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PV is generally the stand-out choice when it comes to the installation of renewable energy technologies

The colour of money

Dovetailing environmental and financial sustainability, by Darren Riva, Head of Sales, Green Finance at Siemens Financial Services

Posted by Hannah Oakman | April 30, 2015 | Sustainability

Schools are a perfect place to instil the importance of environmental sustainability with the younger generation, yet many schools have failed to provide an inspiring example of energy efficiency to their pupils. Energy usage in school buildings accounts for almost 47% of all carbon dioxide emissions in council-owned buildings. Current school energy costs are estimated to increase to £652m per year, and this figure is likely to increase further. On average, the cost of energy per school is £27,000, but it is not unusual for secondary schools to have bills exceeding £80,000 – double the amount spent four years previously.

On the energy supply side, schools can also look to generate their own renewable energy through, for example, solar photovoltaic technology (PV), thereby subsidising their own use of energy while making earnings from the government’s incentive schemes such as the Feed-in Tariffs (FiTs). In fact, the government is actively promoting the potential benefits of solar PV to the public sector, in particular for schools. As most schools have a large roof, solar

PV is generally the stand-out choice when it comes to the installation of renewable energy technologies.

Generating energy from biomass fuel is also becoming a popular alternative, as there is a strong financial and environmental rationale for schools to install biomass boilers. As well as producing a low carbon type of energy, biomass boilers (which burn materials such as woodchips and wood pellets) operate with higher efficiency rates than old fossil fuel boilers, many of which have been installed in schools for decades. The introduction of the government financial support programme, the Renewable Heat Incentive (RHI), has also helped to drive interest. In addition to reducing carbon emissions and gaining green credentials, schools can cut down on their energy bills while receiving RHI payments for over 20 years by undertaking biomass heating projects.

With budgets ever squeezed however, many schools struggle to find upfront costs to fund energy-saving projects, creating the vicious cycle where precious budget capital is further eroded by an inadequate energy management policy. However, a lack of initial capital does not have to shatter investment ambitions. Leveraging alternative financing techniques available in the market means schools under budget pressure can still access and afford green technologies without straining their finances. One such flexible financing option is the Energy Efficiency Financing scheme (EEF).

A joint initiative between Siemens Financial Services Limited (SFS) and The Carbon Trust, the scheme is designed to provide finance for energy-efficient equipment and renewable technologies for organisations, where the expected savings in energy costs and/or income from energy generation offsets the monthly equipment finance costs, effectively making the investment zero net cost – or even cash positive. Prior to finance being agreed, the Carbon Trust conducts an independent energy savings assessment to verify that the expected energy savings/income generation will match or exceed the equipment finance payments, giving organisations the additional reassurance that the projected figures provided by their energy-saving equipment and technology suppliers are accurate.

Bede’s, a school in East Sussex, has made use of the EEF scheme in its £1.2m biomass heating project, one of the largest to date in the UK education sector. The green investment saw the replacement of the school’s 23 existing liquefied petroleum gas (LPG) and oil boilers with three wood pellet biomass boilers, which provide heating and hot water for the senior school and the three boarding properties. With a payback period of 10 years, the £1.2m tailored financing package not only included the acquisition of the biomass boilers and their installation, but also the renovation of the underground electrical infrastructure as well as the installation of a Building Management System (BMS) – a computerised temperature control and monitoring system.

Fuelled by wood pellets sourced from sustainable British woodlands, the biomass boilers are predicted to achieve energy savings of £70,000 per annum, along with an annual reduction of carbon emissions by over 580 tonnes. In addition, the school also benefits from RHI payments as part of the implementation.

Attitudes and behaviour towards sustainability are often framed at a young age and no institution is better placed than a school to cultivate a positive mindset towards environmental protection. With a proactive energy management policy, schools can yield significant energy savings which they can redeploy in their facilities and curriculum, creating the best educational and development environment for their pupils. The implementation of energy-efficiency measures on the school premises also provides practical teaching opportunities which allow for more direct engagement with students. Supported by flexible financing methods available in the market, schools can realise green investments that not only benefit pupils and staff, but also establish themselves as an exemplary leader in their commitment to the environment in the local communities. 

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