Abstract
Energy Service Company (ESCO) is expanding as a means of energy savings in industrial field in Japan. ESCO Performance Contract periods are mostly 10 years. For these long-term periods, utility costs such as fuel and electric prices will vary depending on imported crude oil and liquefied natural gas. These prices will affect ESCO profit yearly. Especially, the fuel costs make up sixty percents of the project costs in the case of ESCO which introduces mainly co-generation system, therefore it is essential to reduce fuel prices fluctuation risk, to maintain the ESCO profit as stable. We examined a way of making use of derivatives to reduce fuel prices fluctuation risk on practical plants, and picked out guidelines for derivatives. Moreover, we have developed a simulation tool to analyze ESCO profit fluctuation easily, and applied to the practical ESCO project plants. As a result, most stable fixed rate of fuel consumption used by co-generation is between 5 to 50 percent.
