Energy Issues & Initiatives Presented by Helen Westwood Tuesday 2 June 2009

Energy Issues & Initiatives Energy Costs Reducing Energy Costs Croydon Contracts Carbon Reduction Commitment Investment Funding Schemes Summary Contacts

Energy Costs The reduction of Carbon Emissions is one of the Council’s priorities Utility prices have increased steeply over recent years and it remains a very volatile market. Oil, gas and coal are all finite resources. It is an environmental issue but it also has huge financial implications Croydon Council currently spends approximately £7M on utilities across it’s property portfolio and this is set to increase.

Reducing Energy Costs Change your utility contract. Have you got the best rates? Take regular meter readings, pay for actual energy used not estimated. Think about energy efficiency when replacing equipment. Invest to save - condensing boilers, insulation, energy efficient lighting and automatic controls and draught-proofing. Raising awareness – encourage an energy saving culture. A desktop computer with LCD screen uses 129 W/h in use, it still uses 53 W/h on standby. Switch it off!

Croydon Contracts Croydon currently has 4 main energy contracts, two gas and two electricity. These are fixed rate, fixed term contracts. We are in the process of aligning the contract end dates so we can combine the demand and let as one large contract – economies of scale The London Energy Project, a centrally funded Government initiative, has developed an approved Consortia Procurement Framework which aggregates the energy requirements of London Boroughs and purchases utility supplies via flexible risk- managed contracts. This framework is recommended for use within the public sector by the Office of Government & Commerce’s pan government energy project. The London Energy Project reported in May 2009, that over the past 3 years flexible versus fixed price contracts have delivered a 4.7% cost reduction and a further 4% savings are achieved through aggregation of demand, resulting from larger volumes, long-term arrangements with suppliers, reduced cost to serve and supplier margins, and removal of the price-risk premium applied to fixed-term fixed-price contracts.

Carbon Reduction Commitment The Government’s Carbon Reduction Commitment is new legislation which will come into force in April It is intended to drive efficiency in both the private and public sectors, including local authorities. It will affect a number of large organisations whose energy consumption is above a certain threshold, Croydon Council is one of these All of the Council’s carbon emissions from stationary sources will be scrutinised. Street lighting and the property portfolio across the whole Borough will be looked at, including SCHOOLS (Academies, City Technology Colleges and maintained schools) Under the scheme, carbon credits are bought to offset carbon emissions. Initially these will be at £12 per ton of CO 2 The organisations will then be rated and put in a league table where there will be a pain/gain arrangement based upon performance. If the Local Authority is towards the top of the table and performed better than the benchmark then there will be a financial reward and any surplus carbon credits can be sold. If, however, the Council underperforms there will be a fine and any shortfall in carbon credits will need to be purchased on the secondary market.

Carbon Reduction Commitment cont…

Investment Funding Schemes LAEF Fund - the Council’s Local Authority Energy Finance (LAEF) scheme is managed by the Environment & Sustainability Team. LAEF is a specialised loan fund available to schools wanting to improve the energy efficiency of their building and save money on fuel bills. The fund is designed specifically to sidestep the financial and administrative burden that can often act as a barrier to doing this type of work in schools. Repayments from the school to the Council are interest-free, over a period of 1- 5 years and no more than the energy saved. Once the loan is repaid all further savings are kept by the school. The Council are currently investigating other cashflow neutral funding opportunities with a year payback period, via energy performance contracts. The longer payback period enables much greater investment and large scale projects to be undertaken, concentrating on the energy efficiency of the whole building rather than small areas.

What the Council is doing? Improving the way we buy energy. Cost effective. Trying to eliminate ‘estimated bills’. Offering a framework for self meter reads. Developing a monthly report detailing all the bills processed so end users can track usage and costs prior to receiving recharges. Looking for further funding opportunities to enable investment in energy efficiency measures. Preparing for the Carbon Reduction Commitment. Raising awareness. In Summary

What can you do? Prepare for the Carbon Reduction Commitment. There are budget and data collection requirements. Take regular meter readings and them in to the Energy Management Team (and to your supplier if you are not in a Croydon Contract). Consider using Croydon Council’s utility supply contracts. Consider options open to your school, whether its investment through the LAEF scheme or an awareness campaign. Other school specific initiatives, such as Switch it off! The cheapest kWh is the one that isn’t used.

Contacts For more information on LAEF and to discuss the other solutions that are available to combat rising energy costs at your school, please contact: Will Walker Energy & Environment Officer ext or For more information on meter reading or to supply reads, please contact: The Energy Management Team ext or For any other energy or utility queries, please contact: Helen Westwood Facilities Manager - Utilities ext or