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The choice of energy saving modes for an energy-intensive manufacturer considering non-energy benefits

Ouyang, Jianjun, Shen, Houcai
Journal of cleaner production 2017 v.141 pp. 83-98
energy conservation, energy efficiency, models
In practice, energy-intensive manufacturers have two main options when improving their energy efficiency: design and implement energy efficiency projects on their own (we call this self-saving) or enter into an energy performance contracting (EPC), which mainly includes shared savings and guaranteed savings. In this paper, we will discuss an energy-intensive manufacturer facing self-saving and shared savings options and how this manufacturer chooses the optimal energy saving mode when non-energy benefits are considered. We only consider “costs and profit” as non-energy benefits and formulate an optimization model of self-saving and a Stackelberg game model of shared savings. From our model analysis, when considering only energy savings, we find that the optimal unit savings has a monotonic impact on the optimal profit of the manufacturer. Our results indicate that: the manufacturer will prefer the second option to the first when the investment cost factor ratio of the energy service company (ESCO) to the manufacturer is small; otherwise, the manufacturer will prefer the first to the second. Furthermore, when considering non-energy benefits, we find that the results change in some cases.