HEFCE : Publications : 1996 : M 5/96 - Energy Management Study in the Higher Education Sector: National Report

Higher Education Funding Councils for England, Scotland and Wales and Department for Education, Northern Ireland

Energy Management Study in the Higher Education Sector: National Report

Ref M 5/96

Published February 1996

The electronic version of this document contains the list of contents and Executive Summary only.

The complete printed document is available from the HEFCE, price £5.00.

1. Foreword
2. Executive Summary
3. Introduction
4. Energy Management within the Sector
5. A Way Forward: 5.1. Vice-Chancellors, Principals and Directors; 5.2. Energy Committees; 5.3. Senior Management Teams; 5.4. Heads of Estates; 5.5. Heads of Finance
6. Appendices: Membership of Panels; Participating Institutions - Feasibility Sites etc; A Way Forward - Key Task Checklist

2. Executive Summary

Introduction

Following wide consultation involving all UK Higher Education institutions during 1993, Energy Management was ranked by the HE sector as one of a number of subject areas of management concern to institutions. It is, therefore, the first of a series of studies to be undertaken as part of the Higher Education Funding Councils' Value for Money (VfM) Initiative.

The study has been undertaken under the direction of the UK VfM Steering Group chaired by Professor Tom Husband, Vice-Chancellor, University of Salford. The development work in respect of the national products arising from this particular study has been carried out by members of the Validation and Verification Panels in conjunction with Project Team staff. Details of the membership of the Steering Group, the Validation and Verification Panels and the HE institutions involved in this study are given in the Appendices. The study has been co-ordinated by staff of the Higher Education Funding Council for England (HEFCE).

Overview of Study Findings

The study has found a wide range of good practice and real achievement within the HE sector. Within this report, therefore, cameos of good practice found in some institutions have been provided in order to illustrate to all institutions the worthwhile benefits to be gained from having effective energy management arrangements in place.

As part of the study, the opportunity was also taken to contact UK and international organisations within the public and private sectors. The aim was to identify sources of advice and good energy management practices and to provide further examples of such that could be shared with the HE sector.

The main findings of the study are as follows:

Commitment from senior management and adequately funded staffing resources are required to deliver effective energy management.

The experience of the various sites involved with this study suggests that overall energy savings of between 10% and 20% of utilities spend are possible over a period, but only if institutions provide the appropriate level of commitment and resources.: An effective energy management programme should be financially self-supporting and a datum point should be established from which to measure all subsequent improvements. Many institutions have financed their energy management programmes from savings resulting from more effective utility purchasing arrangements and from the installation of energy saving equipment. An effective energy management programme administered by dedicated staffing has reduced energy consumption at one institution by 20%. The persons responsible for energy management are continuing to make further improvements whilst maintaining the initiatives implemented in previous years. The savings resulting from the energy management programme more than cover the costs incurred. Several institutions have similarly financed the equipment and the salary costs of energy management staff in this way.
The Management Review Guide provides HEIs with the tools to conduct a co-ordinated, management-led review of the energy management arrangements at their institution.

Raising the awareness of the importance of energy efficiency promotes energy conservation.

With user involvement the potential exists for reducing consumption of energy.: One institution which has promoted energy awareness amongst its staff and students has found that by doing so it assists the Estates Department in the implementation of energy management initiatives within the institution and generates valuable feedback from both staff and students. Energy awareness has been promoted by a diverse range of actions such as poster and sticker campaigns, training sessions, written articles in newsletters, etc. The awareness programme detailed the role and responsibilities of the Estates Department staff in administering the energy management programme; stated the level of investment of resources for energy projects provided by the institution; and indicated the commitment of the institution in regard to energy conservation. The institution's experience has been that energy awareness programmes have enabled it to effect changes relating to energy conservation more readily and that energy cost savings of 8% of its annual energy budget have been achieved.; Both staff and students can be motivated by environmental concerns to reduce energy consumption. However, sometimes, monetary incentives are needed. One institution has introduced prepaid electricity cards at one of its student residences which has led to improved control of lighting and heating by students. The energy savings achieved represented a reduction of 40% in energy consumption costs when compared with a similar residence with a centralised plant and where energy costs are paid indirectly by the students. The cost of the meters was included within the development costs of the scheme and the administration time, associated with issuing the cards to students, is minimal. The payback on the development costs was less than a year and the ongoing administration costs were covered by the savings in energy costs.
This report, the Management Review Guide and the Energy Management Benchmarking Software provide the institution with a vehicle to establish and progress an Energy Management Initiative, which commences with adopting or reviewing an Energy Policy. The Energy Policy should include both long-term and short to medium-term objectives.

