SQUEEZING MORE POUNDS INTO YOUR PROPERTY PORTFOLIO. Ken Gourlay Fife Council

Transcription

1 SQUEEZING MORE POUNDS INTO YOUR PROPERTY PORTFOLIO Ken Gourlay Fife Council

2 What s Covered Asset Planning and disposal Making the business case for energy efficiency measures Delivery models for PV

3 Content Importance of asset planning know your portfolio life cycle costing model dependencies between workstreams Programme governance & individual roles asset disposal cost reduction initiatives alternative delivery models

4 Fife Council too many properties insufficient asset data insufficient maintenance funding poor quality asset portfolio opportunity to improve Status quo not an option

5 Office Rationalisation Business Case - Reasons Asset Plan gives commitment to reduce operational support footprint by 25%. reduce carbon footprint.

6 What will be delivered by 2013? 1,030 staff working mobile; 150 staff home working 97 offices reduced to 37 Workforce reduced by 15% Cheaper customer access channels Central Fife super depot opened New delivery structures within E&D

7 Office Rationalisation Business Case - Reasons offices presently under utilised. we can t afford to maintain current offices portfolio. mobile & flexible working requires modernised offices. number of offices currently below tolerable standards.

8 Office Rationalisation Business Case - Scope close 60 offices 97 to % of staff relocated. 3,800 staff moves will take place. 2,500 workstations will be modernised. 102,000m2 footprint reduced to 63,000m2 6.7m annual running costs reduced to 4.3m

9 Office Rationalisation Programme Update 60 office closures signed off by PFAM. 23 offices closed in 2010/11. Move Management process defined. Construction Lean Event. Move Management Model complete. Space Standard being refreshed.

10 Office Rationalisation Business Case - Objective improve utilisation of our office space. remove unsuitable office space. complete modernisation of retained office space. realise 12.6m capital receipts. save annualised 2.4m running costs. achieve 3 year payback.

11 Priority improvement programmes Office Rationalisation Mobile & Flexible Workstyles Customer Management Workforce Change Alternative Delivery Models Central Fife Depot Social Work CHIP Target Results - Improved performance (SOA s, PI s) Efficient service delivery positive customer feedback Fewer buildings Smaller, more skilled workforce Strong leadership culture

12 Why bring them together? Align dependencies Shared resource (i.e. IT, Property, Business Change) Resolve conflicts Reduce risk of double-counting benefits All ultimately trying to achieve the same thing

13 Dependencies example IT Roadmap Rationalise depots Reduce workforce Mobilise workforce 7:10 enabled offices Reduced office requirement Reduce workforce Improved productivity Online transactions & queries Rationalise offices Fit-for purpose offices Improved efficiency positive customer feedback +ve customer feedback Close surplus offices Refurbished customer access areas Reduced costs Reduced offices

14 Office Rationalisation Programme process for authorising change to the 60 office closures agreed by ARB. ARB agreed that offices will become Corporate assets after refurbishment. Asset Rentals for offices being examined. refresh of demand for offices being carried out.

15 Corporate PMO Information hub & big picture overview Monitoring of benefits and risks Aggregated reporting upwards and early warning of exceptions Prioritisation of Capital & IT resource Standards, governance & tools Independent challenge and scrutiny Development and sourcing of skills Identify dependencies & duplication Aggregated Reporting CMT Corporate PMO Asset Rationalisation Board Programme Manager Support & Assurance Programme Support

16 Added Value Shared understanding of Vision & where we are going What needs to be done & when Who is responsible for what Who needs to be involved Timescales and dependencies Clear audit trail all information in one place Consistency of approach Reduced duplication Clear reporting channels

17 Implementing the Solution A Phased Approach Phase 1: Develop strategic outline business case (SOBC) and identify opportunities Phase 2: Enabling infrastructure ~ establishing programme management, reporting and monitoring, setting up procurement frameworks Phase 3: Detailed design, build and implementation ~ build it once, use it many times Phase 4: Accelerated roll-out Work up High Level Robust Business Cases identifying Quick Wins

18 Delivering the Solution Lifecycle Management flexible process and control environment within which to execute projects Programme / project Management methodology: - PID: Define the project scope and cost framework early - Planning - Projects KPI s financial & non-financial - Deployment: Actively manage the risks - Continuous improvement. Robust Project Performance & Lifecycle Management reviews

