Eurostat, the European statistical office, published an updated guidance note on Tuesday 19 September on the accounting treatment of energy performance contracts (EPCs) and significantly increased the possibilities for public bodies to use such contracts, by including and clarifying the circumstances in which they can be recorded off government balance sheets.
Eurostat’s updated guidance paper is, thus, in line with the requirements of the so-called Juncker investment plan, which seeks to remove regulatory barriers to investment, and paves the way for the development of a stronger market of EPC providers, involving many SMEs, the Commission says.
According to data on public-private partnerships (PPPs) from the European PPP Expertise Centre (EPEC) of the EIB, over the last five years 345 new public-private partnership projects concerning energy performance were signed in 16 EU member states, with a total value of over €65 billion.
The updated guidance note will help member states’ national institutes (NSIs) to better understand the impact energy efficiency investments have on government balance sheets.
It provides guidance to statisticians on interpretation of certain ESA 2010 provisions – the European System of Accounts – in the case of EPCs, more specifically those EPCs which require initial capital expenditure to improve the energy efficiency of a facility.
EPCs where the energy efficiency is obtained through energy management measures, without any investment in equipment addition or renewal, are treated as simple service or maintenance contracts. This revised guidance is applied in cases where the EPC-contractor can be considered as the economic owner of the asset.
Technical assistance facilities like the European Investment Advisory Hub set-up by the EIB and the Commission will use this guidance note to assist in any potential request. The note will be backed up by a Practitioner’s Guide, jointly produced by Eurostat and the European PPP Expertise Centre (EPEC) of the EIB, which will be published by the end of the year.
“With this guidance, we show how public authorities can invest in full respect of the principles of public accounting, now also in the energy sector. Facilitating investments in energy efficiency measures has also an important social function, as public buildings such as social housing facilities will benefit from it too”, said Social Affairs Commissioner Marianne Thyssen who is responsible for Eurostat.
“Thanks to the revised guidance published today, it will be easier for schools, hospitals, and other public buildings to invest for the purpose of improving energy efficiency. Energy efficiency measures are also an important means to combat energy poverty, which this Commission aims at tackling at the roots”, commented Climate Action and Energy Commissioner Miguel Arias Cañete. (Original version in French by Emmanuel Hagry)