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Energy Service Company

  • By: Gavin D. J. Harper
  • In: Green Business: An A-to-Z Guide
  • Edited by: Nevin Cohen & Paul Robbins
  • Subject:Sustainability, Environmental Policy & Law (general)

An energy service company (ESCO) is an organization that delivers “energy services” like electricity or heat, whereby the mode of service provision is determined by the ESCO rather than the user. This is different from the traditional model of energy provision, where the supplier provides the energy and the user decides how to use it. With the rise of green enterprises, ESCOs have sought to enter the energy market by offering services that meet interests in sustainability and alternative energy sources.

The main principles and concepts underlying the business model and management of ESCOs include the following:

  • Providing energy “services” rather than just providing energy
  • Providing those services in the most efficient way and, often, on private networks
  • Increasing the penetration of renewable energy sources and low-carbon technologies
  • Distributing electricity ...
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