ESCos—their role in local authority projects
Produced in partnership with Stephen Cirell of Stephen Cirell Consultancy Ltd
ESCos—their role in local authority projects

The following Energy guidance note Produced in partnership with Stephen Cirell of Stephen Cirell Consultancy Ltd provides comprehensive and up to date legal information covering:

  • ESCos—their role in local authority projects
  • What is the Energy Service Company (ESCo) model for local authority projects?
  • The Choices for an ESCo Approach
  • Why Establish An ESCo—a local authority perspective on using ESCo to supply energy
  • Local Authority energy governance activity to date
  • The types of arrangement
  • What are the local and national government policy and practical considerations that need to be borne in mind for ESCos in local authority projects vs private projects?
  • The Future Development of ESCo’s in local authority projects

What is the Energy Service Company (ESCo) model for local authority projects?

There is no single definition of what an ESCo is, and ESCo has no special legal meaning. The term has been used to describe businesses engaged in the generation, distribution and/or supply of energy to end customers, as well as those engaged in demand management, green retrofitting and other energy efficiency measures.

An ESCo can take many forms, from a single function body that looks after a heat network, to a fully licenced energy services company that is authorised by the Electricity Act 1989 (EA 1989) and/or Gas Act 1986 to sell electricity or gas on a retail basis to domestic customers (see Practice Note: An Introduction to Electricity Licensing in Great Britain). So it is essential to properly define the use of the term at all times.

We set out below some of the alternative structures that are used to establish an ESCo and the purpose for which ESCos are used:

ESCo structures

  1. an ESCo can be private sector or public sector, but in the context of this Practice Note it is civic ESCos that are under consideration

  2. an ESCo can be a joint venture between one or more public bodies, or a joint venture between a local authority and a private sector company

  3. an ESCo can be