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Transforming the “efficiency gap” into a viable business opportunity: lessons learned from the ESCO experience in Sweden

Lindgren, Kate LU and Nilsson, Lars J LU orcid (2009) Act! Innovate! Deliver! Reducing energy demand sustainably 1.
Abstract
Energy service companies (ESCOs) are often portrayed as important change agents in capturing energy efficiency opportunities to curb global energy demand and mitigate climate change. Yet, the literature in this area is limited. While many studies analyze economic and environmental impacts from energy efficiency programs, far less attention has been devoted to evaluating managerial and other challenges for ESCOs in transforming the "efficiency gap" into a viable business. Against the broader question of how to address Demand Side Management (DSM) in a deregulated market, we explore how and the extent to which the Swedish ESCO market’s development has addressed the efficiency gap. Sweden presents an interesting case study given its early... (More)
Energy service companies (ESCOs) are often portrayed as important change agents in capturing energy efficiency opportunities to curb global energy demand and mitigate climate change. Yet, the literature in this area is limited. While many studies analyze economic and environmental impacts from energy efficiency programs, far less attention has been devoted to evaluating managerial and other challenges for ESCOs in transforming the "efficiency gap" into a viable business. Against the broader question of how to address Demand Side Management (DSM) in a deregulated market, we explore how and the extent to which the Swedish ESCO market’s development has addressed the efficiency gap. 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. The insights garnered are especially important as Member States prepare to implement the Directive on Energy End-use Efficiency and Energy Services. By conducting in-depth interviews with ESCOs operating in Sweden (including multi-nationals), we address the following: 1) current market opportunity analysis, including how Swedish market conditions shape firms’ business strategies, 2) service functions and business characteristics, 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 follow-up discussions with policymakers and other relevant players. The paper concludes with insights regarding how public intervention and support as well as voluntary private sector action may stimulate ESCO business investment in energy efficiency. (Less)
Please use this url to cite or link to this publication:
author
and
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
ESCOs, efficiency gap, Energy Services Directive, Sweden, business case, business strategy
host publication
ECEEE Summer Study proceedings
volume
1
publisher
European Council for an Energy Efficient Economy (ECEEE)
conference name
Act! Innovate! Deliver! Reducing energy demand sustainably
conference location
La Colle Sur Loup, France
conference dates
2009-06-01 - 2009-06-06
ISSN
1653-7025
ISBN
9789163344541
language
English
LU publication?
yes
id
3cf7f247-3a73-4579-a1e5-17d7fa43e7ee (old id 4465712)
date added to LUP
2016-04-01 13:37:13
date last changed
2023-04-18 20:32:45
@inproceedings{3cf7f247-3a73-4579-a1e5-17d7fa43e7ee,
  abstract     = {{Energy service companies (ESCOs) are often portrayed as important change agents in capturing energy efficiency opportunities to curb global energy demand and mitigate climate change. Yet, the literature in this area is limited. While many studies analyze economic and environmental impacts from energy efficiency programs, far less attention has been devoted to evaluating managerial and other challenges for ESCOs in transforming the "efficiency gap" into a viable business. Against the broader question of how to address Demand Side Management (DSM) in a deregulated market, we explore how and the extent to which the Swedish ESCO market’s development has addressed the efficiency gap. 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. The insights garnered are especially important as Member States prepare to implement the Directive on Energy End-use Efficiency and Energy Services. By conducting in-depth interviews with ESCOs operating in Sweden (including multi-nationals), we address the following: 1) current market opportunity analysis, including how Swedish market conditions shape firms’ business strategies, 2) service functions and business characteristics, 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 follow-up discussions with policymakers and other relevant players. The paper concludes with insights regarding how public intervention and support as well as voluntary private sector action may stimulate ESCO business investment in energy efficiency.}},
  author       = {{Lindgren, Kate and Nilsson, Lars J}},
  booktitle    = {{ECEEE Summer Study proceedings}},
  isbn         = {{9789163344541}},
  issn         = {{1653-7025}},
  keywords     = {{ESCOs; efficiency gap; Energy Services Directive; Sweden; business case; business strategy}},
  language     = {{eng}},
  publisher    = {{European Council for an Energy Efficient Economy (ECEEE)}},
  title        = {{Transforming the “efficiency gap” into a viable business opportunity: lessons learned from the ESCO experience in Sweden}},
  volume       = {{1}},
  year         = {{2009}},
}