Beyond Guaranteed Savings: Additional Cost Savings Associated With ESPC Projects

Shonder, John A

doi:10.2172/1086643

Cited by 7 publications

(4 citation statements)

References 4 publications

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“…These additional savings include, for example, avoided capital repair and replacement costs for the original pre-retrofit equipment, had it been left in place. Shonder (2013) estimates that these additional savings can be of the same order of magnitude as the guaranteed savings.…”

Section: Representative Projectmentioning

confidence: 99%

Leveraging of Funds in Performance Contracting Projects

Walker

Shonder

2023

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Section: Representative Projectmentioning

confidence: 99%

Leveraging of Funds in Performance Contracting Projects

Walker

Shonder

2023

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“…makes the ESCO more competitive and more likely to win the project bidding process. No 'rule of thumb' can be clearly identified for setting the guaranteed savings value [41] although some argue that ESCOs typically set the savings value of the guarantee below predicted performance using ESCO-specific risk tolerances on individual energy conservation measures [42][43][44]. At around 15 terawatt-hours in 2012 electricity savings, the public/institutional sector dominates the 34 terawatt-hour U.S. energy efficiency market [4,45].…”

Section: Conventional Energy Performance Contracting Risk Mitigationmentioning

confidence: 99%

Risk Mitigation in Energy Efficiency Retrofit Projects Using Automated Performance Control

Taminiau¹,

Byrne²,

Carretero³

et al. 2021

Sustainable Energy Investment - Technical, Market and Policy Innovations to Address Risk

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Performance gap concerns limit investment in the building energy efficiency retrofit market. In particular, the ability of projects to deliver on promised energy savings is commonly drawn into question. Performance risk mitigation mainly occurs through energy saving performance guarantees. Contractual stipulations arrange the conditions of the guarantee, and ceteris paribus, a higher energy saving guarantee should reduce project performance risk. Therefore, methods that yield a higher energy saving guarantee could help accelerate the market. We review the ability of “smart,” automated, and connected technologies to: (a) intelligently monitor and control the performance of energy-consuming devices to reduce performance variations, (b) provide additional degrees of control over the project’s performance, and, by doing so, (c) motivate the energy services company (ESCO) to raise the energy saving guarantee. Our analysis finds that use of such automated performance control could significantly raise the energy saving guarantee, making projects more likely to succeed.

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“…ESPC statutes vary widely across states and many do not allow inclusion of nonenergy-related savings in the evaluation of project economics. In cases where ESPC regulations disallow or discourage inclusion of non-energy benefits, including operations and maintenance (O&M) savings, project contracts fall short of capturing all quantifiable economic benefits (Shonder 2013;Larsen et al 2014). However, it is relatively easy to quantify and monetize O&M savings.…”

Section: Bureaucratic Barrier: Federal Contracting Officers Are Apprehensive About Leveraging Congressionally-appropriated Dollars To Commentioning

confidence: 99%

“…The energy service company (ESCO) industry has a well-established track record of delivering energy and economic savings in the public and institutional buildings sector, typically through the use of performance-based contracts (Goldman et al 2002;Larsen et al 2012;Shonder 2013;Stuart et al 2014;Carvallo et al 2016). This industry often provides (or helps arrange) private sector financing to complete public infrastructure projects with little or no up-front cost to taxpayers.…”

Section: Introductionmentioning

confidence: 99%

Updated Estimates of the Remaining Market Potential of the U.S. ESCO Industry

Larsen

Bodelon

Goldman

et al. 2017

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The work described in this analysis was funded by the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy (EERE) under Contract No. DE-AC02-05CH11231. We gratefully acknowledge Kurmit Rockwell, Schuyler Schell, and Leslie Nicholls (DOE-FEMP) for providing resources to conduct the analysis. Alice Dasek (DOE-OWIP) suggested the importance of presenting disaggregated market potential estimates. We also thank Dr. Timothy Unruh (DOE Office of Renewable Power) for his longtime support of our research into the U.S. ESCO industry. We thank Donald Gilligan (National Association of Energy Services Companies), Bob Slattery (Oak Ridge National Laboratory), Sharon Conger (General Services Administration), and two anonymous reviewers for providing valuable information and insight into some of the underlying assumptions behind this analysis. Andy Satchwell (LBNL) provided independent peer-review of this manuscript. Finally, we would like to gratefully acknowledge key staff at the ESCOs who donated time responding to requests for information-including providing estimates of market penetration. Any remaining omissions and errors are the responsibility of the authors. LBNL and the U.S. ESCO IndustryFor more than twenty five years, the U.S. Department of Energy has supported Lawrence Berkeley National Laboratory (LBNL) to conduct applied research and provide technical assistance on topics related to the U.S. energy services company (ESCO) industry. LBNL activities include, but are not limited to: the production of triennial reports that estimate the size of the industry; assisting in the design of savings measurement and verification protocols; managing the largest database of ESCO projects in the world; and developing the eProject Builder system (ePB). ePB enables ESCOs and their customers to simulate project cash flow scenarios, securely upload project-level information, and track progress over the life of the energy savings performance contract.

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Beyond Guaranteed Savings: Additional Cost Savings Associated With ESPC Projects

Cited by 7 publications

References 4 publications

Leveraging of Funds in Performance Contracting Projects

Leveraging of Funds in Performance Contracting Projects

Risk Mitigation in Energy Efficiency Retrofit Projects Using Automated Performance Control

Updated Estimates of the Remaining Market Potential of the U.S. ESCO Industry

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