UK county councils and city councils could save £500 million a year with an energy performance contract (EnPC), according to energy services company Anesco.
Adrian Pike, CEO of Anesco, said an EnPC, also known as the ‘ESCO model’, could reduce councils’ energy expenditures by around a third each year, potentially rising to up to 50% in certain areas, and generating annual savings running into the hundreds of millions of pounds.
“The ESCO model is a sustainable and highly effective way for local authorities, businesses and other organisations to tackle their energy usage and carbon emissions, without facing any upfront costs,” he said.
ESCO popular in Germany & US
The EnPC or ESCO model is already popular in the US and Germany and allows organisations to install energy saving measures without the need to put up capital costs upfront. The cost of the measures is funded by external financiers with costs recouped via a proportion of the clients’ guaranteed energy savings, as well as other financial support mechanisms such as the Renewable Heat Incentive (RHI).
“For many local authorities budgets remain tight,” added Pike. “This approach can help free up monies that may otherwise have been needed for upgrades of this kind, while replacing equipment reaching the end of its life, reducing maintenance costs and making long-term improvements to the building stock.”
The energy services company has embarked on a marketing drive targeting councils following the launch of a number of energy performance upgrades, carried out by Anesco, across Mid-Devon District Council’s estate.
Devon creams savings
Indeed, the launch event at the Council’s Lords Meadow Leisure Centre in Crediton was used by Anesco as a platform to demonstrate to councils what an EnPC could potentially achieve. In Mid Devon’s case, the council is guaranteed to make annual savings of 28% on its energy bills, whilst reducing its carbon emissions by a third.
However, a spokesoman for Anesco was unable to say how many councils it is currently in talks with, simply telling Energy Demand that the launch event was “well attended”.
According to Anesco, the Mid Devon Council EnPC is the first in the country to be fully funded by investors, and to implement multiple measures across multiple sites. But, although the 12-year EnPC was fully funded, the company confirmed to Energy Demand that the client owns the assets installed, including a biomass boiler.
“Mid Devon is a forward thinking council and had already undertaken a range of upgrades to improve its energy efficiency,” said Pike. “However, through the ESCO model they were able to achieve substantial additional savings.”