The UK market for energy service contracts in 2014–2015

Nolden, Colin and Sorrell, Steven (2016) The UK market for energy service contracts in 2014–2015. Energy Efficiency, 9 (6). pp. 1405-1420. ISSN 1570-646X

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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.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > SPRU - Science Policy Research Unit
Depositing User: Nikoleta Kiapidou
Date Deposited: 17 Feb 2016 14:15
Last Modified: 03 Jul 2019 01:36

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Project NameSussex Project NumberFunderFunder Ref
Research Centre on Innovation and Energy DemandG1020RCUK-RESEARCH COUNCILS UKEP/K011790/1