The promotion of innovative service business models through public procurement. An analysis of Energy Service Companies in Spain

Abstract

Energy Service Companies are one of the most promising sustainable business models that may support the transition towards a more sustainable energy system and mitigate climate change. The existence of multiple barriers in the Energy sercives industry market suggest that public procurement is a useful tool to promote these innovative business models, reducing some of the extant barriers. This paper contributes empirically to analyse the role of public procurement to mitigate barriers and promote sustainable models through a multiple case study of seven Spanish regional and municipal projects centred on Energy Service Companies. The paper is based on a qualitative methodology, which combines the analysis of the projects public tenders and eight in-depth interviews with public and business managers of the energy efficiency projects. The Spanish market is highly conditioned by the large size of awarded companies and the predominance of the construction sector, while the participation of small and medium-sized enterprises is limited. The main insights gained through this research point out to the importance of Energy Services Companies to achieve environmental and economic goals. Finally, based on the analysis of barriers a set of recommendations to promote the uptake of Energy Services Companies by using public procurement are offered. These recommendations are collected in a guide that differentiates five steps, from the needs identification to the evaluation phase. In addition, solutions are proposed in accordance with the barriers identified and the type of company. In conclusion, the adequate analysis of barriers and the definition of ambitious and clear goals by the public sector support the effective use of public procurement of innovation to promote a more sustainable energy industry.