Case of the month - London

APRIL 2013
GREEN BUILDING POLICIES - INTERNATIONAL CASES






Policy   RE:FIT public buildings programme - Building energy efficiency for tomorrow
City
London
Promotor
Mayor of London
Establishment   

The RE:FIT programme was established in 2008
Territorial scope
City level



Target buildings  



Owner

 Type

 Function

Public buildings

 New buildings    
 Residential

Private buildings
 Existing buildings
 Industrial, services, etc.

Main Targets



 
  • Substantial energy and carbon savings – typical savings of up to 28% per year;
  • A guaranteed and contractually return on investment;
  • 5-7 years payback periods;
  • An easy to use framework enabling simple tenders competition in line with public sector procurement requirements;
Summary



The RE:FIT scheme is an ambitious measure of the Mayor of London’s to provide a retrofitting scheme for the public sector to retrofit existing buildings, by improving their energy performance and reduce their CO2 footprint.

Available to all public sector organisations, the RE:FIT programme streamlines an ESCO (Energy Service Company) model to implement energy efficiency measures such as district heating, lighting, insulation and solar thermal, to allow running costs, energy consumption and carbon emissions reduction. The ESCO model is provided by a group of 13 selected framework suppliers in order to guarantee the level of energy savings and offering a secure financial saving over the agreement period.

 

RE:FIT background

The retrofitting scheme RE:FIT is included in a set of retrofitting measures integrated in the London Mayor’s Climate change mitigation and energy strategy.

To limit further climate change in London, the Greater London Authority (GLA) published the Delivering London’s Energy Future strategy, recognising that nearly 80% of CO2 emissions produced in the city come from buildings, and introduced a set of specific incentives for this sector: RE:FIT, RE:NEW, RE:CONNECT, and Decentralised Energy Programme.

A pilot phase of RE:FIT programme was tested on 42 public sector buildings, which achieved significant savings in carbon emissions and energy consumption. The successful pilot stage provided the launch of a new RE:FIT flexible framework for a further 4 years period, including a range of funding options, simpler tenders competition options and more specific requirements and contractual terms.

 

Financing RE:FIT

The programme is entirely funded by the Greater London Authority and the EU ELENA (European Local Energy Assistance) funding programme.

However, the RE:FIT framework recognises a wide range of finance approaches by each public sector organisations, including:

  • Own funding;
  • Borrowing directly by London Energy Efficiency Fund/Banks/Salix or Public Works Loan Board;
  • Finance through a third party which could include “off –balance sheet” options.


RE:FIT Framework

Under a flexible framework, each RE:FIT process will follow the summarized stages:

1.    Commit to engage with RE:FIT programme – signature of a RE:FIT Memorandum of Understanding (MoU) committing to proceed with the RE:FIT Framework and supplier base to contribute to achieving emission reduction targets;

2.    Identify resources & funding approach – provision of building data including energy information, and the establishment of the most advantageous funding approach;

3.    Prepare invitation to tenders – this stage provides the project brief forms basis for the tenders mini-competition (between the 13 ESCOs involved) and includes the specific organisation financial requirements including payback periods, technical and operational requirements  and contract model options;

4.    Run mini-competition – stage which comprises site visits by the ESCOs involved in the competition, reception, revision and evaluation of proposal submissions, hold ESCOs interviews and the selection of the winner ESCO preferred proposal;

5.    Full investment grade proposals – following the ESCO selection, this stage involves the establishment of an Investment Grade Proposal (IGP) of each building, that sets out the Energy Conservation Measures (ECMs) to be installed, tonnes of CO2 to be saved each year, capital costs, payback period and a monitoring and verification plan. Once the IGP is accepted the buildings contract with the ESCO is signed;

6.    Install energy conservation measures – in this stage the ESCO installs the energy conservation measures in the public organisation buildings, and the organisation can begin to measure the energy and carbon reduction savings from the earliest point identified in the Investment Grade Proposal (IGP);

7.    Benefits delivery/monitor performance – the last stage comprises the measurement and verification report carried out by the ESCO throughout the payback period, detailing energy and carbon reductions records over the reporting period.

 

Successful results

The RE:FIT programme has completed retrofit works in 67 London public sector organisations, including 25 of the 33 London Boroughs, 18 NHS organisations and 24 other organisations, such as central government, museums and educational institutions. This overall process represents a capital investment around 15.000€ (£13m) and an estimated CO2 reduction of 12.000 tonnes per year.

The programme has won several distinctions in the fields of sustainability, highlighting the award of the ManagEnergy Local Energy Action Award 2011, where RE:FIT won the technical project category.





Links

http://www.refit.org.uk/what-refit/



http://www.refit.org.uk/files/3213/6541/1144/REFIT_Briefing_Note_Apr_2013.pdf