News

The number of investments in energy-saving solutions is increasing. The related risks can be taken over by specialised companies.

2018-06-14  |  05:00

High energy costs, heating and air conditioning charges are tangible problems for both enterprises and local governments. They often lack funds for investments to increase the energy efficiency of the buildings they use. An alternative solution is investments based on the ESCO formula, where the whole cost and risk are incurred by the company implementing the project. In Poland the value of the market is estimated at EUR 27 m and is constantly growing, as increasingly more emphasis is placed on the significance of energy efficiency for the development of the economy and the competitiveness of enterprises. 

“There are several reasons why we should increase energy efficiency. Firstly, there are legal requirements binding on entrepreneurs. The EU is imposing increasingly stringent requirements as to the energy efficiency levels to be achieved, but there is also very simple reason – energy efficiency is the least expensive source of new energy. Saving one megawatt hour is much cheaper, simpler and quicker than building one megawatt of a new energy source,” Piotr Danielski, Vice President of DB Energy SA, told the Newseria Biznes agency.

Energy efficiency is an issue with a rising priority at the European level. In January 2018 the EU Parliament adopted a draft regulation according to which until 2030 Member States are to increase their energy efficiency by 35 percent. Within EU funds Polish enterprises can claim very high subsidies for projects increasing their energy efficiency. The related legal regulations have also become stricter – the Energy Efficiency Act passed 1.5 years ago imposed a duty on some companies to carry out energy audits; in Poland this requirement applies to around 6,000 enterprises. Also in line with the EU Directive until 2021 in the whole of EU newly constructed buildings must have a high energy efficiency standard and very low energy demand.

 “The leader in implementing energy efficiency solutions is the United States, where the federal government contracts the majority of retrofits and investment projects for buildings to ESCO companies. European enterprises and companies which have a number of locations throughout the world also use the services of professional companies which provide comprehensive services,” Piotr Danielski said.

ESCO companies offer comprehensive services in the field of energy management and provide their customers with a guarantee of savings. Customers do not need to spend their own resources or get into debt to implement investment projects limiting energy consumption. The entire cost and financial risk are incurred by the ESCO company, which joins the project only when there is a guarantee of a satisfactory return from the funds spent. Subsequently, during the contract implementation, the customer and the ESCO company share the financial benefits from the investment. In other words, the cost of the project is paid out from savings in operating costs.

“The market is limited by financial resources and the approach to implementing innovative projects. We should make efforts to encourage entrepreneurs to use new technologies and undertake new investment projects. This can be achieved through transferring investment, technical and economic risks to enterprises dealing only with energy efficiency. In this area it is necessary to promote ESCO solutions and EPC contracts, in which entrepreneurs for whom energy or technical infrastructure is not the focus of their operations are able to cooperate with companies dealing only with technical infrastructure so as not to spend their own resources,” Piotr Danielski emphasised.

ESCO contracts can include both investment projects increasing energy efficiency and the maintenance and repair of equipment, cogeneration and alternative methods of electricity production – provided that the payment for these services is from the savings made.

In the European Union the ESCO contract market is constantly growing (this is resulting from the requirements set by Directive 2012/27/UE). The most attractive markets are Germany, where the value of ESCO contracts reached approx. EUR 2 bn, the United Kingdom (EUR 940 m) and Sweden (EUR 650 m). Poland, with a turnover of EUR 27 m, still ranks low compared to other EU countries.

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