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Landlords and Tenants:Working Together to Reduce Costs & Carbon
An event for commercial property Owners & Occupiers
Welcome
Oxford, 29th March 2011
Agenda
• Welcome & housekeeping• Scene setting: Why Landlords & Tenants? • Sustainability & the Commercial Property Sector.• A Landlord’s story• A Tenant’s story• Overview of Fiscal Incentives• LoCUs - Solutions For Owners & Occupiers• Closing comments• Refreshments & Networking
Commercial Property CO 2
Commercial Property Carbon
Cost Effective Carbon & Energy Reduction Measures
Landlord: Tenant Divide – A Circle of Inertia
Commercial Property sector carbon emissions are INCREASING
I’ll change the bulbs but not
the light fittings.
Its not my energy bill, and
it won’t increase rental
Property is just a long term
investment for me.
Energy efficient buildings are
expensive and difficult to
build.
Commercial Property Lease Agreements
Landlord Tenant
Rent
Lease Obligations
Service Charge
Service Obligation
Quiet Enjoyment
Tenant CSRObjectives
Landlord CSRObjectives
A:Traditional Lease
Source: Cardiff University Centre for Research in the Built Environment
Angela Langley & Lara Hopkinson 2009
Landlord Tenant
Rent
Lease Obligations
Shared building related CSR objectives
Service Obligation
Quiet Enjoyment
Tenant external CSR
Objectives
Landlord external CSR
Objectives
B:“Green Lease”
Source: Cardiff University Centre for Research in the Built Environment
Angela Langley & Lara Hopkinson 2009
Shared cost / benefit
Commercial Property Lease Agreements
Martin Gibbons insert
Mike Jennings Jennings of Garsington Ltd
Reducing organisational footprints in partnership
Jacob Wallace
February 2011 ©Best Foot Forward
This presentation
• About Best Foot Forward
• Keeping our own house in order
• Success stories with our landlord
• Where we’re heading next.
Introducing Best Foot Forward…
Our building
Best Foot Forward: footprinting experts 14
years experienceover
3,500 footprint analyses
more than 300
footprint clientsover
2,500 footprint tool users
operate across25
sectors
Queens Award-winners
About Best Foot Forward
• Metrics: Dedicated consultancy. Market leaders.
• Insight: Thought leaders. Innovation. Wrap-around support.
• Tools: In-house developers. Proven. Existing platform.
Insight Through metricsEstablished in 1997, Best Foot Forward is a specialist sustainability consultancy focussed on delivering an evidence base for decision making. We have completed well over 1000 analyses for more than 200 organisations.
Experience counts.
Keeping our own house in order…
Key goals
1.Measure our own annual greenhouse gas emissions.– Using Footprinter – our SME footprinting tool.
2.Track how we perform over time.– To ensure we stay on top of our impact as we grow
3.Strive to minimise our impacts across the business.– Both things we control + those we can influence
www.footprinter.com
We perform well in-house…
• BFF’s utilities Footprint compared to typical clients…
but…
Last year, we grew…
• More activity, more staff = more challenge to manage your footprint.
• We needed to innovate to keep our in-house footprint under control.
Success stories with our landlord
What can we do…
• So we have identified a range of actions that we can pursue internally in the 2010-11 FY.
• Starting with utilities…as a key component of our footprint, and an area over which we have direct control
The process…
• Previously unsuccessfully lobbied our landlord to install additional roof insulation.
• Landlord unwilling to pay for the installation.
• However, on this occasion took a different approach.
• Agreed that we would fund the insulation through our lease:– effectively a 0% financing arrangement– landlord gets the benefit of enhanced facility– tenant gets benefit of reduced energy bills
Grants available
• £500 grants available for small businesses
Net result
• Only installed at Christmas• Approx. 27% reduction in gas consumption vs
last winter.• Plus…a much more comfortable office
environment for our staff.
Before After
Before
After
Payback periods
• Our insulation payback period is long (>20 yrs) and exceeds the terms of our lease (7yrs)
• However, was ‘well worth it’ on balance for staff comfort.
• It is useful however, to consider paybacks on infrastructure changes.
Identifying the most cost-effective option
• The NHS England’s MAC Curve:
1.Packaging 2.Teleconferencing 3.Hibernation system for stations 4.Improve the efficiency of chillers 5.Voltage optimisation 6.1 degree C 7.CHP installation
0.02
0.05
0.010.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.02 0.02
0.010.00
0.04
0.00
0.01
0.02
0.03
0.04
0.05
0.06
tCO
2/£
Abatement cost
zerocost
zerocost
Considering carbon‘bang for buck’…
• Case Study: Tubelines• Micro-level analysis
• Provided carbon cost-benefit analyses for 19 new and emerging technologies and possible interventions that could reduce energy use at stations. Everything from slowing down escalators and raising equipment room temperatures to new auto lighting control systems and more efficient hand driers.
• Case Study: Tubelines• Micro-level analysis
• Provided carbon cost-benefit analyses for 19 new and emerging technologies and possible interventions that could reduce energy use at stations. Everything from slowing down escalators and raising equipment room temperatures to new auto lighting control systems and more efficient hand driers.
