Carbon trust-financing-energy-saving-projects-geoff-smyth

Financing Energy Saving Projects

Sustainex March 2013

Agenda

› Introduc)on to the Carbon Trust

› The energy efficiency opportunity

› Interest-‐free Energy Efficiency Loan Scheme

› Energy Efficiency Financing Scheme

The Carbon Trust

› We are an independent, expert partner of leading organisaBons around the world, helping them contribute to and benefit from a more sustainable world

-‐ We advise businesses, governments and the public sector on their opportuniBes in a sustainable, low carbon world

-‐ We measure and cer)fy the environmental footprint of organisaBons, products and services

-‐ We help develop and deploy low carbon technologies and soluBons, from energy efficiency to renewable power

› We are not for dividend, with surpluses from our commercial acBviBes reinvested into our mission

› We have about 150 employees working around the world from offices in the UK and China

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

3

Business Advice Helping businesses capture the opportuniBes in the move to a low carbon economy

Public Sector Advice Enabling the public sector to develop carbon management strategies to cut energy costs and carbon emissions

Government Advice Providing cuNng-‐edge policy advice and insights on the transformaBon of markets towards a low carbon economy

We advise businesses, governments and the public sector on their opportuniBes in a sustainable, low carbon world

What we do: Example clients:

4

We measure and cerBfy the environmental footprint of organisaBons, products and services

Measuring Understanding the environmental impact of your organisaBon, products and supply-‐chain and how reducing it can create a beOer business

Cer)fying Providing independent verificaBon that can make your business thrive in a low carbon economy


5

We help develop and deploy low carbon technologies and soluBons, from energy efficiency to renewable power

Implementa)on and Finance Providing experBse, equipment suppliers and financing to help your business put energy efficiency plans into acBon

Innova)on Helping you create value from the clean technology revoluBon


6

Agenda

› IntroducBon to the Carbon Trust




The case for invesBng in energy efficiency is compelling

8

0 10 20 30 40 50

Renewable energy (inc. subsidies)

Typical business investments

Energy efficiency

Internal rate of return (%)

Typical returns from energy efficiency measures relaBve to other investments

40-‐50%

10-‐15%

5-‐10%

Source: Carbon Trust analysis

The opportuniBes are found in every sector and every business

Opera)onal Efficiency and Behavioural Change Low/no cost savings through measuring and monitoring energy use, staff engagement and appropriate improvements to the use and maintenance of exisBng equipment

Building Energy Efficiency Investment in new building technologies including: • Controls • Air condiBoning • LighBng • VenBlaBon • HeaBng

Industrial/Process Energy Efficiency Investment in new industrial technologies and processes including: • Motors & drives • RefrigeraBon • Compressed air • Process heaBng • Process controls

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

9

It is no surprise a lot has been achieved …but a lot more sBll needs to be done

35,000 On site surveys

delivered

75% Of FTSE 250 we have

worked with

£1.6bn Energy Efficiency CAPEX we have helped our customers

implement

£4.5bn Energy savings since

2001

60% Energy Saving

recommenda)ons not yet taken forward

Carbon Trust impact to date But…

50,000 Advice line calls per

annum

10

• Awareness of opportuniBes within both the sector and own operaBons

• Lack of appreciaBon of returns available • No clear prioriBsaBon roadmap

We have idenBfied three main barriers to implementaBon

Lack of funds

Lack of awareness

Lack of confidence

• CompeBng pressures on available capital • Lack of finance available in business • Split incenBves (landlord/tenant, departmental

budgets – capex/opex) • Business horizons

Common barriers Details

• Difficulty developing business case and gaining internal buy-‐in to financial and other benefits

• Unsure that claimed benefits will be achieved • Difficulty in selecBng the correct equipment or finding

the best suppliers

11

Our services help businesses overcome them

Lack of funds

Lack of awareness

Lack of confidence

Advice -‐ Energy saving experBse

Energy efficiency finance schemes

Common barriers How we help

ImplementaBon Support

Energy efficiency made easy

12

Agenda





Carbon Trust Interest-‐Free Loans

Key features of the interest-‐free Loan Scheme:

" Your business can borrow between £3,000 and £400,000 interest free to buy

energy-‐saving equipment

" The savings you make on energy bills should offset your loan repayments, meaning

the energy efficient equipment will pay for itself

" Our loans are government-‐funded and unsecured

" It is easy to apply for our loans and we don't charge any arrangement fees

" You will receive a condi)onal offer within 24 hours of your applicaBon being

processed and you can track its progress online, and

" You have up to four years to repay your loan

Thanks to support from Invest Northern Ireland, we are able to help businesses invest in low carbon equipment and create successful energy-‐saving and renewable energy projects through the provision of interest-‐free loans.

600 Loans to local businesses

>£24m Capital loaned for energy projects

Interest-‐free Loans in Northern Ireland

£50m Value of implemented projects

>£100m Reduc)on in life)me energy costs

Currently 85% of projects are undertaken with local suppliers

38%

18% 10%

10%

8%

6%

4% 6%

LighBng

HVAC

Compressed air

Process

RefrigeraBon

RE & CHP

DHW

Other

Interest-‐free Loans in Northern Ireland by technology

Eligibility Criteria

All businesses & voluntary sector organisaBons registered in Northern Ireland are eligible to apply..

Providing they have:

" A trading history of at least 12 months

" An acceptable credit raBng

" No involvement in primary agriculture, fisheries and transport

Qualifying Projects

" Qualify if savings payback the loan within 5 years – InstallaBon costs can be included – Based on energy savings only

OR

• If payback >5 years the loan is capped at 5 Bmes the annual saving

AND

• Carbon threshold: 1.5 t/CO2 per £1,000 loan

What equipment can be purchased with an interest-‐free loan?

