Future Prospects for ESCOs in a Restructured Electricity Industry

Publication Type

Conference Paper

Date Published

08/1996

Abstract

This paper explores future prospects of energy service companies (ESCOs) to deliver energy efficiency and other services in the context of fundamental changes occurring in the electricity industry. We briefly review the evolution of the U.S. ESCO industry, including an assessment of current market activity and capabilities, relationship to utilities and demand-side management (DSM) programs, and key industry trends. We then describe how energy-efficiency activities may unfold in a more competitive environment as one of a broad array of value-added services offered to customers by ESCOs, utility distribution companies, and other retail energy services providers. We discuss implications of the new market environment for ESCOs including the likely role of public and ratepayer-funded energy-efficiency activities, factors that should increase the demand for "value-added" services, the potential for market-driven alliances with utilities and other suppliers, and how ESCOs may be able to compete as the retail energy services market attracts more and larger players. Superior ESCOs have three distinctive capabilities that should allow them to prosper as valued strategic partners: the marketing art of addressing multiple demands of customers with energy and facility-related problems, the engineering art of identifying efficiency opportunities and proposing viable solutions, and the skills of a project developer who utilizes the stream of future savings from efficiency improvements which are verified to the satisfaction of customer and financier to enhance the attractiveness of major capital investments.

Conference Name

ACEEE Summer Study on Energy Efficiency in Buildings

Year of Publication

1996

Publisher

ACEEE

Organization: 

Research Areas: