tim pryce, carbon trust
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Setting up and financing a carbon and resource efficiency programmeTRANSCRIPT
Carbon in the public sector
Delivering and financing a carbon reduction programme
Wednesday 25 June 2014
Tim Pryce, Head of Public Sector, Carbon Trust
We have a mission to accelerate the move to a sustainable, low carbon economy
Why set up a carbon and resource efficiency programme?
Intergovernmental Panel on Climate Change Confirms global warming trends & that human action is the dominant cause of climate change
› The IPCC is an international body created by the UN in 1988 to collect and synthetize the latest science on climate change
› The 2013 report confirms that scientists are now all but certain that climate change is caused by human action, and that it is already leading to changes in weather patterns, with extreme events on the increase
› The 2013 report also confirms the expected negative impacts of current emission pathways on the economy and society
Financial and regulatory business case
1. UK Climate Change Act – it’s the law!2. Supporting legislation and strategies such as building regulations,
DECs, NHS SDU strategy, mandatory carbon reporting3. Fast increasing international action on climate change4. Good potential to cut ongoing costs5. Stakeholder reputation and local area leadership
How to set up a carbon programme
Build a team
Nominate an empowered carbon and resource efficiency lead. And support them with:
Visible senior engagement
Necessary Estates personnel (e.g. covering different sites or buildings)
Project leads to deliver specific projects in their remit
Engagement of wider community, e.g. students (good work experience), councillors, relevant academics
Using the GHG protocol to set a baseline
Scope 2:Utilities - indirect
Scope 3:Other indirect
Scope 1:Direct
Wider influence- teaching and research
Transport - commuting
Production of purchased materials
Transport – business
Purchased electricity*,
heat and steam
Transport – purchased product**
Fuels Combustion
Owned Transport
Process Emissions
Fugitive Emissions
Franchises and outsourcing
Waste disposal
Use of products
* Green tariffs are treated using average grid emissions factors** From/to point of ownership transfer
Covered by CRC/ EU ETSLikely to be covered by legislation soon ==
Setting carbon reduction targets
Average 5 year CO2 reduction target – 25%
Aggregate projects into a roadmap to meet targets
10%
20%
30%
40%
Yr 5 Yr 10Yr 0
10% after 5yrs from Good Housekeeping, eg: M&T, Awareness, Training, Regular inspection & Audit, DEC compliance
20% after 10yrs from Invest to Save, eg: Insulation, Lighting, Controls, Heat recovery, CHP, Fuel policy, Plant replacement, New technology
Cumulative effect
10% in 10yrs from Design & Asset Management, eg: Low CO2 new build, Property rationalisation, Procurement changes, Targets for refurb’
Build business case and get senior sign off
Build a business caseo Quantify carbon and financial savingso Clearly state all savings and payback periodso Use discounted cashflow analysis for larger projects
Board level sign offo At the highest possible levelo With financing, responsibilities, monitoring all in
place
Monitor and communicate progress
Advanced metering- in time and spaceMonitor progress against targetsCommunicate savings and outcomesCarbon Trust Standard
Carbon Trust Carbon Management programme
Building the team & setting the scope
Measuring baseline and goals
Identifying the risks & prioritising actions
Designing a cost effective strategy
Embedding carbon reduction into daily business
Mobilise1
Baseline & forecast
2Identify & quantify
3Approve
Plan
4Implement
the Plan
5
Financial business caseTechnical and project management support
Proven tools and templates
Going further - scope 3 reporting
Financing a carbon reduction programme
Options for financing your projects
In simple terms, for a public body expenditure is financed:– through your own money (cash)– though grants/ incentives– through public and private debt
But you may be able to explore other options by setting up a SPV (special purpose vehicle)
External finance- public money
Generation support:– FITs for electricity generation– RHI for heat generation
UK Government debt and loans:– NLF and PWLB– Salix– Green Investment Bank (private money too)
EU funds:– Horizon 2020 funds– European Investment Bank money
External finance- private money
Private debt financeCarbon Trust/ Siemens scheme, RBS, Aviva…
Use external ESCo supplier:– CEF framework provides contracts, suppliers and
(optionally) funding– REFIT framework is suppliers and contracts only– New Essentia framework too
SPVs or JVs make possible:– Equity finance (issuing shares)– (possibly) off balance sheet loans
Case study - Addenbrookes Cambridge
Part of Cambridge University Hospitals NHSFTNew energy centre for existing and expanded hospital siteTotal cost of £36m, funded by Aviva and GIBUsed NHS CEF framework to secure an ESCO contractorPlan owned and operated by the ESCO (Mitie) via an SPVExpected to save c. 25,000 tCO2 per year (almost 50%) and a net lifetime saving to the hospital of c. £25m
www.carbontrust.co.uk
020 7832 4662