Energy Service Companies

At the heart of innovative financing models for efficiency

Energy service companies (ESCOs) deliver energy efficiency projects that are financed based on energy savings. Given the need to rapidly and significantly increase financing for energy efficiency, interest in ESCO business models is growing.


Portugal


The following information is derived from both QualitEE's energy efficiency service's analysis and the JRC's 2017 report, Energy Service Companies in the EU


	Share of activity
Public	22
Private	56
Both	22
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	Share of contracts
Energy Performance Contract Guaranteed Saving	11
Energy Performance Contract Shared Saving	67
Both EPC SS & GS 	22
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Insights

The ESCO market is quite underdeveloped in Portugal, with a lot of potential for growth. Most activity is in the industry sector, and investment largely takes place in the private sector.

Average duration of ESCO projects in Portugal: QualitEE Data

QualitEE Data

The energy policies established by the government, especially targeting the public sector, were an important incentive for ESCO development. In particular, the target established for public buildings (30% energy efficiency improvement by 2020) and the launch of the ECO.AP framework, an Energy Efficiency Programme aiming the promotion of EPC implementation in the Public Sector Buildings, in 2011.

The legal framework conditions, the minimum requirements for operation, inspection and accreditation of the ESCO business and the establishment of EPCs are in place and the potential for improvements is high, but lack of funding, affordable financing, as well as lack of expertise in the public sector to launch the contracts and to supervise them and the lack of knowledge about EPC models by the bank sector to facilitate EPC financing, are among the main obstacles identified. In addition, the potential clients are reluctant to understand the announced savings and mistrust the long term contracts with EES providers. In this context and after realising there is still lack of information among customers in Portugal.

The QualitEE survey has collected data surrounding the main drivers and barriers of business for ESCOs in Portugal. This is an excellent opportunity to compare the structural differences of ESCO markets to identify policies or mechanisms that account for such variance. Policies can then be built to complement existing drivers and overcome identified barriers.

QualitEE Data

QualitEE Data