Agenda Item No. 4
THE VALE OF GLAMORGAN COUNCIL
SCRUTINY COMMITTEE (CORPORATE RESOURCES): 10 FEBRUARY 2015
REFERENCE FROM CABINET: 26 JANUARY 2015
C2613 ENERGY COMMISSION RE-INVESTMENT SCHEME (L) (SCRUTINY COMMITTEE – CORPORATE RESOURCES) -
Approval was sought to establish an Energy Fund for investment in energy and water efficiency projects in Council buildings.
The Council was obligated to participate in the Carbon Reduction Commitment (CRC) scheme. The scheme required the Council to annually report on the energy consumption and associated carbon dioxide emissions within its non-domestic buildings and to pay for each year an associated amount. In 2013-14 the amount paid was £126K whereas in 2014-15 the amount would be around £240k as street lighting was included in Phase 2 of the CRC.
The Council’s carbon management strategy and implementation programme was overseen by the Carbon Management Group and reported through the Operational Manager (Property) to the Sustainable Development Working Group. In addition the Council, with Local Service Board partners, had agreed to collectively reduce emissions from its buildings in the Vale by 3% per annum. This was in line with Welsh Government national targets for a 3% reduction in emissions per annum.
The Council satisfied the mandatory qualifying criteria for the CRC scheme and submitted its first CRC report in July 2011, covering the 2010-11 financial year. The scheme encouraged participants to take up voluntary Automatic Meter Reading (AMR) facilities in order to improve the accuracy of billing and to benefit via the 'early action metric' within the CRC scheme. The Council proceeded with the installation of AMR which had helped with the provision of more robust data concerning energy use.
The report outlined that it was only since AMR had been installed that enough quality data had been collected to produce reasonably accurate annual energy use figures. This had helped to inform a range of energy savings schemes funded through the Salix finance arrangement. The Council had participated in this arrangement since 2009 which provided interest free loans for qualifying energy efficiency projects for the Council’s buildings. Further details on how the Salix schemes operated could be found via the following link http://salixfinance.co.uk/loans/welsh-loans.
Since June 2009 the Council had spent over £700k from the Salix fund with a further £110k of projects agreed and awaiting installation and a further £100k worth of projects considered viable and awaiting agreement from budget holders. The projects installed or awaiting installation were predicted to save the Council £195k per year in fuel costs and reduce emissions by 1,330 tonnes per annum. The lifetime savings for Salix match funded measured was predicted to be £4.2 million and 28.5 thousand tonnes of carbon dioxide emissions.
A full list of the type of projects that the energy fund could be used for was attached at Appendix 1 to the report. Appendix 2 attached to the report contained budget figures and expected savings for an initial list of projects that on approval could be progressed as funds would allow. Completion of the schemes would result in a reduction of 1% per annum in carbon dioxide emissions for the authority and around a £26k annual reduction in electricity costs.
The energy fund could also be used to provide additional discretionary funding for projects that did not quite achieve the 5 year payback required to attract a Salix loan but still achieved an 8 year payback as dictated by the rules within the Salix scheme. This would allow more flexibility in the type of energy efficiency projects taken forward.
A key driver in determining which projects to fund would be those that reduced energy consumption figures and met the Council's targets for reducing carbon emissions. Another factor in determining which projects to fund would be to spread the benefits across a number of different buildings in recognition of the contributions made to the fund by a number of services.
At the meeting the Cabinet Member for the Environment and Visible Services commented that the Carbon Management Strategy was introduced by the previous coalition administration back in 2007 and he was pleased that work on this project had continued.
He further highlighted paragraph 15 of the report that estimated that a 50 kW photovoltaic installation would cost in the region of £80k but might produce a 20 year saving of approximately £270k, he also commented on paragraph 11 of the report explaining that photovoltaic panels had been reported to be operating well after 30 years and this could increase savings even further.
This was a matter for Executive decision
(1) T H A T delegated authority be granted to the Managing Director in consultation with the Leader to develop the detailed criteria and conditions for use of the Energy Fund in order to improve the energy and water efficiency of Council buildings.
(2) T H A T the report be forwarded to Scrutiny Committee (Corporate Resources) for information and that further details of the Energy Fund and its use be included in the Sustainable Development progress reports presented to the Scrutiny Committee (Corporate Resources) twice a year.
Reasons for decisions
(1&2) To enable the Council to improve the energy and water efficiency of Council buildings through the use of an Energy Fund and to facilitate monitoring of the Fund and its use.
Attached as Appendix – Report to Cabinet – 26 JANUARY 2015