ESCO model in Lithuania
About this good practice
The description of the ESCO GP will provide the specific information about the benefit and obstacles when implementing ESCO model for EE improvement in different objects.
ESCOs are basically self-financed: they don't get paid unless their customers save money. In fact, the sole source of payment to many ESCOs comes from the savings their customers achieve. This makes ESCOs partners in their customers' risk, and points out the importance of creating a comprehensive energy plan that will ensure savings well into the future. If the company doesn't deliver on the promised energy savings, the financial consequences can be severe and long-lasting.
ESCO project involves many other actors:
- Maintainers, designers, constructors and other important bodies for the implementation of the project;
- Equipment suppliers;
- Funds, banks, leasing companies, financial organizations;
- Municipalities, or other governmental organizations – as a promoters of the ESCO model in order to improve EE in municipal or national companies
The cooperation based on energy efficiency is the guarantee that all the parties will be motivated to reach for the best results. EE is the main indicator for the success in the cost effective way.
ESCO model stimulates the novel view to the energy consumption. The final consumer does not have to care about the different technologies and measures. This kind of contracts guarantees that the EE monitoring of the energy use will be performed after renovation.
Resources needed
Main coordinator of this cooperation in Lithuania is JSC Lietuvos Energijos tiekimas as the interlink between the Customer, Contractor and Financing Company. ESCO projects are financed by LET according the agreements with final users, based on the savings from the efficiency increase not loans.
Evidence of success
It is evaluated that 16 842 000 kWh has been saved since start of the ESCO projects implementation.
ESCO model benefits
- An alternative to self-financing energy savings, but also available own resources;
- After ensuring savings, applying optimum modernization measures, the savings measures remains for the customer;
- Reduced liability to the customer, as the service provider assumes all the risks.
Potential for learning or transfer
Demand management is important in order to stimulate proactive role of the end consumers. Reduction of demand can lead to money savings and decrease of carbon emissions. ESCO model is the innovative cooperation win-win model for all stakeholders which cooperate. ESCOs represent a dynamic and constantly evolving business model. This brings to the key themes of ESCO work: the projects must be turnkey to the customer, and they must offer guaranteed energy efficiency. ESCO demonstrates the transfer from up-bottom to the BOTTOM-UP approach.
The GP of ESCO is not unique in Lithuania, many countries are implementing it in order to stimulate the different cooperation models between the stakeholders with the main aim to increase EE. The Lithuanian ESCO examples show the importance and effectiveness of ESCO model in production companies. While other countries could be more progressive in the buildings sector. Lithuania is making an efforts for the acceleration of ESCO model implementation.
Further information
Website
Good practice owner
JSC Lietuvos Energijos Tiekimas (LET)