Birmingham Energy Savers - preparing for the Green Deal

Dave AllportProgramme Manager

dave.allport@birmingham.gov.uk

• Introduction to Birmingham Energy Savers, Green Deal and Energy Company Obligation

• Our aspirations• AIM HIGH• Next Steps

A G E N D A

Birmingham Energy Savers (BES)

BES is a BCC programme to improve the efficiency of buildings. It has 6 key outcomes

1. Cuts CO2 emissions2. Cuts cost and level of energy used by homes and

businesses3. Improves comfort and energy security4. Cuts fuel poverty among tenants & home owners5. Maximises job creation and investment through

capturing opportunities in the supply chain 6. Is self financing

Birmingham Energy Savers delivering the Green DealBES has authority from BCC to deliver the Green Deal (from Autumn 2012)

• First step is to procure our Green Deal delivery partner (DP).• BCC gives DP access to borrowing (£75m), brand and referral routes• DP (and BCC) promotes Green Deal to the households of Birmingham• DP arranges for qualified adviser to assess homes and identify energy efficiency

measures that meet Golden Rule– Golden Rule = the costs of the measures must be less than the savings

generated• Householder chooses measures and pay back period• DP checks the finance is available• Householder signs Green Deal agreement that adds service charge to electricity

bill• DP deploys certificated contractors to install measures at no upfront costs to

householder• Charge is attached to meter and stays attached even if owner / tenant / energy

company changes• Charge is collected by energy company and paid back to BCC

Energy Company Obligation helps where “golden rule” falls short

• £1.3b per year of energy company obligation (ECO )• 75% Carbon Savings (ECO-CS) and 25% Affordable Warmth

(ECO-AW)• ECO-CS – targets solid wall insulation (SWI) eg hard to

treat and pre-1919 properties (515k homes by 2015) • ECO-AW –targets super priority group of benefit

recipients in private housing (325k households by 2015)– Recipients of Pension Credit, Child Tax Credit or Income Support– Plus Disability or Pension Premium

• ECO-CS can be combined with GD and include other measures as long as SWI is 50% of costs

• ECO-AW expected to be 100% of costs

BES

Green Deal Paymentscollected via energy bill

Green Deal Payments

Generator meter (if PV is fitted)

Benefits

Energy Companies

Surveying

Marketing

Installing

Maintaining

DeliveryPartner

Green DealAgreement

Feed in Tariff

Originating, Managing

Collecting and allocating

Public Borrowing

ECO

Private Finance

BES Model Delivers Green Deal

BES aspirations

• 15,000 homes in pathfinder & 45,000 in extension• Include other authorities

– £488m pathfinder using public and private borrowing– 45,000 Homes and 500 public buildings– £1,080m extension using private finance– 114,000 houses and 1,800 buildings

• Total programme = £1.5b• Be the First! – kick start the green economy

Procuring our Delivery PartnerBackground to the Competitive Dialogue procurement process

• Competitive Dialogue allows BCC to openly meet and discuss the requirement with Bidders during the competition, helping the Bidder’s to develop proposed solutions against this unique requirement

• During the course of the competition ‘Solutions’ are developed progressively by Bidders using ‘Dialogue’ sessions between BCC and the Bidder to support this process

• Once Dialogue is completed Bidders submit their proposed Solutions in response to Questions asked by BCC

Progress to date and next steps• Market testing and engagement – Feb to Aug 2011• Opportunity advertised Sep 2011 • 12 submitted PQQ – many consortia• 7 invited to submit outline solutions• Two dialogue sessions before Christmas• Outline solutions submitted by 23rd Jan 2012• Stakeholder input sessions in Feb 2012• Expect to invite 4 to submit detailed solutions late Feb 2012• Competitive dialogue from Mar 2012 to Jun 2012• Final Tender Jul 2012 • Cabinet sign off Sep 2012• Contract signed• Green Deal go live in autumn 2012

How we’ve organised our resources to deliver the procurement…• We’ve identified 7 ‘Themes’

that reflect the key areas the DP will have to address.

