What is ESCO Project ?
An Energy Service Company (ESCO) identifies and evaluates energy saving opportunities in industrial units, commercial complexes, hospitals, municipalities, buildings and utilities by using energy audit tools and recommends a package of improvements that can pay for itself through the resultant savings.
With the enactment of Energy Conservation Act in 2001, and the Central Government’s commitment to reduce the energy consumption in select government organizations by 30% over the next five years, ESCO business has got a boost. Overcoming conventional barriers to such business and affecting a market transformation holds the key to its further success.ESCOs provide their clients with comprehensive services – encompassing audits for energy saving performance, design & implementation of conservation measures, maintenance, operation and management of the introduces facilities and procurement of project funds. ESCOs conduct retrofitting for energy conservation without damaging the environment. The ESCO will guarantee the savings that would meet or exceed the annual payments to cover up the entire project costs usually a period of 5 to 10 years. The savings can be shared proportionately with the institution for which the project is designed and implemented for.
The salient features of performance contracting for energy savings through ESCO based business model are as under:
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existing inefficient systems.
during the contract period.
Total project cost is funded by ESCO.
& other costs out of generated energy savings.
With the enforcement of the Kyoto protocol, ESCOs can result in additional substantial revenues through Clean Development Mechanism (CDM) benefit to its clients. AEL ESCO has resources and expertise to execute CDM projects
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‘Nil’
investment by customer.