ESCO in United Kingdom

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ESCOs for district energy solutions

There are several examples of ESCOs in the UK. These are mainly used for district energy solutions utilising Combined Heat and Power (CHP), where heat and electricity is provided to networks of businesses and households. ESCOs may be set up by public bodies, private companies, or public private partnerships. In addition to providing energy and maintenance services, they also tend to offer efficiency advice to building owners to help reduce their energy demand. Examples of such ESCOs include Thamesway Energy Ltd, Woking, Aberdeen CHP scheme, Wick District Heating Scheme, Millbrook CHP district heat scheme in Southampton, Titanic Mill West Yorkshire, Blustone Holiday Village Pembrokeshire.

ESCOs to fund refurbishment measures

In some instances, the ESCO actually provides refurbishment measures to buildings, which are paid for by the savings made to on-going running costs. E.g. London Re:Fit project.

The Re:FIT Programme is a procurement framework providing a turnkey contracting model that will greatly accelerate retrofits to reduce energy use in public buildings in London. The RE:FIT framework streamlines the procurement process for energy services by providing pre-negotiated, EU-regulation-compliant contracts that can be used with a group of prequalified energy service companies (ESCOs) for the design and implementation of energy conservation measures. RE:FIT allows public sector building owners to procure a supplier and implement the retrofits as much as six times faster than if they were to undertake their own OJEU process for public sector procurement. In addition, the RE:FIT central project team provides project development tools, best practice and innovation sharing and direct assistance to participants to further expedite energy reducing projects.

Energy Service Companies (ESCOs) install energy conservation measures in identified buildings and guarantee annual energy savings over an agreed payback period. This Energy Performance Contracting model transfers the risk of performance to the ESCO, as they must guarantee the energy savings to be made over the agreed payback period. The entire process is supported throughout by the RE:FIT Programme Delivery Unit (PDU), which is fully funded by the Greater London Authority and the European Commission under the ELENA (European Local ENergy Assistance) programme, and provided at no cost to public sector organisations in London.

More information: Case Study for the London Re:Fit project.