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London Green Fund

Energy Efficiency Urban Development Fund

Procurement Information Event

17 September 2010


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London Green Fund

Energy Effficiency Urban Development FundInformation Event

Agenda

Section ILondons Environment Strategies 9.30 10.30am

1. Welcome and Opening RemarksBrenda Theodore-Marks, Greater LondonAuthority

2. GLA Environment Strategy for LondonMartin Powell, Interim Mayors Advisor forEnvironment

3. European Investment Bank's (EIB)supporting the London Green Fund andenvironment sector London - Simon Brooks, Vice President, EIB

4. RE:FIT, Londons Building Retrofit ProgrammeEmma Strain, Head of ProjectDelivery, Energy Efficiency, LDA

5. Questions & Answers

Comfort break 10.30

10.50am

Section IIEnergy Eff iciency UDF Procurem ent 10.50 11.30am6. Energy Efficiency UDF ProcurementFrank Lee, Head of Holding Funds and

Advisory Northern Europe, EIB

7. Questions & Answers

Networking and refreshments 11.30 12.00pm


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London Green Fund

Energy Efficiency UDFInformation Event

Section I Londons Environment Strategies


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Environmental Strategy For

London

Martin Powell

Interim Mayoral Advisor for Environment

Friday 17th

September 2010


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Overview of Presentation

London Context and Key Facts

Mayoral Strategies and Priorities

The Mayor is committed to London becoming the greenest city

in the world and a city that becomes a world leader inimproving the environment.


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Challenge for London

Private investors are not currently investing in areas such asretrofitting and decentralised energy.

Projects are too small, too risky, and lack sufficient

precedents to attract finance.

Solutions & investment cannot be addressed by the public

sector alone

The London Green Fund will invest in projects in the form of

equity, loan or guarantee and returns arising from successful

investments will be returned to the fund.


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Mayors Statutory Strategies

The Mayor has general power to promote economicdevelopment in Greater London (GLA Act 1999)

Mayors Economic Development Strategy

Vision & Objectives for the next 20 years

Draft Replacement London Plan

Spatial Development Strategy

Website: www.london.gov.uk


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Londons Economy

Vast, global city economy

International centre of trade & innovationCompetitiveness

Responding to Climate Change

Strengths Threats

Making London greener & cleaner

Turning Londons waste into a resource

Delivering a Low-Carbon London

Moving to a low-emission transport system

Responding to Climate Change : London Priorities


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London Key Facts

Mayor of London and EU Commissionerofficially launch fund, October 2009.

Key Facts:

London produces 22 million tonnes of waste per year

Londons waste could deliver 10-20% of Londonsenergy needs

Energy efficiency, waste & decentralised energy arethe 3 biggest carbon reduction opportunities in London


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London Green Fund

Influencing national policy / stakeholder management / communications

Olympic Fringe

EnergyEfficiency Energy Supply Waste Transport

Low Carbon

Economy

Homes Energy

EfficiencyProgramme

Better BuildingsPartnership

Re:Fit - BuildingEnergy Efficiency

Programme

Low Carbon Zones

Green500

Green Enterprise

District

Retrofit Academy

London Transport

Strategy

London Cycle Hire

Scheme & CycleSuperhighways

Low Carbon Buses

Electric Vehicle

Delivery Plan

London Mayoral Strategies

London WasteStrategies

LDA Owned EnergySupply Projects

Crystal Palace CHP

London Thames

Gateway Heat

Network

Royal Albert Basin

Energy Master

Planning

London Waste andRecycling Board

Replacement London Plan 2010

Economic

Development

Strategy

Green Jobs & Skills

Low Carbon

Economy Action

Plan

Low Carbon GLA

Fleet

Traffic flow

smoothing

London Climate Change Programmes

Strategy

Delivery

Climate change,mitigation and

energy strategy

10


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Mayoral Priorities for London

London has adopted a comprehensive climate change action plan which aimsto reduce carbon emissions by 60% compared by 2025 compared to 1990levels.

The Mayor is investing unprecedented amounts in climate change programmesin London. 100m over 3 years.

The programmes aim to devise structures and financial models that allow forlarge-scale roll out of programmes across London.

The Mayor of London is committed to addressing the challenge of climatechange and has signed up to the Covenant of Mayors and Eurocities ClimateChange Declaration.


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Priorities into Action

Being more efficient and using greener technologies Making smarter choices

Decentralised energy & waste

Investing in cogeneration and energy networks

Mass market uptake of green technologies

RESULTS

Reduce fragmentation of programmes and increase impact Enable commercial returns to be made alongside the delivery ofmeasured financial and non-financial (e.g. carbon) benefits


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EIB supporting the

London Green Fund andenvironmental sector

Simon Brooks

Vice PresidentEuropean Investment Bank


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EIB supporting the London Green Fund

EIB is the principal JESSICA promoterand Holding Fund Manager in the UK

and across the EUincluding London

Overview of EIB JESSICA Task Force

What is JESSICA?

