Public sector organisations in Wales are to be offered help from the Welsh government in reducing their energy consumption through a new support framework.
The Re:fit Cymru programme will provide professional support to help Welsh public sector organisations identify, develop and implement projects that will save money, improve the energy performance of their buildings and reduce their CO2 footprint.
Supported by £1.5 million from the European Commission, the initiative will offer a range of services to support organisations seeking to install energy efficiency measures and will subsidise 90% of the costs.
Additional funds will be provided by client organisations, which will commit £20,000 towards the cost of the standard support package. On completion of the project, £10,000 will be recoverable but if the client fails complete the process, the Welsh Government reserves the right to recover up to the full £20,000 to reinvest in supporting other projects.
On a visit to the Radyr Weir Hydro Scheme in Cardiff, natural resources minister Carl Sargeant said: “We know that public bodies often do not have the capacity or specialist knowledge to develop large projects that will reduce energy use, cut energy bills and help deliver Carbon reduction targets. Through Re:fit Cymru they will have access to the right support to help deliver these projects.
Once a project is at a stage to be implemented, the Welsh Government can also offer 0% interest finance which will be paid back by the savings made. Energy service companies (ESCos) will carry out installations in identified buildings and guarantee annual energy savings over an agreed payback period.
This model transfers the risk of performance to the ESCos, as they must guarantee the energy savings to be made over the agreed payback period.
Schemes like these have been identified as a potential route to market for energy management firms however there are a number features in the public sector that make them work well.
Speaking to Clean Energy News during a recent round table discussion, Alex Rathmell, commercial director of Minimise Solutions and managing director of EEVS Insight, said: “The conditions there are very different to the corporate world in the sense that you’ve got a long term counterpart with good credit in the form of the public sector; you’ve got procurement frameworks the public sector can use that give a lot of stability and a lot of certainty to the process that you’re going through.”
Jan-Willem Bode, managing director of Mongoose Energy, added: “They’ve got simple processes because public sector is buildings. They haven’t got manufacturing going on. As soon as you analyse ESCOs and financial performance outside the building sector, it’s particularly poor.
“The public sector is the exception because it can borrow money at significantly lower rates than a corporate can.”
Eligible organisations include public sector organisations in Wales, registered social landlords, colleges and universities.
The new programme is another example of UK nations taking a renewed approach towards energy efficiency. A series of business tax and reporting reforms are expected in this week’s Westminster Budget, alongside a number of other energy efficiency related.
The Scottish government has recommitted itself to the energy efficiency agenda after members of the SNP backed a resolution to combat climate change. This included the government’s pledge to make improving energy efficiency a national infrastructure priority and to set out how it will accelerate use of renewable heat.