How to design and introduce EPC models from the early stages connecting them with business operations?
What are the main advantages streaming out from the proper connection between EPC and operations?
How to avoid the risk of getting trapped at the end of pipe (savings) and make a corner stone out of key learnings about competitiveness in the EPC value processes?
It is becoming more and more familiar the use of Energy Performance Contracts as a mechanism of supplier´s commitment to further levels of service “beyond” the business as usual in many fields as, hospitals, schools, and a variety of other public buildings, as well as in private businesses. Also, the ESCO market is being seen and considered from the policy schemes as a major and strategic function in fostering the transitions to high energy efficient scenarios.
When it comes to the view of equipment/infrastructure investment financing, the participation of a financial partner embodied as an utility company elegantly combines the need for financial capacity and technical expertise that responds for effective energy savings, thus generating confidence on the expected capital returns.
The necessity to create “early adopters” and “success stories” in the market, as well as the focus on the “the low hanging fruit”, and the urgent need to push for funds from ESCO´s when financing is short, come to be circumstances that in many cases deliver in procurement processes in which the administrative burdens, the translation of energy baselines into contractual conditions and the sensitiveness of any close approach to the value processes, usually deliver in EPC schemes very much related to the performance of equipment or utility stand points rather than focusing on processes.
As a general statement to our approach, we do like saying that energy savings deliver cost based competitiveness while energy efficiency delivers in productivity based competitiveness. The second concept being wider and stronger, comprises the former one.
For the second question stated above, we are designing our next energy efficiency project using EPC and ESCO alternatives embedded in the traditional economic analysis and infrastructure project design phase for the refurbishment of a food (vegetables) cold storage warehouse. At the light of flexibility, in mentioned specific case are to be considered:
- upcoming diversification in the kind of stored goods
- high variability in the amounts of different fruits and vegetables
- as well as sharp seasonality in the business activity
as key drivers of the operational conditions.
Whereas usually the EPC contract might be subjected exclusively to energy consumption and performace, in our case we are seeking for a partner company that is tracing as EPC drivers:
- Material turn over vs kwh by means of setting up and managing energy operational patterns in the installation
- Goods handling as per Kwh per ton processed – forklift truck approach
As a result we do expect not only that productivity in terms of lowering energy costs for the SME will be dramatically raised, but also raising competitiveness, based on higher excellence in value processes management as well as strong predictive processes capacities introduction. Yet, we will need to deal with the limits of flexibility within the SME, the customer´s current level of process management capacity and the broader understanding of how energy efficiency delivers in more sustainable operations and businesses.
And that is part of the challenge, and that is somehow why we do share and enjoy it with our customer in the process of delivering better results.