It’s not even low hanging fruit… it’s on the floor

Last week the European Commission hosted a two day workshop entitled "Facilitation of Energy Services and the ESCO market in Europe". The event gathered around 100 key players, including policy makers, ESCOs, financial institutions, and ESCO clients, in order to draw policy recommendations on how the European ESCO market can achieve its full potential and drive forwards the energy efficiency agenda.

The barriers to the growth of the ESCO market and the deployment of energy performance contracting have been well documented in reports previously released by the Commission (the most recent of which can be viewed here). A number of the conference workshops focused on the measures proposed in the Commission's recent Energy Efficiency Action Plan 2011 to counter certain of these barriers. These measures include:

  • Bringing forward legislative proposals to further the production of reliable energy use data need to establish baselines, and to bring greater clarity to legal frameworks currently hampering the deployment of energy performance contracting.
  • Bringing forward legislative proposals requiring member states to address the problem of “split incentives” (between landlords and tenants) for uptake of retrofit in the property sector.
  • Making systematic information on ESCO services available by requiring member states to provide market overviews, lists of accredited ESCO and model contracts.

The need for the public sector to lead on establishing a market for large scale energy efficiency retrofit is widely taken as a given. The Energy Efficiency Action Plan 2011 therefore proposes requirements for the public sector to roughly double its retrofit efforts, noting energy performance contracting as the way to achieve this. However, numerous delegates at the conference pointed once again to the slow evolution of EU procurement law as a severely inhibiting factor in realising ESCO projects in the public sector. Without more streamlined, less administratively burdensome procurement practices to make these projects more attractive to ESCOs, it is difficult to see this level of retrofit being achieved. Whilst it is clear that both ESCOs and energy performance contracting have a key role to play in helping Europe towards its 2020 energy saving goals, it is equally clear that the Commission still has more work to do.