" Any equipment that saves or generates an onsite* energy saving

" Examples range from insulaBon through to CHP or renewables

" Projects may be co-‐joined (say, heaBng and lighBng projects)

" Equipment does NOT need to be listed on the Energy Technology List of the ECA scheme

* Off-site renewable energy projects may qualify, subject to conditions

Repayment period

To calculate the repayment period, simply divide the loan amount by the annual energy saving e.g.

£100,000 loan / saving £30,000 pa = 3.33 year simple payback for which we would offer

a 4 year loan

The loan is designed to pay for itself

Vital Sta)s)cs

" Interest Free

" Unsecured

0% interest

No Annual

Fee

No Set up Fees

No Director Guarantees

No Charge over assets

Vital Sta)s)cs

Borrow

£100,000

Pay Back

£100,000

How easy is it to apply?

" An on-‐line applicaBon process

– 30 minutes maximum (with all the data to hand)

– Customer or some Suppliers can drive the applicaBon

– SupporBng documents uploaded

– CondiBonal offer to the customer once the applicaBon submiOed

Payments

£ 30% Deposit

££ 60% On Delivery

£££ 10% for Commissioning

All paid directly to the customer

Applica)on Process Overview

Pre-‐Customer Submission

Submission

Process ApplicaBon

UncondiBonal Loan Offer

Draw Down the Loan

" It takes us an average of 5 business days to process applicaBons: – Conduct an energy assessment on the

recommended project – Assess the eligibility of the business and the project – Recommend the project for a loan

" Delays may occur for incomplete applicaBons. Fortunately, this can easily be miBgated

Ligh)ng upgrade in manufacturing company

Project details: • Old technology: Switch-‐start T12 luminaires • New technology: High frequency T5 tri-‐phosphor • Monthly 0% finance £2.5k fixed; Monthly savings £3.4k+; Energy price inflaBon 4% pa

CHP in a hotel

Project details: • Monthly 0% finance £3.4k fixed; Monthly savings £3.7k+; Energy price inflation 4% pa

Biomass in a manufacturing company

Project details: • Monthly 0% finance £4.4k fixed; Monthly savings £4.5k+; Energy price inflation 4% pa

£1,631 £3,841

£59,219 £61,587

£64,051 £66,613

£69,277 £72,049

£74,930 £77,928

£0

£10,000

£20,000

£30,000

£40,000

£50,000

£60,000

£70,000

£80,000

£90,000

1 2 3 4 5 6 7 8 9 10 Year

Net annual benefit during finance term

Subsequent annual benefit

Projected Year 1 – 10 Ca

sh Flow

(negaB

ve = expen

diture, posiBve = income)

More informa)on on Loans ...

" Website

– hOp://www.carbontrust.com/client-‐services/northern-‐ireland

" Carbon Trust Loans – Tel: 028 9073 4394 – Email: [email protected] – Janine Cobain, Belfast Office

Agenda





Overview of the Energy Efficiency Financing Scheme

Easier Integrated Flexible

" Convenient and fast -‐ arranged through your chosen recognised Energy Efficiency

Financing supplier

" Affordable -‐ designed so that financing payments are offset against the anBcipated

energy savings

" Flexible -‐ payments can be tailored for individual circumstances

" Easier budge)ng -‐ payments are fixed, not subject to fluctuaBons in interest rates

" Maintains exisBng credit lines

" Tax efficient -‐ payments may be offset against tax, depending on individual

circumstances

" Future proofed -‐ allows the flexibility to change with your business requirements

" Conserves working capital -‐ the flexibility to conserve your exisBng working capital

for other business projects

Who can apply for Energy Efficient Financing?

FOR ALL CUSTOMERS

Customer’s full trading style

Customer’s address and postcode

The date the business was established

Details of energy efficient equipment to be financed.

FOR LIMITED COMPANIES & PLCs

Company registration number

If <3 years trading, details of directors and their home addresses

FOR SOLE TRADERS & PARTNERSHIPS Full name(s) of sole trader/all partners 3 years trading, evidence of date started, eg

VAT number For applications >£5,000 up to date accounts

Trading Information Customer Details

All types of organisaBons

From sole traders and partnerships through to large corporaBons and government bodies

The Application Process

Payment is made to the supplier

Equipment can be installed

The agreement is formalised

Energy saving assessment is completed

A credit check will be completed

Complete the Finance Proposal Form

Ligh)ng upgrade in manufacturing company

Project details: • Old technology: 400/450W high-‐bay metal halide luminaires • New technology: 160/216/320W high frequency T5 floodlights • Monthly finance £1.3k fixed; Monthly savings £2k+; Energy price inflaBon 4% pa

Waste-‐to-‐Energy project with a minerals company

Project details: • Installation of Organic Rankin Cycle (ORC) waste heat powered generators • Monthly finance £22k fixed; Monthly savings £20k+; Energy price inflation 4% pa

More informa)on on Energy Efficiency Financing Scheme…

" Website

– hOp://finance.siemens.com/financialservices/uk/products_soluBons/equipment-‐finance-‐leasing/energy-‐efficiency-‐financing/Pages/index.aspx

" Siemens Financial Services – Tel: 01753 434476 – Email: [email protected]

Carbon Trust

The contents of this presentation are the copyright of the Carbon Trust and may not be copied or republished without the prior written consent of the Carbon Trust. The trade marks, service marks and logo used in this presentation are the

property of the Carbon Trust and no licence or right is granted to use any such marks or logo.

For further advice and to access the services from the Carbon Trust, visit our website at:

www.carbontrust.com