Going green affordably
Embracing new green technologies is a great way to cut expenditure while promoting to pupils and the wider community the importance of protecting the planet. But when implementing these technologies costs so much to start with, schools may wonder: is there a more economical alternative? Yes, says Darren Riva, and schools won’t have to compromise on quality.
Energy use in school buildings accounts for nearly half of all carbon dioxide (CO2) emissions in council-owned buildings in the UK. Implementing energy efficiency measures will not only help schools reduce their environmental impact on their communities, it will also yield them significant cost savings. The financial incentives in particular make for a strong argument for improving energy efficiency, since schools, as with other public sector organisations, are operating under increasing budget pressure as energy prices continue to rise.
Cutting costs where it counts
Non-domestic electricity prices have almost tripled in the last decade – from an average of 3.87 pence per kWh in 2004 to 10.01 pence per kWh in 2014 – while non-domestic gas prices have also doubled, reaching a total of 2.92 pence per kWh last year. In order to contain running costs, schools are increasingly keen to explore different energy-savings options and to leverage the latest technologies to help cut down energy consumption. To take things further, forward-thinking schools are even starting to adopt a cleaner energy portfolio by generating their own renewable energy, a trend that is driven by the introduction of government financial support programmes, such as the Renewable Heat Incentive (RHI) and Feed-in Tariffs.
Many schools are focusing their energy management policy on areas of energy consumption where there is the greatest potential for slashing costs. Heating, for example, can account for half of the school’s energy costs, followed by lighting and hot water. Since so many old boilers running on fossil fuels have been installed for decades, they are increasingly being replaced by biomass boilers operating with higher efficiency rates.
Solar photovoltaic (PV) is another highly popular renewable energy technology, converting sunlight into electricity, which can then be used to subsidise the school’s own electricity consumption. Given the relentless rise of electricity prices, this certainly provides a crucial argument for the investment decision. Since a solar PV system has an average lifespan of 25 years, the installation of the technology can also ensure long-term cost savings.
Finding funding to make the change
Despite many schools’ desire to embrace new technologies to reduce their energy bills, many of them are restricted in their ability to translate their ambition into reality due to a lack of available capital. Few schools command the financial means to fund big projects that demand a large up-front capital. There are, however, alternative financing schemes available in the market, which can help schools go green without further straining their finances.
One such example is the Energy Efficiency Financing (EEF) scheme, a joint initiative between the Carbon Trust and Siemens Financial Services. The scheme is designed to provide tailored finance for energy-efficient and renewable energy equipment for organisations, where the expected savings in energy costs and/or income from energy generation offset the monthly equipment finance costs - effectively making the investment zero net cost or even cash positive. The scheme thereby enables schools to make green investments while preserving their working capital for future budget challenges and without having to make any large upfront payments.
How does it work?
Prior to finance being agreed, experienced specialists from the Carbon Trust conduct an independent energy savings assessment. Because having confidence in the projected return on investment is crucial to any investment decision, the evaluation helps verify that the expected energy savings/income generation will match or exceed the equipment finance payments, giving schools the additional assurance that the projected figures provided by their suppliers are accurate. Since an initial capital outlay is no longer a pre-requisite for investment under the EEF scheme, schools can acquire the most appropriate equipment that best suits their requirements without having to compromise on second best technology.
A number of schools have already taken advantage of such innovative financing schemes to improve their buildings and the learning environment:
Black Firs School: Saving with the sun
Cheshire-based Black Firs School, which offers pre-school and primary school education, has leveraged a ten-year financing solution from the EEF scheme to implement solar PV on its rooftop.
With a return on investment of eight years, the project is predicted to help the school achieve a cut in energy bills of £2,017 per year, along with an annual reduction of carbon emissions by 11 tonnes. Total savings, plus income generation from government subsidy and earned revenues from feeding electricity into the national grid, are expected to reach approximately £5,645 per year. During the ten-year lease term, the monthly lease payments can be fully offset by the energy savings and subsidy income.
Bede’s School: Bountiful biomass
Using the EEF scheme, Bede’s School, a co-educational independent day and boarding school located in East Sussex, was also able to undertake a £1.2 million biomass-heating project. When the time came for the school to replace 23 existing liquefied petroleum gas (LPG) and oil boilers, it decided to overhaul its heating infrastructure with the deployment of three wood pellet biomass heating systems which would maximise its use of energy while helping to cut energy bills.
One of the largest to date in the UK education sector, the biomass project provides heating and hot water for the senior school and three boarding properties. With a payback period of ten years, the £1.2 million tailored financing package not only included the acquisition of the biomass boilers and their installation, but also the renovation of the underground electrical infrastructure, as well as the installation of a Building Management System (BMS) – a computerised temperature control and monitoring system.
Fuelled by wood pellets sourced from sustainable British woodlands, the biomass boilers are predicted to achieve energy savings of £70,000 per annum, along with an annual reduction of carbon emissions by over 580 tonnes. In addition, the school also benefits from RHI payments as part of the implementation.
An opportunity to promote green living
A previous study from EEF revealed that the education sector in the UK is overspending by £173 million per year on their energy bills due to inefficient technology and old equipment. The case is therefore clear: there is a real opportunity for schools to exert a tighter control on their energy costs, and, through the use of environmental-friendly technologies, there are significant energy savings to be seized.
In addition to solid financial and environmental rationales, there is a valuable educational value behind green investments for schools. Bringing green technology and energy efficiency measures into the classroom gives children the opportunity to understand and learn from an early age the importance of sustainable energy practices in our communities. An effective energy management policy can also yield schools significant energy savings with which they can re-invest into educational and recreational programmes, thus creating the best learning experience for their pupils.
By Darren Riva, Head of Sales, Green Finance, at Siemens Financial Services in the UK.
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