OGC Energy Efficiency Review Ann McMaster Lead

1
OGC Energy Efficiency ReviewAnn McMaster
Lead

• 4th July 2006

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Agenda

• Background
• Overview of the Efficiency Programme (Energy)
• The Energy Savings Opportunity
• Immediate savings
• Review of benchmarking analysis
• Pan-Government contract lets
• CCG WPS Engagement
• Action Plans
• Next steps

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Background

• Gershon Report tasked the Public Sector to
• Improve efficiency
• Gain better value for money
• Support delivery of 21.5Bn savings per annum by
  2007/08
• Implementation Plan includes
• 8 Commodity work streams
• 5 in First Wave - Print, Fleet, Temp Staff, IT
  and Energy
• and
• Moving from advising Departments to requiring
  them to follow an agreed approach or justify
  divergence
• Requesting organisations to develop a pan
  Government approach to sharing services or
  justify divergence

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Base PositionAnnual demand for Utilities in the
UK

• UK total (source DTI and DEFRA) - 2003/04
• Electricity 399 TWh
• Gas 723 TWh
• Liquid fuels 4.685 million tonnes
• Water 6.9 billion m3
• Public sector total - 2003/4
• Electricity 6 - 22 TWh (17 TWh HH, 5 TWh NHH),
  1,200m
• Gas 7 - 45 TWh, 757m
• Liquid Fuels - , 1,000-1,500m
• Water 14 - 1 billion m3, 1,100m

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Landscape
Values are based on 2003/4 spend
End User
Supplier Selection
CCG 750m
DATA SOURCE
SECTOR SHARE VALUE GAS CONS ELEC CONS
In House NHS PASA
Health 15 400m 10,000GWh 3,000GWh
Private Sector TPI
Actual spend vol from PASA
MOD 10 150m 3,300GWh 2,000GWh
Actual spend vol from EPD
In House - MOD EPD
LU 5 50m Minor 1,000GWh
Actual spend vol from LU
In House - TfL
Other CCG 10 150m 1,300GWh 2,000GWh
OGCbs
In House
Private Sector TPI
FM
Actual vols from deptsand verified with DEFRA
WPS 1,250m
Regional Buying Organisation
In House
Local Collaboration
Sector Buying Organisation
OGCbs
Local Gov 30 750m 17,000 GWh 8,500 GWh
Extrapolated (46 councils)
Schools - Extrapolated (12,000 schools) FE - No
data yet HE - Actual spend and vol from TEC
Education 25 450m 14,000 GWh 4,500 GWh Of
which Schools 55 250m 10.200 GWh 2,500
GWh FE max 5 Minor Minor Minor HE 45 200m 3,800
GWh 2,000GWh
Police 5 50m 800GWh 600GWh
Extrapolated (23 Forces)
Total 100 2,000m 46,400GWh 21,600GWh
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Energy Cost Reduction Programme

• Identified efficiencies in 3 areas
• Procurement (process and price) e.g. national
  meter operator
• Financial Management e.g. eBilling, direct debit
• Demand and Consumption Management e.g. profile
  class, capacity matching, energy management
• PLUS opportunities to realise additional
  efficiencies
• embedded generation
• demand response
• new procurement model
• Facilitating a cultural change in collaborative
  working between departments

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Implementation Plan

• Three steps
• Apr 06 Sep 06 Step 1 - Getting the basics
  right at No Cost
• Oct 06 - Jun 07 Step 2 - Better Practice at
  little cost
• Jul 07 Mar 08 Step 3 - Best Practice with
  associated costs but fast payback
• Activities sanity checked by independent panel of
  energy industry representatives in January
• We are linking with other work streams to avoid
  duplication, maximise synergies and leverage
  existing work

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Immediate Savings

• Consultancy fees for procurement strategy
  advice and/or benchmarking
• Direct debit saving
• eBilling 28 per bill
• Bill validation 3.2 saving
• Switch to wholesale model (reduce OJEU costs)
• Check available capacity and maximum declared
  demand
• Market Intelligence tools and products

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Procurement Opportunity

• Challenge of Energy markets and rising prices
• Lack of energy procurement expertise
• Fragmented approach
• Benchmarking exercise London SE RCE
• Liquid and Solid fuels

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Contract Lets

• National Meter Operator and Administrator
• Data collection and aggregation services
• Multi utility AMR equipment
• Standby reserve
• Top 20 energy saving assets
• Microgeneration

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CCG WPS Engagement

• Commodity Steering Group
• RCE and Buying Consortia
• Established Energy Stakeholder Forum
• Issued Energy Action Plans
• Held one-to-one meetings
• Pan Government and NGO Forum
• Events/Presentations

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Action Plans

• Establish stakeholder contact 95
• Hold one-to-one meetings 80
• Obtain initial contract/consumption data 65
• Completed action plan 90 CCG 25 WPS

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Activity Plan Summary
Key Y potential interest, N not
possible/relevant, A already in place, FM -
FM contract in place, PFI PFI contract in place
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Common Themes

• Much good work already happening
• Fragmented approach and much duplication e.g. AMR
  trials
• Separation of energy procurement and energy
  management responsibilities
• Energy education and awareness gap
• Finance Department issues with Ebilling and
  Direct Debit processes
• Carbon Trust
• Creative and more sophisticated approach is
  appreciated

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Savings Identified
At 2003/4
For 2006/7
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Financial Management Efficiencies
Switch to eBilling provides savings of 28 per
bill
17
Financial Management Efficiencies
Introducing Bill validation provides savings of
3.2
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What Next?

• Complete Exercise for WPS
• Move from Data Collection to Savings realisation
• Formally agree Departmental Saving Targets by
  activity
• Workshops, Education Training, OJEU data

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Coming Up

• Procurement workshops 9th, 16th, 23rd 30th
  August
• Stakeholder forum 8th Sept
• Pan Govt and NGO 19th Sept
• Microgeneration and Government funding 18th
  September
• September dates TBC
• Energy and Water supplier forums
• Waste and Carbon Neutral Think Tanks
• No cost consumption reduction workshop
• Carbon Trading Forum (3rd workshop)