Thursday, 25 March 2010

Reducing Energy Consumption and Costs for Land Securities

ADIAN Consulting, recently concluded Phase 1 of an estate-wide air conditioning inspection project for Land Securities, the successful delivery of which contributed to 4% of the company’s plans for a 10% CO2 reduction commitment. Land Securities portfolio in London totals some sixty buildings, some of the capital’s prime office and retail space, all of which is subject to the Energy Performance of Buildings Directive.

ADIAN Consulting Ltd (ADIAN) were initially shortlisted alongside others to perform trial air conditioning inspections, but the quality of the consulting advice, reporting and the additional steps ADIAN took ensured they would secure the remainder of the London Portfolio. Richard Weavers, Head of Technical Management – Land Securities explains:

"Rather than ticking a box, ADIAN went that extra step and produced a report that allowed us to work on the performance of that building.”
Demonstrating how Land Securities could take compliance one step further enabled ADIAN to identify reductions in building energy consumption and running costs. Once new buildings are inhabited their operating parameters can be made to work more flexibly than those of the original design. This includes, for example, the widening of humidity control differentials to allow a less rigid operating band. This change in settings, while having no adverse impact on the occupants’ comfort, has a significant impact on reducing energy consumption.

Taking this concept further, ADIAN conducted workshops for the Land Securities operational teams to explore further refinement and improvement opportunities in the design process and the operation of its air conditioning systems. As a result of its structured approach to the air conditioning projects, Land Securities commissioned ADIAN to carry out further energy management assignments focusing on electricity use in buildings. As Richard Weavers says:

“ADIAN has a very honest approach. They are very customer focused, and very environmentally aware. These are three things that Land Securities very much believe in, so there is an affinity between the two organisations.”

Feed-In Tariffs

Feed-In Tariffs, or FiTs as they are known, will be introduced on 1st April 2010. But what are they and what does this mean to UK Businesses?

Born from an urgent need for the UK economy to diversify its electricity generation away from the traditional hydrocarbon fuels such as oil, gas and coal, HM Government set the target of sourcing 20% of the grid supplied electricity by 2020 from renewable or so-called ‘Clean Technologies’ to focus national strategy. So, to meet its 20% renewable target, the Government believes 20GW (gigaWatts) of power will need to be sourced from alternative energy sources, FiTs are being introduce with the intention of incentivising the adoption of small scale low carbon electricity generation technologies.

These small scale low-carbon electricity technologies eligible for FiTs include:

  • solar photovoltaics (PV)

  • wind

  • hydro

  • anaerobic digestion

  • domestic scale micro CHP (with a capacity of 2kW or less)

FiTs will support proven clean technologies, it is not intended to support the development of unproven ones.

The benefit of generating on site is significantly improved by FiTs which offer two pricing elements. One element of the tariff price covers the installed ‘Generation’ capacity and the second the ‘Export’ of electricity. Generation pays a fixed price for every unit of electricity produced on site, whereas Export is a bonus payment for every unit of electricity not used on site but fed into the national grid for transmission to another end user. The revenue and saving by the operating site comprises:

  • Income for generating electricity on site

  • Income for exporting residual power not used on site

  • Savings in cost from the non import of grid electricity

Generation and Export tariffs will be index-linked to the retail price index to prevent inflation eroding the value of revenue from projects.After consultation with stakeholders the price floor for export electricity has been reduced to 3p/kWh [from the originally proposed 5p/kWh]. Producers, however, could opt out of this 'minimum level' and negotiate prices with energy suppliers on an annual basis.So What if You Are Interested in Generating Electricity?

Whatever your motivation to promote site based generation in your organisation the following steps are recommended:

  1. Have you got a carbon management strategy or are you just jumping on the band wagon?

  2. If you are starting from a low base in energy and carbon management discuss energy supply and carbon issues with your senior management. Assess their readiness, risk appetite and inclination to embrace the idea of energy generation. Do they know that you have exhausted energy efficiency gains to the maximum?

  3. There are a range of electricity generation technologies. Establish which option suits your organisation best and provides the most economically advantageous proposition over the life of that investment.

  4. Work with an experienced consultant who will assist you with establishing a commercial and technical strategy. Consider various procurement options and present a clear case to senior management for their consideration and, hopefully, approval.

The field of carbon management is full of new ideas and complexities, but one thing is clear, risk assessment and management will be an essential tool in ensuring that your organisation is benefiting from the position it ultimately chooses to adopt.