What are the characteristics of the project which was approved on May 23 by the Orléans city council?
Serge Grouard: We are going to award a global energy performance contract with deferred payment (MGPE-PD) over ten years relating to the energy renovation of the Nécotin school group, which brings together an elementary school and a nursery school. This involves work, planned over six months, to install a dry geothermal system consisting of using the temperature of the rock at a shallow depth to produce heat via pumps.
The future holder will also ensure the maintenance and management of this system during the remaining 9.5 years of the contract.
The objective is to launch the award procedure around mid-July to be able to award the contract before the end of 2024 and begin work in July 2025.
Why did you choose to use this form of public procurement?
SG: First, for the third-party financing logic that it integrates. The holder pre-finances the work. This is the key to scaling up energy renovation, because a community cannot carry all the investments. However, we intend to extend the system – both the use of geothermal energy and the use of MGPE-PD – to other buildings in the City and the metropolis of Orléans.
Around a hundred buildings could be affected. Olivier Ortega: Several points make the strength of the MGPE-PD. The community retains control, because it remains the project owner, unlike the partnership market, the other public procurement contract authorizing deferred payment. Then, it makes it possible to assign energy performance objectives to the co-contractor on which the public entity will have a greater guarantee basis than in a common law MGPE.
It can act both on the operating price, but also on the one corresponding to the reimbursement of the investment pre-financed by the holder. Finally, this contract fully incorporates the subject of decarbonization in the renovation, which is innovative: performance is not limited to energy consumption, but also includes greenhouse gas (GHG) emissions.
Are these performance objectives already determined?
SG: Two commitments are set for the holder: a reduction in energy consumption by 75% and a reduction of 93% in GHG emissions. Gains in emissions are largely uncorrelated with gains in energy consumption and are primarily linked to the use of geothermal energy. Combining renovation with the on-site production of carbon-free energy makes it possible to be more efficient.
What is the forecast amount of the market?
OO: It is around €2 million, of which €1.5 million corresponds to the amount of initial investments pre-financed by the holder. The rest corresponds to the cost of operation and maintenance. This is a good signal, because energy renovation is rather well thought out with large projects. But the ticket between €2 and €10 million represents the bulk of the market, including in large communities.
SG: We estimate energy savings at 43,000 euros including tax per year, at constant cost, based on the holder’s consumption commitment. The model also allows the community to largely de-risk the cost of energy, with a fixed, global, flat-rate price, indexed periodically. However, the challenge for the future in communities is controlling operating expenses. In this regard, energy renovation appears to be one of the rare sources of cost reduction.
 of Orléans (Loiret), and Olivier Ortega, associate lawyer at Lexcity, adviser to the City on the project assembly){kind=link}