Implementing and financing an energy efficient lighting project 20 November 2013 Myles McCarthy Director, Implementation.

Implementing and financing an energy efficient lighting project

20 November 2013

Myles McCarthyDirector, Implementation

Introduction

› Why am I here?

› Energy savings through lighting

› Barriers to implementation

› Energy Efficiency Financing

› Case studies

2

Myles McCarthyDirector, Implementation

Carbon Trust

Today’s presenter Today’s objectives

› Why am I here?

› Energy savings through lighting

› Barriers to implementation

› Energy Efficiency Financing

› Case studies

3

Agenda

Carbon Trust

Our mission is to accelerate the move to a sustainable, low carbon economy

We are independent experts on carbon reduction and resource efficiency, who reinvest surpluses

from group commercial activities into our mission

4

ADVICE

Business strategyHelping businesses capture the opportunities in a sustainable low carbon world

Government supportProviding cutting-edge policy advice, insights and programme delivery on the transformation of markets

Public Sector AdviceEnabling the public sector to cut costs and emissions

FOOTPRINTING

MeasuringUnderstanding the environmental impact of an organisation, product or service

CertifyingProviding independent verification of organisational or product footprints to endorse sustainable leadership

TECHNOLOGY

Implementation and FinanceProviding expertise and support to businesses to put energy efficiency plans into action

Innovation Partnering with companies and governments seeking to create value from the clean technology revolution

We help our clients benefit from the opportunities of sustainable, green growth

5

£35,000

on-site surveys

75%FTSE 100 companies

£1.6bnspend on energy efficient

equipment

50,000advice line calls per annum

70%Local Authorities

90%Higher Education Institutions

£50%

NHS Trusts

We have worked with:

to deliver:and undertaken:

£4.5bnenergy waste avoided

Our expertise is built on deep experience

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› Why am I here?

› Energy savings through lighting

› Barriers to implementation

› Energy Efficiency Financing

› Case studies

7

Agenda

The opportunities are found across all sectors

Operational Efficiency and Behavioural ChangeLow/no cost savings through measuring and monitoring energy use, staff engagement and appropriate improvements to the use and maintenance of existing equipment

Building Energy EfficiencyInvestment in new building technologies including:• Controls • Air conditioning• Lighting • Ventilation• Heating

Industrial/Process Energy EfficiencyInvestment in new industrial technologies and processes including:• Motors & drives • Refrigeration• Compressed air • Process heating• Process controls

Renewable EnergyInvestment in equipment to generate local renewable heat or electricity:• Biomass • Solar (thermal/PV)• Heat pumps • CHP• Wind • Waste to energy

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The top left box is often the area customers will want to focus on first and gain some early wins

Renewable energy(inc. subsidies)

'Typical' business investments

Energy efficiency

0 10 20 30 40 50 60

Internal rate of return (%)

Indicative potential investment returns

40-50%

10-15%

5-10%

Source: Carbon Trust analysis

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The case for investing in energy efficiency is compelling

Lighting, training and MM&T are the commonest ways to improve energy efficiency

Lighting and co

ntrols

Employee awareness tra

ining

Metering, m

onitorin

g and targeting

Boilers

and boiler c

ontrols

Ventilation and air conditioning

Renewable energy

Building M

anagement Syste

ms

Motors & driv

es

Compressed air

Industrial p

roce

sses

OtherNone

0%10%20%30%40%50%60%70%80%90%

Which of the following technologies have you invested in to improve the energy efficiency of your business in the last year?

10

› Why am I here?

› Energy savings through lighting

› Barriers to implementation

› Energy Efficiency Financing

› Case studies

11

Agenda

Lack of funds

Lack of awareness

Lack of confidence

Technical advice

Energy efficiency finance

Common barriers Our unique service

Accredited supplier schemeEnergy

efficiency made easy

www.carbontrust.com/greenbusinessdirectory

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There are three key barriers to implementation, …which we help organisations to overcome

Technical advice

Site Surveys Business Case Procurement

Impartial, authoritative, impactful advice

Identifying the opportunityData analysis; Investment-

grade surveys; Benchmarking; Staff training

Robust, evidence-based proposals

Making the investment caseFinancing options; Tax-

efficient solutions; Whole-life cost; Market intelligence

Expert, best-value procurement service

ImplementationSupplier sourcing;

Performance specification; Tender analysis & evaluation

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We provide bespoke technical support throughout the implementation process

Technical case studies and

client references

Workforce knowledge, skills and

experience

Adherence to quality,

environmental and safety standards Training,

contracting and customer

processes

Professional memberships

Our accredited supplier base ensures best-in-class solutions

Accredited supplier scheme

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“Being accredited by the Carbon Trust really underlines our credibility. When clients see the Accredited Supplier logo, it immediately puts them at ease.”

- John Robb, Director, Cooper Lighting and Safety

Accredited supplier scheme

› Searchable directory of Carbon Trust accredited suppliers

› Hosted on the Carbon Trust website, which receives over 400,000 unique visitors each year

› Aiming to become the ‘go to’ directory for organisations searching for high quality suppliers with a proven track record

› Wide range of energy efficient equipment and renewables technologies covered

› Email [email protected] or call 020 7170 7000

www.carbontrust.com/greenbusinessdirectory

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Our accredited suppliers are listed on the Green Business Directory

› Why am I here?

