Unlocking energy cost and carbon savings when public finances are tight

Public sector organisations have borne the brunt of the pandemic. But despite the difficulties and disruption this has caused, net zero commitment remains strong, says Phil Bryant of Centrica Business Solutions.

As organisations turn their attention to a green recovery, the pressure to control costs and improve services is greater than ever. Managing energy more effectively is a great place to focus. That’s because using heat and power more sustainably delivers both financial and environmental benefits.

But how do you  achieve energy cost efficiencies while also achieving your net zero goals? How do you avoid incurring extra cost? And how do you reduce the time and cost burden of complying with environmental regulations?

Move beyond the ‘quick win’ savings

Implementing energy efficiency improvements is an effective starting point, but many public bodies have already exhausted the ‘quick-win’ opportunities. Indeed, energy efficiency measures alone are not sufficient to  deliver on net zero goals.

A much more ambitious integrated approach to sustainable energy management is required. This is likely to include solutions such as: data  intelligence; energy optimisation, renewable generation and battery storage; CHP, electric vehicles and low carbon heating and cooling.

Digital innovation and the rising popularity of distributed energy solutions are bringing technology costs down.  As such,  technologies such as solar, battery storage, heat pumps, data insights, optimisation and management platforms and electric vehicles, are all becoming more affordable.

Growing numbers of public bodies are looking at on-site solar with battery storage as a cost effective way to power both  their estate  and electric vehicles.In this way, you can secure uninterruptable back-up power and use power flexibly to manage peak-time energy costs and earn revenue from demand side response markets. Solar can also help power cost effective heat pump installations.

Combined Heat and Power (CHP) remains a key technology for the public sector and can deliver rapid cost savings that can be re-invested in sustainable energy projects with a longer return on investment. Green gas CHP and emerging hydrogen CHP technologies can play an important role in carbon reduction.

There are many more  opportunities to deploy distributed energy technologies for both cost and carbon reduction. If you’re not in a position to install on-site generation, or don’t have space for battery storage, Renewable Power Purchase Agreements (PPAs) can help accelerate decarbonisation, particularly in the earlier stages of a net-zero journey.  However, it is preferable to select certified agreements that support funding of additional new renewable generators, resulting in additionality.

Many public sector organisations are already committed to purchasing green energy as a small part of their commitment to the environment. Our sister company British Gas has helped NHS Property Services (NHSPS)  to switch its entire property portfolio to 100% certified renewable energy. That’s 10% of the entire NHS estate – supplying 3,500 buildings

Energy saving in action

We’ve worked with many hospitals, care homes, councils, leisure centres, schools and universities to cut energy bills, reduce carbon emissions, improve resilience and turn energy into a revenue stream, rather than purely a cost centre.

We’re helping Gateshead Council to improve energy resilience after installing one of the UK’s largest commercial battery storage schemes. The 3MW/3.33MWh system ensures that the Gateshead District Energy Centre can respond to any fluctuations in demand in under a second. It is capable of storing enough energy from the  CHP system to meet the needs of 3,000 homes for one hour. This ensures that the local businesses and residents benefit from stable and reliable power, without being exposed to any fluctuations.

We’re providing various optimisation services and commercialising the battery in a number of Demand Side Response flexibility services. This enables the Council to earn an income to support its public services, while securing the reliability of its site operations and also contributing towards balancing and stabilising the Grid.

The NHS is demonstrating the benefits of its integrated approach to energy management and we’re partnering with many Trusts to deliver funded projects. St George’s University Hospitals NHS Foundation Trust will achieve guaranteed cost  savings of £1m per year as part of its 15-year sustainable energy partnership with Centrica Business Solutions. The integrated energy project was delivered as part of a 15-year Energy Performance Contract (EPC).

Overcoming capital constraints

At a time when public finances are tightly stretched,  you  may lack the capital to invest in sustainable energy projects and the skilled resource to manage them.  But this doesn’t need to frustrate your sustainable energy ambitions.

The government’s Public Sector Decarbonisation Scheme (PSDS) is a good source of funding for organisations in England. As selected suppliers, we’re ready to support the rapid delivery of approved projects within tight deadlines. We are also experienced delivery partners for funded integrated energy infrastructure projects across the NHS.

For those organisations who can’t access these grants, there are other opportunities to implement  complex energy sustainability projects – without any capital expenditure. 

Distributed energy technologies that can fast track energy sustainability provide such strong and predictable returns on investment that projects can be funded off balance sheet via a performance-based operating cost model.

Pay as you save

Our flexible finance solutions are supporting thousands of organisations globally to overcome barriers to investment. In this way, we can help you to unlock opportunities that reduce energy and operational costs, improve energy resilience and boost environmental performance.

By moving from a capital cost model to an operating cost model, you can use energy as a service. You can then share in the cost and carbon saving benefits of distributed energy projects, without the risk, upfront investment or ongoing asset responsibility. You simply pay for the power/cooling/heat or other guaranteed outputs, such as carbon savings, over an agreed contract term.

With no capital expense, you can  balance both your financial and environmental performance by taking advantage of advanced energy opportunities.

The benefits of rethinking energy supply and management are compelling. The sooner you grab the opportunity, the sooner you can feel the benefit of  cost and carbon savings and improve resilience against energy supply interruptions.

Centrica Business Solutions finances and delivers integrated distributed energy projects. We provide full energy lifecycle support across insights; optimisation; efficiency; on-site generation & renewables; supply and trading, and electric vehicle enablement.

See how Centrica Business Solutions can help you realise your pathway to net zero:  

Further information: www.centricabusinesssolutions.co

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