ESCOs – Energy Services Companies

Since the early nineties we’ve seen the immersion of energy service providers. An energy service company (ESCO) is a company that offers a diverse range of energy solutions such as designs and execution of energy cost savings jobs, retrofitting, energy efficiency, energy infrastructure freelancing, power production and energy sources, and risk assessment. An energy services company is a company that boasts extensive energy solutions for its clients, this includes auditing, redesigning and implementing modifications to the ways the customer utilizes energy, the main end goal being improved efficiency.

As oil prices surge to levels prior to COVID, we can see this particular raising trend will likely stretch well inside 2022 according to numerous Canadian energy news outlets. Having said that there still remains very much opposition from federal governments such as Canada, which are executing policies that conflict with the industry in efforts to achieve carbon neutral status in the coming years. A good example of a dispute can be seen between the province of Alberta and the government. Alberta is by far the largest producer of oil in the country while the national government continually obstructs development throughout the sector in that particular province by not granting pipelines and various high valued work.

The ESCO of today is in perpetual flux and forever evolving with new energy service providers being presented as the industry advances post COVID-19. Innovation has a substantial function in the energy market and consequently energy services company (ESCOs) have adapted to serve this now technically sophisticated market.

Energy services companies are primarily distinctive from consulting technicians and equipment contractors: the former are commonly paid for their recommendations, whereas the latter are paid for the tools. With deregulation in the USA energy market in the ’90s, the energy services company enjoyed a quick boost. Utilities, which for many years valued the shelter of monopolies with guaranteed profits on power-plant assets, now were forced to compete to supply power to many of their biggest clientele. Three years in to the Trump presidency we’ve witnessed a sizable extensive deregulation in the energy industry which evidently benefits energy service companies.

In 2006 the trade group NAESCO reported energy service firms expanded by 22% and stated $2.6 billion in revenue marking a paramount moment for energy service companies all over the states. In Canada the popularity of ESCOs also expanded significantly primarily in the oil full province of Alberta.

There’s a number of variations of the sorts of service providers supplied by energy service companies. Some incorporate sustainable energy, commissioning and startup, environmental site evaluations, boiler rentals, fuel flare vent and others. The fact is we can easily go on all day about the broad list of providers ESCOs offer.

The AER – Alberta Energy Regulator, has a program called the Enhanced Production Audit Program (EPAP) which helps companies comply with requirements and supports compliance assurance program. Created through Directive 076: Operator Declaration Regarding Measurement and Reporting, EPAP

  • encourages operators to improve their measurement and reporting processes, which leads to greater compliance and may reduce the number of noncompliances found in field inspections and audits; and
  • helps operators avoid the costs related to enforcement activities created by Directive 019: Compliance Assurance—Enforcement [Rescinded by Manual 013: Compliance and Enforcement Program].

Consulting and negotiating energy rates is an additional in-demand service as energy management firms have already been springing up all over Canada and the USA to fill the need for lower prices. Contrary to popular opinion energy prices are in fact negotiable and it is energy consulting firms that can help companies see more affordable energy rates. These service contractors start with carrying out what is termed a base line of preliminary energy assessment. Energy consultants have a defined start point which is always to complete a full and thorough energy audit to be later made use of as a measurement of future energy cost savings. Generally you can find the energy consultancy firm working jointly with senior leadership in every organization they are contracted by. This allows for prompt important decisions. It is vital to see the benefit of immediate access to top management when reporting on energy finances and especially when negotiating rates.

Some of the services these firms perform might include things like turnarounds, pipeline leak detection, environmental impact studies, meter proving, mobile steam boiler services, transport and others. You don’t have to look very far to see the devastation created by COVID19. Tens of thousands of jobs in the energy sector were lost in the first half of 2020 throughout the US and Canada.

Gail Sayward is a field worker with Intricate Vegetation, an oil and gas weed control company based in Alberta, and this is what her thoughts were on the impact of COVID on the sector.

“Frankly it worries me with what the future holds for the energy industry in Canada. With political stress and the chance of a resurrection of COVID19 we are all susceptible to the government authorities of the planet.”

Energy Service Companies (ESCOs) are ostensibly different from consulting engineers and equipment contractors: the former are often rewarded for their help and advice, while the latter are paid for the hardware or equipment, and neither accept any work risk.

Since its creation in the 1990’s, a single U. S. government program identified as “Super-ESPC” (ESPC stands for Energy Savings Performance Contracts) was accountable for $2.9B in energy services companies contracts. With it being revitalized and modified in late 2008 they’ve granted 16 firms with what’s generally known as Indefinite delivery/indefinite quantity or IDIQ contracts valued at over $5 billion each on average. The business of energy service can indicate many things but the one commonality with them all is the common mission of lowering energy costs and making current processes more cost-efficient.

Nowadays its not unusual to find ISP (Internet Service Providers) that are promoting bundles with television, cellphone,alarm systems and Internet, through just one company. It’s become widespread in Canada and the US that energy providers are now offering bundled service like mobile phones, home phones, internet and TV service but actually there is so much of this going on in the B2B side while society monitoring and security systems are also being supplied. We’re now observing the development and amalgamation of utility and service providers.

So I know what you are thinking. Doesn’t this make energy solutions providers go the way of the dinosaur? Nope. Consider this like the battle of the Titans whereas the big utility organizations are the ones who will negotiate for the energy consumer dough. There are lots of service providers encompassed by the term energy providers company. Many, if not most, all correspond with boots on the ground industrial service providers like those in the oilfields. That being said we hope that 2021 brings much good fortune to the energy sector and we can look back at 2020 as a year of lessons.