Guaranteeing long-term cost savings through energy efficient measures, with the option of fully funded solutions

Guaranteeing long-term cost savings through energy efficient measures, with the option of fully funded solutions

What is energy performance contracting? Innovative way to implement energy saving improvements Guaranteed energy savings pay for the capital investment Client makes no upfront capital investment EPCs are without risk to the customer Energy savings guaranteed and underwritten by the ESCO It is not an asset purchase Works as a service agreement off balance sheet

Pay as you save model No Interventions plus energy inflation Additional cost avoidance due to energy price increase Energy & Operational Costs Baseline (typically the last 12 months consumption) Savings circa 10-30% Savings to pay for Managed Service Reduced Costs due to interventions Customer Savings Duration of EPC (Typically 7-10 years) Time (years)

Energy performance guarantee Formal independent Measurement and Verification (M&V) protocol ESCO assists in development of agreed building user protocol Unequivocal, underwritten fully No risk to client ESCO holds & manages the risk Open book, full disclosure

Typical Energy Performance Contract Process 1Identify opportunity and owner criteria Identify opportunity Develop customer base Understand customer needs Initial assessment of suitability Articulate benefits

Energy Performance Contract Process 2Desktop audit technical review Free desktop audit Base line consumption data Non-invasive inspections Identify likely technologies Go / No go Consult and write up results

Energy Performance Contract Process 3Investment Grade Proposal (IGP) Fixed price proposal Detailed design Implementation costs & schedules Go / No go Go / No go Technical assurance Determine finance source

Energy Performance Contract Process 4Evaluate IGP & define final service scope Secure financing Identify and guarantee savings Agree new baseline and targets Go / No go Go / No go Execute Energy Performance Contract Sign off scope and implementation

Energy Performance Contract Process 5Undertake interventions Supply chain in place Detailed programme Savings guarantee period begins Go / No go Integrated design and delivery Commission new systems and processes Go / No go

Energy Performance Contract Process 6Measurement & Verification Record consumption data IPMVP* Savings guarantee period begins Go / No go Go / No go Demonstrate achievement of new target base line Work place analysis Ongoing training & communication Consider further improvements *International performance measurement and verification protocol

Identify opportunity and owner criteria Energy Services Business Model 1 2 3 4 5 6 Desktop audit technical review Investment Grade Proposal IGP Evaluate IGP and define final service scope Undertake interventions Measurement and Verification Identify opportunity Develop customer base Understand customer needs Initial assessment of suitability Articulate benefits Free desktop audit Base line consumption data Non-invasive inspections Identify likely technologies Consult and write up results Sign MOU Fixed price proposal Detailed design Implementation costs Technical assurance Determine finance source Secure project financing Identify and guarantee savings Agree new baseline and targets Execute Energy Performance Contract Sign off scope and implementation plan Supply chain in place Detailed programme Integrated design and delivery Commission new systems and processes Record consumption data - IPMVP Demonstrate achievement of new target base line Work place analysis Training and communication Consider further improvements No cost to client Walkaway cost to client Payments & receivables Go / No go Go / No go Savings guarantee period begins

Collaboration Leverage Skanska network to ensure best in class partners Partnership with Arup world leading consultants Partnership with GE Ecomagination 7bn R&D budget, Healthymagination 5bn commitment Open collaboration & partnership with best in class energy conservation measure specialists Collaboration is key

Example Secondary School Energy baseline Annual utility cost 183k Electrical consumption p/a 1,102,000 Kwh/m² p/a Annual CO 2 emission 101 KgCO 2 m²/p/a Thermal consumption p/a 2,369,000 Kwh/m² p/a

Energy conservation measure 1 Controls, metering and monitoring Annual saving 9,000 Payback time 13 years CO 2 saving 5 KgCO 2 /m²/pa Capital expenditure 140,000

Energy conservation measure 2 Lighting rationalisation and controls Annual saving 21,000 Payback time 7 years CO 2 saving 11 KgCO 2 /m²/pa Capital expenditure 155,000

Energy conservation measure 3 Behavioural programme Annual saving 6,270 Payback time 3 years CO 2 saving 3 KgCO2 /m²/pa Capital expenditure 13,000

Energy conservation measure 4 600kW Biomass Annual saving/revenue 18,400 + 58,000 Payback time 4 years CO 2 saving 27 KgCO 2 /m²/pa Capital expenditure 296,000

Intervention 5 Voltage Optimisation Annual saving 6,950 Payback time 5 years CO 2 saving 4 KgCO 2 /m²/pa Capital expenditure 34,000

All energy conservation measures ECMs 1-5 Annual saving/revenue (tariff) 61,369 + 58,236 Payback time 7 years CO 2 saving 50 KgCO 2 /m²/pa Capital expenditure 693,000

Solutions energy conservation measures Biomass Energy monitoring and metering Voltage Optimisation Combined Heat and Power Variable Speed Drives Behavioural Engagement Fabric Improvements Decentralisation of plant LED and High efficiency lighting and controls Photovoltaics Solar heating systems Geothermal Air source heat pumps Solar film OTHERS...

Highlights Carbon footprint reduction of 50% Display Energy Certificate improvement from F to C Before After

Skanska s holistic approach Long term view Minimise energy & carbon cost as the estate evolves Consider the impact of what we do now on the future Utility cost & inflation risk Consider all opportunity, obvious & less obvious e.g. Work place productivity Estate rationalisation Energy from waste Data centre management & provision