Energy Performance Contracts: an Analysis of the French Experience Through the Lenses of Contract Theories

Abstract: Energy Performance Contracts (EPCs) are a new contractual to procure energy services, and are lately seen as a major policy tool towards improving efficiency of energy use. In the European Union, a legal framework for such contracts has been adopted in 2006 for this contractual tool, with the hope that this would encourage public authorities to take initiatives towards enhancing energy efficiency of public buildings. In France, while there have been a strong political will to promote energy efficiency projects for public buildings through CPEs, there has been relatively few such contracts that has been signed. In this paper, we try to empirically access the reasons why public deciders in France shy away from EPCs for energy efficiency projects in public buildings. We turn to recent developments in contract theories to identify the extent to which these contracts are adapted for energy efficiency projects. At the empirical level, we investigated the 9 exhaustive EPCs in France relying on interviews with public deciders involved in these projects. We find that EPC contracting involves the use of a lot of public resources (expenses incurred to employ experts and consultants to prepare for the contract and its award, human resources etc.). This suggests that transaction costs associated with CPEs may be high. Nevertheless, we show that public deciders involved in these EPCs are globally satisfied with the outcome of the project.