C40 Good Practice Guides: Houston - Open tender ESPC

Summary

In 2007, with the support of C40 Cities and the Clinton Climate Initiative,^xxxi Houston initiated a large-scale energy efficiency retrofit programme to address all city buildings.^xxxii 271 buildings (over 11 million square feet) are being retrofitted under an energy savings performance contract performed by Schneider Electric and Siemens. The goal is a 25% reduction in energy demand from buildings, which would save over 22 million kWh of electricity every year. The approach was to issue a single contract for all 271 buildings at the same time, split into in different tranches according to the building typology. This allowed the ESCO to optimize the interventions while benefiting from economies of scale.

Results

Over the last four years, retrofits of 87 city buildings have resulted in energy and operational savings averaging US$5.2 million a year. The results have exceeded original estimates, with an expected payback period of just ten years. The first six tranches of upgrades covered 4.3 million square feet, including police stations, health and parks facilities, and the city's main office tower. A new US$8.2 million project to upgrade 18 libraries and two other facilities is scheduled to finish in 2015, with expected savings of US$550,000 annually.

Reasons for success

The city government committed to retrofitting the whole municipal building portfolio through this initiative, which attracted leading firms that brought innovative and competitive solutions. Moreover, by going through the procurement process just once, the city streamlined the selection of firms and accelerated project implementation – thereby expediting the delivery of energy and cost savings in the buildings. Grouping similar building types into multiple-building tranches not only simplified the project management and finance by arranging it as one deal rather than several, but also exploited economies of scale and allowed for a blended project payback of up to 20 years. The city clearly defined its programme goals (e.g. minimum percentage of energy savings) as well as some specific aspects of the buildings that should be addressed (e.g. the building envelope) that the ESCOs had to address, which provided the ESCOs a working framework, while leaving space for maximum innovation and adaptation to building occupants’ needs. 

C40 Good Practice Guides

C40's Good Practice Guides offer mayors and urban policymakers roadmaps for tackling climate change, reducing climate risk and encouraging sustainable urban development. With 100 case studies taken from cities of every size, geography and stage of development around the world, the Good Practice Guides provide tangible examples of climate solutions that other cities can learn from. 

The Municipal Building Efficiency Good Practice Guide is available for download here.  The full collection of C40 Good Practice Guides is available for download here.  

All references can be found in the full guide.