In order to unleash the energy efficiency (EE) potential and achieve the energy savings goals in buildings there is a necessity to adopt new ESCO business models. And this is what MOEEBIUS Consortium is currently working on within the project.
ESCO (energy service company) is a commercial or non-profit business providing a broad range of energy solutions including designs and implementation of energy savings projects, retrofitting, energy conservation, energy infrastructure outsourcing, power generation and energy supply, and risk management. The energy services market is envisaged as a key factor for implementing EE measures and achieving energy savings in buildings.
ESCO models were developed in the USA and afterwards brought to Europe and have been used since the 1970s. Several ESCO models are now being applied. These include energy performance contract (EPC), energy supply contract (ESC), chauffage, integrated energy contracts (IEC) and build-own-operate-transfer (BOOT).
However, due to a set of barriers these types of models are not yet generalized. The main barrier seems to be the lack of awareness and information on the complexity of the ESCO concept, leading to distrust by end-users and also by financial institutions. Other aspects that hinder ESCO market deployment include legal and political barriers, such as erratic legislation, lack of official or generally accepted ESCO definition, certification and standards; ambiguous legislation and lengthy procurement; financing limitations, like problems with bank financing, aversion to loans by potential ESCO clients and high transaction costs.
At the same time, there are several stakeholders involved in this model with interests that may differ, such as the ESCO, facility manager, maintenance responsible party, retrofit advisor, building owner and occupants. Consequently, establishing a win-win cooperation between these stakeholders is critical.
The present activities within MOEEBIUS project focus on developing innovative ESCO business models which are aligned with the stakeholders’ requirements through a benchmarking which included a review of the existing business models (using the business model Canvas) and current market status in Europe as well as identification of their barriers and success factors. The new models will also be based on results from surveys and interviews conducted with stakeholders and brainstorming sessions with experts from the MOEEBIUS Living Lab.
The Living Lab (involving 25 ESCOs from various EU countries) is an environment for experience sharing towards user-driven open innovation, oriented to: widely disseminate the project outcomes to stakeholders for generating a broad awareness and engagement in the project activities; create opportunities for further exploitation and replication of results; obtain feedback from the stakeholders and optimize all developments, directly addressing their critical needs.
The work not only focuses on the business environment of the pilot sites but also on introducing new ESCO business approaches that will be transferable to other business environments, providing solutions with high replication potential. Some examples are:
- the valorisation of buildings through energy certification;
- raising occupants’ awareness to energy consumption;
- condition based maintenance or efficiency based maintenance;
- energy management based on shared-savings.
Future work will include the validation of the innovative business models in three large-scale pilot sites, located in Portugal, United Kingdom and Serbia, incorporating diverse building typologies, heterogeneous energy systems and spanning diverse climatic conditions.
First outcomes resulting from the aforementioned activities have been incorporated in a report: New Business Models and Associated Energy Management Strategies. Read the report >>>