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The UK market for energy service contracts in 2014–2015

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posted on 2023-06-15, 20:58 authored by Colin Nolden, Steven SorrellSteven Sorrell
This paper provides an overview of the UK market for energy service contracts in 2014 and highlights the growing role of intermediaries. Using information from secondary literature and interviews, it identifies the businesses offering energy service contracts, the sectors and organisations that are purchasing those contracts, the types of contract that are available, the areas of market growth and the reasons for that growth. The paper finds that the UK market is relatively large, highly diverse, concentrated in particular sectors and types of site and overwhelmingly focused upon established technologies with high rates of return. A major driver is the emergence of procurement frameworks for energy service contracts in the public sector. These act as intermediaries between clients and contractors, thereby lowering transaction costs and facilitating learning. The market is struggling to become established in commercial offices, largely as a result of split incentives, and is unlikely to develop further in this sector without different business models, tenancy arrangements and policy initiatives. Overall, the paper concludes that energy service contracts can play an important role in the transition to a low-carbon economy, especially when supported by intermediaries, but their potential is still limited by high transaction costs.

Funding

Research Centre on Innovation and Energy Demand; G1020; RCUK-RESEARCH COUNCILS UK; EP/K011790/1

History

Publication status

  • Published

File Version

  • Published version

Journal

Energy Efficiency

ISSN

1570-646X

Publisher

Springer

Issue

6

Volume

9

Page range

1405-1420

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2016-02-17

First Open Access (FOA) Date

2016-02-17

First Compliant Deposit (FCD) Date

2016-02-17

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