Lessons from London: cutting carbon emissions without the financial risk

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This article is part of our special report Energy efficient buildings : Powering Europe.

The GLA's retrofitting scheme is set to save the public sector £6m and 36,000 tonnes of carbon by 2015.

As public sector organisations face a period of unsurpassed austerity, managers are bombarded with directives to not only cut costs and improve efficiency, but to reduce carbon emissions and lower energy consumption at the same time.

In London, mayor Boris Johnson has committed the city to targets that could make it the greenest conurbation in the world, reduce the capital's CO2 emissions and energy consumption by 60% by 2025.

As a significant part of London's CO2 is emitted from public sector buildings, there needs to be a focus on making those buildings more efficient. This will require action from local government – figures estimate that up to 80% of premises belonging to councils, health, and education authorities will still be in use in 2050.

One answer lies with the Greater London Authority's retrofitting scheme, known as RE:FIT, which alone could lead to a reduction of 100,000 tonnes of CO2 emissions by 2015.

The programme works by helping public organisations equip their buildings with energy-saving technology that did not exist when the buildings were first built. Retrofit measures include new building management systems, combined heat and power, photovoltaic solar panels, low-energy lighting and new, efficient boilers.

A pilot exercise applied these tools to 42 buildings currently used by Transport for London, the Metropolitan Police and the London Fire Brigade. This has been followed by work near completion on a further 44 buildings with the London boroughs, universities, hospitals and cultural organisations.

The potential energy and cost savings of retrofitting are substantial: for the organisations that took part in the pilot, the installation of the new technology helped them to identify savings of over 7,000 tonnes of CO2 per annum, generating annual cost savings of more than £1m.

It is anticipated that a total of 100 public sector buildings will have completed or signed up to the programme by May 2012, with 43 organisations already committed to the programme.

The RE:FIT scheme itself places councils at a very low financial risk. Approved energy service companies, which provide the retrofitting work, guarantee that the alterations to these buildings will deliver the agreed reduction in energy over an agreed payback period. This helps transfer the risk from the public into the private sector.

It also gives participants access to specialist skills and support. Financed via £2.67m from the European Investment Bank's ELENA (European Local Energy Assistance) fund, a development unit established to oversee the rapid implementation of the programme – and act as its public face.

This unit provides a single point of expertise and helps participating authorities understand how the scheme can be applied to their assets and provides support during the preparation of tenders and the procurement of suppliers that will help to save them energy. It oversees all projects being undertaken through RE:FIT, reporting back on their overall impact and success so new public sector retrofit schemes can learn from its progress.

This development unit is also responsible for managing the performance of the energy service companies. This is all done at no cost to those taking part.

Plans are underway to retrofit a further 297 buildings in London during the next year, with a target for a total of 600 public buildings to be given an energy-efficiency makeover as part of the programme by 2015. These include town halls, libraries and museums, and could lead to estimated savings of up to £6m on energy bills each year with reductions of 36,000 tonnes of carbon – the equivalent of taking around 60,000 vehicles off London's roads.

Buildings account for over 40% of the EU's final energy demand and are a major source of greenhouse-gas emissions, making energy savings there a key element of European climate change objectives.

The Energy Performance of Buildings Directive (EPBD), adopted in 2002, was meant to reduce the EU's energy consumption by up to 6%. The directive was reviewed in 2010 (read full text) to cover residential and non-residential constructions.

>> Read our LinksDossier on energy efficiency in buildings.

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