How to unlock the secrets of decarbonised buildings - what's holding you up?
Annual EAUC Conference, March 2010
Who we are
Self Energy UK • UK’s first decentralised Energy Services Company (ESCO) • Leader in decentralised energy delivery•Reducing energy costs, carbon emissions and increase the security of energy supplies.
E.ON Sustainable Energy • Created in 2007• Low carbon, decentralised energy advice and solutions • Cost effective response to meet new regulations in carbon reduction• Over 350 people dedicated to delivery
Working together with complementary skills and resources to deliver across the UK
Decarbonisation of buildings
• What does this mean?
– Reduce carbon intensive energy (Energy Efficiency)
– Reduce carbon in the energy (Energy Generation)
• Energy hierarchy
• Opportunities and constraints for taking carbon out of buildings
• Introduce a business model and how it could function
Energy hierarchy
Use lessUse efficientlyUse renewablyUse (fossil fuels) cleanly
This is what you’ve told us….
That’s what is holding you up!
No capital or the fear of it running out
Procurement process takes ages
We understand the technology We’re flat out just keeping it going
New regulations are coming in thick and fast
Which suppliers are the better ones? Which are dodgy?
Hundreds of new entrants into the technology market
We’d love to do loads of energy reduction, we need to do loads of energy reduction
What’s happening out there?
• Pressure to reduce costs; budgets are reducing
• Carbon Reduction Commitment Energy Efficiency scheme – more
data, more compliance
• European Performance of Buildings Directive – DECs for larger
buildings
• Green League – pressure to compete?
• HEFCE funding – linking of capital to carbon
• Important to balance the energy ‘trilemma’
What is an Energy Performance Guarantee (EPG)?
• Means by which a contractor designs an energy reduction solution for a building or portfolio of buildings he selects the equipment, installs it and maintains it, subject to complexity.
• Key features include:– Monitoring and verification, taking into account variables– Contractor acts as single point of contact for whole scheme– Contractor takes risk by underwriting the selection and
performance of the equipment• Two key variants:
– University takes responsibility for funding– Contractor funds the solution
The Energy Performance Guarantee
Total Energy savings
University
Before During partnership Beyond the end of Performance Guarantee
University
Total Energy Consumptio
n(current)
Fixed term partnership periodSavings shared during the partnership
Total Energy Consumption
(post implementation
)
Contractor only paid by
% of net savings
KNOWLEDGEFINANCE
RISK MITIGATION
Process of engagement
Energy Performance Energy Performance GuaranteeGuarantee
Energy & Carbon
Improvement Analysis
Full Feasibility
for Investment
Grade Proposal
Design, Procurement
& Implementati
on
Operate & Maintain, Monitor &
Verify
Initial conversation
Recent Case study
• Large listed building surrounded by administration and accommodation buildings
• Knowledgeable customer but inexperienced; firmly pro some technologies, anti-others
• Wanted to make a statement, keep ahead of peers
• Use opportunity to improve e.g. LED streetlights
• Some active technologies (CHP), some passive, PV and insulation. Behaviour?
• Some constraints on environmental conditions
• c£500k investment, 5 year payback, client to decide on preferred model (see graph)
Summary
• Positive developments supply side; incentives bringing new technology to
UK
• ‘Pay As You Save’ (PAYS) is the model of the moment, see ‘Green Deal’
• Energy Performance Guarantee brings good balance of risk transfer yet
agreed process and technology selection
• Energy reduction is a journey not a project
• Universities and colleges are perfect subjects due to variety and number of
co-located buildings; age, function, complexity
• So, what’s holding you up?
Thank you Paul Lewis CEO, Self Energy UK
Mark SaundersSenior Client Partner, E.ON Sustainable Energy
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