In all relevant international fora, improved energy efficiency is acknowledged as a central response to the climate change challenge and at the same time a measure to foster the growth and development. Wide deployment of Energy Service Companies (ESCOs) on a global scale is essential to achieve energy efficiency’s full potential.
The Global ESCO Network adds to and reinforces 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 for countries to strengthen and achieve energy efficiency ambitions in their Nationally Determined Contributions (NDCs).
- Supporting a better understanding within the finance sector of the value and validity of energy performance contracting, enabling investors to engage in the provision of financial resources that facilitates a decisive scale-up of the reach and depth of ESCO activities.
- Documenting the benefits of applying 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.
Energy Service Companies – ESCOs – deploy a business model directly responding to the global climate change challenge. By directly using energy savings to pay for the cost of equipment and infrastructure that creates those savings, ESCOs challenge the mantra that emissions reduction activity comes at a cost that many, particularly in developing countries, are unable to carry. In the business of climate change, ESCOs deliver some of the best returns on investment, reducing energy consumption while combating excess GHG emissions as a significant co-benefit.
ESCOs are not always well recognized as an industry, nor entrenched in national policies. Nowhere has their full potential been unleashed and in many places they still struggle to find sufficient foothold. In some sectors and some countries, however, they are thriving, but 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.
The growing urgency of decisive responses to a rapidly changing climate, and the inherent ESCO promise of delivering profitable investments to the same effect, suggests a potentially prominent role of energy efficiency and, as its agents, the global ESCO community in the global climate change agenda, from the highest UN level to the grassroots. However, this is a role that the ESCO concept is yet to attain.
Therefore, the Global ESCO Network intends to elevate issues and concepts related to ESCOs to the highest possible level on the international climate change agenda. Key functions of the Global ESCO Network include:
- global-scale research and information dissemination about issues relevant to the proliferation of ESCOs;
- ESCO advocacy in global fora for the currency and relevance of the ESCO approach to accelerating climate change mitigation; and
- Coordinated approaches to securing resources and funding for developing policies, training programs, and enabling environments favourable to ESCO market growth.
The Global ESCO Network has a Secretariat anchored in the Copenhagen Centre for Energy Efficiency.
The Global ESCO Network operates without formal membership, but works by associating existing national and regional ESCO associations and global bodies that are related to ESCO sector development. The Global ESCO Network is mindful to reinforce rather than duplicate efforts of associations. Currently, no association fees are charged. A Formation Steering Committee of 6-8 members drawn from associates is under establishment in order to take the interests of the Global ESCO Network forward.
Proposed Initial Activities
A Formation Steering Committee for the Global ESCO Network is being convened in the second quarter of 2019, to further flesh out potential activities and first-year work plan, and to ascertain initial industry interest. CCEE shall catalyse this by offering in-kind resources for provision of Secretariat services, to establish the Global ESCO Network. As activities grow, the Secretariat would eventually require additional external funding resources. Once the work plan and initial in-kind resources are agreed, activity funding opportunities for the Global ESCO Network will be jointly explored between the Formation Steering Committee Members, with the objective of establishing project funding for key activities in the work plan.