Energy Performance Contracting Case Study:
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1 Energy Performance Contracting Case Study: Lavington School March 2015
2 Energy Performance Contracting Case Study: Lavington School What are energy performance contracts and how do they work? In a nutshell, an energy performance contract (EPC) allows a company to make energy saving improvements at no upfront cost to the customer. The customer agrees to pay a set amount to the company per month, which is no more than their current energy costs. Energy efficiency improvements are made and any saving is split between the two parties at an agreed rate. Once the total cost of the improvements has been recovered by the company, the payments stop, and the customer enjoys the benefits of lower energy bills for the foreseeable future. Lavington School is a rural secondary comprehensive, with approximately 700 pupils, near Devizes. In this case study we hear from Angela Downing, the school s business manager, about their experience of energy performance contracting. Trialling this approach gave the school the opportunity to bring in external expertise and achieve significant energy savings, without the need to put money aside to pay for the improvements. It also helped the school to tackle the rising costs from its oil heating system. Let s see how they achieved it.. How did you first hear about Energy Performance Contracts? Our head teacher attended a Wiltshire Association for Secondary School Heads (WASSH) meeting where MITIE (an Energy Performance Contracting provider) delivered a presentation. Our Head thought it sounded like a great way to save money for the school, so we invited them to the school to discuss possible options for us. Were you concerned about being the first school in Wiltshire to enter such a contract? We were cautious at first at the thought of giving over control to a third party, as we did not want to become committed to anything that would create risks for the school. Having met with an EPC provider we commissioned them to undertake a no obligation study to make sure that any energy savings really stacked up. The proposals included taking control of our energy budget, insulating plant room pipe work, servicing the fan heaters (long overdue) and checking room temperatures throughout the school.
3 They averaged out our previous year s energy bills and charged us accordingly so we could easily budget ahead. Every month our provider calculated fees for their technician s time, paid our energy bills, after which we agreed to share whatever was left. They ensured there was no financial risk to the school. Based on this, we entered a one year contract. How were these plans put into action? Our provider started by simply procuring energy on behalf of the school, securing us a lower tariff than we could have managed on our own. As we have an oversized hot water tank, we tended to waste energy in the summer holidays, heating a large amount of water in order to undertake cleaning or for hand washing. The proposed solution was to install electric point-of-use water heaters (e.g. in the toilets), which makes generating hot water much more efficient and saves us money as we can turn off our big heating system. Our provider had remote access to our Allen Martin building management system (common in many Wiltshire schools) to monitor the heating system. This allowed them to progressively reduce over-heating in the school, without needing to be on site all the time. Did you decide against any of the recommendations and how did that affect the predicted energy savings? Longer term, larger capital investment measures (such as upgrades to the lighting, building management system and controls) were proposed, but we wanted our first contract to focus on the low hanging fruit which didn t need much investment of capital. Our longer term plans may include biomass (wood) based heating systems or renewable energy (e.g. solar photovoltaic panels). However, whilst the savings have the potential to be bigger the longer the period you share a contract, don t feel like this is the only way it could work for you. How long is an EPC contract? These can range from 12 months to several years. It s entirely dependent on what you want to achieve, the length of time the energy saving measures take to pay back, and what the school is happy to commit to. Lavington School started with a 12 month contract (that delivered the projected savings on time) after which they felt comfortable to commit to further 1 year contracts. Are you saving money? The school has grown significantly since we started the EPC, including the construction of new classrooms, sports hall and dining area. This has increased our consumption of oil and electricity, but overall the results are very encouraging.
4 Energy and cost savings Each year the school receives an annual energy management report highlighting the savings that have been achieved. The latest report (2013) shows a significant reduction in gas oil consumption used for heating the main school block, compared to before the EPC started (these figures are used to budget for energy costs). In total, energy consumption for the main school building was down 45%. Taking the average cost for gas oil as approximately 55p/litre, this would equate to a saving of over 10,500. The report also shows that over the same period in the science block, which is heated with burning oil (kerosene), consumption is down 36%. At a similar average cost this would equate to a saving of over 2,000. Energy Use Reduction Cost saving Gas oil Heating main school block 45% 10,500* Burning oil (kerosene) Heating science block 36% 2,000* *Average prices for heating fuels have been taken from boilerjuice.com What are the main advantages and disadvantages of EPC s in your experience? Advantages Identifying no cost improvements Having expert advice on hand Better energy management Disadvantages Potential constraints on out-of-hours activities if not agreed with EPC provider Annual heating period is agreed in advance so a cold day in May or September can result in a surcharge Large savings are difficult to sustain year on year with a short term contract Easier budgeting for energy bills Opportunity to engage pupils on saving energy Are there any top tips you would pass onto other schools considering an EPC? Would you recommend an EPC to other schools? A member of staff with a vested interest (e.g. the business manager) needs to put aside some time to understand the energy savings calculated. Be aware that to begin with, people may complain about any changes to the heating system, especially turning it down. The EPC provider gave us the evidence to show that in most cases the rooms were in fact at recommended temperatures. The site/maintenance manager must be fully involved with the process as they can function as an additional set of eyes and ears in the school. Being the first school in Wiltshire to commit to an EPC was daunting, advice from the local authority gave us confidence, but we would do it again based on what we learnt from the process and know now. In the future, we would seek our provider s advice from the start of any new building projects. Other schools would need to establish whether it was the right thing for them, but our experience has definitely been a positive and happy one!
5 Finally, has your use of EPC had a long term impact on energy management at the school? Five years on, we continue to use our provider to support better energy management at the school. This has enabled us to keep a close eye on our energy consumption through monitoring and reporting. Decisions about which improvements we want to invest in, however, are now taken in house. We have a better understanding of where the opportunities are and in this way we receive the full savings ourselves. Further information 1. RE:FIT is an award-winning programme, delivered by the Greater London Authority, that used Energy Services Companies to implement energy saving measures in public sector buildings throughout London. It includes a framework of approved suppliers Eco-Schools 3. Solar Schools
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