Periodic Reporting for period 2 - eEaaS (Innovative Financing for Servitisation and Capitalization of Energy Efficiency Solutions for SMEs Efficient Equipment as a Service)
Reporting period: 2021-12-01 to 2023-11-30
Efficiency as a service (EaaS) is a business model that creates the right conditions for SMEs (and also larger companies) to access new climate-friendlier technologies without the need to provide up-front capital investment for more efficient and more expensive equipment. Thus, the EaaS model effectively 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 energy 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/remanufactured/and recyclable.
Servitisation represents an effective way to increase investments in energy efficiency needed for the economic recovery after COVID-19 and to deliver the EU targets, the Paris Agreement goals and achieve a low-carbon circular economy; indeed energy efficiency alone represents 35% of the solution to reach the climate targets. EaaS provides a long-term appealing solution to engage on a more sustainable path to Net Zero.
The overall objective of this 3-year project, launched June 2020, is to mainstream the servitisation financial model in three high potential countries in Europe – Spain, Netherland and Belgium – where energy prices are high, the concentration of SMEs is strong and the countries have shown to be early adopters of innovation. Belgium, Spain and The Netherlands are ideal candidates to disrupt the market of energy efficiency and facilitate SMEs to have access to high efficient systems.
To successfully support the markets in adopting the model, the team developed a toolkit to guide companies to offer the approach. This toolkit included the design of standardised contracts (for each country), pricing models, risk mitigation mechanisms and marketing material. In addition, a website was developed to disseminate information on the project, tools, news, and case studies created. For case studies, three videos were published: Danfoss and Aneo Retail offering Refrigeration as a Service in the retail sector, Signify with Light as a Service in industry, and EDF with Battery as a Service for the food and beverage industry.
Beyond the latter, the team supported stakeholders in implementing the model in their operations (solution providers, financiers, and customers). The team successfully managed to build the pipeline and managed to have a couple of projects signed; one in Spain with a sports center (with cooling), and one in Belgium with a nursery school (with ventilation). However, initially the team was aiming to have several millions worth of contracts signed, but challenges occurred which slowed down activities with stakeholders (among which COVID, the war in Ukraine but also challenges in implementing the model within companies' operations as well as time required for negotiations with customers) . The team deployed mitigation strategies to overcome these, but considerably more time was required to build capacity within the market.
Servitisation represents an effective way to increase investments in energy efficiency needed for the economic recovery after COVID-19 and to deliver the EU targets, the Paris Agreement goals and achieve a low-carbon circular economy; indeed energy efficiency alone represents 35% of the solution to reach the climate targets. EaaS provides a long-term appealing solution to engage on a more sustainable path to Net Zero.
The overall objective of this 3-year project, launched June 2020, is to mainstream the servitisation financial model in three high potential countries in Europe – Spain, Netherland and Belgium – where energy prices are high, the concentration of SMEs is strong and the countries have shown to be early adopters of innovation. Belgium, Spain and The Netherlands are ideal candidates to disrupt the market of energy efficiency and facilitate SMEs to have access to high efficient systems.
To successfully support the markets in adopting the model, the team developed a toolkit to guide companies to offer the approach. This toolkit included the design of standardised contracts (for each country), pricing models, risk mitigation mechanisms and marketing material. In addition, a website was developed to disseminate information on the project, tools, news, and case studies created. For case studies, three videos were published: Danfoss and Aneo Retail offering Refrigeration as a Service in the retail sector, Signify with Light as a Service in industry, and EDF with Battery as a Service for the food and beverage industry.
Beyond the latter, the team supported stakeholders in implementing the model in their operations (solution providers, financiers, and customers). The team successfully managed to build the pipeline and managed to have a couple of projects signed; one in Spain with a sports center (with cooling), and one in Belgium with a nursery school (with ventilation). However, initially the team was aiming to have several millions worth of contracts signed, but challenges occurred which slowed down activities with stakeholders (among which COVID, the war in Ukraine but also challenges in implementing the model within companies' operations as well as time required for negotiations with customers) . The team deployed mitigation strategies to overcome these, but considerably more time was required to build capacity within the market.
The Efficiency as a Service (EaaS) initiative, launched in 2020 and funded by the European Union’s Horizon 2020 research and innovation programme, focused on tailoring and mainstreaming the innovative business model of servitisation in energy intensive applications in Belgium, The Netherlands and Spain. The program, under the coordination of BASE and in partnership with Agoria (leading EaaS in Belgium), EiT InnoEnergy (leading EaaS in The Netherlands) and Anese (leading EaaS in Spain) focused to develop and deploy the model of EaaS to enable and facilitate the market transition and adoption to energy efficient equipment-as-a-service in the built infrastructure.
