Developing Model ESCO Performance Contracts
CONCLUSIONS The objective of the project was to (i) assist ESCOs through capacity building, preparation of agreements and assist in third party financing, if required and (ii) assist in developing the standard performance contract and dispute resolution mechanism. AEEE, through this project has been able to interact with a large number of BEE accredited ESCOs to understand the key challenges faced by the ESCOs in executing contracts. The discussions with these ESCOs have brought to surface a number of practical difficulties when deciding to go for an EPC. However, the project proposals submitted by the ESCOs show the level of interest and keenness in taking up project in energy efficiency. The agreements were developed but only a few were negotiated and executed due to variety of reasons related to financing and the inability to get a buy in from the client among other issues. This goes on to show that while services are made available for signing of contracts; there are still major hurdles at the project level, policy level and financing level that need to addressed and these will go a long way in developing an enabling environment to foster the growth of ESCOs in India. AEEE’s standard contract document seek to address some of these concerns at the project level by providing a framework for the ESCO performance contracting; and this can be modified suitably as per the needs and requirements of the project along with the M&V planning template will allow the ESCOs to work towards undertaking more energy performance contracts in the future. Some of the issues that need to be addressed along with the appropriate action have been mentioned as part of recommendation in the next section. AEEE will closely monitor these projects and track the timelines for the projects for the various stages. It is also important to note that Energy Efficiency Services Limited (EESL), working as a super ESCO, have shown keen interest to proactively facilitate the ESCO business in India, and conveyed significant flexibility in development of the ESCO market.
| 47