› Energy savings through lighting

› Barriers to implementation

› Energy Efficiency Financing

› Case studies

16

Agenda

1 2 3 4 5 6 70

10

20

30

40

50

60

Year

Annual savin

g (

£k)

During financing After financing

Illustrative savings profile

Energy Efficiency Finance

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Flexible financing can make projects cash flow positive from day one› £550m partnership between the Carbon Trust and Siemens Financial Services

› Financing structured so that savings exceed repayments

› Available for energy efficiency and renewables projects from as little as £1,000, with no upper limit

› Independent assessment of energy saving potential conducted by the Carbon Trust

How EEF can supports lighting suppliers

Supports growth in sales

Funding available for all types of businesses

Credibility of a Carbon Trust Assessment

Reduce risk of losing deals to competitors

Widens scope and scale of projects

Increased customer satisfaction

Convenient and Fast

Affordable payments and flexible terms

Easier budgeting

Leaves existing lines of credit intact

Environmental benefits

Tax efficient

How EEF can supports lighting customers

› Why am I here?

› Energy savings through lighting

› Barriers to implementation

› Energy Efficiency Financing

› Case studies

19

Agenda

Case Study #1: Small retail shop

Existing Lighting System

Mixture of 79 luminaires at London high-street shopTungsten halogen spotlights and some fluorescent lighting to be replacedExisting equipment is typically inefficient with shorter lamp life

Proposed Lighting System

LED replacements of suitable types to replace all existing fittingsHigher efficiency with improved efficacy: up to 90lm/W for LED*Longer life: up to 60,000Hrs to L70 for LED**

Existing Luminaire Replacement Lamp

50W MR16 Halogen Down light 9W GU10 Down light

35W MR16 Halogen Down light 9W GU10 Down light

50W GU10 Halogen Down light 9W GU10 Down light

45W Specialist watch cabinet lighting LED Strip-light

36W 4ft Fluorescent 20W 4ft LED tubes

50W E27 ‘Golf Ball’ Lamps 10W LED E27 ‘Golf Ball’ lamps

40W BC lamps 10W LED BC Lamps

Notes

*lm/W (lumens per watt) is a measure of the amount of light produced in lumens for each watt of electrical energy.** L70 is a term which denotes lamp life to a stage where only 70% of the original light output is produced. As LEDs degrade rather than fail this has become a standardised measure to define lamp life.

Small retail shop: Summary of energy cost saving assessment

Our assessment indicates that the proposed project should result in monthly energy and maintenance cost savings of £132.00

Monthly Energy & Maintenance Saving

Monthly Finance Payment

£0

£20

£40

£60

£80

£100

£120

£140£132.00 £123.76

Based on a financing term of 38 months

Small retail shop: Projected Year 1-7 cumulative savings

Case Study #2: Transport & Storage Company

Existing Lighting System

325 existing 400W High Bay Metal Halide luminaires across eight warehouse sitesIncluding ballast losses each fitting consumes 450WLighting operates 24hrs per day 7 days per week 51 weeks of the yearExisting equipment is typically inefficient with shorter lamp life of 20,000 hours

Proposed Lighting System

165W & 250W Induction Luminaires

Higher efficacy: up to 85 lm/W*

Long lamp life: up to 80,000Hrs

Reduced re-lamping costs will be

achieved due to long lamp life of

induction fittings

Existing Inefficient Luminaires High Efficiency Luminaires

400W Metal Halide High Bay Lighting High Bay Induction Lighting

Common throughout all eight warehouses. Warehouse 1,3 & 5 250WWarehouse 2,4,6,7 & 8 165W

Notes

*lm/W (lumens per watt) is a measure of the amount of light produced in lumens for each watt of electrical energy.

Transport & Storage Company: Summary of energy cost saving assessment

Our assessment indicates that the proposed project should result in monthly energy and maintenance cost savings of £5,303.00

Monthly Energy Sav-ing

Monthly Finance Payment

£0

£1,000

£2,000

£3,000

£4,000

£5,000

£6,000£5,303.00

£1,844.07

Based on a financing term of 60 months

Transport & Storage Company: Projected Year 1-7 cumulative savings

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› Collaborative procurement model to help Tesco’s suppliers invest in energy efficient lighting solutions

› Part of Tesco’s drive to reduce the carbon footprint of the products it sells by 30% by 2020

› Single solution provider procured by the Carbon Trust› Competitive process, limited to Carbon Trust Accredited Suppliers› Selection based on quality, whole-life cost and capital cost

› Collective purchasing power used to negotiate discounted rate card

› Successful pilot concluded in September; full roll out now underway

“Our suppliers have told us that cost and lack of knowledge can be the biggest barriers to making investment in energy savings. The Buying Club will address these concerns and support them in reducing their carbon footprint in a really practical way.”

- Chloe Meacher, Tesco Climate Change Manager

Tesco Buying ClubA collaborative approach to implementation

Get in touch:

Myles McCarthy, Director of Implementation, Carbon Trust› [email protected]› 07876 390 045

Ian Hunt, National BDM, Energy Efficiency Finance, Siemens› [email protected]› 07921 245 467

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