• Task Groups have been created comprising of BCC (and partner) specialists for each of these Themes

• The overall programme is being co-ordinated by a Core Team with representatives from Finance, Legal and Procurement

Theme1: Marketing

Theme 7:Partnerships

Theme 6:Finance &

Loans

Theme 5:Business Systems

Theme 4: Employment &

Training

Theme 3:Supply

Chain Mgt

Theme 2:Assessment, Installation &

Refurbishment

BES Core Team

Aim High - preparing for the Green Deal

Dave AllportProgramme Manager

dave.allport@birmingham.gov.uk

Aim High• Project to showcase innovative low carbon products/ solutions c. £4m;• Brings together ERDF (£2m); CESP via British Gas (£1m); BCC Capital

Programme (£1m); RESCO (£400k) & Buy for Good (£50k)• Capital Spend - September 2011 – 2013:

– 2011 - £315k; 2012 - £2.7m; 2013 - £447k • 3 procurement ‘tranches’• Focus on energy efficiency improvements in ‘hard to treat’ properties:

– Pre-1919 terraces; Non-traditional Properties; Flats• Opportunity to field trial innovative products and applications• Emphasis on demonstration and dissemination of learning• Emphasis on business & employment growth• Helping to prepare local and regional suppliers for Green Deal

Aim High Outcomes

• 348 BCC households in disadvantaged areas lifted out of fuel poverty

• 120 SME’s assisted and supported to prepare for the economic opportunities presented by the Green Deal

• Local workforce gain skills and experience in innovative technologies

• Innovative manufacturers engaged and encouraged to invest in Birmingham

• CO2 emissions from domestic properties reduced by 538 tonnes• Improved health & comfort for people in disadvantaged areas

The Aim High ‘Need’

No cavity to Insulate

Desire to preserve

architectural heritage

Single glazed windows

Inefficient electrical

infrastructure

Complex heating

Controls

Uninsulated Roofs, Doors, Floors & Walls

Inefficient boilers & heating controls

‘Wasteful’ use of fuel by

inhabitants

Cold in winter & overheating

in Summer

Inefficient lighting

Unhealthy living

conditions

Aim High Supply Chain Outcomes• Meaningful field testing of innovative products which maximise the energy efficiency

of ‘hard to treat’ properties• Carbon emissions reduction• Accessibility to local, small and diverse suppliers• Growth of local and regional product suppliers • The creation of employment and training opportunities• Local & regional suppliers ready for opportunity presented by Green Deal• Optimal resident experience of installation and product• Resident behaviours changed to ensure sustainable reductions in energy usage• Reduction in fuel poverty levels of residents• Improvement in health and comfort of residents• Flexibility to adapt to the evolving project and market• Continuous improvement - competitiveness and innovation• The use of environmentally and socially responsible suppliers

Procurement Criteria1. What market need does your product/ solution fulfil?

– How ‘close to market’ is the product/ solution?– What innovation does it bring to the UK housing market?– What energy efficiency improvements does it deliver?– How does it deliver a carbon emissions reduction?– How does it alleviate fuel poverty?– How has the product/ solution been quality tested?– Is the product/ solution accredited?

2. What market barriers are you currently experiencing?– e.g. Investment availability/ Marketing difficulties/ Lack of qualified installers?– Do you have a business plan?– What volume of sales are required to enable you to reduce unit prices?– How scalable is your product/ solution?– What number/type/ age/ size of properties do you require in order to conduct a

meaningful field test?

3. How does your product ensure an optimal resident experience?– How do you ensure that installation procedures are efficient and minimise the

disruption to resident?– If your product/ solution has a user interface, how do you ensure that it is simple

and intuitive?– How does your product/ solution improve comfort levels throughout the year?– How does your product/ solution improve the living conditions of residents?– What monetary savings saving will the product deliver for residents?

4. What are the supply, installation and maintenance costs?– What are material/ installation/ maintenance / monitoring costs?– What is the whole life cost of product?– Are preparatory/ follow up works necessary?– What level of warranty is offered and for what time period?– What are maintenance and monitoring requirements?

5. If your product/ solution is trialled by Aim High how will this contribute to local economic development?

• What business growth will result for your organisation and supply chain?- Manufacturing/ distribution/ installation/ ancillary works/ after care?

• What skills are required to produce, install and maintain your product/ solution?• What employment and training opportunities will be created?• What will be impact on local/ regional SME’s?• How will you develop partnerships to foster a culture of innovation?

6. How do you ensure that your own organisation and your supply chain operate in an environmentally and socially responsible manner?

• What are whole life carbon costs?• Does your product/ solution contain recycled or remanufactured content?• How do you manage the waste streams associated with the production/

installation and maintenance of your product and solution?• How do you assure environmental and social standards in your supply chain?

The Aim High Procurement Team

Birmingham City Council –

BirminghamEnergy Savers

G Purchase Construction Ltd. –

Procurement Partner

RESCO –Business Support

Partner

Buy for Good –Business Support

Partner

Procuring the products/ solutions

Supporting the Supply Chain to develop capability and through the procurement process

www.birminghamenergysavers.org.uk

dave.allport@birmingham.gov.uk

Thank You