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Building a business to close the efficiency gap: the Swedish ESCO Experience

Soroye, Katie Lindgren and Nilsson, Lars J LU (2010) In Energy Efficiency 3(3). p.237-256
Abstract
Energy service companies (ESCOs) are often portrayed as important change agents in capturing the opportunity to curb energy demand and mitigate climate change through increased efficiency. Yet, the literature in this area is limited. While many studies analyze economic and environmental savings from energy efficiency programs, far less attention has been devoted to evaluating managerial and other challenges for ESCOs to transform the "efficiency gap" into a viable business. Sweden presents an interesting case study given its early experience in energy market reform as well as the rapid growth in recent years of its ESCO market. By conducting in-depth interviews with ESCOs operating in Sweden, this research addresses the following: (1)... (More)
Energy service companies (ESCOs) are often portrayed as important change agents in capturing the opportunity to curb energy demand and mitigate climate change through increased efficiency. Yet, the literature in this area is limited. While many studies analyze economic and environmental savings from energy efficiency programs, far less attention has been devoted to evaluating managerial and other challenges for ESCOs to transform the "efficiency gap" into a viable business. Sweden presents an interesting case study given its early experience in energy market reform as well as the rapid growth in recent years of its ESCO market. By conducting in-depth interviews with ESCOs operating in Sweden, this research addresses the following: (1) current market opportunity analysis, including how Swedish market conditions shape firms' business strategies, (2) business characteristics and service functions, with attention to perceptions regarding which market segments are considered compelling, and (3) how policy might expand the size and attractiveness of additional sectors/market segments. This analysis is informed by additional discussions with policymaker, agencies, authorities, and customers. The insights garnered are important as Member States prepare to implement the Directive on Energy End-use Efficiency and Energy Services. Despite rapid growth, ongoing challenges remain for ESCOs. Government still has a role in education, policy, and residential sector solutions. Greater details and data on the energy savings produced by ESCO projects are needed. Future research could address best practices for reporting data from ESCO projects. Moreover, with additional data on ESCO projects, studies could benchmark these results with other international programs to promote energy efficiency. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
ESCOs, Efficiency gap, Energy services directive, Sweden, Business, case, Business strategy, EPC
in
Energy Efficiency
volume
3
issue
3
pages
237 - 256
publisher
Springer
external identifiers
  • wos:000293067400005
  • scopus:77955056107
ISSN
1570-646X
DOI
10.1007/s12053-009-9069-3
language
English
LU publication?
yes
id
814811b7-b401-473d-b0e4-e61edca390c1 (old id 2065246)
date added to LUP
2011-08-29 17:13:14
date last changed
2018-06-03 03:13:12
@article{814811b7-b401-473d-b0e4-e61edca390c1,
  abstract     = {Energy service companies (ESCOs) are often portrayed as important change agents in capturing the opportunity to curb energy demand and mitigate climate change through increased efficiency. Yet, the literature in this area is limited. While many studies analyze economic and environmental savings from energy efficiency programs, far less attention has been devoted to evaluating managerial and other challenges for ESCOs to transform the "efficiency gap" into a viable business. Sweden presents an interesting case study given its early experience in energy market reform as well as the rapid growth in recent years of its ESCO market. By conducting in-depth interviews with ESCOs operating in Sweden, this research addresses the following: (1) current market opportunity analysis, including how Swedish market conditions shape firms' business strategies, (2) business characteristics and service functions, with attention to perceptions regarding which market segments are considered compelling, and (3) how policy might expand the size and attractiveness of additional sectors/market segments. This analysis is informed by additional discussions with policymaker, agencies, authorities, and customers. The insights garnered are important as Member States prepare to implement the Directive on Energy End-use Efficiency and Energy Services. Despite rapid growth, ongoing challenges remain for ESCOs. Government still has a role in education, policy, and residential sector solutions. Greater details and data on the energy savings produced by ESCO projects are needed. Future research could address best practices for reporting data from ESCO projects. Moreover, with additional data on ESCO projects, studies could benchmark these results with other international programs to promote energy efficiency.},
  author       = {Soroye, Katie Lindgren and Nilsson, Lars J},
  issn         = {1570-646X},
  keyword      = {ESCOs,Efficiency gap,Energy services directive,Sweden,Business,case,Business strategy,EPC},
  language     = {eng},
  number       = {3},
  pages        = {237--256},
  publisher    = {Springer},
  series       = {Energy Efficiency},
  title        = {Building a business to close the efficiency gap: the Swedish ESCO Experience},
  url          = {http://dx.doi.org/10.1007/s12053-009-9069-3},
  volume       = {3},
  year         = {2010},
}