track record
Working within the budgetary constraints associated with public sector financing, Salix has been able
to report savings of 1.2m tonnes of CO
2
lifetime between its inception in 2004 and the end of July 2009
from all its activities. This translates into energy savings worth an estimated £220m at current energy prices.
finance. The fund was used to finance indi- If there were a down side to the new scheme,
vidual projects within the institution with the it would be that the loan has to be repaid over
energy savings being used initially to repay the four years rather than the five (or very excep-
project costs back to the locally managed fund. tionally seven and a half) prescribed for the
Repayment was calculated over a fixed period – conventional co-funded route.
normally five years subject to ceilings on the Alastair Keir, the CEO of Salix Finance, be-
lifetime carbon ‘cost’ of the projects. lieves that it is worth examining the actual
Working within the budgetary constraints savings achieved before a realistic compari-
associated with public sector financing, Salix son is possible. “The notionally shorter pay-
has been able to report savings of 1.2m tonnes back period of the new loan scheme will not
of CO
2
lifetime between its inception in 2004 prove a problem.
and the end of July 2009 from all its activities. “Having supported more than 3,300 projects
This translates into energy savings worth an to date, we know that the average payback is
estimated £220m at current energy prices. only 3½ years; there is an additional benefit in
that the first repayment is not until March 2010.
Energy Efficiency Loan Scheme
“In the case of recycling funds, the projects
pay back over the actual payback period so
The role of Salix Finance expanded by an or- that a project with a two year payback repays
der of magnitude as a consequence of the 2009 in the two years rather than four were it being
Budget, which made provision for additional funded under the loans scheme.”
loan funding in pursuit of carbon reduction.
Under the Energy Efficiency Loan Scheme,
which it is managing on behalf of DECC, Salix
Different targets in organisation
has been able to provide loans for projects in- The Salix Energy Efficiency Loan Scheme
tended to reduce carbon consumption across (SEELS) is being targeted wherever possible
broad swathes of the public sector – without at the energy managers within public sector or-
the recipient having to match the amount. ganisations rather than those responsible for the
Salix was assigned £51.5 million to finance more nebulous sustainability areas of operation.
these energy efficiency projects directly. This By increasing their awareness of the fund-
was a major departure from the co-funding ing, Salix believes that these energy special-
approach. In theory at least, it would open up ists can make a significant contribution to the
Salix-managed resources to organisations carbon reduction targets of their employer.
whose limited budgets prevented their taking While the case for SEELS can be convinc-
advantage of co-funding. (They could previously ing at one level, how does the scheme dove-
only benefit from a Salix loan if they could find tail in with the Carbon Reduction Commit-
a similar sum to put into the loan fund). ment, which has a system of ‘bonuses’ and
‘penalties’ linked to energy reduction in years
after the £51.5 million have been spent?
Since Salix Finance was launched The timetable for the CRC has been set out
back in 2004, the company has elsewhere in this edition: the ‘registration’
collaborated with sources of finance period runs from April 2010 for a year. Partici-
in the public sector to establish and pants will use their qualifying energy con-
manage funds to meet the needs of sumption levels in that time as the reference
those partners. Carbon reduction against which their consumption in succes-
projects at Cambridge University sive years will be compared.
(right) were funded with HEFCE, Simplistically, the greater its like-for-like
The Higher Education Funding energy reduction, the higher a given partici-
Council for England pant will be placed in the CRC ‘league table’.
16
The Informed Executive
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