Combining Third-Party Capital and EaaS to Power and Fund Energy Infrastructure

Businesses across all sectors feel pressure to reduce their carbon footprint as the global conversation around climate change and greenhouse gasses intensifies. However, costs and funding sustainable infrastructure continue to be major hurdles in the energy transition. Leading public-private energy infrastructure finance programs, like the Canadian Infrastructure Bank (CIB) Aggregator Program, help unlock low-cost capital — but these funds are accessible only through pre-approved aggregators, like IonicBlue. 

Through partnerships between public and private finance and implementation teams, businesses can quickly and cost-efficiently implement a wide range of projects – from building retrofits and new construction to equipment upgrades and technology to automate energy efficiency.

Such programs present a unique opportunity for companies to address corporate ESG (Environmental, Social & Governance) and decarbonization goals while funding major infrastructure. And – critically – by combining this source of decarbonization funding with Energy-as-a-Service (EaaS), large businesses can:

• Solve deferred maintenance challenges
• Transfer risk with third-party ownership 
• Finance sustainable infrastructure
• Address energy consumption
• Replace inefficient equipment
• Decrease carbon emissions
• Protect against Debt Covenant restrictions
• Lower operating costs

Of course, there can – and should – be a positive impact on your bottom line when implementing energy-efficient infrastructure and reducing emissions.

In fact, a recent study from Oxford University revealed that transitioning to green energy – taking the 2050 net-zero concept – “is expected to save the world at least $12 trillion, compared to continuing our current levels of fossil fuel use.”

This is part of why Energy-as-a-Service – third-party ownership agreements and creative structured financing – has emerged as a game-changing solution to finance energy infrastructure. This innovative approach redefines how organizations manage energy needs while making significant strides toward a greener future – as well as cutting operating costs and solving for capital budget shortfalls. 

In this article, we’ll explore how you can combine the benefits of private capital, financing options, and EaaS to drive decarbonization through revenue-generating energy infrastructure.

Funding for Industry Decarbonization

Rather than go it alone, businesses can capitalize on both unique funding options and outside energy transition expertise by linking up with lenders specializing in energy infrastructure financing.

The Canadian Infrastructure Bank, for example, invests – via public-private partnerships – in decarbonization projects for up to 20 years. By providing below-market debt, such an approach helps incentivize private equity and serves as a catalyst for companies to pursue large infrastructure projects with less overall risk. 

A growing network of “green banks” are launching similar opportunities in the U.S. Through a variety of structures (credit enhancements or subsidized loans, for instance), green banks can cut through financial or procedural hurdles that traditionally make energy infrastructure financing difficult. 

“Generally, state and local policymakers use green banks to deliver projects that are not sufficiently met by other financial markets and to achieve desired economic development or public benefit outcomes,” according to the EPA.

At IonicBlue, we’re helping lead the way both in the U.S. and in Canada with a $100 million infusion from the CIB to provide companies with a one-stop shop for turnkey energy and infrastructure solutions. To learn more, keep reading. Below, we take a closer look at energy-as-a-service and its unique benefits.

What Is Energy-as-a-Service?

Energy-as-a-Service represents a shift from traditional energy procurement and management models to a more dynamic and customer-centric approach. Energy Service Agreements are flexible and the contract vehicle can be used for infrastructure such as chiller plants, HVAC, boilers, heat pumps, and equipment efficiency measures.

Under the EaaS model, businesses partner with an energy service provider. This jumpstarts access to a comprehensive suite of energy solutions without the need for upfront capital expenditure. 

Instead of purchasing and managing energy infrastructure outright, organizations pay for the energy services they use, often bundled with performance guarantees and ongoing support.

EaaS offers several key benefits:

• No upfront costs: This offers risk transfer and no need for capital investment in energy infrastructure.

• Performance guarantees: Providers often offer performance-based contracts that ensure energy savings and system reliability.

• Flexibility and scalability: EaaS solutions can be tailored to meet the specific needs of a business and scale as required.

• Cutting deferred maintenance costs: Through energy-efficient building retrofits and overhauling end-of-life equipment, companies save.

Key Components of EaaS in Decarbonization

Next, we’ll look at the three major Energy-as-a-Service strategies.

1. Cost & Risk Management

Financial benefits and risk mitigation are the backbone of EaaS from companies like IonicBlue, which specialize in sustainable infrastructure financing.

By outsourcing energy management to a provider, businesses avoid the risks associated with fluctuating energy prices and aging infrastructure. EaaS contracts often include fixed payment structures that align with the energy savings generated, providing a predictable and manageable cost structure. 

2. Energy Infrastructure

EaaS provides businesses with access to modern, reliable energy infrastructure without the burden of ownership or upfront capital investment. Companies can upgrade or expand their energy systems while leaving maintenance, repairs, and technology upgrades to the experts.

Whether it’s installing highly reliable and efficient chillers or boilers, implementing large-scale energy storage solutions, or upgrading electrical systems, businesses can scale their energy infrastructure to meet demand – all while avoiding costly downtime and inefficiencies associated with outdated equipment. Plus, EaaS agreements – like the ones with IonicBlue – offer guaranteed outcomes, with KPIs written into your contract.

3. Energy Efficiency Improvements

EaaS leverages smart technologies to enhance energy efficiency. This includes advanced monitoring systems, smart thermostats and scheduling, and energy-efficient lighting. By optimizing energy use and reducing waste, businesses can achieve substantial cost savings while also lowering their carbon emissions. For instance, a healthcare facility might use EaaS to implement smart HVAC systems that adjust temperatures based on occupancy or peak demand hours, thus reducing energy consumption and demand costs.

4. Renewable Energy Integration

Adopting EaaS is a primary means to integrate renewable energy sources, such as solar and wind power. EaaS providers can manage the installation and maintenance of renewable energy systems, helping businesses transition to greener energy sources without the complexities and costs associated with these technologies. For example, a manufacturing facility might partner with an EaaS provider to install solar panels and benefit from reduced reliance on grid electricity.

Implementing EaaS in Your Business

Transitioning from traditional energy models to EaaS involves several steps:

• Assessment: Evaluate your current energy usage and identify areas for improvement. An expert audit from your EaaS provider is paramount.

• Partner selection: Choose an EaaS provider with a proven track record and expertise in your industry.

• Goal alignment: Your provider proposes solutions that will meet your company’s energy demand and accomplish both efficiency and financial goals.

• Implementation: Select a turn-key service to fully integrate EaaS solutions into your operations.

• Monitoring: Your EaaS partner continuously monitors performance and adjusts strategies as needed to ensure optimal results.

Industry Decarbonization & EaaS

No matter how aggressive your corporate decarbonization goal is, EaaS is financially smart to reduce your carbon footprint and slash energy costs. This model helps finance sustainable infrastructure and introduce fixed-rate energy costs – reducing your overall exposure to energy price volatility. Companies also benefit from EaaS addressing deferred maintenance and the need to replace equipment that is at or nearing the end of useful life. And when combined with strategic financing, businesses can claim a win-win for reducing emissions with revenue-generating energy infrastructure.

At IonicBlue, we start by auditing your operations and plant, facility, or campus. Then we work with you to implement more efficient infrastructure and equipment. With unmatched access to capital, our financial engineers deploy fast and flexible funding structures, including leveraging incentives and tax benefits – passed along via Energy Service Agreements.

Our solutions optimize energy infrastructure financing – reducing your operational expenses and helping your business reduce emissions. Ready to find out how EaaS fits in your decarbonization strategy? Contact us to arrange a no-cost consultation today!