Cracking the Achilles’ heel of energy performance contracting projects: the credit risk identification method for clients

Shang, Tiancheng; Sun, Xiaotong; Liu, Peihong; Gao, Junqing

doi:10.1080/15435075.2020.1712213

“…In recent years, PBC has been widely applied in various fields, therefore the amount of academic research related to PBC is also gradually increasing. Nevertheless, the main research attention is put on contracts [11,12], risks [13][14][15][16], incentives [17], and performance metrics [18]. Tan [11] proposed a new analytical model, which helps to determine the parameters and analyze contracts.…”

Section: Introductionmentioning

confidence: 99%

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-based Contracting

Zhu

¹

,

Wen

²

,

Li

³

et al. 2023

Chin. J. Mech. Eng.

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0

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With the further development of service-oriented, performance-based contracting (PBC) has been widely adopted in industry and manufacturing. However, maintenance optimization problems under PBC have not received enough attention. To further extend the scope of PBC’s application in the field of maintenance optimization, we investigate the condition-based maintenance (CBM) optimization for gamma deteriorating systems under PBC. Considering the repairable single-component system subject to the gamma degradation process, this paper proposes a CBM optimization model to maximize the profit and improve system performance at a relatively low cost under PBC. In the proposed CBM model, the first inspection interval has been considered in order to reduce the inspection frequency and the cost rate. Then, a particle swarm algorithm (PSO) and related solution procedure are presented to solve the multiple decision variables in our proposed model. In the end, a numerical example is provided so as to demonstrate the superiority of the presented model. By comparing the proposed policy with the conventional ones, the superiority of our proposed policy is proved, which can bring more profits to providers and improve performance. Sensitivity analysis is conducted in order to research the effect of corrective maintenance cost and time required for corrective maintenance on optimization policy. A comparative study is given to illustrate the necessity of distinguishing the first inspection interval or not.

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“…In recent years, with the wide application of PBC, the research on PBC has gradually increased. However, most existing studies on PBC concentrate on contracts [13,14], risks [15][16][17][18], incentives [19,20], and performance metrics [21]. Tan [14] developed a distribution-free contract that sets the guaranteed energy savings level based on the mean and the standard deviation of the energy savings and the profit-sharing ratio between the energy service companies (ESCO) and the energy user.…”

Section: Introductionmentioning

confidence: 99%

“…Tan [14] developed a distribution-free contract that sets the guaranteed energy savings level based on the mean and the standard deviation of the energy savings and the profit-sharing ratio between the energy service companies (ESCO) and the energy user. Shang et al [18] established a credit risk identification model to examine the credit status of Energy performance contracting (EPC) project clients (i.e., energy-using companies) in China based on rough set theory. Selviaridis et al [20] conducted three in-depth case studies of contractual relationships, which exhibit differences in terms of how performance incentives are framed, i.e., using promotion, prevention, and "hybrid" frames, respectively.…”

Section: Introductionmentioning

confidence: 99%

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-Based Contracting

Zhu

¹

,

Wen

²

,

Li

³

et al. 2021

Preprint

0

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As a new form of support contract, performance-based contracting (PBC) has been extensively adopted in industry and manufacturing recent years. However, maintenance optimization problems under PBC have not received enough attention. In order to further expand the application of PBC in the field of maintenance optimization, we investigate the condition-based maintenance (CBM) optimization for gamma deteriorating systems under PBC. Considering the repairable single-component system subject to the gamma degradation process, this paper proposes a CBM optimization model with an objective of maximizing the profit and improving system performance at a lower cost under PBC. In the proposed CBM model, first inspection interval is considered to reduce the inspection frequency and the cost. Then, a particle swarm algorithm (PSO) and related solution procedure are presented in order to solve the multiple decision variables in our proposed model. Finally, a numerical example is provided to illustrate the applicability and effectiveness of our proposed model. Through comparing the proposed policy with the conventional one, the superiority of our proposed policy is proved, which can bring more profits to providers and improve performance. Sensitivity analysis is conducted to investigate the effect of corrective maintenance cost and time required for corrective maintenance to optimization policy. Comparative study is given to illustrate the necessity of distinguishing first inspection interval and repeat inspection interval.

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“…Tan [14] proposed a new analytical model, which helps to determine the parameters and analyze contracts. Shang et al [18] improved that energy performance contracting is an effective way to achieve the goals of energy saving and emission reduction. Selviaridis et al [20] presented a cross-case study.…”

Section: Introductionmentioning

confidence: 99%

“…In recent years, PBC has been widely applied in various fields, therefore the amount of academic research related to PBC is also gradually increasing. Nevertheless, the main research attention is put on contracts [13,14], risks [15][16][17][18], incentives [19,20], and performance metrics [21]. Tan [14] proposed a new analytical model, which helps to determine the parameters and analyze contracts.…”

Section: Introductionmentioning

confidence: 99%

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-based Contracting

Zhu

¹

,

Wen

²

,

Li

³

et al. 2021

Preprint

0

View full text Add to dashboard Cite

With the further development of service-oriented, performance-based contracting (PBC) has been widely adopted in industry and manufacturing. However, maintenance optimization problems under PBC have not received enough attention. To further extend the scope of PBC’s application in the field of maintenance optimization, we investigate the condition-based maintenance (CBM) optimization for gamma deteriorating systems under PBC. Considering the repairable single-component system subject to the gamma degradation process, this paper proposes a CBM optimization model to maximize the profit and improve system performance at a relatively low cost under PBC. In the proposed CBM model, the first inspection interval has been considered in order to reduce the inspection frequency and the cost rate. Then, a particle swarm algorithm (PSO) and related solution procedure are presented to solve the multiple decision variables in our proposed model. In the end, a numerical example is provided so as to demonstrate the superiority of the presented model. By comparing the proposed policy with the conventional ones, the superiority of our proposed policy is proved, which can bring more profits to providers and improve performance. Sensitivity analysis is conducted in order to research the effect of corrective maintenance cost and time required for corrective maintenance on optimization policy. A comparative study is given to illustrate the necessity of distinguishing the first inspection interval or not.

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Cracking the Achilles’ heel of energy performance contracting projects: the credit risk identification method for clients

Cited by 4 publications

References 21 publications

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-based Contracting

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-based Contracting

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-Based Contracting

Condition-based Maintenance Optimization for Gamma Deteriorating Systems under Performance-based Contracting

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