Analysis of building energy efficiency service market entrance uncertainty based on option gambling theory

It is regarded that building energy efficiency service market (BEESM) in China is still in the government pushing and demonstration process after about ten years of development. Although Government implemented a lot of incentive policies, as the marekt supply main body, energy service company (ESCo) doesn´t really develop rapidly. To anylyse the contradiction between the management policy and the practice, the paper establishes options gambling model and analyses influencing factor of ESCo behavior choice of entering market. The analysis result shows that the intertemporal characteristic of the contract energy management (CEM) project results in ESCO´s wait and see attitude of implementing the contract energy management project, which enables the CEM investment to have the economy risk. When the income of CEM project cannot meet ESCO requirements, ESCo hesitates greatly whether to develop the CEM project or not. CEM project´s anticipated income and building energy efficiency cost are the key factors. Therefore more income, less cost and controlling CEM risk is helpful to implement CEM project for ESCo.