Challenge

With the project proposal 'Sustainable Healthy Schools' (DGS), the Flemish Energy Company (VEB) aims to develop and test the procurement of comfort and energy renovations in schools through a performance contract.

The majority of Flemish schools will have to carry out deep energy and/or comfort renovations in the next few years, partly because government policy foresees a 40% reduction in greenhouse gas emissions by 2030; the indoor air quality and comfort in many Flemish schools is substandard.

With conventional, non-performance-based contracting of a renovation, many of the necessary comfort and energy renovations end up not being implemented, or the results are not or only partially realised due to unfavourable framework conditions (fragmented construction process, wrong incentives, etc.), and often only at a relatively high cost.

Performance-based contracting implies a result commitment, so the ESCO (Energy Service Company) is focused on achieving the guaranteed performance. Indeed, the ESCO receives a bonus if it outperforms the agreed service and pays a penalty if it underperforms.

The introduction of performance-based contracting in the market still has many challenges that require innovative solutions. These still presuppose development and testing in pilot projects.