Energy costs are manageable costs. Promoting energy management aids cost control.

The sector has effectively managed the transition to a deregulated energy market and achieved significant cost reductions.: Over a two-year period, one institution has progressively reduced the price paid for natural gas from 1.3p per kWh to 0.51p per kWh, a reduction of 61%, leading to annual savings of £346,000.
Most building and maintenance programmes already seek to consider energy efficiency.: At one institution, the planned maintenance programme identified that the chiller plant equipment serving a computer building was in need of replacement. Future operational requirements for such equipment were considered, with the result that a smaller unit, which would meet those requirements, was fitted. Energy-efficient design and operational aspects were also included in respect of the replacement chiller plant. As a result of the above actions, annual cost savings of £200,000 were achieved, equating to a payback period of approximately one year.; The importance of regular boiler maintenance was illustrated at one institution when, following a considerable period of neglect, annual savings of £7,000 were obtained after cleaning the boilers and resetting the burners.
Energy projects compete for available funds; therefore investment criteria need to be identified to prioritise funds and the actions required.: When new buildings or major refurbishment projects are being considered, a problem often encountered is the removal of energy saving equipment included within the initial new buildings design or refurbishment specifications, due to budgetary constraints. At one institution, design alterations were made on the grounds of costs, but subsequently the energy equipment originally specified was fitted one year later at approximately twice the price and with significant disruption to staff and students. The above situation can also occur because the building design and development team is independent of the user operating team (i.e. the Estates and User Departments). The above problems have been overcome at many institutions by involving the energy management team and departmental users at an early stage in the design process. The further involvement of the energy management staff and departmental users can also help to ensure the success and the smooth completion of the later stages in the building and commissioning processes. The above arrangements can assist the institution to ensure that all new or major projects incorporate energy efficient design aspects in order to minimise long-term operating costs. The option to install energy equipment at a later date, funded from the energy management budget, can sometimes provide a sensible and practical solution to funding part of the overall building project costs. However, life-cycle costing should always be considered for all major building projects in order to minimise long-term costs. Typical savings of 10% of development costs can be gained.
Institutions should quantify and report more effectively their achievements in energy management.: At a number of institutions, energy management staff have found that liaison with departmental staff groups, sub-committees etc. and the provision of energy management information to these groups regarding their own energy use has supported the work of energy staff and increased energy awareness overall. At one institution, the running costs of large items of research equipment were highlighted and by rescheduling their operation, a department achieved annual energy savings of over £15,000.

Energy savings can be used to fund future activities within the institution.

Many energy efficiency projects generate a long-term recurrent financial benefit which frequently goes unrecognised.: Several institutions, with annual energy spends (including water) of between £100,000 and £4 million, utilise a proportion of their energy cost savings to fund future energy projects. In the case of some of these institutions, a separate budget from those relating to energy consumption and maintenance costs has been established, ranging from £40,000 to £60,000 a year. The above sums for the institutions concerned represent reasonably modest, initial budgets which will be subject to future review.
Energy savings are a source of future funding for further energy projects, but a proportion of savings should be shared within the institution.: At one institution, a scheme has been established whereby the institution will fund centrally any viable, energy project and reclaim the funding from the utility budget over four years. Since there have been recent discussions with departments within the institution regarding the charging of energy consumption costs to their departmental budget centres, there has been heightened interest by departments in this scheme, which is modelled on contract energy management principles.
Innovative ways of financing capital equipment are being pursued at institutions.: At several HEIs, combined heat and power (CHP) facilities have been financed, installed and operated by a third party with electricity being sold to the institutions at a discount on the market rate. Typically, immediate annual savings in the range £10,000 to £100,000 were realised at no risk and with no capital outlay.

