Local authorities have a number of funding mechanisms available to them in meeting the challenge of cutting carbon waste and making homes energy efficient. But as most of the large scale projects, which offer the most obvious savings, have been completed, authorities have been left with a complex landscape of properties, funding mechanisms and providers which they must navigate to make buildings – public and private – more energy efficient, with the added pressure of limited time in which to act.
Here in the Capital, practitioners are helped by the Mayor of London’s domestic energy efficiency programme ‘RE:NEW’, set up to help boroughs and housing associations navigate large-scale energy retrofit programmes. But as the Energy Company Obligation is set to expire in March 2015, with the last applications accepted in Summer 2014 – and with energy costs becoming a hot topic in Whitehall, no-one is yet sure in what form funding for energy efficiency works will be provided in the future; whether we will see ECO extended, modified, or replaced altogether.
On Friday 8th November, Future of London held the third event in our Delivering Energy Efficiency series of breakfast seminars, “Getting the most from ECO and RE:NEW”. Our panel of expert practitioners looked at how local authorities can make the most of the time remaining of these two programmes and secure efficient delivery and value for money from providers. This series is kindly supported by EDF Energy.
We were joined by five speakers with extensive experience in working with ECO, and previous energy efficiency schemes before it. All agreed that the current situation is complex, with different offers from competing providers, a lack of specific data on housing, complicated contracts, and multiple funding sources. However, the speakers outlined some steps to take to ensure that local authorities and housing associations can maximise their benefits from ECO in the time remaining before it ends in its current form.
Working across departments can often give practitioners access to invaluable expertise from within their own organisation, such as legal and procurement advice, or access to datasets which can be used to identify areas in need of investment. Making the most of internal expertise can help prepare councils for negotiating with external providers.
Our speakers advised local authorities to use the data available to them to assess their properties, what funding they qualify for, and the likely CO2 savings before entering into negotiations with suppliers. Having this data on hand allows LAs to get quotes from different providers and secure the best possible deal, rather than relying on assessments from providers. Speakers urged boroughs to speak to as many providers as possible and to develop a dialogue with them so as to negotiate the best possible outcome. Having good data to hand allows LAs to better compare offers from providers and to make full use of the market. Mapping was suggested as a particularly powerful tool, given the difficulties in sharing some forms of data due to privacy laws.
Nigel Turner, London Warm Zones Manager for EDF Energy, emphasised the importance of partnerships for delivering energy efficiency, especially to those most in need. As the ECO landscape becomes more fragmented, London Warm Zones have been targeting sections of the population who are most likely to miss out on large-scale retrofit programmes. They have worked with other organisations both to identify excluded groups and, once identified, to make sure they receive the full range of benefits they are entitled to. Nigel noted that while boroughs may not have direct funding available, they hold crucial data and have a high level of trust among local communities, giving them a key role in ensuring the success of programmes such as LWZ.
Sharing information among boroughs was seen as just as important as sharing information between internal departments; Richard McWilliams, of the RE:NEW Support Team, advocated that sharing experiences between boroughs made it much more likely that they would be able to get value for money. Richard particularly picked up on the value of RE:NEW support in procurement, an area echoed for its critical role by Becca Aspinwall, Associate at Pinsent Masons, and Gearoid Lane, CEO of Agility ECO. Becca and Gearoid noted the importance of importance of diligent project management, from contracting, through to delivery, reporting, and quality assurance. By having robust governance mechanisms in place, councils can avoid some of the contractual dangers that have been seen so far, such as unexpected penalty charges.
Similarly, authorities should have systems in place to ensure that work is carried out to the standards specified in the contracts, as any problems that are not spotted can be costly later on, and reduce the effectiveness of energy efficiency measures. Authorities were advised to have a clear idea of what they want to get from providers, and be aware that funding and delivery can be split if it is beneficial to do so. Again, establishing a dialogue with several providers can offer significant benefits in getting the best price possible. Sheri Lim, Sustainability Officer at LB Havering, explained how the borough is running separate schemes for social and private housing, with social housing work delivered by the borough and work on private homes by the provider.
Cross-funding was seen as increasingly important, with a whole range of funding options which authorities can take advantage of in the event that improvements cannot be fully funded by ECO. Authorities were advised to bundle several types of improvement into a single programme to get as close to 100% funding as possible, although speakers recognised that gap funding might be necessary to meet any shortfalls. To get the best value from ECO funding, councils should take full advantage of the market and speak to as many different providers as possible. Sharing information across departments and boroughs and taking a rigorous approach to signing contracts can help councils avoid some of the common pitfalls that have been encountered and allow them to make the most of ECO funding while it is still available. The seminar speakers were:
- Richard McWilliams, Operations Director – Housing & Consultancy, Capita
- Sheri Lim, Sustainability Officer, London Borough of Havering
- Nigel Turner, London Warm Zones Manager, EDF Energy
- Becca Aspinwall, Associate, Pinsent Masons
- Gearoid Lane, CEO, Agility ECO
The session was chaired by Susanna Salts, Business Development Manager – Low Carbon Design, EDF Energy.
Presentations and audio