The IEA’s Energy Efficiency market report tracks the size of the global energy service company (ESCO) market. In 2018, the IEA conducted a survey of over 25 national ESCO associations to inform a more in-depth analysis of the global ESCO market. The survey covered ESCO financing models, energy performance contracting, and related policy measures. Overall, the survey covers 80% of the major emerging economies (Brazil, China, India, Indonesia, Mexico and South Africa), 80% of the G20, and 60% of IEA membership. The global ESCO association analysis and country pages will be regularly updated to reflect market growth and relevant policy changes.

1. IEA 2019. All rights reserved.
Global ESCO market updates:
Webinar
Jesse Glicker and Kathleen Gaffney
23 May, 2019
IEA

2. 2IEA 2019. All rights reserved.
Webinar outline
• Investment needs for energy efficiency
• IEA global ESCO Association Survey
• Key findings
- Size of the global ESCO market
- Overview of major markets
- Belgium
- China
- USA
• IEA energy efficiency ESCO website
- Overall site structure
- Future work

3. 3IEA 2019. All rights reserved.
What energy efficiency improvements could be possible
The IEA’s World Energy Outlook provides the context for the role of energy efficiency in the Sustainable
Development Scenario
Global CO2 emissions reductions in the New Policies and Sustainable Development Scenarios
16
20
24
28
32
36
2010 2020 2030 2040
Gt
New Policies Scenario
Sustainable
Development Scenario
Efficiency
Renewables
Fuel-switching
CCS
Other
Nuclear
44%
36%
2%
6%
9%
2%

4. 4IEA 2019. All rights reserved.
But investment levels need to rise
Annual energy efficiency investment must double to 2025 and then double again to 2040.
Policy will need to facilitate finance and business model innovation to stimulate this investment.
Annual energy efficiency investment in 2017 and in the Efficient World Scenario
0
300
600
900
1 200
1 500
Current Average annual 2017-25 Average annual 2026-40
USD (2017) billions

5. 5IEA 2019. All rights reserved.
Energy efficiency financing options
Adopted from World Bank
Market
maturity
Commercial
financing
Public
financing
Vendor leasing
Commercial financing, bonds
ESCO market
Dedicated credit line with commercial bank
Dedicated credit line with development bank
Energy efficiency revolving fund
Pay for service
Grants

6. 6IEA 2019. All rights reserved.
IEA Survey Overview
• Purpose:
To improve the quality and depth of analysis on the
global ESCO market (with a focus on EPCs)
• Key areas covered:
- Market size and composition
- Financing mechanisms
- Contracts utilized
- Policy drivers

7. 7IEA 2019. All rights reserved.
Additional resources included
• Joint Research Centre (JRC) 2017
Energy Service Companies in the EU
• QualitEE Project
- Funded by the European Union’s
Horizon 2020 programme
- The QualitEE consortium comprises 12
partner organizations covering 18
European countries

8. 8IEA 2019. All rights reserved.
The value of the global ESCO market grew by 8% to USD 28.6 billion in 2017.
China continues to underpin the global market, growing 11% to nearly USD 17 billion in 2017.
ESCO revenue by region, 2017
The global ESCO market continues to grow
7.6
3.0
16.8
1.5
United States
European Union
China
Other
USD 28.6
billion

9. 9IEA 2019. All rights reserved.
In which end-use sectors do ESCOs operate?
ESCO market activity globally is relatively evenly split between industry and the non-residential sector.
There is almost no activity in transport.
Global ESCO activity by end-use sector
Industry
37%
Residenti
al
9%
Non-Residential
42%
Other /
not
classified
12%

10. 10IEA 2019. All rights reserved.
What type of organisations engage ESCOs?
Globally, more EPC contracts occur in the private sector.
However, this is heavily influenced by the Chinese ESCO market.
Global ESCO activity in the public and private
sectors
0%
20%
40%
60%
80%
100%
US Canada EU Brazil Mexico Japan Korea India Thailand
Private Public

11. 11IEA 2019. All rights reserved.
What type of ESCO contracts are most common?
The guaranteed savings model accounts for over 50% of all EPC contracts.
Global ESCO activity by contract type
EPC guaranteed
savings
53%
EPC shared
savings
19%
Energy service
contract
5% Both guaranteed savings
and shared savings
3%
No Data
20%

12. 12IEA 2019. All rights reserved.
A snapshot of the European market: Belgium
Recent policy changes regarding ESCO accounting principles in Europe are expected to have a positive
effect on national ESCO markets.

13. 13IEA 2019. All rights reserved.
China dominates the global ESCO market
• Strong targets
- 12th Five-Year Plan (2011-2015) creates
energy efficiency target of 16%
reduction in energy intensity
• Direct financial awards and tax
incentives
- USD 3 million to support ESCOs
• Established frameworks
- Directives for ESCOs
- Favorable accounting system
Chinese ESCO revenue , 2011-2017
0
3
6
9
12
15
18
2011 2012 2013 2014 2015 2016 2017
USDbillions

14. 14IEA 2019. All rights reserved.
Overview of the Chinese ESCO market
China’s ESCO market continues to develop in a unique way given strong government policy and
incentives.

15. 15IEA 2019. All rights reserved.
ESCOs have an extensive history in the US
Efficiency upgrades in public buildings have underpinned the development and success of the US ESCO
market.

16. 16IEA 2019. All rights reserved.
Introducing the IEA’s online
ESCO resources!
https://www.iea.org/topics/energyefficiency/escos/

17. 17IEA 2019. All rights reserved.
Next steps
• Overview of finance options for energy efficiency
• Online country comparison tool
• Continual update of ESCO market analysis and resources
- Possible collaboration with JRC
- Expand to include more markets (Indonesia survey underway)
• In-depth analysis and policy recommendations for countries

18. 18IEA 2019. All rights reserved.
www.iea.org
IEA