March 26, 2013
What can be done to encourage ESCO take-up in an early stage market? ManagEnergy asks Stjohn O’Connor from the Department of Communications, Energy and Natural Resources in Ireland.
Stjohn O’Connor, Department of Communications, Energy and Natural Resources, Ireland
Ireland has an underdeveloped market for ESCOs generally. Within the public sector there has been relatively few ESCO contracts issued in recent years.
This is a difficult question to answer, both from a national perspective as well as a public sector perspective. A study in 2005 estimated that the market value was somewhere in the region of €100 million. However, we believe that this figure is too low. More recent studies have shown that €1 billion could be spent in retrofit activity in the public sector alone. However, more detailed analysis will be undertaken in 2014 to establish the available economic opportunity for ESCOs.
National strategies and policies to encourage ESCO growth
2013 will see the introduction of a National Energy Performance Contracting Policy Framework, which will aim to standardise the approach to ESCO procurement. Most significantly this approach will seek to reduce the barriers to market entry and take-up from purchasing organisations. Aligned to the Framework is a new Energy Efficiency Fund that has been established to provide project finance to ESCO projects. The Department has also issued a call for Exemplar Projects, who will be provided with technical assistance in order to validate the Framework and reach investment-ready status.
What are the barriers to growth?
Knowledge, cost and expertise.
What targets are you hoping to reach in the next 1-3 years?
Ireland has yet to set any formal targets for the development of the ESCO market, but will be monitoring closely the number of ESCO contracts financed via the new Energy Efficiency Fund. Success will be if the Fund manages to disburse its monies via ESCO projects.
For more information:
ManagEnergy and the Energy Performance Contracting Campaign http://managenergy.net/news/articles/217
Covenant of Mayors www.eumayors.eu
Intelligent Energy Europe http://ec.europa.eu/energy/intelligent