The evolution of the US energy service company (ESCO) industry: from ESCO to Super ESCO

Vine, Edward; Nakagami, Hidetoshi; Murakoshi, Chiharu

doi:10.1016/s0360-5442(99)00009-2

Cited by 44 publications

(23 citation statements)

References 2 publications

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“…Various definitions of energy service contracting have been proposed (Vine et al 1999), but few satisfactorily describe the diversity of contractual arrangements that are available or the range of activities involved. Energy service contracts have been variously defined and categorised in relation to the nature of the energy services covered, the source of finance for new investment, the ownership of the relevant assets, the provision of guarantees for savings in energy consumption and/or costs and the degree to which control of energy services together with the associated risks is transferred to the contractor (Lay et al 2009;Sorrell 2007).…”

Section: Types Of Energy Service Contract In the Ukmentioning

confidence: 99%

The UK market for energy service contracts in 2014–2015

Nolden

Sorrell

2016

Energy Efficiency

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This paper provides an overview of the UK market for energy service contracts in 2014 and highlights the growing role of intermediaries. Using information from secondary literature and interviews, it identifies the businesses offering energy service contracts, the sectors and organisations that are purchasing those contracts, the types of contract that are available, the areas of market growth and the reasons for that growth. The paper finds that the UK market is relatively large, highly diverse, concentrated in particular sectors and types of site and overwhelmingly focused upon established technologies with high rates of return. A major driver is the emergence of procurement frameworks for energy service contracts in the public sector. These act as intermediaries between clients and contractors, thereby lowering transaction costs and facilitating learning. The market is struggling to become established in commercial offices, largely as a result of split incentives, and is unlikely to develop further in this sector without different business models, tenancy arrangements and policy initiatives. Overall, the paper concludes that energy service contracts can play an important role in the transition to a low-carbon economy, especially when supported by intermediaries, but their potential is still limited by high transaction costs.

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Section: Types Of Energy Service Contract In the Ukmentioning

confidence: 99%

The UK market for energy service contracts in 2014–2015

Nolden

Sorrell

2016

Energy Efficiency

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“…Determining how dispersed energy efficiency projects can be packaged and implemented effectively has proven immensely difficult. While some mechanisms, such as utility demand-side management (Electric Power Research Institute and Edison Electric Institute 1984) and energy savings performance contracting (ESPC) 3 were developed to address this challenge, experience has shown that such mechanisms 1 See the definition of the Super ESCO in the US in the following publications: Vine et al 1999;Goldman and Dayton 1996;LeBlanc 1995. 2 must be carefully adapted to fit local needs and situations.…”

Section: Why Energy Efficiency?mentioning

confidence: 99%

Scaling up energy efficiency: the case for a Super ESCO

Limaye¹,

Limaye²

2011

Energy Efficiency

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In developing countries the implementation of energy efficiency projects has fallen far short of the potential due to a number of institutional and financial barriers. The concept of energy performance contracting (EPC) implemented by energy service companies (ESCOs) has been recognized as a mechanism to overcome some of these barriers. However, despite the fact that the potential for application of performance contracting in developing nations is enormous, the growth of the ESCO industry has been rather slow. In particular, EPC and ESCOs have played a very limited role in implementation of energy efficiency projects in the public sector. This paper identifies barriers to the development of a viable ESCO industry in developing countries and identifies the need for and the potential role of a "Super ESCO" as a means of facilitating large-scale implementation of energy efficiency projects. While there are different definitions of the term Super ESCO, this paper refers to a Super ESCO as an entity that is established by the Government and functions as an ESCO for implementing projects in public facilities and supports capacity building and project development activities of existing private ESCOs. The Government capitalizes the Super ESCO with sufficient funds to undertake public sector performance contracting projects and to leverage commercial financing. The Super ESCO may also act as a financing or leasing organization to provide private ESCOs and/or customers financing for EE projects or leasing for EE equipment. The paper identifies examples of existing and proposed Super ESCOs in developing countries and defines how Super ESCOs may address some of the barriers to large-scale implementation.