19 Constraints and Lessons Learned Management buy in and stay in is critical - Leadership from senior managers essential - Keep key decision makers engaged - Undertaking detailed business cases at each stage Resistance to change - Perception was often not reality! - Customer / End User need to be consulted and involved. - Who owns the estate? - Who is paying for what? Communication is key -.Programme manager / project managers are key to success - Consistency of approach across the portfolio - Agree office standards and stick to them

20 Constraints on delivering the solution De-motivated staff and resistance to change. Space standards are not maintained post implementation. Confusion between different projects within wider service transformation programme. Given the public spending constraints, the pressure will be on the programme to maximise the net cashable capital benefit. The size of the net benefit will be driven by the property market, future levels of service provision and the balance between refurbishment of existing properties and new build.

21 Opportunities Flexible approach to disposals - property by property - asset backed vehicle - joint venture - sale and lease back - Deferred capital receipts

22 Fife Council Big 8 objectives Improving educational attainment & achievement for all Making Fife the leading green Council in Scotland Improving local conditions for economic development Increasing access to housing Improving community safety Targeting support to vulnerable people Improving sport, leisure & cultural opportunities Making Fife a top performing Council

23 Role of Energy Management Team Manage Energy Contracts Report on Energy Performance Raise Energy Awareness Identify Energy Inefficiencies Implement Efficiency Measures Advise on technical aspects of Energy Management Manage Major Carbon Reduction Projects

24 Making Fife the leading green council Save Energy & Improve Performance The council s aims is to reduce CO 2 emissions by 3% per year To achieve an 80% carbon emissions reduction by 2050 Energy Management s role, with others, is to help Make Fife the leading green council

25 Carbon Footprint By Service

26 Carbon Footprint By Element

27 Manage Energy Contracts Monitor Energy & Water Consumption & Costs for nearly 2000 Properties Verify and pay all of the Council's non-domestic energy and water bills Electricity 7.6 million 95,400,000 kwh Gas 3.5 million 150,100,000 kwh Water 3.6 million 762,000,000 litres

28 People & Projects To reduce energy use, CO 2 emissions & Fife Council s energy bill of 10.9 million, requires both people & projects People To increase their awareness of energy & change their behaviour where possible Projects Technical projects to reduce energy consumption

29 Identify Energy Inefficiencies and Implement Improvement Measures Carry out energy audits & surveys Detect high energy / water consumption Identify energy efficiency improvement opportunities Examine feasibility of possible energy efficiency projects Make the business case for implementing energy efficiency measures

30 Energy Audit Comprehensive Building Energy Survey Describes the Building & Energy Systems Records Energy Consumption & Costs Identifies Efficiency Measures Provides Recommendations No Cost Cost Effective Longer Term

31 Automatic Meter Reading (AMR) Monitors over 90% of Council Energy Consumption Real Time Data Save Energy On Line Daily/Weekly/Monthly Reports for Gas and Electricity Exception Reporting

32 Central Energy Efficiency Fund (CEEF) Finance Energy Efficiency Projects Revolving Fund Maximum 5 Year Payback Lochgelly High School Sports Hall Energy Management Revolving Fund (EMRF) Finance Renewable Energy or Water Efficiency Replacement Lighting Projects Cost 10,000 Payback 3 Years Revolving Fund CO2 Emissions 28 tonne CO2e 75% of Savings back to Fund for 5 Years

33 Other Energy Efficiency Projects The conversion of electric space and DHW heating to wet systems, where cost effective Over 200 properties have recently been networked onto the BEMS Building Energy Management Systems The monitoring, remote controlling and trouble shooting of the heating system using the BEMS in around 260 plus properties Cavity wall insulation Installation of insulation jackets on valves and pipes

34 Advice on technical aspects of energy management Advise on new build and major refurbishments Energy Champion for Bankhead Project Support for new schools projects Look at the whole life costs of different projects, e.g. examination of the NPV (Net Present Value) solar pv with the FIT (Feed In Tariff) Influence the technical philosophy, e.g. the hierarchy of actions to improve energy efficiency 1. Improve passive energy performance of building; then 2. Improve the building services efficiency; prior to 3. Investment in renewable technology projects

