Intracting: EPC applied internally following the Stuttgart model

 

Intracting is similar to EPC in the sense that the initial investment costs are recuperated through the cost savings achieved by implementing energy-saving measures, with resulting savings used to pay the costs. The difference is that contracting happens internally, services are not outsourced. In other terms, the contracting partners form part of the same entity or enterprise, which takes on different roles: customer, energy service provider and financing body.

In this internal contracting model developed by the City of Stuttgart, a revolving fund enabling the financing of energy- and water-saving measures is part of the city budget. The advantages of internal contracting (or “intracting”) are savings in costs and time for transaction and administration. Furthermore, this method easily allows small scale projects to be promoted, which might be unattractive to some external contractors.

This innovative financial tool is particularly adapted to reduce CO2 emissions in times of tight public budgets. It has been applied successfully in four German cities: Stuttgart, Kiel, Wuppertal and Dresden.

Read more here: http://www.managenergy.net/article/133#.VEQ-rL6xr-Y