JESSICA in London

Holding Fund

Urban

Development

Fund

Project Portfolio

Loans, equity

or guarantees


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EIB - growing commitment to climatechange action

Our role in the London GreenFund is part of a wider

commitment to climate change

action across Europe

Climate change lending is key to

meeting the Banks objectives

In 2009 EIB funded over EUR 25

billion of climate change action

projects (32% of total lending)

The EIBs support to the energy

efficiency sector includes:

ELENA

Investment of EUR 2.2 billion across

the EU in last 2 years

3

221

295

3

5

4

73

232

3369

130

42

3

40 60

226

100

118

48

70

224

EIB lending to EU energy efficiencym


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Londons building retrofit programme

September 2010

Formerly

known as

BEEP


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17

London Mayors 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 (2009)

Reduction in greenhouse

gas emissions by 20%

below 1990 levels by 2020

20% increase in

renewables

20% cut in energy

consumption

The Mayor is committed to London becoming the greenestcity in the world and to a city that becomes a world leader in

improving the environment


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43% of Londons total CO2 emissions are from Commercial &

Public Sector buildings

CO2 emissions from London, 2006

(excluding aviation)100% = 47.5million tonnes CO2

Commercial & Public Sector CO2 emissions

from London, 2006100% = 20.5million tonnes CO2

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

Workplaces43%

Homes

36%

Transport

21%

Heating

46%

Lighting

19%

Catering

11%

IT 3%

Cooling 5%

Hot water 9%

Other 7%


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The challenge

A key challenge for London is making the existing building stock more efficient

delivering this at scale is not straight forward

Most existing efforts are only delivering incremental carbon savings

Most organisations face two major barriers: capacity and capital

Source: Survey of potential early adopters

Strong

Moderate

Weak

Other barriers noted in discussions:

Perceived disruption to operations

Pre-conceptions & unfamiliarity with performance

contracting

Lackofaccessto

capital

L

ackofinternal

cap

acity/bandwidth

Regulatory

pr

essuresaretoo

weak

N

otimportantto

our

ChiefExecutive

orCouncilLeader

Larg

ercostsavings

elsewhere

Lackofinternal

expertise

Marketcapacityto

deliver(e.g.

lead

timestoolong)

B

usinesscaseis

n

otclearenough

Otherpriorities


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An Energy service companies (ESCOs)

carry out the works and guarantee the

resulting energy savings

This guarantees the payback of the

initial investment with the delivery risk

transferred to the ESCO.

Hence this is a cost neutral means to

reduce energy bills and carbon footprint of

buildings

Insulation Building managementtechnologies

Cooling equipmentLow carbon heating

What is the RE:FIT building energy efficiency programme?

Energy Performance Contracting

approach: The public sector building

owner identifies a portfolio of buildings

they would like to retrofit, sets a target

percentage energy savings and a payback

period


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Retrofits (almost) complete on 42 buildings

10 London fire stations

10 London police buildings

22 office buildings owned by Transport for London

7million investment

28% energy savings on average

1million per year savings from energy bills

7 year simple payback


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Typical ECMs

Variable speed pumps

and fans

PC shutdown

software

Voltage optimisation Insulation

Draft proofing

Lighting upgrades &

controls

Building Management

System Controls and

strategic review

Heat recovery

Boiler replacements

1E Nightwatchman software for PC auto shutdown

Combined Heat &

Power

Solar thermal

Photovoltaic cells


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Savings being delivered


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Tranche 1

Initial Pilot

Tranche 2

Extra GLA Buildings

Tranche 3

London Public Sector

Buildings

Aim

To pilot concept of Energy

performance contracting and

help develop retrofit market

Extend approach across mix of

GLA buildings, incorporating

lessons learnt

Facilitate Energy Performance

Contracting across London

public sector buildings

Buildings Covered 42 58 maximum 40% of public sector

CO2 Reduction

(tonnes)6,057 8,371 2,500,000

M2

Retrofitted (est) 145,852 201,276 11,000,000

Total Spend (m est) 7 10 400

Status

Audit & Design Completed.

Fully-costed proposals & savings

guarantees received.

Final approvals submitted

Buildings work almost complete.

Buildings being identified.

Initial approval to proceed due

Audit & Design work due 10/11.

