Escape from the energy cost trap by Contracting – we tell you how

Increasing costs for primary energy and electricity as well as the additional charges caused by emissions trading bother many companies. The question as to how to provide the required energy at preferably low costs with an optimum availability keeps coming up. Thus, the current keywords of the energy-political debate are “increase in efficiency”.

The improvement and optimization of energy production, thus increasing energy efficiency, mostly involves high investment costs. Many medium-sized and small companies shrink away from that. Contracting represents a possibility of how to save a lot of energy and invest little at the same time. Contracting characterizes alternative financing and operating models which allow companies to use efficiency technologies without having to deplete equity or having to borrow loan capital.

This is how Contracting works in detail: (source VFW)

An energy supplier assumes the supply of a real property with the required energy. The order may comprise the supply of refrigeration, heat, electricity, compressed air or other types of energy. The supply of energy via a third party (Contractor) may have several advantages for the customer (Contractee). The Contractee for instance does not have to invest into his energy plant and therefore gains new possibilities for his investment strategy. Furthermore, ecological and economical potentials can be released which are not used by the owner so far. There are numerous advantages for the Contractee, such as:

• the Contractor is responsible for coordination and execution
• no expenses for investments – capital can be used for other measures
• higher supply guarantee
• application of efficient and energy-saving technologies
• regular service and maintenance of the plant
• if applicable: decrease of energy consumption, less emissions, the obligation to trade emissions is no longer given.
• By having the Contractor take care of purchase, planning and erection of the plant, cost advantages and synergy effects are the result