Analysis of the EPC period deciding model based on the Game Theory

This paper establishes the decision-making model of the energy saving companypsilas (ESCO) operation period based on the game theory. At first, the whole process of energy performance contracting (EPC) is divided into three stages. Then, based on the game theory, the impact of ESCO operation period on the benefits of both ESCO and its client is analyzed. Finally, the decision-making model of the ESCO operation period is established. The relation of the ESCO operation period, which has been agreed upon by both the ESCO and its client, is positive to the development level of the energy efficiency service industry and the ESCO technique. And, its relation is negative to the client energy cost. So, the transaction cost caused by negotiation and consultation must be reduced. Once these three factors are considered comprehensively, the ESCO can ensure maximum profits by (1) improving advanced technique and maturity and ensuring core technology competence; and (2) choosing the client with potential for energy efficiency.