About ESCO

Energy Service Companies (ESCOs) develop and implement Energy Efficiency (EE) projects to save energy and reduce energy costs for their customers. ESCOs perform all phases of EE projects, including detailed energy audits of a customer’s facility, design and development of energy conservation measures (ECMs), facility/equipment retrofit and process optimisation, as well as project financing. ESCOs typically establish an Energy Performance Contract (EPC) with their customer, which details the energy savings guaranteed by the EE project and the ESCO compensation plan based on the actual energy savings.

The Indian market for energy efficiency products and services is estimated at INR 1,50,000 crores, of which the market share of ESCOs is estimated to be only 5%.

To stimulate growth in the ESCO sector, the Ministry of Power established Energy Efficiency Services Limited (EESL). EESL functions as an ESCO and as a resource centre for capacity buildings of SDAs, FIs, utilities and other stakeholders. Further, in a fillip to ESCO project financing, SIDBI launched the Partial Risk Sharing Fund (PRSF) for financing EE projects implemented by ESCOs using the EPC mechanism.

AEEE strongly believes that the ESCO sector, with its core business being energy conservation & energy efficiency, is a key partner in driving energy efficiency in industry, buildings and municipalities. In the ESCO space AEEE has

  • Developed a model EPC and associated M&V template for ESCOs doing industrial EE projects
  • Conducted regional workshops across India for ESCOs, MSME and FIs, to promote the use of EPC and M&V, as well as SIDBI’s PRSF scheme for financing EE projects
  • Developed a business model for utility-affiliated ESCOs, with participation from Wipro EcoEnergy and utility BYPL
  • Conducted a market assessment of PRGF and VCF EE funds in partnership with BEE, with the aim of improving awareness and utilisation of such schemes

AESCONet AEEE’s ESCO Network, is a platform for ESCOs, FIs and other stakeholders to collaborate on creating a thriving market for Energy Efficiency services through capacity building and advocacy for business-friendly policies and effective financing schemes.

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