frESCO timeline

Project Brief

Energy Performance Contracting (EPC) is a form of ‘creative financing’ for capital improvement which allows funding energy upgrades from cost reductions. Under an EPC arrangement an external organization (ESCO) implements a project to improve the energy efficiency or renewable energy production and uses the stream of incomes from the cost savings to repay the overall costs of the project, including the initial investment. Essentially, in EPC, ESCO’s remuneration is based on the demonstrated performance.

Despite the large economic energy saving potential in the EU, nowadays very few ESCOs apply Energy Performance Contracting to the residential market due to high transaction costs, high fragmentation of market, variation of individual needs and behaviours that require customized and personalized treatment and lack of information and expertise on the residential consumer.

Therefore, new EPCs need to disengage from current old-fashioned savings-based performance contracts and allow to evolve energy market trends with the introduction of novel hybrid schemes that do not only reduce costs, but also create new revenue streams for the end-consumers/ prosumers, by empowering them to participate in energy transactions and become active players to the overlay energy market actors.

In this context, frESCO project will deliver the next generation of EPC under the principle of Pay for Performance.

These packages will combine:

• Building retrofitting and investments for the installation of smart equipment (metering, sensing, actuating), together with extended offerings for the installation of distributed generation (PV) and storage (batteries) units;
• Energy efficiency measures, spanning behavioural transformation, targeted guidance towards energy savings, along with more advanced concepts for net metering/ self-consumption maximization through smart automation at both building and local energy community level;
• Flexibility services (with the introduction of storage and, if available, electric vehicles as means for enhancing flexibility);
• Non-energy services (Comfort preservation, Indoor Air-quality, Security, Well-being, Emergency notification services, etc.).