EU clarifies recording of energy performance contracts

An updated EU guidance on how to record energy performance contracts (EPCs) in government accounts has been published. An EPC is an agreement between a private contractor and government or […]

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By Priyanka Shrestha

An updated EU guidance on how to record energy performance contracts (EPCs) in government accounts has been published.

An EPC is an agreement between a private contractor and government or other private entities and is part of the energy transition promoted by the EU Commission to achieve better efficiency in energy use.

The contract guarantees the energy conservation measures implemented will generate sufficient savings to pay for the project.

Eurostat has clarified the accounting rules applied to the treatment of EPCs, which are expected to “significantly increase” the possibilities for public bodies to use such contracts.

This is said to be in line with the EU plan of removing regulatory barriers to investment.

The updated rules are expected to help Member States’ National Statistical Institutes (NSIs) to better understand the impact energy efficiency investments have on government balance sheets.

The Commission states: “The note provides guidance to statisticians regarding the interpretation of certain ESA 2010 provisions – the European System of Accounts – in the case of EPCs, more specifically those EPCs which require an initial capital expenditure to improve the energy efficiency of a facility.”