Update on UK energy efficiency financing made to ACEEE 6th Finance Forum, Boston, May 2012

1. UK DEVELOPMENTS IN ENERGY
EFFICIENCY FINANCING
STEVEN FAWKES
7TH MAY 2012
ACEEE 2012 ENERGY EFFICIENCY FINANCE
FORUM

2. Matrix Corporate Finance
POLICY CONTEXT
“I want us to be the greenest government ever”
David Cameron, Prime Minister, 14th May 2010
UK government estate achieved 14% reduction in greenhouse gas
emissions in 1st year of Coalition government against target of 10%
25% reduction target by end of Parliament (2015)
Climate Change Act 2008 sets legally binding targets on GHG emission
reductions:
-34% by 2020
-80% by 2050
EU 20/20/20 targets by 2020
-20% reduction in GHG emissions
-20% from renewables
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-20% reduction in energy intensity

3. Matrix Corporate Finance
THE GREEN DEAL
Residential
Privately financed
Repayment attached to energy meter
The Golden Rule
- expected savings must be greater than costs
Accredited advisers
Accredited installers
Targets over 10 years:
-£14bn of private finance
-£13bn of utility finance (under Energy Company Obligation)
-65,000 new jobs
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4. Matrix Corporate Finance
THE GREEN DEAL - 2
Enabled by Energy Act 2011
Pilot schemes start late 2012
Not-for-profit Green Deal Finance Company (GDFC) established by
industry:
• British Gas • Insta Group • Norfolk County Council
• Carillion • Kingfisher • RWE npower
• Clifford Chance • Knauf Insulation • PwC
• E.ON • Linklaters • RBC Capital Markets
• EDF Energy • Lloyds Bank Corporate • RE Thinking Energy
• Gentoo Markets • Scottish Power
• Goldman Sachs • Mark Group • SSE
• HSBC • Newcastle City Council • Willmot Dixon
Some local authorities innovating:
•Birmingham borrowing £75m to establish a retrofit fund and
warehouse loans
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5. Matrix Corporate Finance
THE GREEN INVESTMENT BANK
Established by Coalition government
£3bn funding over 3 years
Has to operate as a commercial bank
Designed to address market failure - (contradicts with above?)
Can only co-finance under EU rules
Focused on:
-Offshore wind
-Waste
-Non-Domestic Energy Efficiency (NDEE)
Fund managers appointed for Waste (£80m to two fund managers)
Current competition for NDEE – result expected in July
Fund managers need to have:
-Project pipeline
-Matching funds or the ability to raise them
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6. Matrix Corporate Finance
THE MARKET
Growing interest in financing energy efficiency retrofits from public and
private sectors
Work going on in central government to resolve Treasury accounting
issues
Energy efficiency practitioners all very busy
Massive confusion in the market about ESCOs/EPC
“ESCO” market dominated by FM based companies and large
technology providers
Number of new entrants - large and small
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7. Matrix Corporate Finance
CONTACT
Steven Fawkes
Partner, Corporate Finance
Matrix Corporate Capital LLP
One Vine Street
London
W1J 0AH
United Kingdom
+44 (0)20 3206 7185
+44 (0)77 0223 1995
steven.fawkes@matrixgroup.co.uk
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