Energy related outsourcing - the case of ESCOs in the Swedish pulp and paper industry

Industrial energy efficiency is stated as a major means of reducing the threat of increased global warming, caused by human use of fossil fuels. Energy service companies (ESCOs) have been expected to play an important role in promoting energy efficiency in different sectors of the economy, including industry. Energy related outsourcing in the complex energy intensive pulp and paper industry, with a continuous production process, represents one of the more challenging types of industrial outsourcing. This paper studies the role of ESCOs as a method to promote energy efficiency in the Swedish pulp and paper industry. A questionnaire was used, complemented by in-depth interviews with mill executives in order to gain more knowledge of the issue. The main conclusion from this paper is that the utilization of ESCOs in the pulp and paper industry is higher in activities with a lower level of energy integration in the production process, and on the contrary, the utilization of ESCOs is lower with a higher level of energy integration in the production process. Since the PPI is a mature industry with a globally well-known and well-spread technique, results from this paper, may plausibly be generalized for PPIs in other countries as well.