Published: Tuesday, 24th February 2015
Cambridgeshire County Council is amongst many hundreds of councils who have entered the MJ Local Government Achievement Awards, the shortlist is to be announced in April 2015
Mobilising Local Energy Investment within the Cambridgeshire County Council
Rising energy costs, global competition for energy resources and carbon reduction; these are major strategic challenges affecting all local authorities.
At Cambridgeshire County Council we’ve been committed to supporting modest ‘invest to save’ initiatives on energy for some years. Now however, we’re stepping up to take a more ambitious leadership role, setting up mechanisms to enable investment in a wider variety of properties and at a greater scale.
We want to bring forward strategic investment into energy infrastructure for Cambridgeshire, and so far we’ve made a good start with our own investment programme, committing £15M to projects on our own sites. But this is just the beginning. We are working to a longer-term vision to ensure that economic growth in Cambridgeshire can fully capitalise the opportunity from the Cleantech sector, whilst keeping the lights on!
With support from the Council’s political leaders, officers have worked to turn the investment vision into reality through the Mobilising Local Energy Investment Cambridgeshire project.
Mobilising Local Energy Investment (MLEI) Cambridgeshire
The MLEI Cambridgeshire project won technical assistance grant support from the EU Intelligent Energy Europe programme. The aim of the grant is to build capacity and skills in local authorities to bring forward investment into energy efficiency and renewable energy generation projects.
A condition of the EU grant is that at least £15million of investment into energy projects must be evidenced by August 2015. Of this, a significant proportion is intended to come from a solar park project on County farmland and at least £5million invested into schools and County buildings for energy performance contracting.
In addition, the MLEI Project is required is set up a finance mechanism that will enable a greater scale of project delivery over the longer term. This will then provide a long term legacy for the MLEI Project. To date, Cambridgeshire County Council has created a £15M Local Authority low carbon investment fund – initially based on prudential borrowing which will be invested to generate a return. The intention is to grow and develop the fund by bringing in other private and public funding streams to continue investment on a rolling basis. Critical to the expansion of the Fund is building a strong pipeline of projects.
Finding the right delivery solution?
To deliver Energy Performance Contracting for schools it was important to procure a delivery partner. Energy Performance Contracting is a finance model based on the reduction of energy consumption in buildings and using the financial savings to pay the cost of the capital investment into measures. In this finance and delivery model, an energy services company identifies appropriate energy conservation measures, is responsible for their installation and guarantees annual energy savings. This Energy Performance Contracting model transfers the risk of performance to the supplier, as they must guarantee the energy savings to be made over the agreed payback period.
Cambridgeshire undertook an options appraisal to assess the most appropriate solution and in January 2014 Cambridgeshire County Council’s Cabinet agreed to use the National RE:FIT Framework run by Local Partnerships to procure a supplier.
Cambridgeshire working with Local Partnerships and the National RE:FIT Programme
The National RE:FIT Framework is available to all public sector organisations in the UK, streamlines the procurement process for energy performance contracting as it provides pre-negotiated, EU-regulation-compliant contracts that can be procured from a group of 12 pre-qualified specialist Energy Service Companies.
A key part of its offering is that it guarantees the energy savings (kWh) through the payback period of the project, removing the risk from the public sector organisation.
Cambridgeshire County Council appointed Local Partnerships, who helped with technical review of the potential buildings that could be involved and then the development of the tender documents for the mini competition phase. Plus they helped with the subsequent review of the tender returns and interviews. In June 2014, Cambridge CC launched their mini-competition and appointed ‘Bouygues Energies & Services FM Ltd’ in August to deliver their ambitious programme. Site assessments got underway swiftly over the summer with the first few sites now going through to formal ‘Investment Grade Proposal’ stage – a significant milestone!
Working with Local Partnerships technical RE:FIT advisors enabled a high level of confidence, when reviewing the tenders returned and also the technical solutions recommended by Bouygues. This support is now on-going and helping to support the developing partnerships with other public sector organisations and schools in the region.
Getting moving on our investment programme
Nearly thirty council owned properties have been identified for energy performance contracting works, plus, 42 out of 240 schools in the County are committed – both academies and maintained - to identifying opportunities for their schools.
A wide range of energy saving and renewable measures are being proposed, with payback periods up to 15 years and energy savings being identified between 15-20% and higher where possible.
The aim is to bring forward public sector buildings during the next 3-5 years with the scheme open to all of Cambridgeshire’s public sector partners. Cambridgeshire Police and Fenland District Council (4 of their leisure centres) have already officially signed up to work with Bouygues.
The outcomes are greater energy savings, improved learning / working environments and most importantly reduced energy and related maintenance bills. These achievements would not have been delivered under normal circumstances.
The range of Energy Conversation Measures being offered to reduce energy and bills
Below are examples of the energy conservation measures implemented across Cambridgeshire’s and their partners’ buildings. This has covered a wide number of buildings supporting proposed deep retrofits, the inclusion of renewable solutions and also better integration and optimisation of the existing mechanical, electrical and heating solutions.
· Boiler replacement and optimisation of existing plant
· Voltage optimisation
· Replacement of building management system
· Insulation and draft proofing
· Combined heat and power (CHP)
· Upgrades to air handling units and variable speed drives
· Low energy lighting and controls / Car parking lighting
· Chiller replacement
· Replace main heating circulation pumps with new high efficiency driven units
A long-term commitment
It is important to note the importance of the MLEI grant in making this work possible at a time of severe financial constraints within the Authority.
There is a high transaction cost associated with an investment programme made up of a large number of relatively small investment projects – for example an engagement programme is required with each school to explain the process and financing arrangements, and each site has unique requirements in terms of the recommended energy measures and their own ambitions.
Equally, this is a new and complex area for Council officers and there has been a steep learning curve to understand the financing and contracting arrangements, and advise senior managers and politicians appropriately.