The energy service gap: What does it mean?
2011 (English)In: ECEEE 2011 Summer Study; Energy efficiency first: The foundation of a low-carbon society: Conference proceedings, Stockholm Sweden: European Council for an Energy Efficient Economy (ECEEE), 2011, 649-656 p.Conference paper (Other academic)
Through the formulation of the 2020-targets, the EU has set as objective to reduce the use of primary energy with 20 % by2020. The target is supposed to be reached through increasedenergy efficiency. Despite a large potential for energy efficiency, cost effective measures are not always implemented which isexplained by market failures and barriers to energy efficiency. This difference between potential energy-efficiency and what is actually implemented, is referred to as the energy-efficiencygap.
Energy service companies (ESCOs) have been put forth asa potential means of overcoming this gap to energy-efficiency.Well-functioning markets for ESCOs are therefore addressedas one of the key elements in the Energy Services Directive(ESD), a tool for the economy to move towards increased energy efficiency and sustainability. In other words, the developmentof the energy service market is of crucial importance if a Member State is to achieve the ambitious 2020-target.
The aim of this article is to analyse the market for energyservices towards industrial small- and medium sized Enterprises(SMEs). Focus will be on the Swedish market, howevergeneral conclusions may be drawn from this example. A large part of the potential for energy services is not being implemented today - this is identified as the energy-service gap. The gap is explained by transaction cost economics; relatively hightransaction costs for consulting ESCOs inhibit further marketdevelopment. The ESCO market in Sweden is estimated, by the Swedish state, to still be immature but have potential forfurther development. A government report does not identify the market barriers on the energy service market as market failures. By introducing market development mechanisms (e.g.standardized contracts and an accreditation system) the state could decrease the transaction and thus the energy service gap. Reducing the energy-service gap could be a cost effective wayof reducing the energy efficiency gap and reach the 2020-target.
Place, publisher, year, edition, pages
Stockholm Sweden: European Council for an Energy Efficient Economy (ECEEE), 2011. 649-656 p.
Energy efficiency, Energy Service, ESCO, Energy Efficiency Gap
IdentifiersURN: urn:nbn:se:liu:diva-71759ISBN: 978-91-633-4455-8OAI: oai:DiVA.org:liu-71759DiVA: diva2:453827
ECEEE 2011 Summer Study Energy efficiency first: The foundation of a low-carbon society, Belambra Presqu’île de Giens, France, 6–11 June 2011