Technology Collaboration Programme

Task 16 Competitive Energy Services

Task 16 Competitive Energy Services


Energy Contracting – also labeled as ESCo or Energy Service (ES) – is a many times proven DSM instrument to implement performance-based energy efficiency measures for lighting, HVAC-technologies or even comprehensive refurbishment of buildings. An Energy Service Company (ESCo) takes over the technical and commercial implementation and operation risks and has to guarantee for it’s cost and results. ESCo services are also well suited to implement innovative energy technologies and renewable energy systems.

In this Task ESCo experts from around the world joined forces to contribute to the market development of performance-based Energy Services by:
1. establishing an Energy Services Expert Platform,
2. designing, elaborating and testing innovative energy services and financing models and to publish them in a series of manuals,
3. developing and following up on country specific activities for implementing energy services in the market with a focus on selected market segments and
4. offering expertise and initiating joint projects and services with other international organizations (e.g., presentations, coaching and training).

Background and Motivation

The success of further increasing energy efficiency in all sectors of consumption plays a vital role in coping with the challenges of our common energy future. Avoiding energy consumption by increasing end-use efficiency is a highly effective way to meet all three key targets of energy policies: Security of supply, affordable costs of energy services and environmental soundness.

But what are the appropriate instruments to bring energy efficiency to the end-user? One of the most urgent energy policy and energy economics challenges continues to be the search for suitable “tools” to execute energy conservation potentials. The level of success is far from satisfactory as the continuous increase in final energy consumption reveals. Now and for the foreseeable future there is an urgent need to conclude and support all suitable political, regulatory and market based instruments for the implementation of Energy Efficiency and Renewables.

The ESCo industry is an expanding business throughout the world contributing to the improvement of energy efficiency, control of energy costs and reduction of greenhouse gas and other emissions. The models of offering these services can get various forms like Energy Supply Contracting (ESC) or Energy Performance Contracting (EPC) resulting in diverse contract models and financing arrangements. Our view of the basic features of “real” Energy-Contracting projects can be downloaded  here: IEA-DSM-Task16_Task-Flyer_Sept2013.pdf

What is Energy Contracting? An integrated service with results guaranteed.

Task 16 serves as a research and expert platform, while national experts carry out individual national implementation activities. The results of Task 16 are discussed and disseminated in a series of stakeholder workshops, publications, presentations at conferences and workshops.

Energy contracting activities have been started in different segments of energy consumption in different countries. White areas on the market map are gradually being covered by existing and new enterprises. Nevertheless Energy Contracting still is a complex product, which can not be sold or procured easily in the markets. As it is the case with energy efficiency in general. In many other countries markets are still immature and in a developing stage. There are many reasons to take the work of Task XVI further on the way towards developed energy service markets:

  • National implementation activities of energy efficiency implementation still face numerous obstacles. There is an urgent need to support all suitable political, regulatory and market based instruments for the implementation of Energy Efficiency and Renewables. This is where the Task XVI extension wants to pay it’s contribution. Realized energy supply contracting projects typically achieve 15-20 % efficiency improvements on the supply side. Energy performance contracting projects have realized efficiency gains of 20-30 % and the integrated contracting approach or comprehensive refurbishment model achieves 30 to 50%. CO2-Emission reductions are in many cases above 50 % because of a change of energy carriers to lower carbon content or renewables.
  • Energy contracting models focus on implementation of any existing or innovative energy efficiency and renewable energy technology. Energy contracting models have an interdisciplinary approach incorporating many aspects of the implementation process, such as economical, financing, organizational, legal and technological issues in order to achieve guaranteed performance and results of the efficiency technology deployed. Further research is needed in a number fields on the way to more competitive energy service products and market development, e.g. integrating demand side efficiency measures into supply contracting models or tools for (public) procurement of energy services.
  • The Task 16 Energy Services Expert Platform has worked successfully over the last three years. The platform will continue to serve the country experts exchange and networking, to support national implementation activities and communication with their stakeholders and to provide access to innovative and competitive Energy service models and tools from the Think Tank.

Task 16 has received considerable interest in its previous work, expressed in a number of invitations to conferences and workshops to more than ten IEA as well as non IEA countries. Also the task work itself benefits from feedback on its publications. This international and national dissemination activity of IEA DSM work should be taken further and will also enhance the visibility of the DSM programme as a whole.


The goals of the Task 16-extension are, to contribute to the development and implementation of innovative and competitive energy efficiency and demand response services. Thus we want to

  1. Continue the IEA DSM Energy Services Expert Platform
  2. Support and follow up country specific national implementation activities in order to foster ESCo market development
  3. Design, elaborate and test innovative Energy-Contracting and financing models and publish them
  4. Elaborate and assess business models for Demand Response energy services
  5. Use the expert platform as a competence centre for energy and de-mand response services for international and national dissemination and assistance services (e.g. coaching, training courses, publications) in the field of Energy-Contracting and to contribute to an “IEA DSM Centre of Excellence”

The underlying goal is to increase understanding of Energy-Contracting as a tool to implement energy efficiency projects: Pros and cons, potentials, limits and added values of ESCo products in comparison to in-house implementation.

Expectations and Results

The benefits for the participating countries and for the DSM agreement will encompass:

  1. Know-how and capacity building on innovative and competitive Energy-Contracting and financing models and support tools from the Think Tank
  2. Mutual feedback, coaching and experience exchange for country specific market development activities (NIA’s)
  3. Participation in the IEA DSM Energy Services Expert Platform and communicating with external stakeholders
  4. Developing and assessing the feasibility of business models for demand response energy services
  5. Demanding the OA to prepare selected Energy-Contracting issues of interest
  6. Task 16 plays an active role in the international and national dissemination of competitive ES and offers assistance services for the market development in other countries
  7. Contributions to an IEA DSM competence centre
  8. Enlarging national and international markets for ESCo and demand response services and developing business opportunities for nationally and internationally acting ESCO

Last but not least networking with innovative ESCo market players may be considered as an added value.

Key accomplishments of Task 16 Think Tank, NIAs and Dissemination

The Think Tank has worked on a variety of topics which have led to the following key publications:

  • “ESCo market development: A Role for ‘Facilitators’ to play”
  • “Integrated Energy-Contracting. A new ESCo Model to Combine Energy Efficiency and (Renewable) Supply”
  • “Financing Options for Energy-Contracting Projects – Comparison and Evaluation” – A Manual for ESCos, ESCo Customers and ESCo Project Developers including Good Pracitce Examples and Calculation Tool
  • “Comprehensive Refurbishment of Buildings through Energy Performance Contracting” – A Guide for Building Owners and ESCos including Good Practice Examples
  • “Energy-Contracting: How much can it contribute to Energy Efficiency in the Residential Sector”

As of October 2013, 15 Energy Service Expert Platform Stakeholder workshops were held in the participating countries.
National Implementation Activities were carried out according to the individual plans of country experts and activities were reported and reviewed at the platform meetings. Ongoing activities can be integrated into the NIA’s.


Task duration:
Phase 1: July 2006 – June 2009
Phase 2: July 2012 – June 2015