BASE, AGORIA, ANESE and Innoenergy have launched the Efficiency as a Service Project to scale up investment in energy efficiency in Europe with funding from the European Union’s Horizon 2020 programme.
BASE has launched early this month the Efficiency as a Service (EaaS) project along with AGORIA, ANESE and Innoenergy with funding received from the European Union’s Horizon 2020 research and innovation programme. The project aims to develop and deploy the servitisation (or pay-per-use) model and a financial structure to enable the transition and accelerate the market adoption of energy efficient solutions by Small and Medium-sized Enterprises (SMEs) in Belgium, the Netherlands and Spain.
The EaaS is a pay-per-use model where the end-customers only pay for the service they receive, rather than the physical product or infrastructure that delivers the service. In this case, the technology provider installs and maintains the equipment and recovers costs through periodic customer payments. These payments are fixed-cost-per-unit for the cooling service delivered (for example, euros per cubic meter of compressed air, per tonne of refrigeration, or hours of lighting), and are based on actual usage.
The EaaS model creates conditions for SMEs to access new climate-friendlier technologies without the need to provide up-front capital investment for more efficient and more expensive equipment. Thus, EaaS project removes market barriers by shifting the energy efficiency costs from an expensive, high-capital expenditure to a transparent, lower-risk operating expenditure, freeing up capital to other investment priorities.
The model also creates an alignment of incentives: it reduces the perceived technology risk for the customers as they are not required to invest in the technologies, while they are also incentivised to cut unnecessary consumption as they are charged per usage; and it gives technology providers the chance to optimise the operation of the equipment to reduce running costs by giving the customer the most efficient technologies on the market. In addition, the EaaS model also supports a circular-economy model, by incentivising technology providers to make their equipment modular, with parts being reusable/recyclable.
BASE already has significant experience in servitisation for energy efficient equipment and has been working since 2018 in developing and implementing the “Cooling as a Service Initiative (CaaS)” in different markets around the world such including Colombia, Dominican Republic, India, Nigeria and South Africa. The EaaS project builds on the learnings and tools developed by CaaS, but covering all clean and efficient equipments and tailoring the model to the European market.
“We are very excited to support the expansion of servitisation as an effective way to drive investment towards energy efficiency to Europe and including all efficient equipments; we believe EaaS is set to be a solution to help European countries to achieve their climate change goals and accelerate the transition to low-carbon economy” said Daniel Magallón, Managing Director of BASE.
The project partners are currently starting to develop a market assessment for energy efficiency servitisation, which will help in the selection of the highest potential technologies and sectors to implement the first pilot projects. The project team expects to have the tools and mechanisms ready for implementation by summer 2021.
The project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 892499 .
