UNEP DTU Partnership hosts new network, unleashing the ESCO potential

Energy Service Companies deliver some of the best results on climate investments, but their potential is far from reached. A new network aims to change that.

June 18, 2019

Last week saw the launch of the new ‘Global ESCO Network’ at the G20 meeting in Tokyo. A network that aims to unleash the potential that Energy Service Companies (ESCOs) have to deliver some of the best returns on green investments, reduce energy consumption and combat excess greenhouse gas emissions.

The ESCO concept of using energy savings to pay for the cost of equipment and infrastructure that creates those savings is a business model directly responding to climate change.
ESCOs thus challenge the mantra that emissions reduction activity comes at a cost that many, particularly in developing countries, are unable to carry.

Through ESCOs, investments in energy efficiency and other green technology becomes much wider available, and the impact of new improved technology can be spread faster and be more inclusive.

Housed by the Copenhagen Centre on Energy Efficiency

The Global ESCO Network will have a Secretariat anchored in UNEP DTU Partnership’s Copenhagen Centre for Energy Efficiency. With links to both UN Environment, the Technical University of Denmark and as the global thematic hub for energy efficiency of the UN Secretary General’s Sustainable Energy for All (SEforALL) initiative, the Copenhagen Centre on Energy Efficiency is more than well suited to convene the Global ESCO Network.

The centre will utilise its extensive international network of energy efficiency actors and both public and private sector partners, across technical, financial and communication disciplines, to ensure, that the ESCO potential is unleashed.

Still far from reaching full potential

ESCOs are not always well recognized as an industry, nor entrenched in national policies. Nowhere has their full potential been reached and in many places, they still struggle to find sufficient foothold.

In some sectors and some countries, however, they are thriving. This, unfortunately is rarely as a result of dedicated policies that promote the understanding of reduced energy expenses as an investable asset class, nor the techniques and requirements of successful and widespread Energy Performance Contracting.

ESCOs have the potential to play a prominent role of promoting energy efficiency and helping the world reach our climate goals. However, this is a role that the ESCO concept is yet to attain.

The Global ESCO Network will work to make sure that ESCOs are acknowledged as a central response to climate change and as measures that foster growth and development. The network also aims to make sure that the ESCO sector is widely deployed globally to achieve energy efficiency’s full potential.

Reinforcing our efforts

The Global ESCO Network will add to and reinforce existing efforts to promote increased activities by the ESCO sector at a global scale, by:

  • Working for formal recognition of the ESCO sector as a pathway to strengthen and achieve energy efficiency ambitions in Nationally Determined Contributions (NDCs).
  • Supporting a better understanding within the finance sector of the value and validity of energy performance contracting, enabling a decisive scale-up of the reach and depth of ESCO activities.
  • Documenting the benefits of ESCO principles in business and policy development through international mapping and benchmarking of framework conditions for successful operation of ESCOs and their achievement of material energy savings.
  • Widely disseminating knowledge related to best practices in policy and business development related to ESCOs, and raising awareness among policy makers of financially attractive models for energy efficiency improvements.