Effective Energy Carbon Reduction EAUC 12 th Annual

Effective Energy & Carbon Reduction EAUC 12 th Annual Conference - 31 st of March 2008 Kevin Mc. Donald & Paul Smyth - Salix David Stutchfield – St Andrews Our mission is to work with the public sector to reduce carbon emissions through investment in energy efficiency and renewable technologies.

Salix Finance – Agenda • Introduction to Salix Finance • Update on current HEI & FE activities • HEI activities – new opportunities from April 08 • Recent improvements to the fund • St Andrews - A Client’s perspective • Questions?

Salix Finance Introduction to Salix Finance

Salix Finance – who are we? • Independent not-for-profit company • Set up by the Carbon Trust in 2004 • Work only with public sector bodies • To reduce energy costs and carbon emissions • Show leadership in tackling climate change

Salix Finance – what do we do? • Stimulate investment • Using ring-fenced funds • Recycle all projected savings • Focus on cost-effective projects with high CO 2 reduction impact • Match funding – typically £ 250 K • Initial fund spent over 2 years • Reduce energy bills • Make capital go twice as far

Salix Finance - types of technology • The following lists the main types of technology in the fund – BEMS – Boiler replacements and controls – Cooling and heating projects including controls – Insulation Building Fabric – Lighting upgrades and controls – Motors and motor controls – Office equipment improvements and network PC management – Renewables – Swimming pool covers and controls – Ventilation – Voltage reduction

Salix Finance – All Clients projects breakdown

Salix Finance – All clients projects breakdown Insulation. Projects Insulation

Salix Finance - project criteria • Projects must deliver both CO 2 & revenue benefits • Two project compliance criteria – 5 year payback period and £ 100/t. CO 2 – 7. 5 year payback period and £ 50/t. CO 2 • Energy efficiency projects – As documented in the Salix Project tool – Or approval through suitable demonstration project • CHP and renewable energy technologies – Include a feasibility study carried out according to a recognised methodology

Salix Finance Update on current HEI & FE activities

Salix Finance - working with Higher Education Initial Pilot consisted of 8 Universities: University Cambridge Kings College Leeds Met UWE Edinburgh Glasgow St Andrews Stirling Total Salix Fund Total Fund £ 2, 079 K £ 4, 171 K Two clients have now increased funding size

Salix Finance - working with Higher Education Projects undertaken – March 08 snap shot Commissioned & In Progress Number of HEIs Number of projects Total value of projects Projected savings Annual financial savings Lifetime Energy Saving Annual CO 2 saved Total CO 2 saved Average payback - 8 93 £ 1, 870 K £ 515 K £ 4, 389 K 3, 417 T 29, 000 T 3. 63 years Average fund age is only 12 months, all clients are ahead or in line with schedule

Salix Finance - working with Higher Education HEI New Phase I clients will be University Durham Exeter Newcastle The Open Portsmouth Sheffield York Aberdeen Abertay Napier Strathclyde Total Salix Fund Total Fund £ 2, 219 K £ 4, 438 K

Salix Finance - working with FE Colleges LSC Salix / LSC Pilot Assessed applications Number of Colleges Number of projects Total value of projects - Projected savings Annual financial savings Lifetime Energy Saving Annual CO 2 saved Lifetime CO 2 saved £ 6, 441 K £ 49, 208 K 47, 047 T 359, 457 T Average payback - 230 1, 248 £ 22, 721 K 3. 52 years Grant payments to be made in April 08, projects to be completed by September 08

Salix Finance HEI activities – new opportunities from April 08

SALIX Finance – new HEI opportunities • New Salix Funds are now confirmed - DEFRA press release 13 th of March • 30 Million over three years • 10 Million earmarked for HEI (2 years x 5) • Intention is that these funds will be used in conjunction with HEFCE Revolving Green Fund – Institutional Fund • Time line for 1 st round of applications anticipated to be July 08 closing date and September 08 award

