LED Lighting Deal will make British Car Parks Save Money at No Cost
Car parks like this one in Manchester, England, are a feature of cities everywhere. Is it possible to make them more sustainable - and what would this mean?
In Britain a company called NCP has held the contract for constructing car parks in towns and cities up and down the country for decades. Many of these need retrofitting for upgrading, repairs and efficiency.
Under a new £10 million deal just announced, Future Energy Solutions (FES) will be undertaking a retrofit of up to 149 of these car parks across the UK with new energy efficient lighting systems over the coming year.
The deal was put together by The UK Energy Efficiency Investments Fund ("The Fund"), in partnership with FES. The Fund is managed by Sustainable Development Capital ("SDCL") and funded by the UK's Green Investment Bank. A UK Guarantee will underpin the investment.
Switching to LEDs like these (available in all types of fitting) will deliver a high quality lighting solution that delivers a better customer experience whilst at the same time significantly reducing energy demand, maintenance costs and greenhouse gas emissions. The project is expected to save over 11,000 tonnes of CO2e per annum and generate energy savings of over 65 per cent in the car parks that are being retrofitted. Financial savings will go to repay the investment with interest.
The investment enables the project to be delivered for NCP at no up-front cost, with the project being financed by energy cost savings over time.
FES is an efficient lighting specialist and developed the project and entered into a supply & services agreement with NCP to deliver the solution.
The UK Guarantee was key to the financing. It was setup in July 2012 to avoid delays to investment in major UK infrastructure projects that may have stalled because of adverse credit conditions. The legislation underpinning the Guarantee Scheme is the Infrastructure (Financial Assistance) Act 2012. Guarantees for up to £40 billion in aggregate can be offered. This is the first transport infrastructure project to have qualified for a UK Guarantee.
CEO of NCP, Jo Cooper said: "NCP has been seeking a partner in the energy contracting market to support and deliver a wholesale upgrade of our lighting systems across the Multi-Story Car Park portfolio. Future Energy Solutions and its funding partners have tailored a deal for us which is off-balance sheet, requires no up-front investment, dramatically reduces our operational costs for an extended period of time, and reduces our energy use substantially.
"This has a big impact operationally and financially. Most importantly of all the car parks will be well fully lit and energy efficient, improving the sites for all our customers and helping us achieve our environmental goals. We look forward to addressing other energy efficiency areas where there are tangible wins for NCP moving forwards."
The UK Energy Efficiency Investments Fund has been launched with a £50m cornerstone investment from the UK Green Investment Bank and is managed by Sustainable Development Capital (SDCL), a specialist financial and investment advisory firm, headquartered in London and with offices in New York and Hong Kong. It was established in 2007 to help governments, financial institutions and companies finance and invest in environmental and social infrastructure assets and services. SDCL's advisory business is focused on facilitating the supply of clean infrastructure. Its investment business is focused on reducing demand for resources through energy efficiency.
The UK Energy Efficiency Investments Fund forms part of GIB's allocation of investment into energy efficiency, one of its priority sectors. GIB awarded the competitive mandate to SCDL to invest £50 million to drive investment in small –scale low carbon infrastructure.
The UK Green Investment Bank was launched in November 2012. It has £3.8 billion of funding from the UK government. It is the first bank of its kind in the world. It is a "for profit" bank, whose mission is to accelerate the UK's transition to a greener economy, and to create an enduring institution, operating independently of government.
Chief Executive of the UK Green Investment Bank, Shaun Kingsbury, said: "This project is important because it offers a demonstration to all businesses that energy efficiency is, first and foremost, good business sense."
Chairman of Future Energy Solutions, Anthony Lyons said: "There are huge wins on a multitude of levels in this project. The deal has enabled Future Energy Solutions to deliver a lighting replacement across a sizeable potion of NCP's portfolio, delivering significant savings in energy and monetary terms for the client of around 70%. The portfolio with efficient lighting technology installed, will have no maintenance costs for NCP moving forwards. Most important of all the new LED lighting will enhance the environment of the car parks, improve safety and security for all users, making the environment within the car parks more inviting."
Chief Secretary to the Treasury, Danny Alexander said: "The project shows that being energy efficient is common sense, saving money and reducing emissions at the same time. I hope it encourages other infrastructure projects to come forward to see how a guarantee might be able to help them."
True, but this deal is only worth £10 million. It seems amazing to me that NCP, which makes millions every year from its car parks, couldn't find a way to finance this deal themselves. Switching to LEDs really is a no-brainer when it comes to saving money, with a simple financial payback measurable in months.
Using Green Investment Bank money and time for such an obvious financial winner shouldn't be what the GIB was set up to do - which is enable the funding of projects which would otherwise find financing difficult.