Energy Performance Contracting (EPC, domestically referred to as EMC) is an energy-saving investment method that pays for the full cost of an energy-saving project with the energy savings; this energy-saving investment method allows the user to use future energy-saving gains for plant and equipment upgrades to reduce current operating costs and improve the energy efficiency.
Role: An energy efficiency investment approach in which reduced energy bills pay for the full cost of energy efficiency projects. This model allows users to use future energy efficiency gains for plant and equipment upgrades, reducing current operating costs and improving energy utilization efficiency. In the practical use of energy efficiency projects, EMC can be seen as an innovation of the BOT model, as both have the same basic approach and purpose of recovering the investment through gains during operation. The only difference is that in the BOT project, the investor is fully entitled to the project revenue, while in the EMC project, the energy-consuming enterprises can also share a certain percentage of the revenue, which is a better impetus to the implementation of the project.
The energy management contract is signed between the enterprise (user) implementing the energy-saving project and the energy-saving service company, and it helps to promote the implementation of the energy-saving project. In the traditional energy-saving investment, all the risks and all the profits of the energy-saving project are borne by the implementation of the energy-saving investment in the enterprise; in the contract energy management approach, generally does not require the enterprise itself to energy-saving projects for large investments in accordance with the specific business approach, can be divided into sharing-type contract energy management business, the commitment-type contract energy management business, the energy costs of the custodian-type contract energy management business.
Contract energy management