There are a wide range of possible energy service type contracts, which broadly cover the fuel supply, maintenance, repairs and billing for an energy system. Nationally these are a new and emerging service designed to simplify procedures and generate savings for the client.
- Energy Service Contracts
- Energy Supply Contracts
- Energy Performance Contracts
- Energy Service Companies (ESCO’s)
- Multi Utility Service Companies (MUSCo’s)
As with Vital Energi’s operation and maintenance services, we don’t generally provide Energy Services to system which we haven’t installed, although in exceptional circumstances we have been able to help clients with another company’s scheme that may have failed.
More commonly, we only provide Energy Services to schemes we have designed and implemented, which allows us to take complete responsibility for the quality and standard of our work.
Energy Services may be performed under an energy service agreement following capital works, or they can be provided as part of a more complete Energy Supply contract.
But whatever the circumstances and whatever the project, Vital Energi can work with clients to determine which type of contract is right for them.
What are Energy Services Contracts ?
Energy services contracts are an extension of the cover provided by operation and maintenance contracts for mechanical and electrical services in energy centres. These may also include heat and power distribution systems between, and within, connected buildings.
The key to energy services contracts is that clients can transfer risk and responsibility back to the service provider. This gives them greater certainty about future costs, as well as simplified budget and cash management. And in many cases it has allowed clients to dispense with significant overheads associated with managing energy systems.
Typically, significant savings can be passed on to clients as a result of:
- Greater economy in fuel purchase, achieved by the service provider buying from a position of strength
- Efficient plant management, procurement and replacement by the service provider
- Efficient redesign of system plant and controls
- Economies due to reduced overhead infrastructure.
Energy services contracts come in a variety of forms, the main difference being the extent to which the service provider takes on increased services and risk. In some, cases this can cause confusion, and leave doubt as to the scope of these additional responsibilities.
Vital Energi has moved to avoid these potential grey areas with a series of clear, concise contracts, in plain black and white, that mean our clients know exactly what is covered.
What are Energy Supply Contracts ?
Energy supply contracts confer a broader scope of responsibility on the service provider and usually cover fuel supply cost and plant replacement over a 15 to 25 year period, at a pre-arranged price.
Because of their broader scope they will often be financed by the service provider and repaid by the client through a standing or usage charge.
What’s new about Energy Services and Energy Supply Contracts?
Energy service contracts have been in existence in certain sectors, most notably healthcare, for many years.
What’s new is their application to developing markets, such as new build developments and urban regeneration. How well they transfer to the new markets depends on the expertise of the service provider and particularly their understanding of different client needs and the supply chain structure in these markets.
Vital Energi benefits from having a management team with a unique blend of experience of the construction industry, coupled with expertise working in a large range of energy supply businesses. This means we can ensure that contracts meet all of our clients’ requirements and expectations each time, and every time.
What are Energy Performance Contracts ?
Energy performance contracts go one step further than energy supply contracts and are based entirely on generating guaranteed savings for clients. They are not about components or services, just savings which, incidentally, can be environmental as well as financial.
The service provider would be required to perform all those services set out above however, the structure of the contact would differ greatly.
A typical energy performance contract might involve the analysis and assessment of a client’s existing and projected energy supply costs. These figures can then be compared with the service provider’s costs for energy provision, based on their alternative energy solutions.
The extent of potential savings depends on the skill of the service provider in defining a more innovative and cost effective solution to future energy needs. For instance, Vital Energi was able to guarantee the Natural History Museum and the Victoria and Albert Museum savings of around £500,000 per annum for the next 15 years on the back of an energy performance contract. There’s a full case study on page **.
What are ESCos and MUSCos?
Energy Service Companies (ESCos) is a term used when referring to companies that provide the services of an Energy Supply Contract.
Multi Utiltiy Service Companies (MUSCos) is term usually refers to companies which provide the services of an energy supply contract for an expanded range of utilities. For example, as well as the generation and distribution of heat, cooling and power, they may also supply infrastructure or complete systems for water, sewage and telecoms.
The MUSCo would typically be the owner of the assets, and would receive repayment of it’s capital investment through standing charges and/or usage charges.