Moldmakers Can Benefit from Energy Service Companies

An energy service company (ESCO) is a professional business that provides a wide array of comprehensive energy solutions—which can encompass the design and implementation of energy savings projects, energy infrastructure outsourcing, energy conservation, energy supply and power generation.

An energy service company (ESCO) is a professional business that provides a wide array of comprehensive energy solutions—which can encompass the design and implementation of energy savings projects, energy infrastructure outsourcing, energy conservation, energy supply and power generation. These ESCOs need subcontractors to perform various services, like precision machining, quality control maintenance and parts delivery. Why not take a service you currently offer and start a dialogue with one of these companies to expand your capabilities?

 

How It Works

An ESCO will come into a company to identify and evaluate any energy-saving opportunities, develop engineering designs and specifications, implement and install energy-efficient solutions, then manage/maintain the solution to ensure that energy savings are realized during a set payback period. According to the Energy Services Coalition (ESC)—a national nonprofit organization of experts from a number of organizations that work together on a state and local level to increase energy efficiencies and building upgrades through energy savings performance contracting—a reliable ESCO will help a business implement a program from start to finish and guarantee the savings will cover all project costs.

Moldmaking industry observer and contributor Patrick Toensmeier, who recently wrote about ESCOs (moldmakingtechnology.com/articles/nl_070902.html), elaborates. “The Department of Energy (DOE) program awards Energy Savings Performance Contracts to ESCOs,” he notes. “The program has been around for a decade. It lets federal agencies achieve energy savings without up-front capital costs or special appropriations, by having private companies assume responsibility for the cost and results of installing energy-efficient systems.

“An ESCO bids to supply systems to a new or renovated building and calculates the savings based on a contract that lasts up to 25 years,” Toensmeier continues. “If a building is using $2 million worth of energy annually and the ESCO cuts that in half, the profit would be $1 million per year over the life of the contract, or as much as $25 million. This is paid to the ESCO as a loan to finance the project. The annual energy savings are used to pay down the loan. If the savings aren’t achieved, the ESCO makes up the difference.”

 

An Energizing Opportunity

The demand for increased energy efficiencies is on the upswing. Toensmeier points out that not only is the Obama administration committed to energy efficiency, but both the General Services Administration and the Department of Veteran Affairs have earmarked billions for new and renovated buildings.

There are 16 ESCOs (see ESCOs sidebar) whose contracts are in effect until December 2016. Conducting some Internet research on the ESCOs in your area may lead to contract work for your company. You also can look up alternative energy companies on the Web, and narrow your search by industry. The Department of Energy’s website (energy.gov) is a great place to start.