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“…Vine et al (1998) present financial and cultural barriers and give guidance for the development of an ESCO industry in Japan, along with recommendations for joint ventures between US ESCOs and Japanese companies. Vine et al (1999) overview the evolution of the US ESCO industry and focus on the relationship between utilities and "Super ESCOs". Davies and Chan (2001) discuss the benefits, obstacles and necessary ingredients for performance contracting that are likely to be applicable to Hong Kong.…”

Section: Review Of Esco Facts and Literaturementioning

confidence: 99%

“…The portion of savings paid to ESCO is always higher for "shared savings" than the "guaranteed savings" projects; reflecting the ESCO's significantly greater risk and expense for borrowing money. Vine et al (1999) overview the evolution of the US ESCO industry and focus on the relationship between utilities and "Super ESCOs". Davies and Chan (2001) discuss the benefits, obstacles and necessary ingredients for performance contracting that are likely to be applicable to Hong Kong.…”

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confidence: 99%

Analysis of ESCO Activities Using Country Indicators

Okay

Akman

2009

SSRN Journal

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Energy Service Companies (ESCOs) are private sector instruments that offer energy-/emission-improvement (energy saving, energy efficiency, energy conservation, emission reduction) projects in the developed and in some developing countries. Literature reveals that energy-/emission-improvements of countries may be related to their innovation-and R&D-activity levels. In this work, we use a literature data on the activities and the sectors targeted by ESCOs in 38 countries, summarized in terms of the age of ESCO market (AEM), number of ESCO companies (NE), and total value of ESCO projects (VE). Along with the Global Innovation Index (GII) data of the countries, we investigate the relationships among the ESCO Indicators (EIs: AEM, NE, VE, sectors targeted by ESCOs), and the Country Indicators (CIs: GII and per-capita GDP, energy consumption, CO2 emission). We observe noteworthy dependencies between the EIs and CIs. Using the simple trend equations we estimate the missing VEs in the original data. We also project, as a hint for the size and orientation of the upcoming Turkish ESCO market, the set of EIs and the distribution of the sectors that are likely to be targeted by ESCOs in Turkey. Keywords:Energy service companies; ESCO; Global Innovation Index; GDP; Energy consumption; Greenhouse-gas (CO2) emission; R&D.Munich Personal RePEc Archive Edition. Reproduction & distribution subject to approval of the corresponding author or the copyright owner. If you are going to cite this work please contact the corresponding author to learn its current status. Analysis of ESCO Activities MotivationESCOs, as private-sector instruments, guarantee and deliver energy improvements (saving, efficiency, conservation) to their clients. An ESCO's remuneration is tied to the energy improvement actually achieved. ESCOs may finance, or assist in financing, an energy project by providing improvement guarantee.Behind our motivation for the analysis of ESCO activities, innovations, energy consumptions, emissions, and GDPs of countries there are two important and implicitlyrelated recent laws of Turkey.Turkey's Energy Efficiency Law (EEL) was enacted in 2007, partially as a result of Turkey's tasks of complying with the European Union (EU) directives. Turkey's EEL aims to end the state monopoly by allowing private-sector participation and competition under independent regulation. One important facet of the EEL was the establishment of an ESCO market, which is currently the hot issue in the Turkish energy market.Turkey's recent law "Law About the Support of R&D Activities" (RDL in short) supports generation of technological know-how to make the economy internationally competitive through R&D and innovation. RDL exploits innovations in developing technology-intensive products and production processes, improving efficiency and costs, and commercializing technological know-how.Turkey's energy policy had been very much supply-oriented in the past. Reflecting this policy, Turkish manufacturing sectors had not been very energy efficient, and...

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The evolution of the US energy service company (ESCO) industry: from ESCO to Super ESCO

Cited by 44 publications

References 2 publications

The UK market for energy service contracts in 2014–2015

The UK market for energy service contracts in 2014–2015

Scaling up energy efficiency: the case for a Super ESCO

Analysis of ESCO Activities Using Country Indicators

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