This briefing paper outlines the specificities of the EaaS model, how it brings value to the markets and the key activities the consortium worked on during the duration of the program, along with the tools that were developed to support solution providers, customers and financiers. Further to the latter, the report also outlines some of the key findings that were established during the period of the project: from the opportunities of the model, the status in the respective countries, the challenges to implement it and the areas where it currently works best. These findings should be considered as a means of support for stakeholders interested in deploying the model or simply in learning more about it.
With energy prices fluctuating considerably, and climate change impact being on the rise, it is key for European markets to shift to more sustainable technologies through energy efficiency and renewable solutions. Efficiency as a Service offers an interesting solution which can also incentivise the implementation of a circular economy, benefiting the economy, the people and the planet.
To continue supporting the market beyond the program duration, the learnings of the EaaS initiative have been integrated into the global Servitisation for Energy Transition (SET) Alliance. This strategic alliance is dedicated to sustaining momentum in markets, facilitating the widespread adoption of the Servitisation model, and expediting the transition to a more sustainable future. Composed of forward-thinking companies and individuals, the SET Alliance invites organisations enthusiastic about embracing the Servitisation model to become part of this transformative movement. For more news on SET, please visit (https://set-alliance.org/(opens in new window)).
This briefing paper outlines the specificities of the EaaS model, how it brings value to the markets and the key activities the consortium worked on during the duration of the program, along with the tools that were developed to support solution providers, customers and financiers. Further to the latter, the report also outlines some of the key findings that were established during the period of the project: from the opportunities of the model, the status in the respective countries, the challenges to implement it and the areas where it currently works best. These findings should be considered as a means of support for stakeholders interested in deploying the model or simply in learning more about it.
With energy prices fluctuating considerably, and climate change impact being on the rise, it is key for European markets to shift to more sustainable technologies through energy efficiency and renewable solutions. Efficiency as a Service offers an interesting solution which can also incentivise the implementation of a circular economy, benefiting the economy, the people and the planet.
To continue supporting the market beyond the program duration, the learnings of the EaaS initiative have been integrated into the global Servitisation for Energy Transition (SET) Alliance. This strategic alliance is dedicated to sustaining momentum in markets, facilitating the widespread adoption of the Servitisation model, and expediting the transition to a more sustainable future. Composed of forward-thinking companies and individuals, the SET Alliance invites organisations enthusiastic about embracing the Servitisation model to become part of this transformative movement. For more news on SET, please visit (https://set-alliance.org/(opens in new window)).
Efficiency as a service goes beyond the usual disruptive business model of servitisation.
Innovative financing schemes that are operational and ready to finance energy efficiency investments in the three European countries deemed to have the highest potential. As a set of market-based mechanisms, the model will be self-sustaining beyond the life of the project.
The team adapted and standardised training and capacity building workshops, webinars, and business workshops for key market stakeholders aiming at convincing them to engage in the project and tailor the tools to their needs.
Long-lasting training tools were created, including a Toolkit, case studies and videos.
However, as mentioned, the aim of the project was also to build a pipeline of EaaS opportunities as well as signing contracts by the end of the project. The team successfully managed to build a pipeline but challenges occurred which slowed down activities with stakeholders to sign contracts. The team deployed mitigation strategies to overcome these, but considerably more time was required to build capacity within the market. Two contracts were signed (one in Spain and one in Belgium). However since these projects have just been implemented, no measurements of impact are yet available.
The detailed status of the EaaS initiative in Belgium, the Netherlands, Spain, as well as lessons learnt and the path for mainstreaming servitisation in Europe are outlined in the EaaS Briefing.
Innovative financing schemes that are operational and ready to finance energy efficiency investments in the three European countries deemed to have the highest potential. As a set of market-based mechanisms, the model will be self-sustaining beyond the life of the project.
The team adapted and standardised training and capacity building workshops, webinars, and business workshops for key market stakeholders aiming at convincing them to engage in the project and tailor the tools to their needs.
Long-lasting training tools were created, including a Toolkit, case studies and videos.
However, as mentioned, the aim of the project was also to build a pipeline of EaaS opportunities as well as signing contracts by the end of the project. The team successfully managed to build a pipeline but challenges occurred which slowed down activities with stakeholders to sign contracts. The team deployed mitigation strategies to overcome these, but considerably more time was required to build capacity within the market. Two contracts were signed (one in Spain and one in Belgium). However since these projects have just been implemented, no measurements of impact are yet available.
The detailed status of the EaaS initiative in Belgium, the Netherlands, Spain, as well as lessons learnt and the path for mainstreaming servitisation in Europe are outlined in the EaaS Briefing.