New approach could save councils £500m annually

Councils in Britain could save an estimated £500 million a year if they were to take a new approach to tackling their energy efficiency, a leading cleantech expert has claimed.

The ‘ESCO model’, already popular in the US and Germany, allows councils and other organisations to upgrade their properties and assets without the need to allocate precious funds – “which is vital at a time when budgets are under extreme pressure”, says Adrian Pike, CEO of Anesco.

The model works by examining current energy usage and planning the most effective mix of energy efficiency measures and upgrades that could be made to bring the greatest benefit. The measures are then installed at no upfront cost, through an investor-backed funding route.

Adrian estimates that if councils were to undertake an ESCO they could reduce energy expenditure by around a third each year, potentially rising to up to 50% in certain areas, and generating annual savings running into the hundreds of millions of pounds.

Adrian explains: “The ESCO model is a sustainable and highly effective way for local authorities, businesses and other organisations to tackle their energy usage and carbon emissions, without facing any upfront costs.

“For many local authorities budgets remain tight. This approach can help free up monies that may otherwise have been needed for upgrades of this kind, while replacing equipment reaching the end of its life, reducing maintenance costs and making long-term improvements to the building stock.”  

Mid Devon District Council recently became the first organisation in the country to tackle its energy usage by undertaking a fully funded, multi-site and multi-measure ESCO. Following completion of the project the council is in line to make a guaranteed annual savings of 28% on its energy bills, while reducing its carbon emissions by a third.

The project was designed and managed by Anesco using locally based teams.

Adrian added: “Mid Devon is a forward thinking council and had already undertaken a range of upgrades to improve its energy efficiency. However, through the ESCO model they were able to achieve substantial additional savings – reducing their annual expenditure by a third.”

The upgrades at Mid Devon were provided by energy services company Anesco Energy Services (South) Ltd (AESSL) and come at no upfront cost to the council. The cost is being recouped by AESSL both through sharing a percentage of the savings generated on energy bills and through the government’s Renewable Heat Incentive (RHI) scheme. The agreement will run for 12 years, after which time the council will receive the full benefit of the energy savings generated.