The provision of accurate, timely and relevant information aids decision-making in respect of energy management.

There is scope for a more integrated approach to energy management in order to identify areas where further savings can be achieved.: An early decision taken by one organisation was that Energy Management should be focused via a small, multi-disciplinary committee. The committee includes representatives from both management and departmental-users. The committee is empowered by, and accountable to, the Board for the organisation's corporate policy. Regular reports are prepared and submitted to the Board for its consideration. Energy efficiency was already part of the organisation's published environmental policy but it was felt that a specific policy on Energy Management would be helpful. Significantly, the organisation decided to link its Energy Management Policy overtly to one of its corporate objectives, which is to protect the health and safety of its staff, the public and the environment.
The Energy Benchmarking Software Disk will complement existing management information by identifying buildings with poor energy performance where action is required.: At one institution, the monitoring of energy consumption has enabled it to keep close control over its consumption of energy, to progress energy savings as they occur and to check that tariff arrangements are acceptable. The institution recently identified an error in the billing of its tariff arrangements which would have resulted in an overpayment of £50,000 to the energy provider.
Some institutions have made a significant investment in energy management and reduced their consumption to levels that are comparable with the good energy performance standards developed by the Department of the Environment (DoE) and its former Energy Efficiency Office.: One institution identified that a particular academic science building was consuming excessive amounts of natural gas which placed it within the DoE's poor energy performance category. A further investigation was undertaken which identified a range of contributory factors. In the final evaluation, the institution considered that the most cost-effective and practical solution was to upgrade the central boiler plant controls. The existing controls consisted simply of a time switch. The upgraded controls included optimised start and stop to operate the boiler plant in accordance with the prevailing weather conditions (i.e. the warmer the weather, the later the start time and the earlier the stop time of the boiler plant); compensated flow to adjust the hot water temperature in the radiators in accordance with outside air temperatures; and boiler sequence controls to ensure that the correct number of boilers fired depending on demand. The resultant savings have reduced energy consumption to within the DoE's average yardstick because of installing the superior heating controls, upgrading the insulation levels and improving the operational procedures. Annual savings of £3,000, on a previous spend of £20,000, represent a 15% ongoing improvement and provided a one-year payback on equipment costs.

National Products

The National Report is one of three national products, the other two products being the Management Review Guide and the Energy Management Benchmarking Software.

The purpose of the National Report is to summarise the main findings of the study, to provide cameos of good practice identified in the HE sector and elsewhere, and to encourage HE institutions to reduce their energy costs by indicating a way forward.

As regards the Management Review Guide, its purpose is to enable HE institutions to undertake a review of their energy management arrangements. By doing so, an institution will be able to draw its own conclusions and to identify appropriate actions regarding the enhancement of those arrangements, in the format of a Management Action Plan and Energy Report, for consideration by its Senior Management Team.

Finally, the Energy Management Benchmarking Software will enable HE institutions to calculate site-specific, energy performance benchmarks. The disk and accompanying user manual are user-friendly and aim to provide HE institutions with the means to produce regular management information regarding their energy performance.

Together, the three national products outlined above aim to support a process whereby institutions identify actions directed against wasteful energy consumption in order to achieve a sustained reduction in their energy operating costs.

The national products of the study have been commended by the Department of the Environment.

The DoE has published substantial guidance on the various matters linked to effective energy management. HEIs will be able, therefore, to take advantage of the extensive technical advice and training workshops available in order to support the response to their own energy management requirements.

Conclusion

Responsibilities for energy management should be clarified, since these can sometimes be ad hoc and unstructured, with each institution typically benefiting from in-house expertise in one or more aspects of estates management. There is a risk that without a strong, positive and integrated approach to energy management, involving both staff and students, future savings will be restricted to those arising from ad hoc technical innovations. Nevertheless, there are opportunities for the sector to build on a strong foundation. When these opportunities are realised, energy savings might be made available for subsequent reinvestment in other projects that will lead to further savings, rather than being absorbed by the centre.

The outputs of this study will provide an invaluable set of tools and ideas for all those involved in managing estates, at a time when rising costs threaten to erode the resources available for the funding of creative activities in curriculum development.