The energy performance contract - key towards energy efficiency in Europe?

Open access

Abstract

The paper focuses on the Energy Performance Contract (EPC) as a business model for energy efficiency. More precisely, it examines, using two case studies, enablers and disablers – from an economic, legal and institutional/managerial perspective – for advancing this arrangement across the EU. The EU has set a 20% energy savings target by 2020 (roughly equivalent to turning off 400 power stations), with an even more ambitious target of 27% by 2030. To reach these ambitious targets, the investments needed are approximately EUR 100 bn/year across the EU (according to the European Commission). Energy efficiency is not, as fervent proponents often claim, the low hanging fruit in terms of investment efforts. Like any other sub-sector, such as transmission and distribution, it demands innovative financing instruments to ensure adequate scale-up. In the paper, I use two comparative case studies to identify and classify the disablers and enablers of Energy Performance Contracting/Energy Services Companies (ESCOs) development: the European frontrunner, namely Germany, and a laggard, namely Romania. As research methodology, I use literature review, comparisons between similar government policy planning and evaluation documents, and stakeholder interviews. While academic literature on the topic (Seefeldt, 2003; Wilhelm, 2015) is developed for Germany, for Romania a critical reflection on EPC promotion policy is to be found only in industry documents (e.g.: ARPEE, 2013; Tractebel, 2015). The German success demonstrates that, contrary to the belief of Romanian stakeholders, it is not the lack of a standardized contract model that prevents EPC development, but lack of genuine commitment, drive and leadership of public officials in promoting this financing instrument. A solid communication between public authorities and private beneficiaries, and public administration capacity for impact assessment and evidence-based policy planning are two other significant enablers of EPCs, that could foster this financing instrument across the EU.

Asociația Română pentru Promovarea Eficienței Energetice (ARPEE) (2013), Eficiența Energetică în România. Cartea Albă, Editura AGIR.

BfEE (Presenter, Jonas Geissler) (2015), Energy Performance Contracting in Germany. The role of facilitators for the market, available at www.esd-ca.eu/private-area/.../energy.../energy-performance-contracting-germany (last accessed 3 March 2017).

Bleyl, J.W. (2011), Conservation first! The new integrated energy-contracting model to combine energy efficiency and renewable supply in large buildings and industry. ECEEE 2011 Summer Studies, paper ID 485.

DIRECTIVE 2012/27/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC, available at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:EN:PDF (last accessed 21 February 2016).

DG Energy webpage on energy efficiency financing, https://ec.europa.eu/energy/en/topics/energy-efficiency/financing-energy-efficiency (last accessed 31 October 2016).

DG Joint Research Center webpage on energy service companies, http://iet.jrc.ec.europa.eu/energyefficiency/esco (last accessed 12 January 2017)

Economidou, M., Joint Research Center (2015), Energy Services Market in the EU Workshop. An EU Overview, available online at http://iet.jrc.ec.europa.eu/energyefficiency/sites/energyefficiency/files/events/Energy-Services-Market-in-the-EU/2_esm_slides_economidou.pdf (last accessed 3 March 2017).

European Commission, 2015, COM(2015) 574 final, Assessment of the progress made by Member States towards the national energy efficiency targets for 2020 and towards the implementation of the Energy Efficiency Directive 2012/27/EU as required by Article 24 (3) of Energy Efficiency Directive 2012/27/EU, available at https://ec.europa.eu/energy/sites/ener/files/documents/1_EEprogress_report.pdf (last accessed 21 February 2016).

Wilhelm, B. (2015), EnpC-INTRANS: Baseline study on the current state of EPC/ESCO project development and implementation in the public sector in partner countries, Deliverable no 6.1 in the project “EnPC-Intrans Capacity Building on Energy Performance Contracting in European Markets in Transition”, available at www.enpc-intrans.eu/wp-content/uploads/2015/07/EnPC-INTRANS-D6-1-Final.pdf (last accessed 4 March 2017).

Limaye, D. R., & Limaye, E. S. (2011), “Scaling up energy efficiency: the case for a Super ESCO”, in Energy Efficiency, 4(2), 133-144.

Seefeldt, F. (2003), “Energy performance: Success in Austria and Germany – Dead End for Europe”, in eceee 2003 Summer Study proceedings, ISBN: 91-631-4001-2, available at http://www.eceee.org/library/conference_proceedings/eceee_Summer_Studies/2003c (last accessed 12 January 2017).

Tractebel Engineering GDF Suez, Bogdan Anton – Energy Efficiency Department (2015), Contractul de Performanță Energetică. Proiecte pilot în municipalități, available online at www.anre.ro (last accesed 3 March 2017).

Journal Information

Metrics

All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 129 129 21
PDF Downloads 48 48 10