Article ID: | iaor20128510 |
Volume: | 52 |
Issue: | 7-8 |
Start Page Number: | 748 |
End Page Number: | 759 |
Publication Date: | Jan 2013 |
Journal: | Energy Policy |
Authors: | Kostka Genia, Shin Kyoung |
Keywords: | China, conservation, public policy |
China's energy‐service companies (ESCOs) have developed only modestly despite favorable political and market conditions. We argue that with sophisticated market institutions still evolving in China, trust‐based relations between ESCOs and energy customers are essential for successful implementation of energy efficiency projects. Chinese ESCOs, who are predominantly small and private enterprises, perform poorly in terms of trust‐building because they are disembedded from local business, social, and political networks. We conclude that in the current institutional setting, the ESCO model based on market relations has serious limitations and is unlikely to lead to large‐scale implementation of energy efficiency projects in China.