Presentation to the TEC Regional Conference at the Imperial War Museum. The presentation explores the success of energy efficiency policies and the opportunities for the Higher Education Institutions (HEIs).

1. Association for the Conservation of Energy
The impact of energy efficiency and opportunities
for demand reduction in HEIs
Darryl Croft
Senior Researcher
Association for the Conservation of Energy
Presentation to the TEC Regional Conference 2012
Imperial War Museum
27 June 2012
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

2. Association for the Conservation of Energy
Presentation message
• Positive story:
We are successfully reducing energy demand in the UK
• Lots of opportunities for further reductions + numerous
reasons why all sectors, including the public sector, should
look to reduce their energy demand, implement
efficiency, and adopt better energy management practices.
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

3. Association for the Conservation of Energy
About ACE
• We exist to:
“reduce overall energy demand to ensure a secure and
sustainable energy future”
• We do this by lobbying, campaigning and carrying out
research to achieve sensible and consistent policy, legislation
and targets
• ACE is no ordinary trade association - we don’t push or
research specific products or technologies
• We research and push for strategic policy and specific
legislation that saves final energy use
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

4. Association for the Conservation of Energy
For example…
This past week ACE have been involved in:
• The European Commission’s Reasoned Opinion on the UK’s reduced VAT
rate on ‘Energy Saving Materials’
“VAT on ‘Energy Saving Materials’ in a nutshell” summary
• Pushing Government to include energy demand within the draft Energy
Bill and Electricity Market Reform proposals
• Generating support for the Energy Bill Revolution campaign that would
see revenues from the EU ETS and CPF recycled to consumers in the form
of energy efficiency support
• Looking at how energy efficiency can offset
increases in domestic energy bills.
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

5. Association for the Conservation of Energy
Members
www.ukace.org

6. Association for the Conservation of Energy
The ‘good’ message
“The cheapest, cleanest and safest way of addressing our energy
policy objectives is to use less energy.”
- Energy White Paper, 2003
Reduced Carbon emissions
Energy
Objectives
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

7. Association for the Conservation of Energy
The ‘good’ message
“The cheapest, cleanest and safest way of addressing our energy
policy objectives is to use less energy.”
- Energy White Paper, 2003
Good for environment
Energy
Objectives
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

8. Association for the Conservation of Energy
The frequent messages
“People don’t want to have to use less energy”
“We’re using more and more energy in our lifestyles”
“Energy saving won’t stop the lights going out”
“If you improve efficiencies, people just waste more”
“The difference that improved efficiency makes is rather small”
=> Often viewed as ‘a bit woolly’ at best – something that it’s
good to do, but that doesn’t make the world of difference.
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

9. Association for the Conservation of Energy
What have we achieved to date?
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

10. Association for the Conservation of Energy
Global energy savings
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

11. Association for the Conservation of Energy
EU 25 Energy Savings
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

12. Association for the Conservation of Energy
UK Domestic Energy Savings
100
90
80
Energy consumption, Mtoe
70
60
50
40
Actual energy consumption
30
20
10
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

13. Association for the Conservation of Energy
UK Domestic Energy Savings
100
90
80
Energy consumption, Mtoe
70
60
50
Insulation energy saving
40
Actual energy consumption
30
20
10
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

14. Association for the Conservation of Energy
UK Domestic Energy Savings
100
90
80
Energy consumption, Mtoe
70
60 Heating systems efficiency
energy saving
50
Insulation energy saving
40
Actual energy consumption
30
20
10
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

15. Association for the Conservation of Energy
Not just about avoided demand...
....last ten years have seen real reductions in the UK.
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

16. Association for the Conservation of Energy
UK Energy Demand
250
200
150
Mtoe
100
Primary Energy Demand
50
(temperature corrected)
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

17. Association for the Conservation of Energy
UK Energy Demand
250
200
150
Mtoe
Service sector and
Agriculture
100
Domestic
Primary Energy Demand
50
(temperature corrected)
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

18. Association for the Conservation of Energy
UK Energy Demand
250
200
Transport
Industry
150
Mtoe
Service sector and
Agriculture
100
Domestic
Primary Energy Demand
50
(temperature corrected)
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

