Applying the Energy Service Company Model to Advance Deployment of Fleet Natural Gas Vehicles and Fueling Infrastructure

While natural gas has not historically been used widely as an energy source for transportation in the United States, interest in the expanded use of natural gas as a fuel for cars and trucks has grown primarily as a result of the development of abundant, domestic natural gas supplies, which has reduced the fuel’s price relative to gasoline and diesel. In addition to the prospect of fuel cost savings, natural gas vehicles (NGVs) also offer environmental benefits over gasoline and diesel vehicles, including reduced climate and air quality impacts. In some cases, heavy-duty NGVs may also be a lower cost compliance option with tightening emissions regulations compared to diesel alternatives. In addition, adoption of NGVs may offer “green” or energy security related marketing benefits. Exploring how innovative service contracts that incorporate features of the Energy Service Company (ESCO) business model can help reduce the barriers to vehicle fleet investment in NGVs and fueling infrastructure, is the purpose of this paper. An ESCO is typically a business that develops, arranges financing for, and installs projects designed to improve the energy efficiency of and reduce maintenance costs for buildings, usually over a 7 to 20 year time period. The ESCO business model is promising because NGV deployment and building energy efficiency present a similar opportunity—energy cost savings—and face similar challenges of high upfront costs, risk aversion, and information barriers. This paper (1) summarizes the opportunities and experience to date applying the ESCO model to NGVs and fueling infrastructure projects; (2) presents recommendations for companies and policymakers to help address identified barriers; and (3) lays out next steps for this project.

Language

  • English

Media Info

  • Media Type: Digital/other
  • Features: Figures; References; Tables;
  • Pagination: 35p

Subject/Index Terms

Filing Info

  • Accession Number: 01535667
  • Record Type: Publication
  • Contract Numbers: DE-EE0006085
  • Files: TRIS
  • Created Date: Jul 29 2014 10:20AM