Abstract
The market for Energy Performance Contracting (EPC) in Russia is just emerging, but progress has so far been slow despite of promising forecasts. The successful realization of EPC projects requires a sound understanding of the main project risks. It highly depends on effective risk analysis and management, which should be essential parts of daily business activities of Energy Service Companies (ESCOs) and Energy Service Providing Companies (ESPCs) engaged in EPC projects in Russia. This study provides a first risk analysis framework for EPC projects executed in the industrial sector in Russia. General risks associated with EPC projects identified from the international literature were validated by Russian EPC practitioners in expert interviews. An Analytic Hierarchy Process approach was used to rank the identified risk factors and causes of risk in terms of their contribution to the riskiness of EPC projects. The data were obtained from a web-based survey among the Russian ESCOs and ESPCs. A widely usable risk management framework is proposed that is potentially very useful for EPC practitioners and can support the development of proactive risk analysis in EPC projects required both by third-party capital lenders and the further development of EPC market regulation. We also identify causes of risk related to the financial and regulatory aspects contributing the most to the riskiness of industrial sector EPC projects in Russia.
Notes
- 1.
When considering risks associated with EPC projects in Russia, we refer only to ESCOs, implying ESCOs and ESPCs, unless we explicitly differentiate between those types of company.
- 2.
Risk factors are triggered by causes of risk, affect timely achievement for the guaranteed amount of energy savings and impede the refinancing of an EPC project on time and in full. A cause of risk is defined as events or sets of circumstances “ [...] which exist in the project or its environment, and which give rise to uncertainty” [6].
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Garbuzova-Schlifter, M., Madlener, R. (2017). Risk Analysis of Energy Performance Contracting Projects in Russia: An Analytic Hierarchy Process Approach. In: Dörner, K., Ljubic, I., Pflug, G., Tragler, G. (eds) Operations Research Proceedings 2015. Operations Research Proceedings. Springer, Cham. https://doi.org/10.1007/978-3-319-42902-1_92
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