Kenya kickstarts a Super ESCO for boosting energy efficiency
The new Super Energy Service Company will boost investments in energy efficiency
You might have seen the headline above and wondered what an ESCO is.
Since 2012 energy management regulations were passed thousands of energy audits have been carried out in Kenya.
Despite the high level of audit compliance studies show that few companies have implemented energy efficiency measures. Some of the key reasons companies have cited include:
- Financial Risk: High up front cost of energy efficient equipment with savings realized over a number of years.
- Technical Risk: High perceived risk of new technologies that promise energy savings.
An ESCO directly addresses these two challenges. How?
- Financial Risk: by identifying and implementing energy savings opportunities at their own cost. Customer does not pay anything up front.
- Technical Risk: Payments by the customer to the ESCO only come from savings achieved after implementing projects. ie the difference between initial power bill and new power bill after improvements.
The ESCO Process
1. Initial Assessment
- Preliminary energy audit to determine energy savings opportunities available eg. in systems such as compressed air, lighting.
- The audit identifies corrective measures and their payback period.
2. Energy Performance Contracting
- ESCO takes the financial risk and implements energy savings measures.
- The savings are shared between ESCO and Client.
- Equipment is owned by the ESCO
3. Financing and ROI
- Project financing is arranged by the ESCO.
- A full contract with efficiency measures, savings, construction costs, ESCO costs is developed.
4. Construction and Staff Training
- The ESCO is responsible for construction and commissioning.
- ESCO Provides training to staff to ensure they understand how to operate the systems.
- ESCO ensures proper maintenance of the equipment during the contract period
5. Savings Verification and annual costs verification
- A monitoring system is installed to ensure verification of the savings over the long run.
- The owner does not invest any money up front and the ROI is guaranteed.
- Customer only pays ESCO a portion of month savings from implementing energy savings measures
- Customer reduces total cost of owning his equipment through access to the latest most efficient equipment and high quality maintenance.
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