STRATEGIC PLANNING AND DEVELOPMENT FOR ENERGY SERVICE COMPANIES TO ENTER SINGAPORE'S BUILDING ENERGY RETROFIT MARKET

Abstract

The total energy cost savings potential for EE in the commercial and industrial sector, came up to approximately $463.3 million and $409 million respectively. Many building owners realize the need for EE under the pressure of government regulations and public scrutiny, but it is not their top priority due barriers such as, the competing use of capital for non- energy efficient projects that attain higher rates of return, high upfront costs and reluctance on taking up loans for EE projects due to the impact of loans on their balance sheets. The adoption of ESPC, a market mechanism and financing tool that can resolve the barriers mentioned above, still remains low as the ESCO industry in Singapore as it is still in its infancy and not all ESCOs are offering ESPC yet. However, ESCOs in Singapore can take advantage of the EE potential in these sectors and the low adoption rate to develop the ESPC market in Singapore. Therefore, this dissertation aims to develop strategies that ESCOs can take to enter the ESPC market, which is part of the EE market. As such, the objectives of the report are to identify the strengths and weaknesses of ESCO industry in Singapore, to assess the external environment of ESCOs in Singapore and to propose strategies for ESCOs development and entrance to Singapore’s energy retrofit market. To achieve the objectives, interviews with experts from the ESCO industry was conducted. Survey questionnaire was also disseminated to understand FMs perspective of ESPC and ESCOs. The results indicated that FMs were aware of ESCOs and ESPC, however the use of ESCOs services was limited and building owners’ are a barrier to the approval of EE retrofits. Data gathered from the interviews revealed the strengths and weaknesses of ESCO industry and the external opportunities and threats of the ESCO industry. 12 strategies were then developed based on the SWOT of the ESCO industry, for the various situations. With the help of this study, ESCOs looking to enter the energy retrofit market, or to offer ESPC, can identify and apply those strategies that are most suitable for their situation.