Energy services companies offer an alternative to traditional contracting. Andrew Brister talks to Anesco CEO Adrian Pike to see how it's done.
When is a building services contractor not a contractor? When it's an energy services company, it seems. Recently-formed Anesco is pointing the way forward to a bright new future for the m&e sector.

Anesco is the brainchild of CEO Adrian Pike and business partner and COO Tim Payne. Together they have a wealth of experience of contracting with Scottish and Southern Energy (SSE); Pike as group managing director of contracting, telecoms and utility solutions at SSE and Payne as MD of m&e arm Southern Electric Contracting (SEC).

The new venture has £6 million of equity investment from clean technology investor Zouk and SSE.

Anesco offers energy efficiency and microgeneration services to domestic and commercial customers, including solar power, renewable heating, insulation, and building energy management systems, as well as energy efficiency consultation.

So why did Mr Pike feel that the time was right to unclip the corporate seat belt and strike out on his own into energy services? 'I call it the perfect storm,' he explains. 'Politically, whatever party you look at is championing the green agenda. Fuel poverty is a big issue. The UK is facing energy price rises of up to 10 per cent next winter. And you've got all the incentive schemes coming together.'

Ah yes, incentives. Who could have failed to notice that among the few bright spots for m&e firms out there at the moment are the opportunities on offer from the Feed-in Tariff (FiT) scheme, Renewable Heat Incentive (RHI) and the forthcoming Green Deal and Carbon Reduction Commitment (CRC) programmes.

'You put all those together with the fact that the City wants to invest in all things green, corporate social responsibility issues, where being green is good, and we now have a moment in time where things are starting to move,' reckons Mr Pike.

Mr Pike himself is no stranger to moving forward. He joined Southern Electricity Board as an electrical apprentice at 16, very quickly being picked out and fasttracked for management.

He was part of the original team that set up SEC in 1992, seeing the organisation grow from a £40 million turnover business to just short of £500 million some 19 years later. Each year the organisation grew in revenue and net profit and became the most profitable m&e contractor in the UK.

His move across to SSE brought him into contact both with renewable companies and venture capitalists.

For example, Mr Pike represented SSE's interests on the board of leading solar PV specialist Solar Century and SSE had stakes in geothermal and heat pump businesses - all valuable experience for what was to come.

Anesco sees itself as an energy efficiency specialist, with around half of its projects being ones where the customer does not provide the capital for any technology investment upfront.

'We go into businesses and say this is how you could improve on energy efficiency. The first thing they say is look: 'We haven't got any money.'
We say that you don't need to put any money in, the capital investment will be paid for by the energy savings. From a sales point of view, that is not a difficult sell.'

Mr Pike does not see Anesco as a traditional contractor, nor does he want to be a consultant. 'I've got a funder with money that wants to be green. I've got a customer that needs to green up, that's got no cash.

I've got manufacturers looking to supply. Anesco is the glue that brings it all together. We act as a conduit to deliver a project.' The company set up Anesco Asset Management as an investment vehicle to offers firms a workable way to reduce their carbon and energy costs without using their own capital and also works with similar funders such as Solutions in Energy.

Does Mr Pike think that m&e contractors are about to muscle in on his patch? 'This is very different from traditional contracting,' he explains.

'There you take a spec, price it, try to win it on cheapest price and then try and make your money on extras.

Yes, that industry will try and move into this space but will they stop and take the leap of faith to look at what they are doing?

'I think that, because they need to make a profit each year, they will always gravitate back to what they know and understand rather than invest in the training, the marketing and the necessary design skills.'

However, he does see a threat from the big building contractors, with the likes of Carillion buying heating and renewables specialist Eaga.

There are other threats too, of course. The Government has already reduced the incentives on offer from the FiT scheme on schemes over 50kW - a good thing, thinks Mr Pike.

'What was the original aim of the scheme? It was to create green jobs and reduce carbon.

'As the UK was so far behind the rest of Europe, the large solar farms were going to German contractors so that wasn't creating many jobs. Now, with lots of sub-50kW schemes going on to roofs, we can help businesses become greener, reduce carbon and reduce electricity consumption and it's all being done by British contractors.'
Mr Pike does see a problem with government strategy on renewable heating, however. 'They've delayed announcement. There is the uncertainty of when and how to include air source heat pumps and this has led to a stalling in the whole of the market.

Heat from renewable devices makes sense and, along with PV, insulation and controls, could really help reduce carbon in the UK.'

Things will really kick in when the CRC comes into force. 'That's the big one for me,' says Mr Pike. 'That's where our model will come into its own with funding for capital investment from Anesco Asset Management and Solutions in Energy.'

Mr Pike exudes a steely confidence Given his track record, it's hard to believe he's still in his early 40s. He knows exactly what he's doing and where the market and Anesco is heading. If I was an investor, my money would be on him.

Anesco powers into billion pound energy efficiency sector

Former Scottish & Southern Energy (SSE) managing director Adrian Pike is set to capitalise on the multi-million pound energy efficiency sector with the launch of his latest venture - Anesco.

Anesco is backed by a £6 million equity investment from clean technology investor Zouk Ventures and Scottish & Southern Energy (SSE). Mr Pike and Anesco partner Tim Payne have procured part of SSE's microrenewables business for a sum of £425k to help give Anesco an immediate start.

Anesco has invested more than £200,000 in head office premises near Reading and is now rapidly growing its experienced senior team, with the creation of up to 200 jobs over the coming year. A further 500 jobs are expected to be created in the next three to four years.

While only formed at the end of November 2010, Anesco CEO Adrian Pike says that the company is on track for a turnover of £26 million this year and will make £1 million profit (EBIT). 'It's unheard of to make a profit in your first year,' says Mr Pike. He expects turnover to climb to £49 million next year. 'Demand for energy efficiency solutions from both the commercial and domestic markets is set to increase dramatically over the coming years. With the strong support and incentives being offered by the UK Government, it is likely to create a market worth in the billions per year.'

Vixen at heart of Anesco business

Anesco has turned to building services software specialist Vixen to drive the business forward. 'One of the first things we did when we set up the company was to call Vixen in. We purchased the full Vixen suite and the company hosts it for us as well,' says Anesco CEO Adrian Pike.

Vixen, part of the Causeway group, provides customised solutions for building services contractors, from cost planning and estimating to project management, financial control and service and maintenance.

'We invested in Vixen when we set up SEC back in 1992 and we were their biggest customer. I've always thought it was a brilliant system,' explains Mr Pike. 'Vixen's real-time job costing facility is pretty much unique in the construction field and it's what you need if you are running a business.

'I can hit a button and look at what we spent today, I can look at what is our profitability, what our margins are. It gives me total control in a really flexible way.'

As well as the Vixen suite, Anesco is using Causeway's Document Management software. Document Management provides a single repository for storing and organising electronic documents. It allows management and control of documents, including access control, audit trails, workflows for automating document change request, review and approval processes and indexing and search capabilities.