London’s building retrofit programme

The Mayor’s CommitmentLondon Mayor’s Climate Change Target

Today 2020 2025 2050

• Reduction in greenhouse gas emissions by 60% below 1990 levels by 2025

UK Climate Change Act (2008)

• Reduction in greenhouse gas emissions by 80% below 1990 levels by 2050.

European 20-20-20 Target

• Reduction in greenhouse gas emissions by 20% below 1990 levels by 2020

• 20% increase in renewables • 20% cut in energy

consumption

Regulatory framework

42% of London’s CO2 emissions are from workplaces

CO2 emissions from London, 2008(excluding aviation)100% = 44.7 million tonnes CO2

Commercial & Public Sector CO2 emissions from London, 2008100% = 19.2 million tonnes CO2

Workplaces42%

Homes36%

Transport22%

Heating46%

Lighting19%

Catering11%

IT 3%Cooling

5%Hot water9%

Other7%

Public sector comprises health (23%), education (47%) and offices (30%)

Run a mini competition to select an Energy Service Company (ESCo) to carry out the works

and guarantee energy savings

Payback of the investment is guaranteed with the delivery risk transferred to the ESCo

Identify buildings to retrofit, set a target energy saving and payback period

RE:FIT allows public bodies to make substantial cost savings, reduce energy bills and the carbon footprint of their buildings

The RE:FIT model

Summary

% Savings

Maximum Investment

Payback Period

Jan 2010: RE:FIT framework procurement

OJEU compliant framework established

Benefits for public sector clients:

• Provides pre-negotiated, EU compliant contracts

• No royalty costs to access the framework

• No shared savings

• Opportunity to make substantial energy and carbon saving

• Savings are guaranteed

• Low payback periods

• Uses experience to develop best practice templates/ standards

• The GLA secured funding from the European Commission under the European Local ENergy Assistance Programme (ELENA)

• ELENA funds the Programme Delivery Unit (PDU) to deliver the RE:FIT Programme

• 90% of the £2,671,000 funding is provided by ELENA and 10% by the GLA

• This means the PDU is provided at no cost to RE:FIT users

2011: Long-term funding for RE:FIT PDU

The PDU aims to leverage its operating costs 25-36 times in delivered capital investment

PDU engagement through the RE:FIT process

Gain Management

Buy-in

Secure Funding & Resources

Prepare Project Brief

Mini Competition

Investment Grade

Proposal

Install Energy

Conservation Measures

Monitor Performance

ServiceDelivery/

Marketing & Engagement

Benchmarking

Technical Support

Procurement Advice

Programme performance

• Minimum leverage required is £66,775,000 (25

times leverage)

• Aim to deliver £96,156,000 (36 times leverage)

On track to deliver minimum leverage and plan in place to achieve higher leverage

• 93 London organisations engaged

• Buildings retrofitted

• Complete/ being delivered = 235

• Square metres of space retrofitted

• Delivered/in delivery = ~1,000,00 m2

• ~24,000 tCO2 saved

• ~50,000,000 kWh saved

£9,336,660 £12,620,637

£15,040,000

£50,336,850

£26,879,000 Achieved

Secured

Committed

Planned

Forecast

Maximum Total Contract Value

RE:FIT achievements

• Universities• Hospitals• Cultural centres• Colleges

Retrofitting completed/near completion on 235 buildings including:• Schools• Fire stations• Police buildings• Leisure centres

93 London organisations are engaged with RE:FIT:

• 28 London Boroughs• 21 NHS Organisations• 44 others (Central Govt, Education Institues etc)

£3.5m energy bill savings per annum

£3.1m investment

24,000 tonnes CO2 savings

• Civic centres• Office buildings• Community buildings• Libraries

Case studies: Newham University Hospital and Royal Botanic Gardens, Kew

Ealing Council

Project: Two-phased upgrade of air handling units

Savings: 9.8% reduction in energy costs

732 tonnes of CO2 per annum to be saved

Value: £433,000 capital investment 5 year payback period

Timescale: Phase 1 completed 2011, phase 2 to complete 2013

Project: Two-phased retrofit across Kew & Wakehurst Place

Savings: 7% reduction in energy costs

760 tonnes of CO2 per annum to be saved

Value: £690,000 capital investment

Average 6 year payback period

Timescale: Installation to be completed summer 2013NHS Waltham Forest (PCT)Royal Botanic Gardens, Kew

