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Evolving energy service companies in China

Energy service companies (ESCOs) deliver energy efficiency projects that are financed through the resulting energy cost savings. ESCOs can thus unlock energy efficiency action by addressing barriers related to funding and technical expertise. Despite their potential, many governments still struggle to stimulate development of a market for ESCOs. Evolving Energy Service Companies in People’s Republic of China, (“China” hereafter) provides an overview of how China has built the world’s largest and fastest growing ESCO market over the past decades. This report highlights how the government’s strategic measures to set up key agencies for ESCOs, engage the State-Owned Enterprises, and encourage market play by bringing in commercial players, in line with China’s socio-economic transition, have been critical to making the Chinese ESCO model a success. Looking ahead, ESCOs in China continue to evolve, for example by using digital technologies to make their businesses more sustainable and lucrative. Based on the insights gained from a survey of major ESCOs in China, the report highlights the challenges and opportunities of digitalisation and provides some policy insights.

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