Innovative Procurement Frameworks for Energy Performance Contracting in the UK Public Sector

Friedemann Polzin, Steve Sorrell and Colin Nolden
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Friedemann Polzin: Utrecht University School of Economics (USE), Sustainable Finance Lab, Kriekenpitplein 21-22, 3584 EC Utrecht, The Netherlands
Colin Nolden: SPRU (Science Policy Research Unit), School of Business, Management and Economics, University of Sussex, UK

SPRU Working Paper Series from SPRU - Science Policy Research Unit, University of Sussex Business School

Abstract: Procurement Frameworks for Energy Performance Contracting (PFEPCs) simplify the process of negotiating, developing and implementing Energy Performance Contracts (EPCs) with Energy Service Companies (ESCOs). This paper analyses their role in promoting the implementation of cost-effective energy efficiency measures in the UK public sector. Compared to conventional approaches to procuring goods and services involving detailed specifications, PFEPCs translate the challenge of upgrading, retrofitting and replacing energy related equipment and infrastructures into required outputs through functional specifications. The innovativeness of specific PFEPCs often lies less in the diffusion of ‘developmental’ innovative energy efficient solutions, although partner bidding approaches create favourable conditions for innovation. However increasing standardisation and bundling prove successful at lowering transaction cost, which enables ESCOs to address projects which would not be considered in the absence of PFEPsdue to high transaction costs. This particular organisational innovation opens the market up to new approaches to implementing costeffective energy efficiency measures.

Keywords: Energy efficiency; energy performance contracting (EPC); energy service companies (ESCOs); public procurement of innovation; public sector. (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ene and nep-ino
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Citations: View citations in EconPapers (7)

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