19. Association for the Conservation of Energy
Energy Intensity
100
Energy intensity (Index 1990=100)
Transport
Domestic
Industrial
Service
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

20. Association for the Conservation of Energy
Service Sector
20,000
18,000
16,000
14,000
12,000
ktoe
10,000
Commercial sector
8,000 Public sector
6,000
4,000
29% reduction
2,000
-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

21. Association for the Conservation of Energy
Domestic Demand
60
50
Million tonnes of oil equivalent
40
Lighting and appliances
30
Cooking
Water
20 Space heating
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

22. Association for the Conservation of Energy
Energy Efficiency of Homes
55
50
Average SAP rating
45
40
24
35
22
Internal temperature
30
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
18
16
14
12
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

23. Association for the Conservation of Energy
Domestic Lighting and Appliances
Kettle
Microwave
Electric Hob
8,000 Electric Oven
Mulit-Function Devices 3
Printers
7,000 Monitors
Laptops
Desktops
6,000
Power Supply Units
Energy consumption, ktoe
Games Consoles
5,000 DVD/VCR
Set Top Box
TV
4,000 Tumble Dryer
Dishwasher
Washer-dryer
3,000
Washing Machine
Upright Freezer
2,000 Refrigerator
Fridge-freezer
Chest Freezer
1,000 LED
Energy Saving Light Bulb
0 Fluorescent Strip Lighting
Halogen
Standard Light Bulb
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

24. Association for the Conservation of Energy
Domestic Lighting and Appliances
8,000
7,000
6,000
Energy consumption, ktoe
5,000
4,000
3,000
2,000
1,000
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

25. Association for the Conservation of Energy
Domestic Lighting and Appliances
8,000
7,000
6,000
Energy consumption, ktoe
5,000
4,000
3,000
2,000
1,000
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

26. Association for the Conservation of Energy
Domestic Lighting and Appliances
8,000
7,000
6,000
Energy consumption, ktoe
5,000
4,000
3,000
2,000
1,000
0
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

27. Association for the Conservation of Energy
Domestic Lighting and Appliances
8,000
????
7,000
6,000
Energy consumption, ktoe
5,000
4,000
“In 2006 National Grid’s forecast
3,000 of peak demand for 2012-13, the
2,000 year we are in, was 68 gigawatts.
Their forecast now is 57 to 59
1,000
gigawatts. The principal reason
0 for that is demand destruction.
Two-thirds of it, at least, is due to
energy efficiency. It has gone. ”
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

28. Association for the Conservation of Energy
The story so far…
• Improved efficiency has gone beyond negating some
additional demand:
across most sectors, the past 10 years has seen a reduction in
energy demand in the UK
• This has been relatively easy and uncontroversial:
– No huge lifestyle changes
– No unpopular enforced technologies
– Just sensible policies and regulations
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

29. Association for the Conservation of Energy
Why ‘do’ improved efficiency and better energy
management?
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

30. Association for the Conservation of Energy
Why ‘do’ improved efficiency and better energy
management?
Opportunity Drivers Mechanism
Rising fuel
Availability of prices
low Availability of
cost/financeable finance
opportunities Environmental
leadership
/CSR
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

31. Association for the Conservation of Energy
Efficiency measures at lowest cost

32. Association for the Conservation of Energy
Efficiency measures at lowest cost

33. Association for the Conservation of Energy
Opportunities for energy saving
• Consume lots of energy
– 3,900 GWh gas => c.£125m/a
– 3,300 GWh electricity => c.£395m/a
• 2010 report from Oakleigh Consulting Limited found that
there was between £230m and £530m of potential efficiency
projects across the HE estate
• Specific case studies later in the day
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

34. Association for the Conservation of Energy
Still lots of uninsulated homes
25
20
8.8m
GB homes, millions
15 7.5m
Uninsulated
10 Insulated
5
7.7m
-
Cavity walls Lofts Solid walls
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

35. Association for the Conservation of Energy
Energy Prices
18
16
Electricity price
14
Energy price p/kWh
12
10
8
6
Gas price
4
2
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

36. Association for the Conservation of Energy
Energy Prices
18
16
Electricity price
14
Energy price p/kWh
12
10
8
6
Gas price
4
2
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

