Capacity Building on ESCO Business for Energy Service Company

On March 5, 2025, the training course “Capacity Building on ESCO Business for Energy Service Company” was held as part of the VSUEE Project.

The “Capacity Building on ESCO Business for Energy Service Company” training course is an activity under Component 2: Technical Support of the “Vietnam Scaling Up Energy Efficiency” (VSUEE) Project. The training took place from March 5 to March 7 in Hanoi and will be held in Ho Chi Minh City from March 18 to March 20, 2025.

Ms. Nguyễn Thu Phương, the VSUEE Project Coordinator, delivered the opening speech at the training course.

The industrial sector currently accounts for a significant portion (over 50%) of the total national energy consumption. Therefore, the implementation of energy-saving solutions not only helps businesses reduce production costs and improve competitiveness but also plays a crucial role in achieving sustainable development goals and reducing national greenhouse gas emissions. However, one of the biggest challenges that businesses face when implementing energy-saving projects is the limited capacity to identify, assess, implement, and finance these projects.

To address the challenges businesses face in optimizing energy use, the Energy Service Company (ESCO) model has emerged as an essential solution, contributing to enhanced energy efficiency in key energy-consuming industries. ESCO not only provides advanced technological solutions but also manages the entire process, from consulting, design, investment, and implementation to operation and maintenance. This ensures that businesses can significantly reduce energy costs without requiring substantial upfront capital investment. By linking repayment to the savings generated, the ESCO model not only boosts business competitiveness but also fosters the transition to a green economy. Therefore, expanding and promoting this model offers not only economic benefits but also plays a crucial role in realizing sustainable development goals, reducing greenhouse gas emissions, and protecting the environment.

In Vietnam, the ESCO model is seen as a promising solution to promote energy savings. However, it is still in the development stage and faces several barriers that need to be addressed. Firstly, the system of mechanisms and policies supporting ESCO is limited, lacking the strong incentives needed to encourage business participation. Additionally, the risk-averse mindset and lack of confidence in the practical effectiveness of the ESCO model have made many businesses hesitant to adopt it, especially given the limited implementation experience in Vietnam. Furthermore, there is a shortage of skilled personnel in the energy services sector to meet market demand, and advanced energy management technologies are not yet widely adopted. Moreover, the absence of transparent and reliable tools for measuring and monitoring energy-saving effectiveness further reduces the appeal of this model. These challenges require close collaboration between regulatory authorities, financial organizations, and businesses to establish a robust ESCO ecosystem, which would expand the application scale and optimize benefits for the economy.

Mr. Mai Văn Huyên, Director of the Green Development Center (the consulting unit implementing the training), introduced the program.

Acknowledging the critical role of expanding and professionalizing the ESCO model, the “Vietnam Scaling Up Energy Efficiency” project, funded by the Green Climate Fund (GCF), is being implemented in partnership with the Ministry of Industry and Trade and the World Bank. The training program, “Capacity Building on ESCO Business for Energy Service Company,” is designed to assist industrial businesses, ESCOs, and Energy Efficiency Service Providers (EESPs) in enhancing their skills and expertise in energy efficiency.

Experts and instructors from the Project’s Consulting Unit and Bách Khoa University delivered the training modules.

The training course will focus on key topics, including: (i) Enhancing capacity for identifying and developing energy-saving projects; (ii) Energy audits and financial analysis for energy efficiency projects; (iii) Introduction and application of Measurement, Reporting, and Verification (MRV) systems; and (iv) Marketing strategies and business strategies for Energy Service Companies (ESCOs) and Energy Efficiency Service Providers (EESPs).