evaluating projects
Prioritising projects in terms of payback
helps generate cash flow from savings to
apply to further proejcts
rather than a single higher-spend initiative that
would have placed heavy demands on inter-
nal resources.
“It was important from our perspective and
that of Salix Finance that whatever we pro-
posed could be managed effectively within
the organisation.”
There was already an internal energy group
of key officers in place, bringing revenue
projects to the table. This meant that there
was an array of initiatives which could be put
forward within the proposal to Salix Finance.
Cheng again: “Conscious of the requirements
for a Salix loan fund that projects have to re-
pay within 5 years, we were able to prioritise
those initiatives so that cash would flow rap-
idly from the savings achieved in a matter of
months and fund the next round of carbon re-
duction opportunities. In practice, we opted investments was to install low energy light
for five separate projects which we were sat- bulbs and fittings in its two residences. In de-
isfied could be achieved if we had access to termining whether the upgrade could meet the
the funds needed.” Salix Finance criteria, the full installation cost
had to be taken into account.
Lighting upgrade funded by Salix
As Kwan Cheng noted, working in residen-
tial accommodation, where staff might be
Timing is often of the essence in the success asleep or alone, requires that the installer must
of a bid for external funding. In the case of the be accompanied. “The cost associated with
Frimley Park application to Salix, the team that has to be calculated and added to the
was about to go out to tender on their external price of the new bulbs and their installation.
lighting maintenance contract and therefore “The project can still meet the savings cri-
used the opportunity to ask tenderers to make terion if this total cost is low enough to achieve
a separate proposal for an energy-efficient a payback in under the five year ceiling.”
scheme.
Those offering solutions had to demonstrate
the minimum possible payback. Whilst the
Justifying energy calculations
actual investment of £500 was quite small, While the direct energy savings to be achieved
greater energy efficiency even at this level though the use of higher performance light fit-
would earn a payback in just under two years, tings can be calculated almost on the back of
and contribute a net saving to the hospital’s an envelope, there have been projects in the
budget every year thereafter . Salix Finance fund at Frimley Park where re-
liance has to be placed on other sources of
Calculating the complete costs
information.
In the case of changing the thermal invert-
Experience at Frimley Park highlights one of ers in the hospital’s boilers, where complex
the issues surrounding carbon reduction pro- thermodynamic data is involved, justification
grammes – being able to calculate the true was based on the manufacturers’ design data.
cost involved in achieving payback. One of Not all Salix-funded projects can be as-
the projects in the hospital’s first round of sessed in advance with the same accuracy,
The Informed Executive
33
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