Abstract: Energy Performance Contracting (EPC) is a new mechanism for energy saving. In the Energy Performance Contracting, the energy service demander and energy service company (ESCO) cooperate to save energy and share the benefit. One difficulty in actualizing the EPC is to select the best ESCO. However, there are few literatures to analyze the efficient selection mechanism. A government is used as the energy service demander and the ESCO selection based on multi-attribute reverse auction model is studied in the paper. The ESCO's strategy depends on three attributes, including the energy saving quantities supplied, the project leading time, and the sharing proportion of the energy saving benefit. A non-cooperative game model is proposed to study the multi-attribute reverse auction between a government and n qualified ESCOs. Regarding the sharing proportion of the energy saving benefits as a function of the energy saving quantities supplied and the project leading time, the optimal strategy of the ESCO can be obtained. As a result, every ESCO can determine the bidding strategy according to its actual energy-saving technologies and capabilities, and the government can directly select the winning ESCO based on the optimal combination of energy saving quantities supplied and project leading time without negotiating on sharing proportion of the energy saving benefits. Subsequently, the ESCO selection mechanism is able to avoid the bargaining procedure in determining the benefit share, and constrain the vicious competition among the ESCOs. As a result, the actualizing efficiency of the EPC project is improved. The simulation experiment discovers that, along with the increase of the number of the ESCOs, the benefits of both the government and the ESCO will decrease. As a result, the government should set some criteria to limit the number of the ESCOs participating in the auction.

Key words: Energy Performance Contracting (EPC), energy service company, multi-attribute, reverse auction