Buildings work due from late

10/11 onwards

Extensive market engagementundertaken and full concept

design nearing completion

Tender completed and enabling

Framework in place since Dec

2009

A pilot has proved the model we are now extending the

model to the whole of Londons public sector


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Framework Agreement to carry out works in public sector

buildings across the UK

Available for 3 years with an option to extend to a fourth year

Call offs from the agreements will be for periods of 10 years,

depending on the payback period that is selected for each

requirement

Managed by the LDA

Call offs contracts will be managed by the respective contracting

organisation

First call-offs commenced in September 2010

Buyer guidance and toolkits have been developed


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The Framework Panel Approved Suppliers

Balfour Beatty

COFELY (GDF SUEZ)

MITIE (Dalkia FM)

EDF Energy

E.ON Sustainable Energy

Business

Hoare Lea Consulting

Engineers (Parkeray)

Honeywell

Hurleypalmerflatt

Interserve

Johnson Controls

Schneider Electric - Strategic

Building Solutions

Willmott Dixon Partnerships


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Key Benefits of the RE:FIT Framework

Innovative - provides guaranteed energy savings from ESCOs& access to the latest energy saving products

Significant

energy savings

- 25% energy savings or more

Ready to use - cuts out the time delay, hassle & expense of OJEU

procurement process

Proven - Piloted by TfL, Metropolitan Police and London Fire

Brigade

Sustainable - Makes retrofit of existing buildings sustainable

Alternative

financing Solutions

- eg. Banks

- London Green FundLDA support - Support & advice with standardised contracts &

toolkits

Single Point of

Responsibility

-ESCO has contractual responsibility for

performance


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Public Sector Client Targeted (over 400)

Public

Sector

Clients

Central

Government

TfL

Met Police &

Fire Brigade

Crown

Estate

Cultural &

Heritage

London

Boroughs

NHSUniversities

&

Colleges

City of

London Corp.Historic

Palace

Judicial

Gardens

Cathedrals

Royal

Household

Professional

Institutions


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Funding Options

Own Funds

Borrowing on balance sheet

e.g.:

- Salix- Banks- Public Works Loan Board (PWLB)- London Green Fund- Others

Borrowing off balance sheet- Exploring options for service-based contracts


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London Green Fund


Section I Questions & Answers


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London Green Fund


Section II Energy Efficiency UDF procurement


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3333

Energy Efficiency Urban

Development Fund ProcurementFrank Lee and Fiona Chisholm

JESSICA Task Force

European Investment Bank


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Projects must be part of an Integrated Plan for SustainableUrban Development, which for the energy efficiency UDF is

both the London Planand the Mayors draft Climate Change

Mit igat ion and Energy Strategy

Projects must involve the establishment of:

the adaptation and/or refurbishment of existing public/voluntary sector

buildings.

improvements to existing social housing to make them more energy

efficient (max. London Green Fund commitment of 11m).

What will the energy efficiency UDF investin?

Subject to the agreement of EIB, the technical focus of the UDF may evolve

over time to include, for example, energy efficiency measures in the

private sector or wider support for decentralised energy projects.


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Energy Efficiency UDF funding structure

Project

Waste UDF

Energy efficiency

UDF

35m investment

European

Commission

London Green Fund

100m

(EIB fund manager)

LWARB LDA

Project

Project

Project

Project level repayable investment (debt/equity)

35m private sector

pari-passu co-

financing

Urban Project level public &/or private

additional financing

50m investment

Minimum 20m state aid

compliant Match Funding

50m cash32m cash and land/buildings18m cash

Complementary

Financing


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Direct lending by December 2015 to:

Public sector bodies and/or voluntary sector organisations for energyefficiency measures to their building stock;

Energy service providers that have been procured by the public/voluntary

sector to deliver a funded energy service solution for energy efficiency in

public buildings or social housing.

Secure state aid compliant match funding, at a UDF level, of at

least 20m, and to the extent possible, additional

complementary financing.

Work with EIB, LDA and other stakeholders to develop afinancing model that would provide further investment

opportunities to the UDF.

Key activities of the energy efficiency UDF


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Response requirements and timetable

Activity Timing

Deadline for Stage 1 requestsfor additional information

20 September2010

Deadline for submission ofStage 1 Expressions ofInterest

1 October2010

Notification to applicants ofoutcome of Stage 1

15 October2010

Deadline for submission ofStage 2 Offers

10 December2010

Notification to applicants ofoutcome of Stage 2 Offers Mid-January2011

Start of negotiations onOperational Agreements

Mid-February2011

STAGE 1 Expression of Interest Provide a declaration of your

suitability (including FSA

authorisation)

Illustrate credible experience

STAGE 2 OffersBusiness plan showing:

Governance and legal structure

Investment strategy

Transaction structure Sourcing of match/Co-finance

Management fees


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www.eib.org/jessica

EIB CONTACT INFORMATION

Clarification questions for Stage 1in writing only by 20 September 2010

Isabelle Rei Procurement Officer)European Investment Bank

98-100, Boulevard Konrad Adenauer

L-2950 Luxembourg

fax: +352 437 968 167

email : [email protected]


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London Green FundEnergy Efficiency UDFInformation Event

Section II Questions & Answers

esco exemplu londra london green fund energy

Documents