For my final blog I wanted to give a little more than just an article or my own unexperienced opinion. That’s why I did an interview with someone who has experience with working in and for different kind of ESCO’s or energy service companies. David Martens is an engineer that works in the company EFIKA.
EFIKA is still a very young company, and at the moment it exists out of five people. They perform energy audits on buildings mostly under a performance contract. The group of people working there are mostly people with a previous background in the company Cenergie, which is also a type of ESCO.
In the following chapter I will display the questions together with the answers of David. Please note that I have notated the answers on a free basis. So none of the quotes could be taken correct to the letter. With that said, here are some questions of the interview that correspond a lot of my previous blogs.
Which type of ESCO model do you apply? And would you change this in the future?
“We mostly work under performance contracts with the customer. But we never invest our own money in any of the energy saving projects ourselves. This because it is not our scope and more important, because we don’t have the budget strength to do this as a small company.
We also have another model for customers that can be used for studies that only apply to the parameters of an building installation and do not include the placing of new installations. Called “no pay, no cure”. In this case the customer is certain that he will get savings that is in line with the price they pay for it. We’re also working on starting up energy corporations with investment plans like crowdfunding. For this we work together with companies like CORE CVBA-so and schools.”
Do think the ESCO model where they invest themselves could be more realistic for other companies?
“Yes, but you have to keep in mind that these companies will still have to make a payback plan with the costumer. This because the payback times are still too long, and the energy price is still too low. We do work together with companies that do this, Infrax for example. But they do also arrange a payback plan on top of the % energy savings achieved.”
What would you say is mostly the incentive for a company to invest in energy saving audits and projects? Return of investment, sustainability or even a little greenwashing?
“Well, in most cases it is a combination of all of them. The companies are not going to invest money in projects that don’t give a good return. And if you define sustainable, then economical sustainability is just as important as ecological sustainability. For bigger companies the green labels are of course also quite important.
And don’t forget comfort, like the climate of an office room. Because often energy saving isn’t question from the start, but it could be an outcome.”
Where an how much do you see the market growing in the future? And do you see ESCO going more to the industrial process?
“Well, we do see a certainly growth in the future, but it is really hard to predict. A lot will depend on outside factors like the energy price. For the moment we will keep our focus on buildings, because we have the most of expertise in this area. But new ESCO’s that specialize industrial process will start up in the future, and they also already exist, Indea is an example.
But in my experience there are different rules that apply in the industrial process. Situations can change a lot quicker there, so the demanded payback times could be a lot shorter.”
What’s your opinion about this interview, agree? And did u see the link with the questions and the rest of my blog?
Well, in this blog post I am going to ask u guys for an honest opinion about my theses project. But without going to technical I am going to give u a short briefing of the DUWAHE² project. (http://www.vlakwa.be/projecten/demonstratieprojecten/lopende-projecten/duwahe2/ )
The project started as a funding call of VLAKWA. They are a government funded institution that works on the sustainable use and reuse of our water resources in Flanders. Four companies took the initiative to start a project together in cooperation with VITO ( https://vito.be/nl ). The project covers the reuse of the waste water into the brewing process as well as the reuse of the large amount of heat energy trapped in the water. And by this making a closed cycle process. The following companies are working in this project.
Pantarein: This is a water treatment company with a huge amount of expertise on the subject of waste-water and reuse. Logically, they will focus on the part of water reuse. Pantarein was also the one who took the first initiative to start the project. (http://www.pantarein.be/nl/index.html)
CORE CVBA-so : This is a student controlled company that focuses on rational energy usage. I myself am an engineer/theses-student in CORE, and had about one year of experience when writing the project at the start. Although my lack of experience and background, I did do a full energy audit + optimization in a big textile company, and have some practical experiences in the brewing industry. And obviously we take on the part of the energy recovery. ( http://www.thinkcore.be/website/index.php )
Bosteels and Huyghe : These are the breweries that work with us on the project and will actively try to install and use the developed installations in this project. Of course they’re better known for their beers like Karmeliet and Delirium respectively.
The final goal of the project is to spread the word of a working installation, and with this hopefully a lot of other breweries in Flanders will follow.
But what is your opinion of these kind of industrial cooperation projects? Should the gouvernement fund these kind of projects?
Article on the market for ESCO’s in the future:
“Energy savings contracts could be worth $15 billion by the end of the decade. “
September 26, 2013
Performance-based contracts have been a boon to the energy efficiency industry. Since 1990, U.S. energy services companies (ESCOs) have grown the market from less than $500 million to more than $5 billion in 2011.
