Chances and barriers for energy services companies?

This paper explores barriers to the Rational Use of Energy (RUE) in two sectors in Germany that are usually neglected by energy efficiency policy: the brewery and university sectors. In particular, it is analysed to what extend energy services companies (ESCOs) may help overcome some of these barriers. Several case studies were conducted in breweries and universities to analyse barriers to RUE using ideas from economic, behavioural, and organisational theory. Based on the empirical evidence, policy measures are proposed. To assess whether energy services companies may help overcome barriers such as transaction costs, bounded rationality, lack of capital, or information deficits, success factors and limiting factors are identified for both sectors. Important factors include the nature of the RUE-technologies and the changing operating environment. In the brewery sector, ESCOs are unlikely to succeed since RUE-technologies are rather company specific, process integrated, or affect the core production process. Smaller breweries, who would benefit the most from contract energy management, face considerable business risk stemming from a stagnating German beer market with continuing horizontal concentration, and from investment risks associated with the introduction of the returnable PET-bottle. In the university sector, ESCOs are expected to succeed, since RUE-measures are rather cross-cutting, and since current reforms imply more financial flexibility and autonomy for universities, result in a shift in competencies from the state administrations to the universities, allow for increased internal transferability of funds, and foster the introduction of business accounting.