March 2022 edition: Tackling Energy Price Inflation – What can Trusts do?

Tackling Energy Price Inflation – What can Trusts do?

Everyone wants to take action on climate change but the recent and unprecedented rises in electricity and gas prices have added further urgency to this issue.

As we argued in our last Trust article, Doing nothing is no longer an option but, with many technologies, suppliers and funders in the market, many Responsible Bodies do not know where to start or are worried about making the wrong decision.

What action can we take to mitigate the impact of energy price rises?

There are 3 main areas where schools and Trusts can implement change. And this will not only reduce carbon emissions but save money too.

1. Energy Procurement

You can buy your energy in an efficient and sustainable manner across your organisation. Using a specialist broker who understands the market and gets to know your organisation, can help in finding the best tariffs and contracts. But how to find the right partner? Here are some things to consider:

  • One size does not fit all. Find a broker who gets to know your organisation’s buildings, financial status and risk profile.

  • Get full transparency on fees and commission structure. Will they offer you a good service in the long run or just offer a short-term sale?

  • Make sure you discuss and understand the benefits and risks of different contract lengths.

  • Beware of brokers that require immediate decision-making, early in the sales process

  • Supplier pool - Is the broker full-market or do they only work with a few suppliers?

  • Range of products - Understand what products and associated services are on offer such as metering, billing and reporting.

  • Check for conflicts of interest. Will your energy broker be motivated to support on energy reduction programmes?

2. Reduce Energy Consumption

50-60% of energy in a typical school is used when there are no students in the building. Reducing the amount of energy consumed will save costs and reduce carbon emissions. For most Trusts the areas of most benefit come from the following:

  • Switching to LED lighting

  • Insulation of building fabric and heating pipework

  • Correctly operating Building Management Systems

    Everyone wants to take action on climate change but the recent and unprecedented rises in electricity and gas prices have added further urgency to this issue.

    Robert Gould

  • Installation of heating controls

  • Smart switching or heating and electrical systems.

  • Behavioural change for building users

Many of these can be done at low cost or with zero capital and offer significant returns on investment. It is important to do your due diligence and seek professional advice.

3. Generate Renewable Energy

The more energy you can generate, the less reliant on shifting energy prices you will be. A school can typically generate 25% of its electricity on site from Solar PV panels at a fraction of the cost of buying from the grid. Funding solutions are available to enable schools and Trusts to do this even if they do not have available capital. Many Trusts with reserves are looking at the potential returns available as part of their treasury management strategy.

Things to think about when considering a Solar PV installation:

  • Size of the system: This should be sized to suit your electricity consumption, not the size of your roof.

  • Permissions: You may need planning permission and/or a licence to alter before installing a PV array.

  • Building condition: It is important to consider the building you are proposing to install your Solar panels on. A Solar PV system has an expected life of 25 years so is the roof going to last as long or is maintenance required?

  • Warranties: Look for warranties that run for the same time or longer than any associated finance solutions. If you are installing panels on a roof with a warranty, ensure that this is not invalidated when the panels are installed.

  • Maintenance: Make allowances for ongoing maintenance of the system when building your business case. Panels will require electrical safety checks, physical checks of mounting systems and regular cleaning to ensure efficient and safe operation. Invertors will typically need to be replaced halfway through a 25 year lifecycle.

What do we do now?

  • Get a plan in place. Devising an energy strategy need not be complicated but will help to focus activity and promote action.

  • Start simple and build your plan at your own pace. Develop areas that are priorities for your estate and remain open and responsive to changes in technology and funding structures.

  • Setting your overall strategy and targets can be a quick win. Separating this out from the detail of delivery helps make the task manageable.

  • Go for the quick wins. For the majority of Trusts, your initial focus should be on Solar PV, LED lighting and energy procurement as these are not dependent on securing grant funding and provide financial surpluses that can fund future activity.

  • Get yourself "bid ready”. Whether through Trust-wide energy audits or targeted feasibility studies, it pays to have information available for grant applications so that you can react quickly when new schemes open up.

By taking a strategic approach and implementing some of the quick win projects outlined above, many Trusts have already met or exceeded their 2030 carbon reduction targets with little capital expenditure. Never, has it been more important to start your journey towards Net Zero.

Barker Associates is a CST Platinum Partner.