And according to a new analysis of the market from the Lawrence Berkeley National Laboratory, revenues will double or even triple from $6.4 billion in 2013 to between $13.3 billion and $15.3 billion by the end of the decade.
But how will it reach its potential under a high penetration scenario?
ESCOs are a staple in the efficiency market within K-12 schools, universities and other public buildings. By providing energy savings performance contracts (ESPCs), these companies can help building owners with an appetite for longer payback periods finance efficiency projects through the energy savings over time, with very little upfront investment.
The market for these contracts is already very mature. Lawrence Berkeley researchers report that 42 percent of K-12 schools, 28 percent of federal buildings and 25 percent of colleges have taken advantage of ESPCs, mostly for energy efficiency. While there are still plenty of opportunities in these sectors, ESCOs will need to expand into new markets to continue double-digit growth and hit the high projections.
More than 80 percent of revenues for ESCOs come from public or institutional buildings investing in energy efficiency. If the market is going to continue growing, there are a few ways these companies can expand their services to stimulate more demand.
The full article is to be found at the bottom. They also further discussed about where the ESCO’s should try to do their upcoming market penetration. I personally think that they definitely should focus more on the commercial market or more specific the industrial companies. Moreover they should not stick to the common building analyses, but instead focus on the working process as well. Especially in the industry the production process is often a lot more energy demanding. They will also need more expertise to make changes in the process. But where do you think they should concentrate? And is the assumption of Stephen lacey ( at the top ) realistic ?
In the previous blogs we discussed where the biggest potential of energy saving investments is to be made. And I think it is clear that there is no straight answer to that question. Both agriculture , house holding and industry have big potentials. And despite of the larger direct saving potential of the industry, there are a lot of other factors involved like sensitization for example. But is there a difference in the energy saving projects itself? And especially the economical part?
In the following links there are a couple of free calculation-tools to determine the payback time of solar panels and the placing of roof insolation
For an average household in Belgium it takes about 10 years until the investment of solar-panels repays. An industrial company could buy more panels at once, so the price will drop, but the total investment will probably be larger. On the other hand they could get subsidized and subtract the investment from their profit, to get tax benefits. But which of the 2 ( households or Industry ) would benefit the most of a shorter payback time? For a household 10 years may be good enough, but for some industries this is way too long. They tend to calculate the total profit for an investment on a shorter time ( EX. 5Y) . This because €1 investment today is considered €2 some years later that could be used in another project.
But should there be an exception for sustainable projects? And shouldn’t the industry be capable of surviving more long term investments with respect to small households? Personally, I think that an exception should be made because it’s proven that the return of a project will go on for a long time, hence “sustainable”!
In my last post we talked about the where the focus of energy saving should be. It was clear that the biggest winnings are still in industry, but also that most of the effort done so fare, has come from the industry. Putting down more rules on emissions and consumption for industry could backfire into an economical crisis. And in my opinion an economical crisis is also devastating for the environment.
So maybe it is time for the people and the households to show there support and do some effort for a more sustainable future. There are a lot of campaigns running that are funded by the government to convince people to go the extra mile. One of those campaigns is SMERGY (link below).
The campaign aims a young adults from 19 to 29. They use a energy saving tool that people can play on to save energy. It allows the player to chose from a big data base of energy-saving tips and tricks. And if he completes one the money and CO2 savings are added to hes player score. This way they also follow the first essential step of trias energetica!
They base there campaign on the following theory: ” If a person goes trough a life event like having a first job, graduating , living alone for the first time and so on. It is much easier to change hes or her behavior forever!” . That’s why SMERGY focuses on the age group of 19 to 29.
But what do you think about this theory?
A question that i was asking myself is where should we focus or energy savings? Households that use to many domestic energy? Or should we mainly look at industry and agriculture? Or should the real focus be on creating renewable energy rather than trying to limit the use?
According to the trias energetica concept the first step should be lowering the energy consumption, before we take any steps to convert to renewable energy. But at wish fase do we make the step? Should it be at 80, 90% efficiency ? This is still very unclear. But lets say try to get the most out of step one, with the least effort, ” the pareto approach”. If we only look at the numbers , we see that in Flanders the industry is the biggest consumer. ( see link)
But does that mean that a focus on industry is more important? I personally think that there are other parameters to be considered than just plain quantities of energy.