Darren Holman, Energy Services Product & Compliance Manager at Total


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Darren Holman, Energy Services Product & Compliance Manager at Total spoke at the FM & Property Event 2012

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Darren Holman, Energy Services Product & Compliance Manager at Total

  1. 1. Presented by: Darren Holman, Energy Services Product & Compliance ManagerPresentation Location & Date: FM & Property Event, 19th October 2011Strategies to Improve Energy Efficiency
  2. 2. Session OverviewDrivers of energy efficiency in the UKKey challenges to improving energy efficiencyA strategic approach to energy efficiency2
  3. 3. Drivers of Energy Efficiency3
  4. 4. 4Political Drivers of Energy EfficiencyInternational Level79% of EU emissions relates to energy use1EU targets: 20% reduction in GHG emissions by 2020 (against a 1990 baseline) 20% of total EU energy consumption from renewable energy by 2020X Improve EU energy efficiency by 20% by 2020 – NOT ACHIEVINGSupply and demand-side technology and energy efficiency solutionsJune 2011 - European Energy Efficiency DirectiveDec 2013 – Planned implementation by Member States1 European Environment Agency, 2010 (based on 2008 data)Public Sector Impact Private Sector Impact Annual renovation targets Introduction of Energy ManagementSystems (EnMS) Procurement of energy efficientproducts, services and buildings Systematic use of energy performancecontracting Mandatory audits for large companies Incentives to implement recommendedmeasures and introduce an EnMS CHP obligations for power and industrialplants
  5. 5. Political Drivers of Energy EfficiencyNational LevelClimate Change Act 2008 set legally binding carbon budgets and CO2 reduction targets: 12% by 2012? 34% by 2020 (or 266.8 million tonnes of CO2 reduction against 1990 baseline)★ 80% by 205052008 - 21% reduction (170 Mt C02)on 1990 levels already achieved
  6. 6. Political Drivers of Energy EfficiencyNational LevelClimate Change Act 2008 set legally binding carbon budgets and CO2 reduction targets: 12% by 2012? 34% by 2020 (or 266.8 million tonnes of CO2 reduction against 1990 baseline)★ 80% by 205062008 - 21% reduction (170 Mt C02)on 1990 levels already achieved
  7. 7. 7Energy Efficiency Policy InstrumentsEconomic Instruments: EU ETS – EU-wide cap and trade scheme for power generators and largest users CCAs – 80% discount on CCL for EIUs if achieving sector efficiency targets CCL – End-user tax on all non-domestic energy use CRC Energy Efficiency Schemeo Mandatory emissions reporting for UK’s top 2,800 EIUso Tax on carbon emissions: £12 per tonne of CO2 from 2012o Cost to Participants will be approx. 10% of their annual energy spendo Autumn 2011 – First league table of relative carbon reduction performanceEnergy Performance of Buildings All buildings when sold, built or rented now require an Energy Performance Certificate Larger public buildings must display a Display Energy Certificate Mandatory Air Conditioning InspectionsRoll-out of Smart Meters Roll-out of 50 million gas and electricity smart meters across GB by 2018
  8. 8. 8Energy Bill 2010-11The Green Deal (Autumn 2012) Loan for energy saving measures in domestic and non-domestic buildings Covers energy efficiency AND renewable generation measures Cost of measures should not be greater than energy saving over the loan period Attached to the electricity meter with energy suppliers obligated to collect repayments Repayment responsibility will transfer between landlords and tenantsPrivate Rented Sector From 2016 landlords will not be able to refuse reasonable requests from tenants, orlocal authorities acting on behalf of tenants, to improve their property From April 2018 the government will make it unlawful to rent out a house or businesspremise which has less than an "E" energy efficiency rating, ensuring at least 682,000properties will have to be improved2Summary• Ambitious, legally binding national emissions reduction targets• Complex range of policy measures – Combination of penalty andincentives mechanisms with far-reaching implications2 www.decc.gov.uk (2011)
  9. 9. 9Organisational Drivers of Energy EfficiencyRising cost of compliance with environmental legislationRising cost of energy and CO2 emissions / Focus on carbon accountingDifficult trading conditions driving cost-cutting initiatives and eco-efficiencyStakeholder pressure to improve the sustainability ofoperations, products, services and supply chainBrand reputation risks and opportunitiesStakeholder risk and opportunitiesPublic corporate sustainability commitments and targets“UK operations to be carbon neutral by 2012”“Reduce energy use per ft2 by 35% by 2015”“Reduce carbon emissions by 10% by2015 against a 2007 baseline”“Reduce energy consumption by 15%by 2013 (against a 2010 baseline)”
