or building activity
Changes in the amount of space being heated or air-conditioned
Changes in energy subsystems and end-use equipment/appliances
Changes in the amount or use of equipment
Changes in environmental conditions (lighting levels, set-point temperatures, etc)
Changes in production throughput, schedules or product mix
Changes in maintenance practices
Example 1: Weather changes
27
When considering ECMs related to a buildings HVAC system, the unforeseeable changes in atmospheric
temperature and humidity will affect the systems energy consumption. Weather information for the year
measured post installation should be compiled by the ESCO based on Bureau of Meteorology data, and
changes to the baseline consumption should be made as a minimum to reflect the actual weather patterns.
Example 2: Customer initiated changes

An ESCO implements Lighting ECMs to an office facility. After installation the customer informs the ESCO
that the occupancy levels have changed from 12 hours to 24 hours. A baseline adjustment calculation to
capture the extra energy consumption as a baseline should be done by the ESCO. Calculations of actual
energy incorporating this new usage condition to show the savings will also be presented to the customer for
verification.
Example 3: Tariff changes
The ESCOs savings guarantee is essentially guaranteeing the energy consumption savings, generally not
based on a value of money, and thus tariff changes will not require baseline adjustments by the ESCO. If
savings guaranteed are based on monetary savings, then tariffs are usually fixed at the time of negotiation.
In this case, if the tariff changes, the nominated tariff is used to determine energy cost savings.
28

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<insert Project name>

Version Date: <insert version date>

<insert Project name>

<insert Project name>

Request for Proposal (RFP)...................................................................................12

Expressions of Interest (EOI).................................................................................12

Detailed Facility Study (DFS) Agreement...............................................................14

Measurement and Verification Plan.................................................................................17

Project Delivery plan.....................................................................................18

<insert Project name>

<insert Project name>

1.2 Project Definition

1.2.2 Scope Inclusions

1.2.3 Scope Exclusions

1.2.6 Dependencies and related activities

1.3 Project Funding

<insert Project name>

1.4 The Panel

1.5 Standard Templates

1.6 Project Facilitation Service

access to standard tender documentation and contracts;

scoping of potential options for tendering of projects;

<insert Project name>

advice and support in the management of tender processes;

advice and support in determining appropriate funding requirements;

advice and support in the implementation of projects;

access to specialist technical and legal advice if required;

access to specialist monitoring and verification advice if required; and

coordination of program results and case studies.

<insert Project name>

Project Control Board

Sam Burke, Peter Phan

Project Management Team

2.1 Overview of roles

<insert Project name>

3.2 Expected costs

<insert Project name>

Best Practice Guide to EPC (refer to www.eec.org.au)

The standard EPC process is illustrated below:

<insert Project name>

4.1 Determine Scope

4.1.2 Site selection

4.1.3 Project solutions

lighting and lighting control systems;

heating, ventilation and air-conditioning systems;

building automation systems;

water saving opportunities;

power factor correction opportunities; and

demand-side response opportunities, giving agencies the capability to respond to price

<insert Project name>

4.2 Expressions of Interest (EOI)

location and size of sites

associated utility consumptions

relevant existing infrastructure

an indicative timeline for the project

Previous experience in providing energy efficient services at similar facilities

Suitability in the project outlined

4.3 Request for Proposal (RFP)