Energy Services Market in the EU Workshop An EU overview Dr Marina Economidou Renewables and Energy Efficiency Unit Institute of Energy and Transport Brussels 22/10/2015
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Energy Services Market in the EU Workshop
An EU overview
Dr Marina Economidou
Renewables and Energy Efficiency Unit Institute of Energy and Transport Brussels 22/10/2015
EED policy support for energy services
• Model contracts
• Info on financial instruments
• ESP list/interface
• Quality labels
• Points of contact for final customers
• Removal of barriers impeding EPC uptake
• Independent mechanism to handle complains
• Market intermediaries
• Etc.
Article 5
Promotion of use of energy services in the public sector (central government renovations)
Article 18 Article 7
Article 8 Article 19
Boost for the uptake of energy audits
Actors such as ESCOs can contribute towards meeting the end-use target imposed on the energy companies
Public purchasing, annual budgeting and accounting to ensure public bodies can use EPCs and TPF
…but also
JRC work on ESCOs
Review of the ESCO market across the EU and the world
Energy Service Companies Market in Europe, Status Report 2005
Latest development of energy service companies across Europe, A European ESCO update
Energy Service Companies Market in Europe, Status Report 2007
Energy Service Companies Market in Europe, Status Report 2010
The European ESCO Market Report 2013
ESCO market size across the EU
Large
Medium
Small
Zero
NA
Source: Bertoldi, Kiss, Panev, & Labanca (2014)
ESCO market size across the EU
In terms of investment volume In terms of number of projects
BE €1.5 million (EPCs) AT 15-20 EPCs; 30-35 ESCs
CZ €10 million yearly CY 2 EPCs in 2014
DE €1.6-2 billion (2010)* CZ 10-15 EPCs yearly
ES ͂ €1 billion yearly DE Around 200**
FR €189 million (2013) FR 143 EPCs
PL PLN 40-100 million turnover (2011) SE 10 EPCs in recent years
SE SEK 40 million (underestimate) yearly
UK GBP 180 million
Source: JRC analysis based on National Energy Efficiency Action Plans 2014
Barriers to ES market development
Information & awareness
Absence of success stories
Low client awareness on
ESCO concept or EPC models
Lack of awareness on how to access
financing
Undervalued benefits of energy
efficiency improvements
Institutional & legislative
Problematic government procurement
rules
Legislations creating
unfavourable conditions towards EE
Lack of accrediting
mechanisms to certify ESCOs
Financial
Difficulties accessing financing
Scarce or expensive capital/
Stale banking sector
Conventional financing rules
are incompatible with EPCs
Lack of experience in EE
projects of financial
institutions
Market & external
Low energy prices
High perceived risk compared to other investment
options
Small scale projects
Multi-party ownership and split incentives
Technical & administrative
Complex administrative
procedures
High transaction costs
Complex M&V protocols; future
savings predictability
issues
Lack of technical skills/experience in EPC projects
Behavioural
Client risk aversion about EPC models or
future uncertainty
Limited confidence in ESCO services
Preference for in-house solutions
Unwillingness to take on long-term
debt
EED policy support for energy services
Legislative
measures
Financial
incentives
Info.
measures
Registry
of ESPs
AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HR P
HU
Legislative
measures
Financial
incentives
Info.
measures
Registry
of ESPs
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE P
SI
SK P
UK
ESP: Energy Service Providers P: Planned
Source: JRC analysis based on National Energy Efficiency Action Plans 2014
Energy services market
• Published EPC models: AT, CY, CZ, EL, ES, FR, LU, PL, NL, UK
• Current number of ESCOs still low
• Germany, Spain, Italy: more than 300-400
• All other countries: less than 50
• Size of EPC market is generally small
• Current trends in market for energy contracting:
• Growth: BE, DE, ES, FR, SE and UK
• Decline: AT, PL
• Future trends in the market for energy contracting
• Positive trends reported for: CY, CZ, DE, NL
Measurement and verification (M&V)
M&V's pivotal role in the overall project success
• project savings are used to pay the financing obligations of EPCs
• energy savings represent avoided energy consumption
Use of M&V protocols in the energy service sector in 22 EU MSs
Source: ten Donkelaar, et al., 2013
IPMVP Certified M&V Professionals
0
100
200
300
400
500
600
700
800
Source: EVO, 2014
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