Organizational Strategies For Global ESCOs

Deregulation of the utility industry is changing companies oncelimited to protected local service into global competitors. Independent"ESCOs" (energy service companies), which provide energy efficiencyprograms and performance contracting, are being integrated to offer"customer value" and "business solutions" in the new battles for marketshare. But these battles do not change the fact that energy markets aremature in the US and other developed countries. Growth in energy de-mand is to be found primarily in developing countries. Competition willtherefore be inexorably drawn to global markets.Power pla yers ha ve been entering developing markets primarilyby participation in generating assets , either as a state-o wned sector ispri vatized or as new plant is contracted. As these markets mature intoincreasing competition, energy ser vices will again emerge as part ofcustomer strategy: seeking direct relationships with de sirable customersand creatin g ne w, on-site sources of re venue . Need for new capitalequipment will drive interest in programs which pro vide plant im-pro vements, especially if capital costs can be reduced by innovativefinancing. With the availability of incentives for climate change abate-ment, the joint implementation of energy efficiency can be a leadingedge of capital investment intended to establish long-term customer re-lations.