Driving decarbonisation of public sector sites at speed and scale – Chris St John Cox

Comment by Chris St John Cox, Platform Lead – Complex Site Decarbonisation and Head of MEP at Energy Systems Catapult

With more than 300,000 individual properties, at a combined value of £515bn, the UK public sector manages by some distance, the largest property portfolio in the country. The central government estate alone has an estimated value of £157.6bn, with an annual running cost of £21.7bn. Public sector buildings are responsible for around 2% of total UK greenhouse gas (GHG) emissions.

While the government has made good progress in decarbonising its operations – reducing emissions by 57% by 2021-21 compared to 2009-10 and with an estimated 38% of this reduction due to improved management of the estate – there is still more to be done. In its 2017 Clean Growth Strategy, the government committed the public sector to lead by example in reducing emissions.

Leading from the front

Modern Energy Partners (MEP) was an award-winning, £20 million innovation programme (2019-2021) that looked at the practical steps we can take to decarbonise the public sector estate in a bid to help the government reduce carbon emissions.

The programme used a sample of 42 campus-style sites and tested out the practicalities of decarbonising by doing through current systems and processes. The recent publication of the evaluation report reviewed the MEP work and highlighted a host of similar barriers and recommendations that the programme also saw.

Did either the programme or the evaluation however, answer the big question:

Can decarbonisation of public sector sites be delivered?

What we learnt, and subsequently experienced, is that there are multiple barriers and challenges which prevent or limit the potential for decarbonisation of public sector sites from taking place. It’s easy to suggest that there’s just one challenge around cost and financial payback. The reality is, this can be influenced by focusing on other barriers and resolving them.

The 5th and 6th carbon budgets have set specific public sector decarbonisation goals which are creeping ever closer by the day. The UK Government for instance is aiming to reduce public sector emissions by 50% by 2032 against 2017 levels.

Our view is that it will be difficult for this decarbonisation goal to be met if we continue to deliver at the same limited pace and scale as we are today. There needs to be a shift in gear. We need to increase the speed and scale at which we’re delivering to see the low carbon transition that is required.

During the MEP programme, we evidenced how long a project took and how effort intensive it was to achieve just a small installation. We mapped out how long it would take for a large programme to deliver projects across a multi-site estate and found that action needed to start at the earliest possible opportunity and then be scaled-up rapidly. Nearly two years later there is some evidence of this beginning to happen but there are still barriers that prevent action which require consideration.

“Only by cutting timelines through the simplification of processes and decision-making, by being able to access finance, and by immediately increasing scale and pace can changes happen in time to meet the national Net Zero commitments” – MEP evaluation report, page 5.

Below are a few barriers we have observed and think should be considered by those working to decarbonise the public sector estate:

  1. Unlocking alternative investment routes and investigating different funding options for varying public sector groups will speed up deployment and offer value for money.

  • Funding required to meet the size and scale of the challenge of public sector decarbonisation is simply not available. This is evidenced by the number of project applications for the Public Sector Decarbonisation Scheme (PSDS) and Low Carbon Skills Fund (LCSF) far exceeding the funding available. At present this is the main funding route for grant funding.
  • Offering grants for certain types of projects has been well received and each round has been oversubscribed several times over. It demonstrates the want to do more, however there is a lack of other funding sources or solutions which enable projects to go ahead.
  • There are examples of different funding methods seen in similar types of projects such as heat networks or renewable energy projects, but these methods are limited and not accessible to the public sector, varying substantially. Typically, the only source of funding is through capital projects (often taking away investment maintaining the estate) or grant funding.
  • Government investment in decarbonisation projects on the public sector estate can reduce the long-term economic burden of managing such a vast estate and deliver value for money for the public purse.
  1. Accelerating business-as-usual capacity building and integration across normal activities and governance.

