Dear Vice-Chancellor or Principal
1. Higher education institutions (HEIs) are invited to submit applications for funding from the second phase of the Revolving Green Fund (RGF). Applications must be submitted by noon on Monday, 17 October 2011.
2. In this second phase (RGF2), we will make available up to £10 million over the academic years 2011-12 and 2012-13 in recoverable grants for projects that reduce carbon emissions.
3. Funds will be targeted in two areas: small-scale energy efficiency programmes, and retrofit projects, which will act as exemplars.
4. In contrast to the first phase of RGF, HEIs will not be required to make an institutional contribution.
History of the Revolving Green Fund
5. The RGF was established as a partnership between HEFCE and Salix Finance Ltd to help HEIs in England reduce carbon emissions. The first phase of the fund (RGF1) has made a major contribution to reducing carbon emissions as demonstrated in an independent evaluation.
RGF2 strand 1: Small-scale energy efficiency programmes
6. In strand 1 we are seeking applications for small-scale schemes to improve energy efficiency.
7. One application will be accepted per HEI for a programme consisting of a single project or a suite of projects. In order to make effective use of limited funds there is a minimum application value of £25,000 and maximum of £500,000 per HEI.
8. We have set the minimum application value at £25,000 to encourage applications from institutions that may not have engaged in this area previously.
9. To help ensure that the funds are used for the most efficient programmes, projects must meet one of the following criteria:
- maximum five-year payback period for projects with a lifetime capital 1 cost saving per tonne of carbon of £100 or less
- maximum seven and a half-year payback period for projects with a lifetime capital cost saving per tonne of carbon of £50 or less.
10. Up to 25 per cent of the total application may be spent on automatic meter reading.
11. Small-scale energy efficiency programmes must be completed within 12 months of the date of award.
RGF2 strand 2: exemplary retrofit projects
12. We are also seeking applications for whole-building, retrofit projects that will reduce carbon and act as exemplars. These projects will provide evidence of what works and will form a research base for new and existing technologies. They will also promote skills development and market growth in relevant technologies, as well as cultural and behaviour change.
13. We only intend to fund a small number (estimated three) of this type of project, so only one application will be accepted per HEI with a maximum HEFCE contribution of £1 million per project.
14. Applications should demonstrate how the project would act as an exemplar and how the learning will be captured and disseminated. Institutions can decide how to demonstrate the project's merit, for example through the use of BREEAM ratings or improvements in carbon emissions per floor area.
15. Retrofit projects must be completed within 24 months of the date of award.
How to apply for RGF2
Who and what is eligible?
16. All HEFCE-funded HEIs are eligible to apply. Projects starting after 1 January 2012 are eligible for funding.
17. Our aim and responsibility is to fund the best applications, whatever their source. Therefore, institutions may apply for both strands of the fund.
18. Projects that benefit from Feed-in Tariffs (FITs) or Renewable Obligation Certificates (ROCs) are eligible for funding. This aligns with the Department for Environment, Food and Rural Affairs' (DEFRA's) greenhouse gas company reporting guidance and the Carbon Trust's Higher Education Carbon Management Programme.
19. In June 2011 the Department of Energy and Climate Change advised that under the DEFRA guidance for measuring and reporting greenhouse gas emissions, organisations are able to claim an emissions reduction from renewable electricity projects that benefit from ROCs or FITs. Reductions arising from such projects can therefore count towards institutional carbon targets.
The application process
20. Applications must be made via the HEFCE extranet by noon on Monday 17 October 2011. Please see the sample application forms at Annexes A and B. We will write to all heads of institution providing details on how to access the form in July.
21. Applicants will be notified of the outcome of the selection process in December 2011 and the first payments will be made to successful applicants in January 2012.
22. Applicants should be aware that we will publish details of successful applications in order to share good practice within the HE sector as recommended in the RGF1 evaluation.
Assessment criteria and process
23. The assessment criteria for the small-scale energy efficiency programmes will be:
- predicted carbon savings
- financial savings, payback period and lifetime cost of carbon
- arrangements for project management
- institutional commitment to reducing carbon emissions, influencing behaviour and establishing a low-carbon culture.
24. The assessment criteria for the exemplary retrofit projects will be:
- predicted carbon savings, financial savings and payback period
- extent to which the project will act as an exemplar
- project management including arrangements for managing risk
- institutional commitment to reducing carbon emissions, influencing behaviour and establishing a low-carbon culture
- benefits for the sector - potential for replication across the sector and plans for how the learning will be captured and disseminated.
25. Applications will be assessed by HEFCE. We will contract external expertise to help assess the applications, including validation of the predicted savings.
26. The process will be overseen by the RGF advisory group, which will also have a role in assessing the applications for exemplary retrofit projects. Members were appointed primarily by seeking nominations from representative groups, to provide the appropriate range of skills and perspectives.
27. Where an institution plans a programme of small-scale energy-efficiency projects, we will assess them as a whole and normally fund all or none of the projects within the programme.
Financial and monitoring arrangements
28. It is expected that up to £3 million of the £10 million fund will be made available for exemplary retrofit projects. This may be varied on the advice of the advisory group.
29. The funds will be paid to institutions on a payment profile agreed between HEFCE and the institution at the time of award.
30. The funds will be repaid over a fixed period through a reduction in the HEFCE grant to the institution. The repayments will be made in eight equal, six-monthly instalments in May and November, starting 12 months after the date of award for small-scale energy efficiency programmes and 24 months after the date of award for exemplary retrofit projects.
31. RGF2 funding allocations should be included in any notification to HEFCE on borrowing limits because there will be a clear intention and timescale for repayments.
32. Institutions will be expected to tell us when the projects are completed and progress will be monitored by HEFCE through a brief report twice a year.
33. HEIs may be able to develop new revenue streams as a result of work undertaken using funds allocated from the RGF. As a public body, HEFCE must ensure that RGF2 support does not constitute unlawful state aid. This is unlikely to be the case if products and commercial partners are procured according to public procurement rules. Further advice is available, in advance of application, from Stephen Butcher, HEFCE Head of Procurement (tel 0117 931 7425, e-mail firstname.lastname@example.org). If necessary we will seek legal advice.
Equality and diversity
35. The Equality Act 2010 requires HEIs to undertake equality analyses, formerly known as equality impact assessments, for all policies and significant projects and to publish information annually to demonstrate their compliance with the general Equality Duty. Projects for which Revolving Green Fund support is sought may require such analyses. There is guidance on undertaking equality analyses on the Equality Challenge Unit's web-site.
Freedom of Information Act 2000 and Environmental Information Regulations 2004
36. HEFCE is subject to the Freedom of Information (FOI) Act 2000 and the Environmental Information Regulations 2004 (EIRs), which give a public right of access to information held by a public authority. Much of the information provided to us in applications to the RGF will fall within the meaning of 'environmental information' as defined in the EIRs.
37. As a result, if a valid request is received, applications, communications between HEFCE and applicant HEIs, information arising from this work, and the outputs are subject to disclosure. We will comply with such requests in accordance with the relevant legislation and our own policies.
38. Institutions can, if they wish, provide potentially sensitive information (such as trade secrets or information relating to commercial interests) in a separate annex attached to the application form. This approach will highlight to us that you want the information to remain confidential. You should indicate to us the nature of the sensitivity.
39. Where possible we will seek the views of applicants before disclosing this information. The information provided in the annex can only be withheld if it is legal to do so, so HEFCE may be obliged to disclose. We will disclose upon request all information in the main expression of interest document.
40. Further information about FOI and EIR can be found on the Information Commissioner's web-site.
Sir Alan Langlands