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Report shows surge in energy efficiency projects

A surge in the number of energy efficiency projects commissioned has been reported in the latest UK Energy Efficiency Trends report published by EEVS energy analysts and Bloomberg New Energy Finance today.

Over 80% of those responding to the survey confirmed they had authorised new programmes in Q3 of 2015. This is the highest proportion of new projects recorded in a single quarter since the survey began in 2012. It also shows a significant uptick in commissioning, exceeding the long term trend of 70%.

Consumer technologies

Of the technologies being used, lighting continues to outperform other energy saving technologies (Figure 11, below). The specification and use of lighting controls grew, with a noticeable increase during Q3. Boiler controls also experienced growth, perhaps due to seasonal influences, as did projects that included efficiency measures to a building’s fabric. There was a fall in the number of measures specified for heating, ventilating and air conditioning systems.

Click here to download this graph: EET Jan 2016 Figure 11

Consumer finance

Survey responses showed that the capital cost profile of energy efficiency projects remained volatile. Q3 saw a strong volume of smaller scale projects (up to £50k) and large projects (over £500k), but the core mid-range (£50 – 500k) was down, accounting for only one in five projects.

Financing arrangements remained stable, but a trend that has emerged throughout 2015 has been the use of combination funding (a mix of in-house and external finance).

Financial payback periods returned to the long term trend of between three and four years, driven by a growth in longer five to 10-year payback projects.

Supplier landscape

Energy efficiency suppliers reporting rising national orders dropped to an all-time low in Q3, whilst overseas orders picked up for 28% of respondents. Supplier demand however remained the biggest single sectoral concern at 31%. When combined, however, 35% of suppliers were concerned about government impacts on performance, with regulation (14%) and subsidy/policy uncertainty (21%).

Corroborating these findings, Jason Thackray, Head of Energy Services at Bellrock FM, said: “In the last six months there has been significantly more interest in energy reduction technologies across the supply chain. This is a really encouraging sign that organisations are focusing on energy and therefore carbon reduction. Bellrock works closely with the supply chain to ensure our clients get the best possible return on investment.”

David Lewis, marketing manager, energy efficiency, Schneider Electric said “It is clear from this report that uncertainty around subsidies and policies exists and this remains a key challenge for the energy efficiency industry. More than this, however, it supports the argument for greater education of existing personnel within organisations, and improved optimisation of existing energy assets, alongside capital investment in technologies and services. In order to successfully fuel continued growth in energy efficiency projects, suppliers must enable greater use of information across their products and services, ensuring that businesses are equipped to make better decisions of an investment or operational nature when it comes to energy consumption.”

Commenting on the findings, Ian Jeffries, Head of Performance Management at EEVS, said “This set of quarterly market results points to something of a ‘a tale of two sectors’.

“On the one hand we have bullish consumers reporting an upbeat set of results and, in particular, an 82% commissioning rate for new energy saving products and services.”

“On the other hand, this buoyancy has not trickled down to our supplier respondents that posted a largely downbeat set of results driven by flat domestic sales and continued concerns over future demand, alongside what is increasingly felt to be an unsupportive policy and regulatory landscape.”

“Taken together – and bearing in mind the wider macro-economic picture and major global uncertainties that will also influence respondents – it is clear that there is a raft of business uncertainties to deal with. Now could be a good time to be on the consumer side of the tracks.”

Of the consumer opportunity, Michael Rudd, co-head of the International Energy Management Team at Bird & Bird LLP, said “The private sector in the UK is pioneering the delivery of energy management solutions. Funders are creating multiple, increasingly sophisticated funding products – there is good, available money in the energy efficiency space. Together with progress in creating bankable project income streams, bespoke insurance products and commoditisation of contractual documents, we are creating a very accessible energy management industry.”

Compiled from the results of a confidential, quarterly industry survey, the UK Energy Efficiency Trends Report clearly evidences industry trends and has become one of the sector’s leading sources of market intelligence. The report covers both energy suppliers and consumers, providing differentiated results for each market sector.

The report is delivered by a research partnership between EEVS and Bloomberg New Energy Finance, and supported by Bird & Bird, Bellrock and Schneider Electric.

Download the full report here.

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Green Gas plant to inject £60 million into local economy

Britain’s leading green energy company, Ecotricity, has submitted a planning application for a Green Gas Mill at Sparsholt College – a partnership that will inject £60 million into the local economy.

As part of the unique partnership, Ecotricity will finance and build the Green Gas Mill, with an initial £10 million investment, and will also help fund the development of a renewable energy centre, where the college can train the workforce necessary to support the green gas revolution coming to Britain.

Ecotricity introduced the concept of making green gas from grass in Britain early last year[i], and if the company’s application to Winchester City Council is accepted, the Green Gas Mill will pump £3 million into the local economy every year for the twenty years of its operation.

Dale Vince, Ecotricity founder, said: “We have to stop burning fossil fuels, and green gas will play a big part in helping us to achieve that in Britain – it’s good for our economy, because we’ll no longer need to import those expensive fossil fuels; it’s good for the environment, because it’s carbon neutral and creates new wildlife habitats; and it’s good for farmers, because it allows them to diversify, rely less on farming livestock, and build a more sustainable future.

