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Living in an era where cost savings are on everyone’s mind, if you are like most people, you can probably think of benefits of saving energy, such as reduced costs and lower greenhouse gas emissions. In line with this, a new guide has been released to help countries save energy in office buildings, water utilities, public lighting, schools and hospitals.

Developing countries could save up to 40 percent of the energy used in public office buildings if energy efficient measures are incorporated. The guideline for Public Procurement of Energy Efficiency Services--Getting Started shows how energy waste can be addressed through focusing on the public sector, making incremental adjustments in budgeting and procurement procedures, and actively promoting the energy efficiency service industry through bundled tenders and financing programs for retrofit projects. Use of performance contracts allow public agencies to outsource energy efficiency projects from development to financing to monitoring, and yield quick gains with less hassle.

“The potential for energy saving is large, given that the public sector is generally the largest single purchaser of energy in a given country. We have a unique opportunity to significantly influence World Bank funded projects to adopt energy efficient measures,” said Rohit Khanna the Program Manager of the Energy Sector Management Assistance Program-ESMAP. He was addressing energy, environment and procurement specialists at the World Bank in Washington DC, on November 18, 2010.

One approach to factor in energy savings in a project is through energy savings performance contracts (ESPCs). For instance, in Armenia, the government and the World Bank are using ESPCs to reduce energy consumption in public facilities. This will lead to immense monetary savings, of 30-50 percent savings per facility, and better energy security, since about 97 percent of Armenia’s energy is imported.

One of the benefits and challenges of energy savings performance contracts is that they allow for payments for goods and services to be based on measurable output indicators rather than inputs, said Jas Singh, the author of the guideline and a Senior Energy Efficiency Specialist of ESMAP.

In conclusion, the public sector holds significant potential for improved energy efficiency and represents a large and important market, globally. The new guideline is a result of ESMAP’s work with World Bank procurement staff to operationalize the findings of a report published in 2009. The report offers practical policy advice about ways to achieve real energy savings in government-owned facilities.

Link to ESMAP's Energy Efficient Cities Initiative - EECI Website