  10. 10. Key Challenges10 - Reference, date, place
  11. 11. 11Materiality Energy costs relative to other costs (e.g. facilities, staff, supply chain) - lack ofinterest and senior commitment energy saving initiatives Focus on compliance and risk management rather than opportunitiesLandlord-tenant divide Benefits of investment in energy efficiency by the landlord are received by the tenant Complex FM provider and building manager relationships Sub-optimal ROI unless part of major refurbishmentInadequate metering arrangements, management systems and ownership Lack of actual energy usage and time of use information - management attentiondiverted away from energy-saving measures Lack of monitoring and targeting (M&T), energy management systems andstructures, poorly defined roles, no accountability for delivering improvementsFinancial disconnect & conventional wisdom Energy savings achieved at facility level not recognised (or rewarded) Perception that energy saving measures will increase costs Energy projects are often technical in nature and cover unfamiliar territoryBarriers to Energy Efficiency Uptake
  12. 12. A strategic approach toenergy efficiency12 - Reference, date, place
  13. 13. Develop and overarching approach13Energy EfficiencyDrivers• Operating costreduction• Stakeholderpressure• Brand reputation• Stakeholderengagement• CompetitiveadvantageCorporate Environmental Commitments(Energy Efficiency and CO2 reduction vision & targets)Legal requirements(Legislation that the organisation must comply with)Energyefficiency& carbonreductionprojectsEnergy Management System“Focus on Process and Performance”ManagementstructuresandresponsibilityEnergyreview andbaselineCompetence,training andawarenessMonitoring, reporting, recordmanagementand auditEnergy andemissionsreductionpolicyEnergyobjectives, action plan, andKPIsStakeholderengagement,communicati-on andfeedbackGovernancestructures forprojects, operations &procurement
  14. 14. Take a Systematic Approach to Projects1. Establish a baselineMonitor current energy usage and calculate related expenditure and emissions. Survey andbenchmark current building efficiency and energy infrastructure performance.2. Identify high or unexpected levels of energy usage and take immediate actionEliminate energy wastage, e.g. implement operational or behavioural changes and employgood practice energy management techniques.3. Appraise options / evaluate the suitability of more substantial initiativesDevelop outline business case for building fabric improvements, energy infrastructure/plantupgrades. Consider on-site generation only after energy efficiency.4. Select projects for full business case development / investment grade audits5. Develop detailed business caseUndertake detailed site audits, in-depth feasibility studies and project life-cyclecosting/payback. Select projects for implementation and secure project funding.6. Implement energy efficiency measuresImplement building improvements and new energy infrastructure.7. Monitor & quantify energy usage and emissions reductionsEvaluate the performance of the implemented measures8. Ensure the project benefits are communicated to key stakeholders14
  15. 15. Engage with Energy Services PartnersTotal Gas & Power’s Energy Services Performance Contract (ESPC)Installation and maintenance of energy infrastructure and building improvementmeasures to deliver savings in energy expenditure and CO2 emissions at no upfrontcost to the client.Features of the ESPC Guaranteed savings achieved by improving building fabric, energy infrastructure,plant and equipment, and installing onsite generation equipment Access to financial appraisal services, PM consultancy and technical expertise Firm price for the project Fixed price for plant/equipment operation & maintenance for the contract term Guaranteed levels of energy efficiency performance for the contract term Access to off balance sheet funding Fixed rate financing for the term of the contract Transfer of project delivery and project performance riskTechnical Scope of the ESPC Projects (not exhaustive) Training and behavioural change, building fabric, BMS, HVAC, lightingtechnologies, plant optimisation, voltage optimisation, water controls, heat recovery FiTs & RHI eligible technologies15
  16. 16. Thank you for your time.16Darren HolmanEnergy Services Product & Compliance Manager( +44 (0)1737 275797( +44 (0)7912 997544* darren.holman@totalgp.com8 www.totalgp.com