Study of Contract Models in Energy Service Industry through Consideration of Carbon Tax---A Case Study of Employing LED Street Lights in an Isolated Island
Date Issued
2015
Date
2015
Author(s)
Huang, Shao-Kang
Abstract
Many countries start focusing on issues of environmental protection and climate change in recent years. In the meanwhile, the energy prices began to increase substantially which causes heavy burdens for countries including Taiwan who are lack of natural resources. Green energy thus becomes important. However, before the green energy can be used thoroughly, governments usually set up policies in advance for energy conservation and carbon deduction. In response to this situation, the energy service company (ESCO) has been developed for the purpose of improving energy waste for enterprises or governments. Projects are conducted according to energy savings performance contracts (ESPC) by which the future energy saving can be used to pay back the installation cost of energy efficiency systems through the technical support of ESCOs. How to choose a proper type of contract according to real circumstances of users is a critical issue. In the present research, analyses are carried out based on two commonly applied energy saving contracts named ‘shared savings contract’ and ‘guaranteed savings contract’. Carbon tax is taken into consideration in particular to investigate its influence on the contract. As the cost of power generation on off-shore islands is higher than that of Taiwan itself, and the scope of off-shore islands is also relative small. It would be reasonable to launch energy saving programs for initial experiments. Beside, in order to respond to the government’s project to replace traditional mercury-containing streetlights with LED streetlights, this thesis takes the replacing mercury-containing streetlights with LED streetlights on one of Taiwan’s off-shore island as an example. We first consider the cost and profit of construction, operation, maintenance of LED streetlights, and carbon trading, carbon tax, government’s grant-in-aid and other factors. Secondly, we analyze two kinds of performance contracts described above respectively to realize their payback periods and returns on investment. And then, we consider the perspective of ESCO, energy consumer, and government, respectively, to find out the appropriate energy saving business model and policies which benefit for each of themselves.
Subjects
Energy Service Company (ESCO)
Energy Saving Performance Contracts (ESPC)
Carbon Tax
Carbon Trading
LED Streetlights
Type
thesis
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