What is the best way to start?

Answer by Alejandro Morell (Creara)

The first step when starting an EPC is to understand the current level of efficiency of the facilities subject to the ESCO project. Secondly, in order to quickly assess the attractiveness of the ESCO project, it is highly recommended to have a rough estimation of potential savings of the project.

An energy audit is the most common tool used to analyse potential energy savings.

Energy audit

An energy audit allows knowing in detail the facility consumption and its potential savings. It is a systematic, independent and documented process for obtaining valuable information and evaluating it in order to:

- Get reliable and accurate information of energy consumption and its associated costs

- Identify and describe the main factors that affect energy consumption

- Detect and evaluate different saving opportunities and energy diversification and maintenance costs, as well as other associated benefits and costs.

The result of an energy audit should be a complete list of energy saving measures to be implemented and how they will be obtained.

Measures typically implemented

The most common measures for achieving energy savings within the context of an EPC project are those related to technology replacement. One of the most representative examples of this type of project is street lighting renovation.

Many street lighting facilities are outdated and therefore highly inefficient. This leads to higher energy requirements and costly maintenance. For a number of municipalities which have outdated systems, street lighting can account for as much as 30%-50% of their entire energy consumption.

The most common practice in street lighting under ESCO projects is the replacement of the existing lamps and luminaires.

Meanwhile, in the case of ESCOs in buildings, these are usually based on the replacement of HVAC equipment, since it is one of the largest sources of energy consumption in public buildings.

In buildings with high HVAC consumption, replacement of equipment can require high investments, so it is a necessary consideration when negotiating an ESCO contract.

Tender process

The tendering process is generally preferred for procurement or contracts involving substantial amounts of money. Tendering are usually used both by public govern procurement and private sector companies, and often comes about as the result of an energy audit. The ESCO client prepares the tender request document, which consists in invitations to suppliers to provide a competitive offer for energy services.

On the ESCO side, the ability to identify opportunities in the competitive tender market will be a crucial part of achieving success.