Comprehensive Analysis of Energy-Saving Business and Competitive Technologies

SUMMARY

This report describes the current state of the energy-saving business; specifically, we are presenting research results and analysis, based on an energy-saving and efficiency improvement business study of both the power companies and the Energy Service Companies, or the ESCOs.

Power companies in the U.S. are facing fierce competition due to the deregulation of the electrical power market. We tend to think that if the power companies pursue energy-saving policies, it will be akin to putting a noose around their own neck. However, in the situation where an energy crunch exists, rather than investing in a new power generation plant or buying electricity from far away, lowering the power load could be a better solution. Also, if launching new programs for energy efficiency improvement or encouraging use of renewable energy at the state level is thought to be necessary, it is easy to assume the power companies might calculate and conclude that by promoting energy savings, capital investment could be less.

Meanwhile, private sector, for-profit ESCOs -- whose purpose is aiming for the highest revenue -- have established a profit model, and money-making structure, based on past accomplishments. Total energy-saving business revenue for the fourteen ESCOs we studied in this research project was 6, 410 million dollars; eleven ESCOs were profitable, one ESCO suffered a loss, and two ESCOs had results that were unclear. While the vitality of the ESCO business seemed to be on the decline, based on the research findings, we came to the powerful realization and conclusion that the ESCO business is still quite healthy.

This report accurately portrays the U.S. energy-saving business by presenting the power company's and the ESCO's approaches, with actual examples to help the reader. We would be most happy if this report helps your business.

TABLE OF CONTENTS

1 Executive Summary

2 Market & Industry Structure of ESCO & Public Funded Energy Conservation Programs

• 2.1Electric Utility's Energy Saving Business Operation and Flow
• 2.2 Energy Services Company (ESCO) Business Operation and Flow
  • 2.2.1 ESCO's Performance Contracting Energy saving business model flowchart
• 2.3 Money Flow in the energy efficiency and conservation market
  • 2.3.1 Internal Financing
  • 2.3.2 Debt Financing
  • 2.3.3 Lease and lease-purchase agreement
  • 2.3.4 Energy Savings "Performance Contract"
  • 2.3.5 Electric Utility/ Public funds rebates and financing

3 Market Business Players

• 3.1 Current Status of Electric Utility for Energy-Efficiency Programs
• 3.2 Other Major Electric Utility companies with Energy Efficiency Programs
  • 3.2.1 Major Utilities By Ranking, Revenue, P/L and No of Employee having Energy Saving programs
  • 3.2.2 Major ESCO By Ranking, Revenue, P/L and Advantage for Energy Saving Business

4 Major Player's Alliance Map and Researcher's Analysis about Competitiveness

• 4.1 Electric Utility Company Segment
  • 4.1.1 Northeast Utilities Example

5 Major Customer Profile by Industry by Large business share

• 5.1 Retail and Small Businesses
  • 5.1.1 Retail
  • 5.1.2 Small-scale businesses
• 5.2 Schools/Colleges/Higher education
  • 5.2.1 Schools/Colleges
  • 5.2.2 Higher Education (University)
• 5.3 Commercial
• 5.4 Industrial
• 5.5 Federal/State/Local Buildings

6 Actual Case Study (10) by Customer Segment

• 6.1 Retail and Small Business Customer & Revenue/Profit Model
• 6.2 Schools/Colleges/Universities & Revenue/Profit Model
• 6.3 Industrial & Revenue/Profit Model
• 6.4 Commercial & Revenue/Profit Model
• 6.5 Federal/State/Municipal Buildings & Revenue/Profit Model

7 Business demand Status and Forecast

• 7.1 ESCO Market Segmentation
• 7.2 Energy Conservation Industry Size and Forecast

8 Overall Current Growing Areas & New Business Model in the U.S. Electric Power Industry

• 8.1 Electricity Deregulation
• 8.2 Impact of Electricity Deregulation on Energy Efficiency and Conservation

9 Key Factors to make a profit of Energy Saving Businesses

List of Tables

• Table 3-1 Current Status of Electric Utility for Energy -Efficiency Programs (E.E.P)
• Table 3-2 Other Major Electric Utility Companies with Energy Efficiency Programs
• Table 3-3 Major Utilities at a Glance
• Table 3-4 Major ESCO by Ranking, Revenue, P/L and Advantage for Energy Saving Business
• Table 3-5 Market Share by ESCO Ownership (Categories) in 2005
• Table 6-1 The Details of Energy Conservation Measures
• Table 6-2 Energy Conservation Measures
• Table 6-3 Energy Conservation Measure
• Table 7-1 ESCO Energy Conservation Projects by Market Segment in 2005
• Table 7-2 ESCO Energy Conservation Industries Revenue 2000 - 2006
• Table 8-1 Overview of the U.S. Deregulated Energy Market
• Table 8-2 U.S. Electric Generating Capacity Margins as of 2001
• Table 9-1 High Efficient Lighting Measures Used in Energy Saving Projects
• Table 9-2 High Efficient HVA Measures
• Table 9-3 High Efficient Motors

List of Figures

• Figure 2-1 Electric Utility Operation and Flow
• Figure 2-2 ESCO Business Operation and Flow
• Figure 2-3 Performance Contracting Business Model Flowchart
• Figure 2-4 Customer - ESCO Financing Model for Performance Contracting
• Figure 2-5 Third Party Financing Model for Performance Contract (ESCO-Bank)
• Figure 2-6 Third Party Financing Model for Performance Contract (Customer-Bank)
• Figure 2-7 Benefits for Energy Savings Performance Contract Model
• Figure 2-8 Public Funded Energy Savings Programs Business Model
• Figure 3-1 Illustration of Market Share by ESCO Ownership in 2005
• Figure 4-1 Major Players Alliance Map in the State of Connecticut
• Figure 4-2 PG&E, SCE and SDG&E Alliance Map in California
• Figure 4-3 Alliance Map of Electric Utilities in Washington Major Players Alliance Map in the State of Washington
• Figure 6-1 Vendor/Contractor Revenue & Profit Model
• Figure 6-2 Electric Utility Revenue & Profit Model
• Figure 7-1 ESCO Energy Conservation Projects by Market Segment in 2005
• Figure 7-2 ESCO Energy Conservation Industries Revenue from 2000 - 2006
• Figure 8-1 Restructuring Status of the U.S. Electric Markets in 2006
• Figure 8-2 U.S. Electric Generation Capacity Margin as of 2001
• Figure 8-3 U.S. Electric Power Grid