What encourages local authorities to engage with energy performance contracting for retrofitting? Evidence from German municipalities
Municipalities aiming at mitigating climate change by implementing new energy efficiency technologies face budgetary and capacity constraints. Outsourcing through energy service contracting could provide a solution. This paper reports results from a survey of 1298 municipalities concerning barriers to retrofitting public street lighting and the possible role of energy service contracting to overcome these barriers. Using a logistic regression analysis, the authors investigate determinants of opting for energy service contracts in the specific context of LED retrofits. Results point to an advantage of outsourcing in a financially and capacity-constrained environment, which corresponds with the main reasons for engaging in contracting: minimising investments and financial risks. However, municipalities often do not fully grasp the risks associated with retrofitting especially using a novel technology such as LED. In relation to that they underestimate the risk reduction potential of energy performance contracts (EPC). Previous experience with outsourcing increases the probability to engage in servitization although certain existing partnerships, particularly with utilities, prevent municipalities from considering energy performance contracts. Interestingly, engaging an energy consultant has a negative propensity to use energy service contracts, while pre-negotiated standardised contracts for energy performance contracts have a positive influence.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Haas, Reinhard & Nakicenovic, Nebojsa & Ajanovic, Amela & Faber, Thomas & Kranzl, Lukas & Müller, Andreas & Resch, Gustav, 2008. "Towards sustainability of energy systems: A primer on how to apply the concept of energy services to identify necessary trends and policies," Energy Policy, Elsevier, vol. 36(11), pages 4012-4021, November.
- Sorrell, Steve, 2015. "Reducing energy demand: A review of issues, challenges and approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 74-82.
- John Bennett & Elisabetta Iossa, 2006.
"Delegation of Contracting in the Private Provision of Public Services,"
Review of Industrial Organization,
Springer;The Industrial Organization Society, vol. 29(1), pages 75-92, September.
- John Bennett & Elisabetta Iossa, 2005. "Delegation of Contracting in the Private Provision of Public Services," Economics and Finance Discussion Papers 05-15, Economics and Finance Section, School of Social Sciences, Brunel University.
- Elisabetta Iossa, 2005. "Delegation of Contracting in the Private Provision of Public Services," The Centre for Market and Public Organisation 05/125, Department of Economics, University of Bristol, UK.
- Radulovic, Dusko & Skok, Srdjan & Kirincic, Vedran, 2011. "Energy efficiency public lighting management in the cities," Energy, Elsevier, vol. 36(4), pages 1908-1915.
- Steinberger, Julia K. & van Niel, Johan & Bourg, Dominique, 2009. "Profiting from negawatts: Reducing absolute consumption and emissions through a performance-based energy economy," Energy Policy, Elsevier, vol. 37(1), pages 361-370, January.
- Helle, Christoph, 1997. "On energy efficiency-related product strategies--illustrated and analysed using contracting approaches in Germany as an example," Utilities Policy, Elsevier, vol. 6(1), pages 75-85, March.
- Anna Bergek & Ksenia Onufrey, 2014. "Is one path enough? Multiple paths and path interaction as an extension of path dependency theory," Industrial and Corporate Change, Oxford University Press, vol. 23(5), pages 1261-1297.
- Fogheri A.M., 2015. "Energy Efficiency in Public Buildings," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 3-4, pages 763-784.
- Friedemann Polzin & Paschen von Flotow & Colin Nolden, 2015. "Exploring the Role of Servitization to Overcome Barriers for Innovative Energy Efficiency Technologies – The Case of Public LED Street Lighting in German Municipalities," SPRU Working Paper Series 2015-07, SPRU - Science and Technology Policy Research, University of Sussex.
- Magda M. Smink & Marko P. Hekkert & Simona O. Negro, 2015. "Keeping sustainable innovation on a leash? Exploring incumbents’ institutional strategies," Business Strategy and the Environment, Wiley Blackwell, vol. 24(2), pages 86-101, 02.
- Vine, Edward, 2005. "An international survey of the energy service company (ESCO) industry," Energy Policy, Elsevier, vol. 33(5), pages 691-704, March.
- Jackson, Jerry, 2010. "Promoting energy efficiency investments with risk management decision tools," Energy Policy, Elsevier, vol. 38(8), pages 3865-3873, August.
- 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.
- Roehrich, Jens K. & Lewis, Michael A. & George, Gerard, 2014. "Are public–private partnerships a healthy option? A systematic literature review," Social Science & Medicine, Elsevier, vol. 113(C), pages 110-119.
- Marino, Angelica & Bertoldi, Paolo & Rezessy, Silvia & Boza-Kiss, Benigna, 2011. "A snapshot of the European energy service market in 2010 and policy recommendations to foster a further market development," Energy Policy, Elsevier, vol. 39(10), pages 6190-6198, October.
- Sanderson, Susan Walsh & Simons, Kenneth L., 2014. "Light emitting diodes and the lighting revolution: The emergence of a solid-state lighting industry," Research Policy, Elsevier, vol. 43(10), pages 1730-1746.
- Edquist, Charles & Zabala-Iturriagagoitia, Jon Mikel, 2012. "Public Procurement for Innovation as mission-oriented innovation policy," Research Policy, Elsevier, vol. 41(10), pages 1757-1769.
- Hannon, Matthew J. & Foxon, Timothy J. & Gale, William F., 2013. "The co-evolutionary relationship between Energy Service Companies and the UK energy system: Implications for a low-carbon transition," Energy Policy, Elsevier, vol. 61(C), pages 1031-1045.
- Friedemann Polzin & Steve Sorrell & Colin Nolden, 2015. "Innovative Procurement Frameworks for Energy Performance Contracting in the UK Public Sector," SPRU Working Paper Series 2015-31, SPRU - Science and Technology Policy Research, University of Sussex.
- Li, Xun & Lopez, Rigoberto A., 2015. "Energy Price Transmission and Retail Milk Prices," Working Papers 38, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
- Li, Xun & Lopez, Rigoberto A., 2015. "Energy Price Transmission and Retail Milk Prices," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205318, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
- Sorrell, Steve, 2007. "The economics of energy service contracts," Energy Policy, Elsevier, vol. 35(1), pages 507-521, January.
- J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LP, edition 2, number long2, January.
- Suhonen, Niko & Okkonen, Lasse, 2013. "The Energy Services Company (ESCo) as business model for heat entrepreneurship-A case study of North Karelia, Finland," Energy Policy, Elsevier, vol. 61(C), pages 783-787.
- Bertoldi, Paolo & Rezessy, Silvia & Vine, Edward, 2006. "Energy service companies in European countries: Current status and a strategy to foster their development," Energy Policy, Elsevier, vol. 34(14), pages 1818-1832, September.
- Ang, B.W. & Choong, W.L. & Ng, T.S., 2015. "Energy security: Definitions, dimensions and indexes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 1077-1093. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:94:y:2016:i:c:p:317-330. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.