  • Whilst we have seen some evidence of resources being allocated to support the planning of decarbonisation projects, integration into business as usual is not yet endemic. There are examples of seedling adoption, for example the Ministry of Defence (MoD) is building Net Zero into its Establishment Management Plans meaning that as plans for a site are acted upon, Net Zero is integral to the steps taken. Though for decarbonisation to be successful, it must be carried throughout all activities such as management and maintenance regimes.
  1. Improving skills and knowledge across the construction sector both customer and supplier.

  • Decarbonisation is currently seen as a specialist theme with high quality outcomes beginning with project leads setting out high quality requirements. Through the MEP programme we consistently saw singular energy or carbon experts responsible for the decarbonisation of their whole organisation, and whole estates teams focusing on the upkeep of their estate.
  • To deliver at scale these teams need to be combined, with all estates professionals realising that they have responsibility, in the same way that they must for health and safety. We need to support this upskilling and expanding of their responsibilities.
  1. Adopting standardised approaches and guidance to decarbonisation.

  • The MEP programme was a truly collaborative programme delivered with many industry partners. They provided high quality outputs, but the observation was that they all provided them in a different format, against different assumptions and based on different parameters. Making comparisons is difficult and selecting the best investment hard. By standardising early-stage assessment approaches further and setting clearer guidance on interpretation of assumptions industry will benefit.
  • Professional bodies already provide fantastic technical guides on detailed design for decarbonisation technologies. Additional early stage assessment guidance such as the Public Sector Decarbonisation Guidance (PSDG) and Net Zero Carbon Building Standard layout a better pathway to detailed design. Where possible professional bodies, Energy Systems Catapult, and industry should work together and continue to evolve guidance around areas where consistency will support scale and speed.
  • Where knowledge can be simplified or demystified it should be, enabling projects to be appraised more rapidly and consistently.
  1. Coming together to adopt a different delivery model to support scaling of the supply chain.

  • At present projects are delivered one by one, with individual specifications, procurement and delivery contracts used for each solution or even each public sector body. If we continue at this speed and scale, our commitments won’t be met.
  • Our only option is to think differently. We need to understand our supply chain, both products and installers, and consider how we are going to procurement to drive price and scale. Manufacturers need to be engaged to understand if they can supply to the scale required and installers need to be contracted so that they are able to deploy their workforce effectively over multiple sites in the same geographical location.
  • Setting out the scale of the challenge and the need in geographical areas will also help the supply chain to think about scaling up their resources and ability to support delivery.
  1. Recognising that changes in energy capacity need to be managed by sites as well as providers.
  • Moving away from fossil fuels through electrification will require additional electricity supply, meaning that capacity will increasingly be a problem. Distribution Network Operators (DNOs) need to plan out how they will support additional capacity, through dialogue with sites to understand requirements. Sites need to explore what they can do to support capacity constraints, to make the whole system work.
  • This will not just be a job for the DNOs, estate managers, or other such site operators. We need to take a whole systems approach to local energy planning, ensuring that we’re working with local authorities to make a decarbonisation plan that works for the whole area.
  • Our pioneering Local Area Energy Plans (LAEPs) are designed to provide an evidence-based approach that sets out to identify the most effective route for the local area to contribute towards meeting the national Net Zero target, as well as meeting its local Net Zero target. Public sector estates and sites play an important role in LAEPs.
  1. Reflecting energy prices that incentivise decarbonisation projects.

  • It can be hard to make the business case for switching to a more expensive fuel, even if the energy product is more efficient. By rebalancing the relative cost of electricity and gas, we can make electricity a more attractive fuel alternative for sites and estates, helping to incentivise decarbonisation projects. The government has acknowledged that there is a need for such rebalancing. Until this is confirmed however, there is a risk that businesses will be put off from transitioning to electricity while prices remain high.

You can check out the full suite of tools, guides and decarbonisation framework here at the Public Sector Decarbonisation Guidance homepage.

For more information, get in touch: psdecarbguidance@es.catapult.org.uk

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