Energy services
Energy services can help municipalities to save energy in their buildings. To make energy services easier to work with, the Trust has developed a standard document for use by municipalities.
Purpose of energy services
Energy service companies are private businesses working to help deliver energy services. For example, these could be heating, ventilation, refrigeration, lighting or total solutions for buildings. Energy service companies are also known as ESCOs.
Advantages of energy services
A municipality enters into an agreement with an ESCO for a total energy service, at a fixed price. For example, this could be to provide clean air, or heat, within a building over 3 years.
In this situation the municipality does not have to take responsibility for researching the market, or the investment, purchase and installation of the equipment required in order to obtain the service. All this is transferred to the ESCO. Prices become generally lower because the ESCO can concentrate on the total financial package when all the responsibility is gathered together at one location.
Experience from abroad shows that savings of 10-15% are possible by using energy services.
ESCO's responsibility
The municipality decides how much responsibility an ESCO should have. The ESCO can be involved in the consulting stage or can take part in the whole process: from the moment the municipality decides to improve its energy efficiency through to the final implementation of improvements.
> Read more about different types of agreement
Energy savings are a guarantee for savings
An ESCO must guarantee that a municipality will save enough energy and overheads to cover all the costs of the project – i.e. that the savings will cover all the repayments on the investment, and all payments for the energy services.
If the ESCO fails to deliver the agreed savings, the company must refund the difference to the municipality. At the end of the contract term, all the savings go directly to the municipality.
Payment of ESCO
The ESCO is paid from the operational savings achieved.
Standard concept for energy services in the pipeline
The Trust has developed a standard document for energy services in municipal buildings. This will make it easier for the municipalities to make use of these services.
Page last updated 29.03.2010