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Innovative Procurement Frameworks for Energy Performance Contracting in the UK Public Sector

Author

Listed:
  • Friedemann Polzin

    (Utrecht University School of Economics (USE), Sustainable Finance Lab, Kriekenpitplein 21-22, 3584 EC Utrecht, The Netherlands)

  • Steve Sorrell

    (SPRU (Science Policy Research Unit), School of Business, Management and Economics, University of Sussex, UK)

  • Colin Nolden

    (SPRU (Science Policy Research Unit), School of Business, Management and Economics, University of Sussex, UK)

Abstract

Procurement Frameworks for Energy Performance Contracting (PFEPCs) simplify the process of negotiating, developing and implementing Energy Performance Contracts (EPCs) with Energy Service Companies (ESCOs). This paper analyses their role in promoting the implementation of cost-effective energy efficiency measures in the UK public sector. Compared to conventional approaches to procuring goods and services involving detailed specifications, PFEPCs translate the challenge of upgrading, retrofitting and replacing energy related equipment and infrastructures into required outputs through functional specifications. The innovativeness of specific PFEPCs often lies less in the diffusion of ‘developmental’ innovative energy efficient solutions, although partner bidding approaches create favourable conditions for innovation. However increasing standardisation and bundling prove successful at lowering transaction cost, which enables ESCOs to address projects which would not be considered in the absence of PFEPsdue to high transaction costs. This particular organisational innovation opens the market up to new approaches to implementing costeffective energy efficiency measures.

Suggested Citation

  • 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 Policy Research Unit, University of Sussex Business School.
    • Handle: RePEc:sru:ssewps:2015-31
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    References listed on IDEAS

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    Cited by:

    1. Ben Martin, 2016. "What is Happening to our Universities?," SPRU Working Paper Series 2016-03, SPRU - Science Policy Research Unit, University of Sussex Business School.
    2. Petersen, Alexander M. & Rotolo, Daniele & Leydesdorff, Loet, 2016. "A triple helix model of medical innovation: Supply, demand, and technological capabilities in terms of Medical Subject Headings," Research Policy, Elsevier, vol. 45(3), pages 666-681.
    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. Polzin, Friedemann & Nolden, Colin & von Flotow, Paschen, 2018. "Drivers and barriers for municipal retrofitting activities – Evidence from a large-scale survey of German local authorities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 88(C), pages 99-108.
    5. Tereza Rogić Lugarić & Domagoj Dodig & Jasna Bogovac, 2019. "Effectiveness of Blending Alternative Procurement Models and EU Funding Mechanisms Based on Energy Efficiency Case Study Simulation," Energies, MDPI, vol. 12(9), pages 1-15, April.
    6. Matthew L. Wallace & Ismael Rafols, 2016. "Shaping the Agenda of a Grand Challenge: Institutional Mediation of Priorities in Avian Influenza Research," SPRU Working Paper Series 2016-02, SPRU - Science Policy Research Unit, University of Sussex Business School.
    7. Emily Cox, 2015. "Opening the Black Box of Energy Security: A Study of Conceptions of Electricity Security in the UK," SPRU Working Paper Series 2015-37, SPRU - Science Policy Research Unit, University of Sussex Business School.

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