One Year Update to ESCO Companies Post-COVID

A rapid growing sector in the energy sector is the ESCO (Energy Service Company). Energy service providers offer a wide of energy solutions which include fuel flare venting, monitoring & safety, shutdowns, discontinued well recovery, vegetation control & chemical clean-up. The top intent of the ESCO is to supply noticeable savings in energy costs by producing energy audits and reviews and effectively making processes more economical in regards to energy prices.

In line with the latest papers and press originating from Canadian energy news websites, heading towards 2022 we are positioned to witness historic high petroleum prices. Conversely yet another parallel trend is governing bodies, just like Canada, are all pushing for carbon neutrality over the following 5 years. Alberta, a province of Canada, is a great example of this whereas the province generates the bulk of it’s oil stocks nonetheless the federal government often stops growth of the sector in that province by refusing to take on projects.

It is now crystal clear that the “new norm” post coronavirus is forcing companies to assess their business models and adapt accordingly. Technologies has a considerable part in the energy market and consequently energy services company (ESCOs) have changed to support this now technologically sophisticated market.

Mainly energy service providers pay attention to lowering energy consumption and saving companies on energy expenses by a number of methods including moderating energy consumption and cut rate negotiations when it comes to energy advisory firms. In the nineties with deregulation we saw the rise of ESCOs then things stunted throughout the Obama administration we witnessed reversals of regulations to again be deregulated by the current President Donald Trump. At the moment we are witness to almost certainly the largest deregulating governments the U . S . has ever experienced which is only improving with recent statements from the Trump Administration made in Texas this past week.

The stark dissimilarities regarding the Republican led government of the US and the Liberals of Canada is drastic where one trusts in sweeping deregulations whilst the other regulates the energy sector scare off investors.

There is a number of varieties of the sorts of services offered by energy services companies. Some offer wellsite heating, commissioning and start-up, vegetation management, mobile steam boilers, fuel flare vent and much more. A couple of other service include mobile steam services, water treatment, transportation, pipeline tracking, well restoration, midstream & downstream solutions and leak detection services.

Energy procurement firms also play a very important role in the management of energy expenses with the target of lowering expenditures and making efficiency a top priority in most organizations. For energy consultants as they’re also called, the principal focus is always to save their customers in the energy consumption department. These service professionals get started with undertaking what is also known as a baseline of initial energy assessment. Energy consultants use a defined start task which is always to conduct a wholesale and thorough energy audit to be later used as a measure of future energy cost savings. In many cases you will find the energy consultancy firm functioning hand-in-hand with senior leadership with each organization they are contracted by. This allows for quick decisive judgments. At this hierarchical level the energy consultants have direct access to the organizations decision makers.

Of the plethora of different service providers available, some may include shutdown service, new plant fabrication, fuel flare venting, well providers and chemical cleansing to name a few. Overall though we are on the cusp of a paradigm shift within this sector due largely in part to the pandemic that has gripped the world over the past 6 months.

Clyde Zierdt is a senior official with Tristar Energy Providers and this is what his thoughts were on the effect of COVID19 on the sector.

“What the future holds post COVID-19 is anybody’s guess but we’re going to endure like always by adapting to what everyone else is calling the new norm.”

Energy Service Companies (ESCOs) regularly use performance contracting, signifying that if the project does not deliver ROI, the ESCO is accountable to pay the difference, therefore assuring their valued clients of the energy and cost cost savings.

Since its creation in the nineties, a single US governmental program known as “Super-ESPC” (ESPC stands for Energy Savings Performance Contracts) was responsible for $2.9B in energy services companies contracts. With it being revitalized and modified in late 2008 they’ve awarded 16 organizations with what’s regarded as Indefinite delivery/indefinite quantity or IDIQ contracts priced at a minimum of $5 billion each on average. Whilst it is true there’s certainly numerous different solutions delivered under the energy service providers array, what is certainly, cost and efficiency as their primary focus.

You have probably observed that utility firms have, for sometime now, been bundling providers. That’s the progression of these energy utility organizations we previously talked about. In the U.S. and Canada this shift has already launched with leading utility organizations bundling their service providers and mating them with the bow of discounts, with the purpose to encourage people and companies to entrust them with their energy service needs. From a simply economic/business perspective this marriage of utility company and service company is genius.

Energy solutions firms but are a motley bunch that provide industrial service like shutdowns, fuel flare venting, repurposing of discontinued wells etc. service providers that the utility companies couldn’t be bothered to offer nor will they ever. These kinds of service will continuously remain private. If there’s any takeaway from this read is that energy service providers firms are going to be with us for the predictable future and adjusting to whatever the world brings its way.


