Energy related outsourcing - the case of ESCOs in the Swedish pulp and paper industry

Abstract

Industrial energy efficiency is stated as a major means of reducing the threat of increased global warming, caused by human use of fossil fuels. Energy service companies (ESCOs) have been expected to play an important role in promoting energy efficiency in different sectors of the economy, including industry. Energy related outsourcing in the complex energy intensive pulp and paper industry, with a continuous production process, represents one of the more challenging types of industrial outsourcing. This paper studies the role of ESCOs as a method to promote energy efficiency in the Swedish pulp and paper industry. A questionnaire was used, complemented by in-depth interviews with mill executives in order to gain more knowledge of the issue. The main conclusion from this paper is that the utilization of ESCOs in the pulp and paper industry is higher in activities with a lower level of energy integration in the production process, and on the contrary, the utilization of ESCOs is lower with a higher level of energy integration in the production process. Since the PPI is a mature industry with a globally well-known and wellspread technique, results from this paper, may plausibly be generalized for PPIs in other countries as well.

Beyond barriers – A case study on driving forces for improved energy efficiency in the foundry industries in Finland, France, Germany, Italy, Poland, Spain, and Sweden

“…Moreover, relating the findings to previous studies on energy services, e.g. [27][28][29][30][31][32], reveals similar findings; in order to improve energy efficiency there is an energy service gap still to be bridged: indeed, it seems that future efforts should be devoted in fostering the adoption of the existing instruments to promote energy efficiency and energy management within the foundry industrial sector, such as e.g. TPF and EPC, maybe thanks to a stricter support from ESCOs.…”

“…Moreover, studies concerning energy services in industry have not been extensive, some exceptions being [27][28][29][30][31][32]. Studies on driving forces for improved energy efficiency in industry have not been extensively published either [33][34][35][36][37].…”

Industrial ecology and the boundaries of the manufacturing firm

“…If recovery is intimately connected to critical activities in the manufacturing firm's primary process, there is a strong motive to avoid external dependencies. In studies on pulp and paper firms’ outsourcing of energy services, Thollander and Ottosson () found a higher degree of outsourcing activities where there was a relatively low level of production system integration, whereas in cases where the energy system was integrated with the production system, the firms tended to prefer retained control. Moreover, in their studies on biogas production at Nordic pulp and paper mills using the organic content of the wastewater streams, Ottosson, Andersson, and Magnusson () found that regulatory control could be an additional obstacle for outsourcing; the firms had to ensure that the wastewater would comply with the environmental permits for their mills and it was not possible to transfer this responsibility.…”

Drivers, Barriers, and Success Factors for Improving Energy Management in the Pulp and Paper Industry

“…In the study by Cagno et al [41], perceptions of what constitute the major drivers and barriers for EE were shown to differ among different actors, that is, among enterprises and the major actors promoting EE. Outsourcing of EnM is seen as a promising means of deploying EE in industry and the European Energy Services and EE Directive from 2006 addressed energy services as a promising means for the EU to overcome barriers and improve EE [42]. In one study within the European foundry industry [43], energy services were seen to have reached some level of deployment, even though this was not large.…”

“…If this is due to a real lack or just a scarcity of studies is difficult to state. As stated by Thollander and Ottosson [42], energy services in the PPI are more likely to be more attractive in activities that are outside of the core production process, and where the lower the energy integration is in relation to the production processes, as it may take 5-10 years to gain sufficient knowledge of the production to deploying EE. A general conclusion, based on this, may be that different explanatory models exist between different sectors, even regarding the organizational issues.…”