PERTH AND KINROSS COUNCIL. Strategic Policy and Resources Committee 14 September 2011 CORPORATE ENERGY MANAGEMENT AND CONSERVATION POLICY

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1 PERTH AND KINROSS COUNCIL 10 11/465 Strategic Policy and Resources Committee 14 September 2011 CORPORATE ENERGY MANAGEMENT AND CONSERVATION POLICY Report by Depute Director (Environment) This report seeks approval to a new Corporate Energy Management and Conservation Policy designed to set enhanced standards for the sustainable and cost effective operation and future development of the Council s property portfolio. RECOMMENDATION The Committee is requested to: (i) Approve the adoption of the Corporate Energy Management and Conservation policy as set out in Appendix 1 of this report. (ii) Note the summarised strategy for delivery of the policy as set out in Appendix 2. BACKGROUND 1. On the 30 August 2007 the Property Sub-Committee approved an Energy Management and Conservation Policy (07/569). This report was subsequently submitted and approved by the 12 September 2007 meeting of the Strategic Policy and Resources Committee and thereafter remitted back to the Property Sub-Committee meeting of 18 October 2007 (07/675) together with the conservation measures necessary for its implementation. This initiative was driven by the Council s increasing demands for energy coupled with high and volatile energy prices. 2. The period since 2007 has been characterised by a raft of legislation on energy conservation and more recently carbon reduction, together with a heightening of energy issues across the public spectrum. In addition, there has been a tightening of the Building Standards Regulations and recent announcements by utility companies of substantial increases in energy prices. 3. For the remainder of 2011 and beyond, further legislation and energy price increases can be anticipated and given the financial restrictions over the next three years, increasing pressure to reduce the Council s current energy spend, now running at some 4,000,000 per annum. Taken together, all these aspects warrant a review and an enhancement of the Council s policy in this field to set new corporate and consistent standards across the entire property portfolio. 121

2 PROPOSALS 4. New national contracts are now in place for the supply of the Council s gas and electricity. The costing structure for the new national procurement contracts are more complex than previous contracts and include significant and unavoidable standing charges. These charges currently amount to 24% of total costs for gas and 22% of the total cost of electricity. Altogether, standing charges amount to some 720,000 of the current energy spend. These charges are significant and are imposed whether or not a property is occupied. They also impact on the ability of the Council to maximise its energy conservation savings. 5. The key to future financial savings and carbon reductions therefore lies in the Council reducing energy consumption. Against this background and the impact of new legislation (including a further review of the Building Standards in 2013), the policy and strategy set out in Appendices 1 and 2 has been developed for application across the Council s property portfolio. 6. In order to minimise energy usage, it is recognised that the measures outlined will impact on the capital cost of new buildings and building extensions etc. This initial capital investment will however be more than offset by reduced operating costs over the operational life of the building. It is also recognised that these measures will impact on planned maintenance projects; again, this will be offset by reduced running costs over the life of the building. 7. Appendix 2 provides a brief summary of the strategies that will be used to deliver the new policy; these will be further developed and advised by way of interim reports to the Property Sub-Committee. 8. To allow time for required adjustments to capital and revenue budgets, it is proposed to bring the new policy and attendant strategies into effect from the beginning of 2012/13, these initiatives to be further reviewed in 2014/15. CONSULTATION 9. The Head of Performance and Resources, Executive Director (Education and Children s Services), Executive Director (Housing and Community Care) and the Head of Corporate Business Change and Information Technology together with the Acting Head of Finance have been consulted in the preparation of this report. RESOURCE IMPLICATIONS 10. The standards set out in this policy and the consequent conservation and other measures will have both property and capital and revenue implications. 122

3 11. The policy will set increased specification levels for property related building and maintenance projects across the Council. Whilst this increase in standards brings with it energy conservation savings, there are consequential capital construction costs and revenue implications. As these costs will be project specific, it is impossible at this stage to quantify these, or the consequent running cost savings over the life of the building. To support this, evidence of energy conservation measures will require to be included in all future building related Outline and Full Business Cases. COUNCIL CORPORATE PLAN OBJECTIVES The Council s Corporate Plan lays out five Objectives which provide clear strategic direction, inform decisions at a corporate and service level and shape resources allocation. They are as follows:- (i) (ii) (iii) (iv) (v) A Safe, Secure and Welcoming Environment Healthy, Caring Communities A Prosperous, Sustainable and Inclusive Economy Educated, Responsible and Informed Citizens Confident, Active and Inclusive Communities 13. This report relates to item (iii) above. EQUALITIES IMPACT ASSESSMENT (EqIA) 14. An Equality Impact Assessment needs to be carried out for functions, policies, procedures, or strategies in relation to race, gender and disability and other relevant protected characteristics. This supports the Council s legal requirement to comply with the duty to assess and consult on relevant new and existing policies. 15. The function, policy, procedure, or strategy presented in this report was considered under the Corporate Equalities Impact Assessment process (EqIA) with the following outcome: 16. Assessed as relevant and the following positive outcomes expected following implementation: (a) (b) The Policy acknowledges there will be particular buildings with particular needs, for example Residential Homes, Schools and Community Halls. As the Policy is pursued, Council Services will consult with Community Councils and other representative bodies on specific aspects such as the use of Halls and school lets where for example energy use may have to be constrained and/or higher charges imposed. The Equality Impact will be assessed by the Services concerned. 123