Where we’re heading next
Further phases• Currently have a new bicycle shed in for planning
approval…match funding grants available through sustainable routes up to £1000. WE have also ‘rentalised’ this capital cost with landlord.
• New server – thin clients…rather than desktop computers: 90% reduction in energy consumption.
The goal
• In partnership with our landlord and, and with the assistance of some small grants, we’ve managed to make a significant dent in our footprint in a short time, despite already efficient practices.
• The goal is an absolute reduction in our carbon footprint, while growing the business, and expanding our range of influence.
Two client experiences for context…
Importance of good measurement
0
500
1,000
1,500
2,000
Rehearsal, pre-production
Internationaltravel
Equipment -whole tour
Travel & energyfor 19 shows
Merchandise &catering for 19
shows
Fans Travel
tCO2 EF
…to get your priorities right
Radiohead Nth America tour
Allocating responsibility to achieve results
IT team
Travel team & SMT
FM
HR
-
500
1,000
1,500
2,000
2,500
3,000
tCO
2e
Updated 06/07 Footprint 08/09 Footprint
15% reduction (aiming for a further
23%)
Fiscal incentives for green energy
LoCus Landlords & Tenants event, Oxford
Gabriel Berry29th March 2011
Agenda
• Introduction: green energy
• IncentivesFeed in tariff + case studyRenewable heat incentive + case studyCapital allowances
• Issues & opportunities
Introduction – green energy
POWERSolar electricity
HEAT COOLING
Small wind
Biogas
Hydro power
Wood boilers
Wood heaters
Solar thermal
Heat pumps
Wood boilerswith chillers
Heat pumps
Feed in tariff
• Incentives for small-scale electricity• 18,500 installations by end-2010 • Incl. 14,300 kW commercial capacity
Feed in tariff (2)
• Generation + Export Tariffs• Rates of return 5–8 % • Benefits 325+12+38= £375 /kW/yr
Case study – Conference centre
• Owner: Sheepdrove, a Berks SME• 32 panels, 5.44 kW, 4800 kWh p.a. • Benefits 1814+74+240= £2128 p.a.• Likely cost £18k, payback ~8yr
Renewable heat incentive
• Renewable heat excl. ASHP/stoves• World’s 1st; from Autumn 2011• Paid ¼ly over 20yrs; RoR 12% (6%)
Case study – Offices on estate
• Landlord: Steljes, a Berkshire SME• 220kW boiler, solar £20k• Benefits 14.7k+2.7k+14.2k= £31.6k pa• Cost £60k + £20k, payback <3yr
Capital allowances
• Annual investment allowance• Enhanced allowance: Energy tech. list• Plant only: not works, fuel, other kit
Issues
• Legislation• Insurance • Tax• State aid• Independent advice
Opportunities
• Local & secure• Cash generating • Energy & carbon efficient• Marketing• Innovative finance
Green Deal
• Pay as you save funding mechanism• Starts late 2012• Domestic & Small business premises• Covers retrofitting but not renewables• No up-front costs• Charge applied to energy meter• Installation costs recovered by utility provider
http://www.decc.gov.uk/assets/decc/legislation/energybill/1010-green-deal-summary-proposals.pdf
Assessment Finance Installation Repayment
“Golden Rules” of the Green Deal.
Introducing LoCus:Solutions for commercial tenants and
landlords
Oliwia MilekLoCus Project Officer
property
landlordtenant
Things you control.
• How you use stuff• 20% savings • Boring to do … … but effective• Staff Engagement• Low / no cost
Things you don’t control.
• Legislation,
• Energy supply issues
• Energy cost/ unit
In the middle
LoCus Environment Review LoCus One to One / training: Legislations update
Cost- effective energy- efficient
measures
In the middle
Retrofitting building fabric, i.e. - • draught proofing• insulation• lighting & heating controls• replacement windows• replacement boiler• renewable energy
Cost : Benefit – whose?
Define the cost benefits
Years
Cost &
length of
lease
Define the cost benefits
Occupier Owner
Negotiations arena:
Find mutual benefit -• the economic business case• CSR “ticks”• good publicity• seen as modern and progressive• be reasonable
• be reasonable• acknowledge your rights and duties
LoCus services
Contact Neighbours
Create Clusters
Reporting
Contact Landlord
Site based Services
CO2
LoCus support is free and flexible to your needs and objectives, but for example:• Ideas to save money and realise revenue • Individual on-site visit• Environmental improvement plan• Training & events• Renewable energy assessment • Ongoing environmental business support
• no risk• save money• tailored advice• differentiate yourself• gain competitive advantage• let us do some work for you! • prepare for the low carbon tomorrow
Why to take advantage?
Oliwia Milek, Project OfficerOn behalf of Reading Borough Council and the 19 Partners
0118 973 [email protected]
www.locusproject.org.uk
Landlords and Tenants:Working Together to Reduce Costs & Carbon
An event for commercial property Owners & Occupiers
Thank You