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Being an ESCO in Denmark a case of regulatory (un)certainty

Being an ESCO in Denmark a case of regulatory (un)certainty. Morten Dahl, Bussiness Manager Energy Solutions (DK/N). Solar panels in the Municipality of Høje Taastrup.

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Being an ESCO in Denmark a case of regulatory (un)certainty

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  1. Being an ESCO in Denmark a case of regulatory (un)certainty Morten Dahl, Bussiness Manager Energy Solutions (DK/N) Solar panels in the Municipality of Høje Taastrup. Part of their 10 MEu ESCO project is invested in solar panels on the town city hall. The energy production equals the annual use of electricity consumed by IT in all local government buildings

  2. Schneider Electric – the global specialist in energy management Balanced geographies– FY 2010 salesYear-end 2010 employees billion € sales in 2010 % of sales in new economies people in 100+ countries of sales devoted to R&D WesternEurope 34% North America 24% Asia Pacific24% 41,700 26,000 Rest of World18% 31,900 19,200 Diversified end markets– FY 2010 sales1 Utilities & Infrastructure 20% Industrial & machines 24% Data centres 17% Non-residential buildings 30% Residential 9% Listed on the Paris Stock Market – CAC40 1 Proforma with Areva D integrated on 12-month basis

  3. Energy Energy cost Customer 1 MEu. Yearly Savings Energy and facility development project Guaranteed Savings1 MEu/year Facility Company ESCO Private Financial Institution Investment ESCO/EPC business model Wish to improve facilities 24 GWh  18 GWh Energy 3 MEu.  2 MEu Energy cost 10 MEu.

  4. Benefits of the EPC/ESCO model • You get substantial Energy/CO2 savingsTrack record of 10-30% on all our Nordic projects • Results within a short time frameExamples of Energy renovation of 150 buildings within 2-3 years • The model does not require public budgets to increase in order to meet 20/20 goals • Projects are financed with private money. Payments on loans are secured with a guarantee from the Energy Service Company (ESCO) • Green Jobs are createdFor every 1 MEu investment 14 jobs are created (source, Danish Construction Associatation)

  5. How the legislative framework plays a vital role…

  6. Summary • An uncertain legislative framework can prevent or prolong the time for Energy Service projects to take off • Creating cumbersome rules on private financing and if/how public entities can invest their money in Energy projects can create a “stop-go” market that is unattractive for both buyers and suppliers to enter • The case of Denmark shows that as soon as legislative certainty is created, both buyers and suppliers create the market themselves (no subsidies required) • A simple and attractive legislative framework creates substantial effects on energy efficiency, CO2 emission and green job creation

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