“The world signed up to the limiting temperature rise to well below 2 degrees C at the Paris Climate Conference last year – that included a long term goal of being carbon neutral after 2050 and eventually carbon negative, which means taking more carbon out of the atmosphere than we put in. They’re big ambitions – and green gas is essential to that vision.

“Sparsholt is one of the first Green Gas Mills we’re looking to build in Britain – one of the first in what will be a green gas revolution in this country. And what’s particularly special is that, together with Sparsholt, we’ll be helping to train the green gas engineers Britain will need.”

The Sparsholt College Green Gas Mill, fuelled by locally harvested grass, could produce enough clean gas to power the equivalent of 4,000 homes every year.

Tim Jackson, Sparsholt College principal, said: “We’ve carried out public consultation over the past four months with local councils, farmers and residents – and the feedback has been a mix of those who are very positive to those with concerns about the impact on local roads and the visual landscape.

“I am pleased to say that we were able to provide facts and explanations to address most of the concerns and look forward to responding to more of those as these arise.

“The Green Gas Mill is the next step on the journey towards Sparsholt College developing our status as a ‘Centre for the Demonstration of Environmental Technologies’, which is being supported by Ecotricity and through a grant from the Enterprise M3 Local Enterprise Partnership.

“Creating our own green gas on site will massively cut our environmental impact and reduce our energy bills – which have made up an increasing portion of our budget over the past few years, money that could be better spent on educating our students.

“However, the fact we can share the financial and environmental benefits of this project with the local farming community is a massively positive outcome for the college.”

Up to eight specialist professional jobs will be created to run the Green Gas Mill, while the new supply contracts with farmers – providing the grass and rye feedstock required to supply the anaerobic digestion process – will also reinforce existing jobs.

Feedback from local residents has most frequently focused on concerns about extra traffic and the routes chosen to transport feedstock.

Tim continued: “We have addressed residents concerns in the planning application and can reassure people that the Green Gas Mill will only receive normal farm traffic such as tractors and trailers which are typical of the countryside.

“We will ensure deliveries don’t happen during peak traffic times, tractors stick to main roads wherever possible, do not go through Sparsholt village, and in fact even at the busiest times of year during harvest, feedstock movements would represent a very small proportion of existing college traffic and be well within the capacity of the highway network.

“The Green Gas Mill will be a key component in the College’s development of a Centre of Excellence that will produce specialist professionals to work for the green gas industry, training engineers, plant managers and technicians in what is a growth area across the agriculture, energy, waste, water and food processing sectors.”

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COP21: How construction can help tackle climate change

18 countries and over 60 organizations launch an unprecedented global alliance for buildings and construction to combat climate change.

Ministers from Cameroon, Finland, France, Morocco, Senegal and Sweden, international organizations, multinational CEOs and civil society leaders launch the alliance to speed up and scale up the potential of the sector for climate action.

18 countries (Austria, Brazil, Cameroon, Canada, Finland, France, Germany, Indonesia, Japan, Mexico, Morocco, Norway, Senegal, Singapore, Sweden, Tunisia, Ukraine, United Arab Emirates, United States of America), and over 60 organizations on Thursday launched an unprecedented Global Alliance for Buildings and Construction to speed up and scale up the sector¹s huge potential to reduce its emissions and literally build greater climate resilience into future cities and infrastructure.

The Alliance, which gathers organizations from countries to cities, NGOs, public and private organizations, networks of professionals, of cities, of companies as well as financing institutions, announced the initiative at the Lima to Paris Action Agenda Focus on Buildings, in Paris. Among other members, the International Union of Architects (UIA) now represents, through national architecture organizations, close to 1,3 million architects worldwide; the World Green Building Council (WGBC) represents 27000 companies involved in green buildings business worldwide; the Royal Institution of Chartered Surveyors (RICS) represents 180000 building surveyors globally; the European Construction Industry Federation (FIEC) represents the construction sector employers through 33 national federations in 29 countries.

The buildings and construction sector is responsible for 30 per cent of global CO2 emissions but it also has the potential to avoid about 3.2GtCO2 by 2050 through mainstreaming today’s available state-of-the-art policies and technologies. Reducing energy demand in the building sector is one of the most cost-effective strategies for achieving significant greenhouse gas reductions.

Real estate represents about 50% of global wealth. Creating this transformation requires investing around an additional US$220 billion by 2020 ­ an almost 50% increase on 2014 investment in energy efficient buildings ­ but less than 4% of the current total global annual investment in construction activity ($8.5 trillion/yr). Returns on this investment could be as high as 124% if investments in ambitious policy and technology actions are being made now.

As of today, 91 countries have included elements of commitments, national programs, or projects and plans relating to buildings in their Intended Nationally Determined Contributions (INDCs), the declarations by countries of what they are prepared to commit to.

With support and greater awareness, many more may realize the potential for the building sector to contribute to realizing national targets. Yet, the building sector is very local and needs to align many different actors, which is a primary objective of the new alliance.

As cities keep on growing until more than 70% of the global population will call urban areas home, it becomes crucial for the sector to reduce its emissions and literally build in greater resilience against climate change.

Action will include:

  • minimizing energy demand
  • greening the construction value chain
  • integrating renewables through district energy
  • implementing integrated building design and urban planning
  • engaging financing institutions.
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