8 Issues and options
It is clear from the analysis presented over the previous sections, that CEEF has achieved considerable successes in the relatively short period since it was set up. Over 500 projects have been instigated, and lifetime energy savings of over £20 million, or 80,000 tonnes of carbon will arise if these are successfully taken through to completion.
There are considerable variations between local authorities in the extent to which they have made use of their CEEF allocation and developed projects. There have been substantial increases in project implementation over the life of the fund to date. Some local authorities have made much more use of the potential benefits of the fund than others. This section draws on understanding gained on the operation of CEEF in practice and considers options for developing CEEF further.
8.1 Identifying projects
Local authorities have the freedom to set their own approach to identifying projects. This has resulted in a wide range of strategies, ranging from focusing on the building with the largest energy consumption to drawing on the results of monitoring and targeting systems to address the worst performing buildings, regardless of their energy consumption. There is some evidence that some of the local authorities are drawing on the information available on the CEEF website to help them to develop potential project ideas.
Greater Strategic Direction for more effective projects
There may be a benefit in increasing the strategic direction of the project selection, to encourage the most effective options to be developed. Different routes could be envisaged for this. Both Salix and CEEF Northern Ireland employ central evaluation and approval of projects. However, this is not the only model - CEEF Northern Ireland in particular has built up a sizeable energy monitoring system for the public sector in Northern Ireland. This enables the Northern Ireland public sector to establish realistic benchmarks for its public building stock and hence ensure that measures supported under CEEF are cost effective. Establishment of a similar system in Scotland could prove valuable in informing project selection and need not imply central control. Indeed this is an option which is already receiving some interest within the Scottish Energy Efficiency Officers Network. It is also important to consider whether there are benefits in strategic direction from those local authorities engaged in the Carbon Trust's Local Authority Carbon Management programme that could feed into CEEF, especially as this is rolled out to increasing numbers of local authorities.
8.2 Setting up projects
Agreeing potential projects with budget holders, heads of department and building managers can take a great deal of effort. This can substantially slow the agreement and implementation of projects and reduces the recycling of the available funds. However, it is clear that this is less of an issue in some local authorities than others, and that several factors can contribute to making this easier:
- High Level Support for CEEF
It is clear that if the chief executive is strongly behind CEEF, and has taken action to remove barriers to its deployment, this can make it considerably easier to progress projects. In some local authorities high level support means that the energy officer can inform those concerned of the potential developments rather than having to seek permission for every project.
- Fund Payback
Concerns have been raised that there is a perception that if a department achieves a reduction in its energy bill, its budget will be cut - thereby removing a major incentive for managers to support CEEF. This can be exacerbated by the current requirement for quarterly repayments - as this can require repayments before projects have produced energy savings (especially for seasonal projects relating to space heating). Some local authorities have reduced concerns relating to CEEF repayments by repaying the funds from central budgets rather than from individual department or facilities budgets - however, although this route offers both simplicity and reduces barriers to take up it does not seem to be common.
Easing the Route to Project Set Up
Maximising the take up of the CEEF fund is one of the most effective means of increasing cost effectiveness and it would therefore be worth addressing the issue of barriers to project implementation.
This should be carried out in conjunction with local authorities as they differ strongly and it would not be appropriate to try to make one solution fit all.
However, our consultation with local authorities indicates it is key to gain high level commitment to reducing barriers to CEEF if the path to efficient project take up is to be smoothed. It is therefore suggested that the Scottish Executive engage at the highest level with the local authorities to bring chief executives or directors on board. This has obviously taken place in the past, but there may be changes in personnel with time, and it would therefore be useful to revisit this. Given the considerable variation in local authority performance it would be most appropriate to focus on the local authorities who have made least progress with CEEF. However, it should be borne in mind that some local authorities ( e.g. North Lanarkshire) have made good progress but still find the project agreement process very time consuming - so even local authorities who have achieve a good level of project implementation may benefit from this.
8.3 Future evaluations
This interim evaluation of the impact of CEEF has used estimates of potential future energy savings, made by applicants on project submission. It would be desirable to require applicants to provide additional information on actual energy savings achieved, perhaps as part of an annual review. This would increase the robustness and accuracy of future evaluations, by providing a clearer picture of how long projects are operational for and how much energy they are saving.
8.4 Terms and conditions
In general no major issues were raised about the CEEF terms and conditions, apart from:
Repayments
Without exception those consulted viewed quarterly repayments as undesirable. There would be considerable support for replacing these with an annual payment. This would in principal reduce the amount of money available to fund projects, but at the moment there is sufficient funding available and this would not be an issue: if take up increased this could be reviewed.
Payback criteria
A number of local authorities expressed concern that a payback limit of five years would restrict project choice, either for local authorities that had been pro active in the past, or for increasing numbers as they implemented more projects. It may be worth considering relaxing the payback criteria for local authorities who have already used their full initial CEEF allocation. Another option is the dual approach to criteria used by Salix which provides a focus for the more cost effective renewable technologies.
8.5 Support from Scottish Executive
Local authorities were very positive about the support provided by the Scottish Executive. No major omissions were identified. It was however thought that there were a few minor issues which could be clearer relating to inputting data on the CEEF website:
Project dates
There are currently three dates that the user specifies: project committed date, spent date and implemented date. Some users thought it would be good to give guidance concerning these - and looking at the data provided it is clear that they are being either not fully completed or in some cases completed incorrectly. It would be worth clarifiying this, and in particular if it is possible to update the information - for example if a project start date is delayed. More accurate information in this regard would enable more accurate estimates to be made of resulting savings.
Floor area/volume
The applicant is asked to specify floor area or building volume on the form, but is not able to say which they are specifying. It would be useful to make this clearer - again this would be useful when evaluating the impact.
Actual savings
It would also be worth considering requiring applicants to supply information on actual energy savings achieved after project implementation, to feed into evaluations of CEEF in the future.
8.6 Support from Carbon Trust
The Carbon Trust has supported all but one of the 32 local authorities through the provision of a wide variety of services including:
- Carbon Management Programme
- Initial Opportunities Assessment
- Specific Opportunity Assessment
- Design Advice
- Multi Site Assessments
The form of Carbon Trust support most often mentioned by those contacted was multi site assessments. At the time of this evaluation, 21 authorities had undergone at least one multi site assessment, with five of these having had two. The energy officers clearly had mixed views on the benefits of these - and in some cases concerns that they were insufficiently specific or detailed. However, one local authority in particular did find theirs very valuable. They were at an earlier stage in progressing CEEF than many others and it may be useful to consider whether multi site assessments are of particular value in these circumstances or whether there is scope to increase the level of detail.
Some staff in local authorities reported being confused by the relative roles of the Carbon Trust and the Energy Saving Trust - they also commented that there would be benefits to greater visibility of Carbon Trust support in local authorities - that although they are well known to the energy officers, that was not the case overall.