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UK Local Authority engagement with the Energy Service Company (ESCo) model: Key characteristics, benefits, limitations and considerations

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  • Hannon, Matthew J.
  • Bolton, Ronan

Abstract

This paper explores how some UK Local Authorities (LAs) have opted to engage with the Energy Service Company (ESCo) model in a bid to enhance their influence over local energy system change and help them to deliver on their political ‘public good’ objectives. Three common approaches to LA ESCo model engagement are outlined including the: (1) LA owned ‘arm's-length’ model; (2) private sector owned concession agreement model; and (3) community owned and run model. The LA's decision to establish its own ESCo, or alternatively enter into a partnership with another, predominantly depends on: its willingness to expose itself to risk, the level of strategic control it desires and the resources it has at its disposal. However, the business case is contingent on the extent to which the national policy and regulatory framework facilitates and obligates LAs to play an active energy governance role. Stronger alignment of local and national energy agendas through communication and coordination between different governance actors could help to remove critical barriers to LA ESCo engagement and their wider energy governance activities.

Suggested Citation

  • Hannon, Matthew J. & Bolton, Ronan, 2015. "UK Local Authority engagement with the Energy Service Company (ESCo) model: Key characteristics, benefits, limitations and considerations," Energy Policy, Elsevier, vol. 78(C), pages 198-212.
  • Handle: RePEc:eee:enepol:v:78:y:2015:i:c:p:198-212
    DOI: 10.1016/j.enpol.2014.11.016
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Chiara Candelise & Gianluca Ruggieri, 2017. "Community Energy in Italy: Heterogeneous institutional characteristics and citizens engagement," IEFE Working Papers 93, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    2. repec:spr:epolin:v:45:y:2018:i:2:d:10.1007_s40812-017-0083-8 is not listed on IDEAS
    3. Polzin, Friedemann & von Flotow, Paschen & Nolden, Colin, 2016. "What encourages local authorities to engage with energy performance contracting for retrofitting? Evidence from German municipalities," Energy Policy, Elsevier, vol. 94(C), pages 317-330.
    4. repec:eee:rensus:v:88:y:2018:i:c:p:99-108 is not listed on IDEAS
    5. Helms, Thorsten, 2016. "Asset transformation and the challenges to servitize a utility business model," Energy Policy, Elsevier, vol. 91(C), pages 98-112.
    6. Bolton, Ronan & Hannon, Matthew, 2016. "Governing sustainability transitions through business model innovation: Towards a systems understanding," Research Policy, Elsevier, vol. 45(9), pages 1731-1742.
    7. Hall, Stephen & Roelich, Katy, 2016. "Business model innovation in electricity supply markets: The role of complex value in the United Kingdom," Energy Policy, Elsevier, vol. 92(C), pages 286-298.
    8. repec:eee:enepol:v:107:y:2017:i:c:p:345-355 is not listed on IDEAS
    9. Cherrelle Eid & Rudi Hakvoort & Martin de Jong, 2016. "Global trends in the political economy of smart grids: A tailored perspective on 'smart' for grids in transition," WIDER Working Paper Series 022, World Institute for Development Economic Research (UNU-WIDER).
    10. repec:eee:enepol:v:114:y:2018:i:c:p:63-76 is not listed on IDEAS
    11. repec:eco:journ2:2018-01-10 is not listed on IDEAS
    12. repec:eee:rensus:v:79:y:2017:i:c:p:730-749 is not listed on IDEAS

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