King’s College London is the largest centre for the education of healthcare professionals in Europe. Its ground breaking research and teaching facilities have complex estate service requirements and some of King’s most advanced buildings are managed by a PFI partner. LCMB worked in partnership with the PFI contractor and King’s to integrate an innovative energy performance contract within the existing PFI agreement. This collaborative approach is on track to deliver 14% cost savings and 1,500 t carbon savings (13% CO2 reduction).
King’s College London gaining energy savings from PFI contracts
In order to reduce cost and carbon emissions in its highest energy consuming buildings, King’s required a contractual approach to implementing operational change at their PFI managed buildings. Any investments needed to be paid back within the term of the existing PFI contract and a third party facilitator was necessary to secure the best possible outcome for both the PFI partner, Bouygues Energy & Services (BYes) and the client, King’s.
LCMB undertook a 2 stage process working alongside King’s estates department, their legal team and BYes.
- Two PFI buildings were identified as priorities for action, accounting for 20% of total college energy consumption.
- LCMB undertook a technical assessment of viable energy saving measures through building surveys and reviews with the BYes onsite team. Opportunities identified in the existing Investment Grade Proposal were expanded upon and King’s were provided with technical due diligence.
- A range of projects was identified relating to lighting, controls, insulation, non-regulated loads in laboratories and behaviour change activities.
- Technical advice was combined with commercial, programme planning and strategic expertise to identify the best course of action to deliver a contract variation to the main PFI agreement.
- LCMB produced a finalised list of energy conservation measures, including savings commitments and costs.
- An installation programme for the measures was developed and critiqued. LCMB provided expertise on engagement to support operational interventions, as part of a strategic plan.
- A measurement and verification plan was drawn up to enable independent quantification and validation of savings to international industry (IPMVP) standards.
- A heads of agreement document was developed to streamline the negotiation of contractual terms and input provided to create the variation to the main PFI agreement.
- Contracted energy cost savings of close to £400,000 per annum following full implementation of all energy conservation measures.
- Under-utilised PFI lifecycle funds now being reinvested to deliver payback within the timescale of the PFI contract.
- A contractual solution enabling King’s to deliver a significant proportion of their carbon reduction target in buildings over which they do not have day to day control.
- A model that can be adapted across the estate to enable further reductions in cost and carbon emissions.
- Enhanced working relationship between client and PFI provider and ground breaking innovation.
Challenges and Achievements
Achieving carbon reductions in PFI managed buildings
The massive scale and long term nature of PFI contracts can prove unwieldy for implementing operational change. King’s and their PFI partner, BYes were committed to achieving significant carbon reductions and tackled this through a blend of technical and contractual expertise, utilising both in-house and contracted resources. It represents one of the few examples of an energy performance contract being integrated into an existing PFI agreement.
Innovation brokered by third party service provider
King’s secured an innovative contractual solution that will deliver significant carbon savings for the college over the long term. The use of a third party to broker the terms of the contract amendments was essential in securing a result that was transparent and acceptable to all parties.
The energy performance contract is on track to deliver 14% cost savings and 1,500 t carbon savings (13% CO2 reduction) across two of our largest consuming buildings. The agreement is innovative in its approach to delivering this contract form in a PFI estate and will give King’s the platform from which to launch a positive legacy of Energy Contracts and enhancements across our buildings.”
Thomas Moreton, PFI Manager, King’s College London
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LCMB improves the financial and environmental sustainability of buildings and estates, and the productivity and well-being of the people using them. We do this by reducing building operating costs, energy used and improving building space and its’ utilisation. We offer Workplace Performance, Facilities Management, Project Management and Resource optimisation support.
Amongst others our clients include King’s College London, Birmingham Airport, Tata Technologies, University College London Hospitals NHS Foundation Trust and Bouygues Energies & Services.