Energy Services Providers & The Future After Coronavirus

A fast growing sector in the energy sector is the ESCO (Energy Service Company). service providers supply a wide of energy solutions this includes energy management, measurement and examination, resource efficiency, facilities and eco-sustainability and servicing. The greatest goal of the ESCO should be to provide sizeable cost savings in energy spending by producing energy audits and reviews and effectively making processes more streamlined pertaining to energy costs.

After their beginnings in the 1980s, energy service providers have evolved and expanded. Since COVID enveloped the world we’ve seen probably the most radical changes to this sector while trying to remain relevant. Tech plays a crucial function in the energy vertical and consequently energy services company (ESCOs) have changed to support this now technologically progressed industry.

It’s fairly unknown outside of the industry however energy costs and efficiency can be elevated and the fact is that is the principal objective for most energy service company. With deregulation in the USA energy markets in the 1990’s, the energy service business enjoyed a quick rise. Utilities, which for decades experienced the cover of monopolies with secured returns on power plant investments, now were forced to compete to supply power to quite a few of their largest clients. Energy service organizations shine in a deregulated market condition similar to the one we’ve got now with the Trump Administration.

Image courtesy of Energy Leads

In 2006 the sector group NAESCO stated energy service providers expanded by 22% and stated $2.6 billion in revenue marking an important moment for ESCOs all through the country. In Canada the popularity of energy services companies also expanded significantly primarily in the oil abundant province of Alberta.

With such a wide array of OandG service these firms provide, it’s tough to identify only a few whilst leaving out so many other important varieties. but it is worthwhile bearing in mind that within this vertical, technology has performed a pinnacle role in encouraging the industry evolution. A few other providers include water treatment, transportation, pipeline screening, leak detection, midstream & downstream solutions and energy cost savings and administration.

Energy procurement companies also play a vital factor in the management of energy expenditures with the intent of reducing prices and making efficiency a top priority in many organizations. For energy consulting firms as they are also referenced as, the primary focus is always to save their customer in the energy expenses department. Energy consultants generally begin the process of their jobs by doing a detailed energy review and establishing a start line. Developing a documented starting point after a company runs its energy review is vital. The advantages of working closely with top company management is that when a judgment has to be made its made right away. That is why energy consultants work with and are accountable to, business administrators. Whereas energy management companies work independently of the organization contracting them, it’s a reality that energy consultants work directly with senior leadership for multiple reasons.

Energy providers companies encompass a wide array of different providers and products. As to be expected across much of the world, coronavirus has forced the industry to rediscover itself and therefore we’re now seeing many providers adapt to this “new normal”.

We interviewed an executive with EnStar Energy service who had this to say about our post-COVID world.

“Nice to talk to you today so many thanks for letting me to explain. In reality we see things a little different than most by seizing this moment to reconsider how this virus will influence our work environment and adjusting what we can to support our employees healthy while staying productive.”

Energy Service Companies (ESCOs) very often utilize performance contracting, signifying that if the job does not create returns on the investment, the energy service company is accountable to cover the difference, therefore assuring their valued clients of the energy and cost cost savings.

Energy service firms understand the intricacies of sustaining governmental and other regulatory specifications to ensure they can achieve efficiency, compliancy and cost savings, for what ever business they are working with. The business of energy service can indicate many things but the one commonality with them all is the common target of decreasing energy costs and making current systems more efficient.

Long ahead of coronavirus we had already began to see utility firms begin to transform themselves and make themselves more relevant by bundling service providers you may not of previous thought they could offer. Things like internet providers now offering bundles with TV and home phone on top of the internet service. It’s become common in Canada and the USA that energy providers are now featuring bundled services like television, Internet and home phone but in actuality there is a great deal of this going on in the B2B (business to business) side while society monitoring and security systems are also being presented. Fundamentally as this develops, energy providers transform into energy service companies offering a diverse variety of solutions instead of focusing on only providing it.

Now before you go off thinking this spells the end of energy service providers organizations I’d like to emphasis that professional energy solutions firms or those operating in the oilfields, are a modern necessity and can never be substituted by utility titans. Although there is always the chance they could bring them more in house versus outside private firms. If there’s any takeaway from this read is that energy service companies are going to be with us for the foreseeable future and adjusting to anything that the world throws its way.

For more information regarding the energy management sector we’d encourage you to visit the fine folks over at QuotEnergy. Below find their location on Google Maps.