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.