Evaluating the Market for Industrial Energy Service Outsourcing

Jay Owen Resource Efficiency






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Evaluating the Market for Industrial Energy Service Outsourcing 


Energy service outsourcing is a business relationship that relieves a large facility from the potential distractions imposed by the ongoing management of one or more energy functions, such as steam, compressed air, water treatment, lighting, or other activities. Surprisingly, although these services have existed in the market for many years, many in the industrial sector are unaware of them or unsure how to take advantage.


The industrial energy efficiency program sector is also largely unaware of these market-based solutions. This is unfortunate, because U.S.-based manufacturers in 2006 acquired $156 billion dollars’ worth of energy to transform raw and intermediate materials into finished products. Of that total value, $80 billion was lost through inefficient conversion and use-thus providing a first-cut estimate of the market for energy service outsourcing. Forward-thinking program administrators are now looking to outsourcing as a method to effectively boost customer investments in energy efficiency while improving system reliability.


One approach is for these administrators to influence and support the existing market. Another method is to incorporate outsourcing into program offerings. A new report by aceee finds that both of these methods are viable options for assisting the industrial base in improving its use of energy. Outsourcing can address all the classic impediments to industrial energy efficiency by providing some combination of capital and expertise to perform common energy functions. The report does find, though, that the devil is in the details. A literature review and interviews with 41 experts (both energy users and solution suppliers) revealed that early identification of risks and associated contract terms are important to successful outsourcing experiences… 


To continue reading the blog post visit: http://aceee.org/blog/2014/03/evaluating-market-industrial-energy-s 

To read the research report visit: http://aceee.org/research-report/ie1402


About ACEEE: The American Council for an Energy-Efficient Economy acts as a catalyst to advance energy efficiency policies, programs, technologies, investments, and behaviors. For information about ACEEE and its programs, publications, and conferences, visit aceee.org