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Why Suppliers Must Rethink Strategies For Energy Performance Contracting

Date: 07 December 2015

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10 pages

EXECUTIVE SUMMARY

For the past decade energy services providers, facilities management firms and utilities in the UK have been developing Energy Performance Contracting (EPC) propositions in an attempt to win multi-million pound deals and open up new opportunities. Whilst EPCs are a powerful concept and sound like a low-risk way of cutting energy cost for customers, in reality there are many barriers on the customer and supplier side which have been slowing down uptake. This report helps EPC providers to understand the current state of the UK EPC market and the key trends that will shape the market in the next three years. It also sheds light on how EPC providers can position themselves for success in a challenging market. The study finds that the key components to success include energy services providers using EPCs as one option of many to deliver energy services, building relationships with customers and spending more time preselecting EPC tenders to bid for.

TABLE OF CONTENTS

Why Suppliers Must Rethink Strategies For Energy Performance Contracting
Defining The Energy Performance Contracting Market

EPCs Are A Powerful Idea But With Mixed Results
EPCs Are Helping To Open Up Energy Efficiency Projects In The Public Sector
RE:FIT And CEF Frameworks Have Spurred Market Development In The Public Sector
The Market Is Still Operating Well Below Potential With Customers Reluctant To Sign Long-Term Contracts
Suppliers Face High Bid Costs And Limited Data On Customer Energy Usage

Now Is The Time For EPC Providers To Refresh Their Strategy
Suppliers Need To Be More Selective About When To Offer EPCs

TABLE OF FIGURES

Figure 1. Summary Of The Benefits And Challenges Of Energy Performance Contracting
Figure 2. High Cost Of Mobilizing Capital Means Small Projects Are Less Commercially Attractive Via An EPC

ORGANIZATIONS MENTIONED

Ameresco, Anesco, Aneurin Bevin University Health Board, Aramark, Barts Health Trust, Bedford Borough Council, Bouygues Energies & Services, Breathe Energy, British Gas, Carbon Credentials, Carbon and Energy Fund, Cofely GDF Suez, Cynergin, David Lloyd, De Vere hotel group, Ealing Council, Ecova, EDF, Emstar, Ener-G, E.ON, E.ON Community Energy, Essentia, FirstFuel, Four Seasons Hotel, Geoscart, Gloucestershire Hospitals, Green Investment Bank, Guy’s and St Thomas’ hospital, Honeywell, Leeds City Council, Matrix, MITIE, Nevill Hall Hospital, NHS, Nottingham University Hospitals NHS Trust, Official Journal of the European Union, Peterborough Council, powerPerfector, PowerTherm, Public Works Loan Board, RE:FIT, Retroficiency, Sainsbury’s, Salix Finance, Skanska, SSE, St George’s University Hospital, Tesco, Tower Hamlets College, Veolia, Verco, Vital Energi, Warrington and Halton Hospitals NHS Foundation Trust, York Teaching Hospital