Barriers to energy service contracting and the role of standardised measurement and verification schemes as a tool to remove them

Stephan Ramesohl and Christiane Dudda, Wuppertal Institute for Climate, Environment, Energy

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Abstract

Inspired by the US-DOE initiative of the "International Performance Measurement and Verification Protocol (IPMVP)" the paper presents an empirical study undertaken in North Rhine-Westphalia that investigated the prospects of standardised measurement and verification schemes (M&V) as a mean to stimulate markets for performance contracting. It presents an empirical analysis of crucial barriers to third party financing. The study is based on indepth interviews with 30 market actors, both Escos and customers (public authorities, housing companies, hospitals) and discusses critically the role of M&V. The findings indicate that aspects related to M&V are not perceived as the most relevant hurdle to enter energy service contracts. Much more important, market actors demand assistance with regard to the quality of the technical solution and they seek solutions to overcome bureaucratic hurdles in public administrations. In addition, many customers simply lack the minimum expertise to engage themselves in energy service markets. From this perspective, activities aiming at an empowerment of customers appear to be a more urgent field for action than standardised frameworks for M&V.