35 Manage Major CO 2 Reduction Projects Conversion of methane gas to electricity at our landfill sites near Dunfermline and Ladybank Dunfermline community energy scheme Biomass boilers at Kinghorn Primary School & Dunfermline Business Centre Cardenden Heat & Power Project Central Scotland Green Network Wood Energy Initiative Anaerobic Digestion Project

36 The Future Need to do more faster Be Leaner Be more effective at reducing consumption Be Greener Install more renewable energy technologies Be Cleaner Consider Combined Heat & Power (CHP), more district heating & local generation

37 Alternative Delivery Models PV for Free or Rent a Roof Feed In Tariffs (FIT s) Most forms of Renewable Energy which produce Electricity up to 5MW Guaranteed Payment for Electricity Produced Green Electricity Generation for Free Developer Pays Capital Cost Renewable Heat Incentive (RHI) Most forms of Renewable Heat Generation Due to start June 2011

38 Alternative Delivery Models Energy Performance Contracting (EPC) Barriers to making Building Stock more efficient include: Capacity & Capital EPC Uses an Energy Services Company (ESCO) to carry out efficiency improvements ESCO Guarantees Energy Savings & Payback of Investment Transfers Risk to the ESCO 3 Finance Options Council pays all costs gets all the benefits ESCO pays all costs ESCO gets payback plus profit - Council gets Carbon Savings plus eventual cost benefit Shared Cost - ESCO gets share of payback plus profit - Council gets carbon savings plus larger cost benefit

39 Photovoltaic Installations Ore Valley Cardenden Sheltered housing unit

40 Ore Valley, Cardenden

41 System details In roof system, tiles removed and system fitted to give a low profile appearance. 12 panels System commissioned on March 23rd 2011 Latest reading on June 22 nd 964 kwh Total expected generation per year, 2343 kwh

42 Cost Considerations Cost of installation 16,672 Inverters, assume 3 replacements over a 25 year period. Annual maintenance/inspection Cost of finance

43 Cost benefits Feed In tariff (FIT) for systems up to 4KWp = p FIT from 2343kwh = 1, Export tariff = 0.03p on 50% of generation 0.03 x 1172 = Savings from reduced supply from grid at 0.12p/kwh = 2343 x 0.012p = Total expected income for year =

44 Summary Based on today s prices a a 25 year life expectancy would return 33,271 Pay back in year ,599 in profit

45 Fife Council Example 3000 houses 21m est cost Average yearly net profit 725K Total net profit 18m Total gross income 60m Yearly CO2 saved 3,276t Yearly tenant savings 276K 25 year tenant savings 6.9m

46 Photovoltaic at Lochhead Landfill site 50KWp system

47 Lochhead MRF Building

48 Cost Considerations Cost of installation est. 150,000 Inverters, assume 3 x 5 (15) replacements over a 25 year period. Annual maintenance/inspection Cost of finance

49 System Details 50KWp system to be fitted to a new steel portal frame building. System consists of 210 panels and 5 inverters Expected generation capacity 38,653 kwh FIT = 38.95p / kwh

50 Cost benefits Feed In tariff (FIT) for systems up to 50KWp = 38.95p FIT from 38,653kwh = 15, Export tariff = 0.03p on 50% of generation 0.03 x 38,653 = Savings from reduced supply from grid at 0.12p/kwh = 38,653 x 0.012p = 4, Total expected income for year = 20,273.50

51 Summary Based on today s prices, income of 20,273 and a 25 year life expectancy would return 506,825 Cost 150 K Pay back in year 7 356,825 in profit

52 Combined Heat and Power Combined heat and power plant Landfill gas used to generate electricity and heat. 2 km Only plant of its type in Scotland Generates enough electricity for over 1,500 homes Provides heat to 270 homes and 7 public buildings Saves tens of thousands of tonnes per year of carbon emissions Brings in substantial income Similar facility at Lower Melville Wood

53 Proposed Anaerobic Digestion Facility Will treat 43,000 tonnes per year of organic waste Will produce 1.3MW of renewable power and 1.4MW of renewable heat Will reduce carbon emissions by 11,000 tonnes per year Will produce 15,000 tonnes of agricultural grade compost per year Will save circa 1.5 million revenue costs per year compared to BAU Will be operational by April 2013

54 Questions?