Get a helping hand
The world is a very different place than 100 years ago, and will be different again in another 100 years. A key change will be climate. Without getting into the debate on the extent of climate change, increasing numbers of organisations realise that they have responsibility for minimising the impact their activities are having on the environment. This is not philanthropy, this is common sense: why should organisations generate a profit at the expense of future generations?
Many organisations today outsource all but their core activities, so when the call comes down from the board room to reduce the carbon footprint of the organisation, they have to turn to the external specialist facilities management company to deliver. There are many ways that an organisation can reduce its carbon footprint in terms of buildings and facilities – they fall into three broad categories: engineering and maintenance, energy supply, and investment.
Engineering and maintenance
This is broadly optimising what is already being used. Ensuring all plant and equipment is properly maintained is an obvious step to make sure it is operating as efficiently as possible. Some FM companies will employ energy managers who will be able to take this process further by assessing energy usage across all buildings, plant and equipment, identifying areas of energy wastage and ways of making savings.
This links demand side energy efficiency improvements to supply side measures, resulting in a combined carbon reduction. Many organisations simply buy their utilities on standard tariffs and pay the bills when they arrive. They may not realise that they are paying far too much because of an inappropriate tariff, or paying bills that are incorrect, or that carbon savings could be made by switching tariff.
Procurement of utility services is becoming an ever more time consuming and complex task, especially so with sustainable/renewable fuels. Selecting the right tariff is a function most FM companies undertake: injecting experience of this type of procurement, with the ability to properly evaluate each tariff and offer, will allow the most appropriate tariff to be selected. Typical savings from this process could range from five to 40%.
Another step would be to introduce additional systems for data collation and recording, enabling verification of the utility bills against actual consumption. This will immediately identify deviations from what would be expected, such as water leaks and excessive consumption, which would otherwise go unnoticed for long periods. Typical savings here could be between five to 10%.
This comprehensive data collection will also highlight areas of potential saving, with subsequent steps to improve the control of plant and processes. This is not switching it off, but perhaps optimising the usage. Other steps would include raising energy awareness within the organisation through training and campaigns – broadly good housekeeping. This kind of monitoring and targeting could save between four and 18%.
Energy and carbon reduction investment
This runs on from the two previous groups and involves identifying projects that could improve efficiency, energy usage, carbon emissions, or a combination of these. Projects could include installing combined heat and power units or other cogeneration or trigeneration equipment, use of sustainable fuels, or simply replacing old or inefficient plant with the latest state of the art energy efficient plant.
Following the theme of outsourcing, organisations are choosing to secure these energy and carbon reduction investments through contract energy management agreements (CEM). A CEM agreement involves the installation and finance of improvements to plant and equipment that will reduce the client’s utility costs and possibly other costs such as maintenance, water treatment and labour, as well as achieving efficiency and carbon improvements. There are several different types of CEM:
- Guaranteed savings
- Guaranteed and shared savings
- Shared savings
- Thermal charge
A guaranteed savings agreement, which is typically for five years, involves determining baseline consumption and emissions, based upon the last three years, and then entering into agreement to guarantee consumption and emissions savings. Savings depend very much upon individual circumstances: the potential for inherent savings (efficiency and usage), the required investment to achieve further savings and the contract term, but clients can typically expect between five to 10%. This type of agreement is on a closed book basis as the costs will need to be reduced by such an amount that there is a margin after the company has paid the reduced utility bills, paid off the expenditure on the new plant and for the expenses of the contract. A guaranteed and shared savings agreement is similar to a guaranteed savings agreement except it is on an open book basis. Savings in excess of the agreed target will be shared with the client via a negotiated split, eg 60:40.
A shared savings agreement is similar to the first two except all of the savings will be shared with the client on an agreed split. Under this agreement the split will be less favourable to the client than above as the CEM company has to recover its investment it has made in order to achieve those savings.
A thermal charge agreement involves the CEM company offering the client a fixed unit rate for energy, typically for a ten year term. This will often involve a saving of between five to 10% on existing costs, and although the plant and equipment alterations will remain the property of the CEM company at the end of the contract, the client can usually purchase the new plant and equipment.
Taking the holistic approach to buildings and facilities management, combining the demand side energy efficiency with supply side savings, and then investing through CEM, will enable organisations to not only reduce costs, but also address the responsibility they have for minimising the impact their operations have on the environment.
CASE STUDY Energy efficiency at BskyB
One of the key objectives for BSkyB when it outsourced its mechanical, electrical and fabric maintenance services to Norland Managed Services was to enhance energy efficiency and its environmental impact. As one of the UK’s leading broadcasters of sports, movies, entertainment and news, it has to have 99% uptime for business critical systems. As well as offering its 8.5 million customers over 200 programmes, it also provides a range of interactive services including broadband, telephony, shopping and gaming.
During the last five years, Norland has implemented planned preventative and reactive maintenance systems, and has assisted BSkyB in retaining its position as a carbon neutral operation, the first media company in the world to achieve this accolade. Ongoing initiatives have included deploying power points for charging electric cars, and installing efficient lighting systems and boilers that use 20% less energy. Brian Humber, Director of energy strategy and infrastructure at BSkyB, added: “With Norland’s help, we are looking to install solar panels at one of our buildings. We are also investigating solar street lighting and a significant wind turbine that will back-feed energy onto the national grid”.
Athena Court is one of 17 buildings at Sky’s main campus in Isleworth, West London. The original lighting system was old and inefficient, with staff in the habit of leaving lights on day and night. Norland installed a new smart lighting system which adapts the level of lighting required to the presence of natural light and people. Lower wattage in the new T5 tubes means that light is generated for longer as bulbs last longer, less energy is consumed and the overall cost is reduced. The system produced an immediate 35% reduction in energy.