Energy service companies in the EU

To attain the target of an 80–95% reduction of greenhouse gas emissions by 2050 compared with 1990 levels, the EU will need to make big investments. A prospective resource in this regard are the energy service companies (ESCOs), which specialise in assessing, designing and implementing energy efficiency and renewable energy projects, and typically arrange or even take on the project financing themselves. Clients do not need to pay huge upfront costs, as these are covered by the future cost savings.

However, ESCO markets have matured in only a handful of EU Member States, namely Austria, the Czech Republic, France, Germany and the United Kingdom. ESCOs have facilitated energy efficiency gains in industry and have delivered projects, though not on a massive scale, involving the installation of modern energy-efficient street lighting and the renovation of social housing through public-private partnerships. However, their engagement in the private residential sector has been modest.

Recently, a potential new role has emerged for them: in decentralised power production, ESCOs could ‘aggregate’ excess electricity produced by small producers (prosumers) and help place it on the wholesale market.

Author: Nikolina Šajn

Website: European Association of Energy Services Companies http://euesco.org/home/home.html

European Commission: JRC: Energy efficiency: Energy efficiency activities: Energy Service Companies http://iet.jrc.ec.europa.eu/energyefficiency/esco

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