The HEFCE – SALIX Partnership Two strands to the funding with an annual application process • An institutional small projects fund - Size £ 20 M - This will use the traditional Salix model with HEFCE providing the match funding on behalf of the HEI • A transformational fund - Size £ 10 M - The purpose is to tackle large projects that will transform the institutions energy consumption and reduce its emissions

The Institutional Small Projects Fund • HEFCE will match Salix’s funding on behalf of each HEI & fund size will be determined on an individual application basis • HEI’s will be required to contribute a minimum of 25% of their fund value but they are encouraged to exceed this and those that do so will be preferred in the selection process • HEI’s will be able to use their contribution to fund projects that fall outside Salix’s criteria but still give savings Closing date of Consultation is 21 st of April 08

The Institutional Small Projects Fund – Assessment Criteria Applications to the fund will be assessed using Salix’s current assessment process. Considering the following • The number of ‘ready to go’ projects at the time of the application • The presence of energy management expertise and capability to manage the fund • The level of financial contribution from the institution

Salix Finance Recent improvements to the fund

Changes over the last 12 months - New structure Starting in February 07 we brought our client facing activities inhouse and set up a team of Client Relationship Managers. The aim was to take a more pro-active approach to working with clients. This has resulted in: • • • More time being spent with clients on-site and in group meetings Improved ‘key point of contact’ communication Support in accelerating project implementation and carbon delivery Better sharing of information and technology Two way feedback helping us to continue to improve the business model

Changes over the last 12 months - The application process To support recruitment of new clients we have appointed a Business Development Manager. We have also worked hard on the application process resulting in: • Hands-on support to explain the Fund and support the application process • A revised application document with only 7 pages. Previously it was 30 pages • A compliance tool complete with supporting technical notes that logs projects and provides both financial and carbon savings in a consistent format • Sharing of approximately 1000 projects showing clients what is working in their sector

Changes over the last 12 months - Making the model work for you Making use of the scheme management charge (SMC) For each project undertaken, a client can exercise a right to take up to 15% of the project spend as a scheme management charge which can then be used for the following options: • • • To fund resource to run the Salix programme To support consultancy investigations to establish new Salix projects To pay for investment in M&T To pay for Infrared Thermography technology To help make a new non-compliant project compliant, based on a 20% non-repayable contribution option

Salix Finance St Andrews - A Client’s perspective

Skills for Sustainability Exeter Effective Energy and Carbon Reduction David Stutchfield Energy Officer University of St Andrews 25

St Andrews University Overview • • Voted Best University in Scotland 2007 (source - Sunday Times UK University Guide table 2007) 1 st place in Scotland People and Planet SD League table 2007 6, 808 students (UG &PG) 1, 884 staff £ 120 M annual turnover 229, 792 m 2 building stock 180 buildings from 1410 AD

Measure your footprint - HECMP ·

Utilities Strategy § 4 Utilities Workstreams - Ultimate aim to be carbon neutral for energy § Information and tools (M&T and AMR systems) § Behaviour (Awareness Interhall Energy Competion, Psychology project) § Investment (Salix) § Renewables

§ Higher Education Carbon Program Effective use of. Management the advice bodies § Partnership Agreement with Carbon Trust – gives access to significant consultancy of Site Surveys for carbon reduction each year. § Energy Reduction in buildings § Renewable Resources § Design Advice on new buildings from Carbon Trust § Green Fleet / Travel Plan Review from Energy Saving Trust § Low Carbon Technologies grants from Energy Saving Trust and Low Carbon Buildings Phase 2 (GSHP, Solar PV & Thermal etc) § Big Splash Water Saving Review from Envirowise § Salix funding for specific projects 29

Effective Use of Salix Fund • • • Develop program of works based on HECMP or Carbon Trust Site Survey reports Work out what is the maximum the University can afford to match fund, and what is the maximum number of projects you have time to implement. With Salix Funding of £ 524 K, and a total of £ 1, 068 K to be spent over a two year period, St Andrews has the largest fund value of all the pilot universities.