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Alexandra Hammond is associate director, sustainability with Essentia

Taking a comprehensive approach

Alexandra Hammond looks at how energy performance contracts can help schools implement energy-efficiency measures

Posted by Dave Higgitt | April 24, 2015 | Sustainability

It’s a good time for the education sector to be addressing energy consumption. Technologies to reduce energy use are making significant progress and continue to be at the forefront of research and development. And other parts of the public sector have tackled energy issues with excellent results. With increased competition, particularly in higher education, education leaders should see energy and carbon reduction as a real opportunity to get ahead – both in terms of finance and reputation.

Where does one start when it comes to addressing energy consumption? Many educational institutions will have an energy-saving plan or commitment, but often these programmes are approached in a piecemeal way – estates teams are forced to react to needs and requests and, more often than not, do not have a proactive and strategic approach to energy management.

The plan needs to be relatively simple, form part of a long-term strategy and, in these times of financial constraint, be relatively risk-free. Energy performance contracts (EPCs), already used in some part of the NHS, are ideally placed for the education sector. They have the potential to enhance financial resilience, improve services, foster a positive reputation and dramatically reduce impact on the environment – all with a guaranteed return on investment.

An EPC is a partnership with an energy-savings company (ESCo) that enables educational institutions to improve the energy efficiency of their buildings and facilities, delivering real and longstanding savings. The contract guarantees that the measures implemented by the ESCo will generate sufficient savings to pay for the projects and all savings accrue to the client. With transfer of risk to the ESCo and an average energy saving of 14 percent, the education sector alone could save over £56m annually by implementing strategic energy and utility reducing programmes (see:

A particularly exciting element of implementing an EPC in the education sector is the model’s ability to utilise and showcase ground-breaking technologies. By approaching energy management strategically, educational institutions can look to the future and, in collaboration with their selected ESCo, devise strategies for bringing new technology to reality, as well as finding ways to engage those who are not typically involved in utility management.

Sustainability programmes must adapt to and support the delivery of their organisations’ business and strategic objectives. Essentia, for example, is working with Guy’s and St Thomas’ NHS Foundation Trust to develop a portfolio of energy-efficiency works that will ensure the trust achieves its required carbon reduction targets and saves over £1.3 million each year – over 10 percent of its utility spend. In addition, the trust’s capital development team has been tasked with ensuring that all projects within its £1 billion programme incorporate energy management; the team works across projects to rationalise equipment and make sure the trust’s estate can adapt to future service needs.

By putting together a strategic plan that delivers a range of projects, EPCs can blend the “quick wins” with those that add value, but perhaps do not have the necessary defined paybacks. Therefore, educational institutions can achieve a programme of investment that delivers true and lasting value to the institution.

Addressing utility consumption, typically the second highest overhead cost in education after staff cost, presents an excellent opportunity to tackle finances and enhance reputation within an increasingly competitive market. Forward-thinking institutions know that reducing spend on energy, water and waste is no longer a “nice to do”, but something which makes sound financial as well as environmental sense. Taken as part of a long-term sustainability programme, an EPC goes a long way to alleviating cost pressures and providing a platform for emerging technologies and strategic engagement.

Alexandra Hammond is associate director, sustainability with Essentia

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