United Kingdom
Power politics - Michael Ware
Green issues took a back seat in the general election but that’s no reason for town halls and NHS trusts to ignore them. Installing wind and solar power in public buildings will cut both costs and emissions.
We are actually in the midst of an industrial revolution from ‘micro-generation’, where individuals, small firms and even the public sector can utilise their assets to produce low-carbon heat and power.
But the potential remains largely untapped. In the 90 minutes it will take England to lose in the quarter-finals of this year’s World Cup, the sun will beam enough light on to our planet to power global energy needs for two years. Not a lot of people know that, and fewer still in the public sector are doing anything about it.
According to the Office for National Statistics, the public sector consumes energy equivalent to 7 million tonnes of oil every year. Only a tiny fraction of this is derived from renewable sources. The sector also emits 9.7 million tonnes of CO2, which is at least four times more than the emissions of the domestic aviation industry.
The public sector also has the largest collection of roofs, buildings and windy open spaces in the UK and hence has the potential to be at the forefront of a green revolution. But with the exception of a few brave pathfinders, most are still buying energy made from dirty fossil fuels rather than the wind and the sun.
The primary objection to all of this is, is, of course, money. All micro-generation requires an upfront investment followed by an uncertain but definitely long payback period.
The outgoing government, to its credit, did try to create a more amenable financial environment by introducing Feed-In Tariffs. In essence, these work by giving micro-generators a cash payment for every unit of energy produced, even though they consume it themselves, plus a cash payment for anything exported back to the grid. A typical medium-sized school with solar panels on the roof, a wind turbine in the grounds and a biomass boiler in the basement could make £20,000 per year in income and savings.
The tariffs are designed to give an internal rate of return of 8%–10% for electricity and 10%–12% for heat. Not spectacular but not shabby in a world where bank base rates bump along at 0.5%.
So why this apparent reticence on the part of the public sector to save money and what can be done to change it? First, to be fair, the Feed-in Tariffs regime for electricity is relatively new and the equivalent scheme for heat will not come in until April 2011.
Secondly, not all sites are suitable. With renewable energy, location is everything. For example, a wind turbine needs an average wind speed of at least 8 miles per hour over the course of a year; easily achievable on the north coast of Scotland, less so in a playing field in leafy Surrey.
Finally, the private sector has so far focused its marketing drive on the angsty middle-class domestic market rather than the public sector. This is probably why the Prime Minister has a wind turbine on his roof and my local school doesn’t. It is a matter of understandable expediency on behalf of the technology suppliers. It’s his roof, there are millions of people like him, and they can all make a decision a lot quicker than a council finance committee.
Despite all of this, there remains a wall of private sector money that is keen to get involved in anything secure and vaguely green, so finding a partner will not be an issue.
Whatever your organisation does, the key is to do something and do it now. Every sunny day and every gust of wind is a missed opportunity to make savings.
For the hard-pushed local finance director, the rules of the energy game have changed. Time is not money anymore, the weather is.