Newham University Hospital

First building retrofitted

RE:FIT Pilot 42 buildings

£1m energy bill savings per annum

136 buildings

£2.16m energy bill savings per annum

£15.1m investment

2008 2010 2012

RE:FIT pipeline

Target > 600 buildings

Savings of up to £12m in energy bills per annum

Pipeline of 370 buildings

Savings of over £4.9m p.a. in energy bills

£26m investment

2013 2015 2025

Target 40% of public sector

buildings

Savings of up to £80m in energy

bills

Programme improvements:

• Financing options• Self finance

• Third party finance (ESCO/ LEEF/ Salix/ Banks)

• Off balance sheet

• Range of tender options

• Schools and SME programme

RE:FIT future plans

The GLA is committed to supporting retrofit activity to deliver its 2025 targets

Next steps:

• Scale up activity and deliver current

programme goals

• Secure a long-term future for RE:FIT

• Long-term funding and resourcing

strategy

• Extend to support commercial sector

London Energy Efficiency Fund

GLA European Commission (ERDF via JESSICA)LWaRB

London Green Fund£100m

(EIB holding fund manager)

£35m private sector pari-passu co-financing Waste UDF

London Energy Efficiency FundLEEF - £100m

(Amber Infrastructure with Arup & RBS)

RBS match and complementary

financing £50million

Project Project Project Project

Urban project-level public &/or private additional financing

Project-level repayable investment (debt)

£35m investment £50m investment

£18m £32m £50m

Project-level repayable investment (equity)

E-mail: REFIT@london.gov.uk

Or contact

Dimitri HadjidakisTurner & Townsend(+44) 20 7544 4110

Vicky KingstonGreater London Authority

(+44) 7920 579298

For more information

Visit: www.REFIT.org.uk

Back-up slides

• Balfour Beatty Workplace

• British Gas Trading Ltd

• Bouygues Energies & Services

FM (UK) Ltd

• COFELY Ltd

• EDF Energy Customers Plc

• E.ON Energy Solutions Ltd

• Honeywell Control Systems Ltd

• Imtech Technical Services Ltd

• Norland Managed Services

Ltd

• MCW/Breathe Energy

• MITIE TFM Ltd

• Skanska Construction UK Ltd

• Willmott Dixon Energy

Services Ltd

Framework of approved suppliers

• District Heating• CHP• VSDs on pumps and fans• PC control• Voltage optimisation• Lighting & controls• BMS controls• Heat recovery• Solar thermal• Photovoltaic panels• Cavity wall insulation• Loft insulation• Insulation to pipework• Secondary glazing• Draught proofing• Radiator reflector panels

1E Nightwatchman software for PC auto shutdown

Energy Conservation Measures include:

The Programme Delivery Unit team

Dimitri HadjidakisProgramme Director

Robert McKinnonMarketing & Engagement

Jon SpringBenchmarking

Tristan OliverTechnical Team

Roger Simpson-JonesProcurement

Chloe DeBanks-HirstProgramme Office

Merv ChapmanChloe DeBanks-Hirst

Chris SampsonElliot SmithPhil Toombs

Natalie CraneDavid Rees

Catherine Roche

Rommy PereaChris Spicer

Mark Phelpstead

Vicky KingstonGLA Programme Manager

Next steps

• Senior management buy-in

• MoU signed• Handover meeting

• Building portfolio selected

• Energy savings assessed

• Project brief• Preferred Supplier

selection

• Investment Grade Proposal (IGP)

• Building contract signed

• Capital Project

• To verify guaranteed savings

• For the duration of the contract

Memorandum of Understanding

Benchmarking & mini competition

Investment Grade Proposal & Implementation

Measurement & Verification

Tender options

Option 1 - Partner BidSelect a delivery “partner”

First building retrofitted

Option 3 – Demonstration Bid

Includes detailed technical/commercial proposal(s) on specific

building(s)

Option 4 – Portfolio BidDetailed technical/commercial

proposals for all buildings

Option 2 – Target BidBased on supplier technical

solutions