What is energy contract and what does energy contract mean

Energy contract management is a new type of market-oriented energy-saving mechanism.

1) The energy-using unit does not need to bear the financial and technical risks of the implementation of the energy-saving project, and at the same time reduces the energy cost of the project implementation, it can obtain the benefits brought by the implementation of energy-saving and obtain the equipment provided by ESC.

2) High energy-saving efficiency, the energy-saving rate of ESC projects is generally 5% to 40%, and the maximum can reach 50%.

3) Improve customer cash flow, with the help of ESC, customers can improve cash flow and invest limited funds in other higher priority investment areas.

4) Make customer management more scientific, customers can obtain professional energy-saving information and energy management experience with the help of ESC to implement energy-saving services, improve the quality of management personnel, and promote scientific internal management.

5) Enhance customer competitiveness, after the customer implements energy-saving improvements, it reduces energy costs and improves product competitiveness. At the same time, because of energy saving, environmental quality improvement, the establishment of a green corporate image, so as to enhance the market competitive advantage.

6) Energy conservation is more professional, because ESC is a professional "energy saving service company" that is fully responsible for energy management, so it can provide more professional and systematic energy saving technology than general technical institutions.

7) Energy saving***, ESC can promise energy saving to users, to ensure that customers can achieve energy utilization costs immediately after the implementation of the project.

9) The investment is short, the investment amount of ESC project is large, but the investment period is short. Judging from the projects that have been implemented, the investment period is 13 years on average.

10) Market mechanism and win-win results, ESC assumes the risk of energy-saving projects for customers, and only shares energy-saving results with customers after customers see energy-saving benefits, so as to achieve win-win results.

Energy contract refers to a contract in which an energy-saving service company provides necessary services to energy-using units, and energy-using units pay all the costs of energy-saving projects with reduced energy costs. The future benefits of energy contract use are to upgrade plants and equipment, reduce current operating costs, and improve energy efficiency.

[Legal basis].Article 464 of the Civil Code of the People's Republic of China.

A contract is an agreement between civil subjects to establish, modify, or terminate a civil legal relationship.

Marriage, adoption, guardianship, and other agreements related to status relationships shall be governed by the laws and regulations on such status relationships; Where there are no provisions, the provisions of this Part may be applied by reference on the basis of their nature.

Article 509.

The parties shall fully perform their obligations in accordance with the agreement.

The parties shall follow the principle of good faith, and perform obligations such as notification, assistance and confidentiality in accordance with the nature of the contract, its purpose and transaction habits.

In the process of performing the contract, the parties shall avoid wasting resources, polluting the environment and damaging the ecology.

Legal analysis: contract energy management refers to the energy-saving service company and the energy-using unit in the form of a contract to agree on the energy-saving target of the energy-saving project, the energy-saving service company to achieve the energy-saving target to provide the necessary services to the energy-using unit, and the energy-using unit to pay the energy-saving service company's investment and reasonable profits with energy-saving benefits. In essence, it is an energy-saving business method that pays the entire cost of energy-saving projects with reduced energy costs.

Legal basis: Article 7 of the Contract Law of the People's Republic of China The parties shall abide by laws and administrative regulations, respect social morality, and shall not disturb the social and economic order or harm the public interest when entering into and performing a contract.

Energy contract management refers to the provision of energy-saving diagnosis, scheme design, financing, and renovation by energy-saving service companies. For energy users, and through the sharing of energy-saving benefits, investment, to obtain reasonable profits. EPC solves the pain point of high investment risk of users, and shares energy-saving benefits with users on the premise of ensuring energy conservation for users, so it is highly accepted by users.

Especially for China's important electrical equipment such as fans, pumps, compressors, etc., the energy efficiency improvement space is still 30-40%, with great energy-saving potential and high return on investment, which is a relatively high-quality project resource for energy-saving service companies.

Energy spectrum network has long been committed to the research and application of energy efficiency management, providing users with value-added technical services such as real-time monitoring of power quality, reactive power compensation, power harmonic control, energy efficiency management, energy-saving transformation, energy storage peak shaving and valley filling. Assist enterprises in the construction of energy-efficient power plants.

Energy Performance Contracting (EPC) is an energy-saving investment method that pays the full cost of energy-saving projects with energy savingsThis energy-saving investment allows users to use future energy-saving benefits to upgrade plants and equipment, reduce current operating costs, and improve energy efficiency.

The energy-saving service company and the energy-using unit agree on the energy-saving target of the energy-saving project in the form of a contract, and the energy-saving service company provides the necessary services to the energy-using unit in order to achieve the energy-saving target, and the energy-saving service unit pays the investment of the energy-saving service company and its reasonable profit with energy-saving benefits.

The essence of the scheme is to reduce energy costs to cover the entire cost of energy-saving projects. This energy-saving investment allows customers to upgrade their plants and equipment with future energy-saving benefits to reduce operating costs; Or the energy-saving service company provides energy-saving services to customers by promising the energy-saving benefits of energy-saving projects, or contracting the overall energy cost.

In the past, contract energy management was widely known as EMC in China (this is the old name, in the latest national standards have been in line with international standards, called EPC - Energy Performance Contracting), this market-oriented mechanism is in the 70s in the western developed countries began to develop a new energy-saving mechanism based on market operation.

The national standard for contract energy management is GB T24915-2010 "Technical Specification for Contract Energy Management", and the state supports and encourages energy conservation service companies to carry out energy conservation services through the contract energy management mechanism, and enjoy financial incentives, business tax exemption, value-added tax exemption and enterprise income tax exemption.