ENERGY SAVINGS PERFORMANCE CONTRACTS (ESPCS) AND THEIR SUSTAINABILITY IN SINGAPORE: PERSPECTIVE OF ENERGY SERVICES COMPANIES (ESCOS)

Abstract

In many parts of the world such as Japan, Canada, Germany and USA, ESPCs have matured into an effective mechanism to deliver Building Energy Efficiency Projects (BEEPs) while aiding the development of a viable private sector energy services market. Given Singapore’s 2020 target to cut carbon emission by 16% below business as usual if a global environmental pact is reached, ESPCs may be the key solution. There has been little literature discussing on the practice of ESPCs in Singapore. Therefore, the objectives of this study are to find out the incidence in the adoption of ESPCs in Singapore, barriers faced by contracting parties and recommendations to promote ESPCs. Literature review, surveys and in-depth interviews with local ESCOs, owners and government officials were conducted to achieve the objectives. From the findings, the adoption of ESPCs in Singapore is found to be low, especially on the private sector buildings. The government, on the other hand, is beginning to show more drastic support for ESPCs as seen from the introduction of the Building Retrofit Energy Efficiency Financing (BREEF) scheme. 19 barriers were identified to be faced by the ESCOs in Singapore that inhibit the adoption of ESPCs such as the nascent stage of financial institutions in financing BEEPs, short payback period required in the ESPC, lack of trust between building owners and ESCO, insufficient top management support and commitment on the client’s side, and more. The study has provided a detailed understanding of how the 19 barriers arise and their implications on the contracting parties through the production of memos for every barrier. It is however limited by the small amount of data collected to statistically generalize on the viewpoint of the ESCO population in the survey and also denied the usage of robust statistical analysis. Finally, the recommendations to promote the ESPCs in Singapore are formulated, which include the bundling of small BEEPs, provision of incentives for ESCOs, improving the ESCOs Accreditation System, standardization of the ESPC and Measurement and Verification (M&V), and so on.