CICERO - Center for International Climate Research
Energy Food and forests Climate finance Local Solutions China The Arctic ​International Climate Policy

Energy performance contracts in the municipal sector in Norway: overcoming barriers to energy savings?

Marianne Aasen, Hege Westskog, Kristine Korneliussen

In this paper, we investigate which factors are significant for the uptake of energy performance contracts (EPCs) in Norway’s municipal sector, based on qualitative case studies. An EPC consists of a set of energy efficiency measures provided by an energy service company. The model used in Norway guarantees that savings produced by a project will finance its full cost. Estimates indicate that an EPC is a promising way of substantially increasing savings. We find that a committed individual in the administration is essential for the adoption of an EPC. Such individuals have the technical and/or economic competence to see the potential for energy savings and the organizational competence for moving an EPC through to the political level. Further, we find that the guarantee that accompanies an EPC is well suited for addressing the logic of politicians, and is crucial when the final decision is made. These findings indicate that a standard economic understanding of energy savings is not sufficient. Efforts to increase energy savings might benefit from being targeted at the contexts where measures are to be implemented and at the logic of those making energy-saving decisions.

More details