4 (c) Higher insulation standards will allow higher temperature and comfort levels to be maintained, particularly where mobility is restricted due to being elderly and infirm, disabled, or pre-school. STRATEGIC ENVIRONMENTAL ASSESSMENT 17. Strategic Environmental Assessment (SEA) is a legal requirement under the Environmental Assessment (Scotland) Act 2005 that applies to all qualifying plans, programmes and strategies, including policies. 18. The matters presented in this report were considered under the Environmental Assessment (Scotland) Act 2005 and pre-screening has identified that the PPS will have no or minimal environmental effects, it is therefore exempt and the SEA Gateway has been notified. The reasons for concluding that the PPS will have no or minimal environmental effects are that: the policy is limited in direction, applying only to the Council s own property portfolio the policy is designed to reduce the Council s energy and water consumption and the resultant carbon emissions substantially, the works flowing from the policy will be internal, encompassing controls, insulation etc any wider environmental impacts will be caught by the separate SEA covering low and zero carbon development. CONCLUSION 19. A higher standard of energy conservation is needed in order to achieve the Councils targets for reducing our carbon footprint. These improvements will: Reduce energy consumption and in doing so minimise revenue expenditure. Assist compliance with increasingly demanding legislation, avoiding potential financial penalties. Reduce the Council s carbon tax payments. Ensure that the Council acts sustainably in respect of the management of its property assets. JIM VALENTINE Depute Director (Environment) 124

5 Note The following background papers, as defined by Section 50D of the Local Government (Scotland) Act 1973 (and not containing confidential or exempt information) were relied on to a material extent in preparing the above report: (i) Report no. 07/569: Property Sub-Committee 30 th August 2007 Energy Management and Conservation policy (ii) Report no. 07/562: Strategic Policy and Resources Committee 12 th September 2007 Energy Management and Conservation policy (iii) Report no. 07/675: Property Sub-Committee 18 th October 2007 Energy Management and Conservation policy - energy conservation Contact Officer: A.J.Stanger (01738) Address of Service: Pullar House, 35 Kinnoull Street, PERTH, PH1 5PH. Date: 16 th June If you or someone you know would like a copy of this document in another language or format, (On occasion only, a summary of the document will be provided in translation), this can be arranged by contacting The Directorate Support Team on Council Text Phone Number

6 Appendix 1 Corporate Energy Management and Conservation Policy Perth and Kinross Council will reduce its energy consumption and costs, together with its carbon emissions, across its entire property portfolio, for the benefit of the environment and the community and in support of that aim will: 1. Maintain a high profile for energy management and conservation within and outwith the Council and take steps to secure exemplar authority status in this field. 2. Implement the Council s commitments under the Local Authority Carbon Management Programme, the Scottish Climate Change Declaration and in respect of all relevant legislation. 3. Make provision within the Capital and Revenue programmes for an appropriate level of energy management and conservation investment, including the maximum use of external funding and Spend to Save initiatives. 4. Ensure all new Council buildings, building extensions, or maintenance works exceed by a minimum of 10% overall the standards of energy management and conservation laid down in the current Building Standards Regulations. 5. Ensure all existing buildings retained within the Estate, are brought up to the minimum standards in section 4 above within a ten year programme. Where this is not practical, review the buildings retention within the Corporate Asset Management Strategy. Where an existing building is extended, converted, or refurbished, the minimum standards shall apply at the time the extension is constructed. 6. Implement measures to ensure the optimum operation of the Council s buildings, maintaining minimal energy consumption consistent with location, Service needs and building users. 7. Explore innovative use of new technology and other developments, including district heating initiatives, to reduce energy consumption and carbon emissions and to generate energy for the Council s use. 126

7 Appendix 2 Corporate Energy Management and Conservation Strategy To deliver the six Policy Directives set out in Appendix 1, the Council shall undertake a number of initiatives, including in summary: Policy Directives 1 and 2: Sustain close links with the Scottish Executive, the Carbon Trust and the Energy Saving Trust Continue to aim and qualify for the Carbon Trust administered Carbon Standard Maintain close links with the Council s Community Partners to share Best Practice and Value in energy management and conservation. Retain membership of the Scottish Energy Officers Network and chair of the Tayside Energy Consortium Actively participate in the member/officer working group on sustainability Comply with all relevant legislation including the Carbon Reduction Commitment and the Energy Performance Certificate requirements. Policy Directive 3: Ensure full use of external grant funding, including Central Energy Efficiency Fund and Energy Saving Trust Utilise all beneficial tariff arrangements, including Feed-in Tariff and Renewable Heat Incentive. Maximise Prudential Borrowing powers and Spend to Save and other initiatives Policy Directives 4, 5, 6 and 7: Set out minimum energy efficiency and thermal insulation standards for all new buildings, building extensions and all maintenance works. Set out minimum requirements for heating and lighting controls, water conservation and Building Monitoring Systems, including remote metering Review information from BMS systems to understand patterns of usage and to inform future strategy. Ensure the incorporation of passive heating, cooling, lighting and ventilation systems with heat recovery installations where feasible. Consistent with building function, location and Service needs, establish benchmark lighting and temperature levels Examine local building usage, particularly at evenings and weekends, to avoid duplication of function and minimise energy usage Establish three and five year programmes for biomass and renewable energy sources and water re-cycling installations, consistent with feasibility, cost and return on capital. Establish three and five year programmes for building energy audits and consequent conservation and management works. 127

8 In order for the Corporate Energy Management and Conservation Strategy to succeed, a mandatory Building Design Standards document will be produced in respect of works to new and existing buildings. 128

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