37. Association for the Conservation of Energy
Energy Prices
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

38. Association for the Conservation of Energy
Policy Impacts
• Estimated impact of energy and climate change policies on an
average medium-sized business user’s energy bill in 2020
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

39. Association for the Conservation of Energy
Carbon Savings / CSR
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

40. Association for the Conservation of Energy
Carbon Savings / CSR
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

41. Association for the Conservation of Energy
Carbon Savings / CSR
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

42. Association for the Conservation of Energy
Carbon Savings / CSR
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

43. Association for the Conservation of Energy
Financing Mechanisms
• Revolving Green Fund (RGF)
– a partnership fund between HEFCE and Salix Finance Ltd
– aims to help higher education institutions (HEIs) in England reduce
greenhouse emissions
– Institutions repay the funds through the savings they make
– £30 million was available from 2008 to 2011 to provide recoverable
grants to institutions for projects that reduce their emissions.
– 384 projects with lighting upgrades and motor controls the most
commonly undertaken projects (collectively accounting for
approximately 25% of the total).
– Initial evaluation: If the current trajectory sustained, will lead to
carbon and cost savings of up to 8.6% of current English HEI carbon
emissions every year by 2020.
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

44. Association for the Conservation of Energy
Financing Mechanisms
• In the second phase (RGF2), £10 million is available over the
academic years 2011-12 and 2012-13
• Funds targeted in two areas:
– small-scale energy efficiency programmes, and
– retrofit projects, which will act as exemplars.
• In contrast to the first phase of RGF, HEIs will not be required
to make an institutional contribution.
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

45. Association for the Conservation of Energy
Green Deal?
• Likely to be available to public sector organisations
• What is it?
– No upfront cost to pay
– Financed through energy bill over lifetime of measures (i.e. 25 years)
– Based on assessment: determine measures for which repayments are
lower than savings: the ‘Golden Rule’
– Assessment ‘tweaked’ for specific customer
• Why would you be interested?
– Removes the need for upfront cost
– Potentially longer repayment periods
– Potentially easier to access this support
– Measures protected by accreditation and redress regime
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

46. Association for the Conservation of Energy
Green Deal?
Differences with domestic Green Deal:
• Assessment:
– Non-domestic buildings are more varied than domestic properties,
– Assessment method will necessarily need to be more complex in order
to provide appropriate recommendations for the property.
– Will build upon the existing SBEM methodology but will allow the
actual use of the building to be captured
• Measures:
– Wide range for non-domestic buildings including:
lighting, ventilation, heating systems, insulation, chillers, variable speed
drives, solar shading
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

47. Association for the Conservation of Energy
Green Deal?
• Golden Rule:
– more flexibility in the non-domestic sector
– specialist assessments to provide a more detailed savings
estimate, taking account whole systems of measures and energy
tariffs.
– not proposing to limit applicable interest rate structures in the non-
domestic sector as businesses should be well equipped to ensure they
are entering into a deal which best suits their needs.
– Expectation that Green Deals in the non-domestic sector will be
shorter – to reflect payback in line with lease length
• Lots of scepticism about the Green Deal at the moment:
we wait to see if it will be the “game-changer” we’ve been
promised!aims to reduce overall energy demand to ensure a secure and sustainable energy future
ACE
www.ukace.org

48. Association for the Conservation of Energy
Conclusion
• Energy efficiency is working
• There is lots still to do: including much of the low cost / easy stuff
• Public sector organisations have the opportunities, the drivers, and the
means to finance energy reduction
• Implications of saving energy are huge:
– Financially: hedge against (very likely) increases in energy costs
– Environmentally: saving energy is cleanest and easiest way of
achieving energy objectives
– Economically: organisations must remain competitive and could be
more productive
– Socially: reduce fuel bills and help alleviate fuel poverty
– Politically: hard to sustain decarbonisation agenda in face of rapidly
rising prices, unpopular technologies and uncompetitive businesses.
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org

49. Association for the Conservation of Energy
Thank you
Darryl Croft
Senior Researcher, ACE Research Team
darryl@ukace.org
ACE aims to reduce overall energy demand to ensure a secure and sustainable energy future
www.ukace.org