Innovative Procurement Frameworks for Energy Performance Contracting in the UK Public Sector Innovative procurement frameworks for energy performance contracting in the UK public sector
SWPS 2015-31 (November) Disclaimer The works av ailab le h ere ar e th e resp onsibility of the ind ividu al auth or(s) and do not necess arily repres ent the views of oth er SPRU researchers. As matters of policy and practice, SPRU does not endorse individual research contributions. Guidelines for authors Papers sh all be submitted in pdf or Word format. They should con tain a title, an abstract, and keyw ords. Pap ers should be submitted to on e of th e Editors, who will process them and send
... ocess them and send them to th e appropriate Associate Editor. Tw o memb ers of SPRU will be asked to provide a short written rev iew within three weeks. The r evised v ersions of th e pap er, togeth er with a rep ly to the reviewers, should be sent to th e Associate Editor, who will prop ose to th e Editors its publication on th e series. When submitting th e authors shou ld ind icate if th e paper has already undergone peer-reviewing, in which case th e Associate Ed itors may decid e to skip internal review process. Websites SWPS: www.sussex.ac.uk/spru/research/swps IDEAS: ideas.repec.org/s/sru/ssewps.html Economics of Technological Change M.Savona@sussex.ac.uk M.Mazzucato@sussex.ac.uk Andrew Stirling Transitions A.C.Stirling@sussex.ac.uk Caitriona McLeish Civil military interface C.A.McLeish@sussex.ac.uk SPRU Working Paper Series (ISSN 2057-6668) The SPRU Working Paper Series aims to accelerate the pub lic av ailab ility of the r esear ch undertaken by SPRU-associated p eople of all categories, and exceptionally, other r esear ch that is of consider able interest within SPRU. It pres ents research r esults that in whole or p art are suitab le for submission to a refereed journal, to a sp onsor, to a major confer ence or to th e editor of a book. Our intention is to provide access to early copies of SPRU research. 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 PFEPCs due to high transaction costs. This particular organisational innovation opens the market up to new approaches to implementing cost-effective energy efficiency measures.