RE:FIT – Energy efficiency funding

October 29, 2014

Matthew Cripps (RE:FIT) came to talk us through the Mayor of London’s award-winning
procurement initiative that provides a framework for the public sector to retrofit their buildings and to achieve substantial cost savings improve energy performance & reduce their carbon footprint.

 

Please find the associated PDFs below:

 

 

 

RE:FIT is the Mayor of London’s award winning programme which provides a commercial model for public sector organisations wishing to achieve substantial financial cost savings, improve the energy performance of their buildings and reduce their CO2 footprint.


The RE:FIT Framework, available to all public sector organisations in the UK, streamlines the procurement process for energy efficiency works by providing pre-negotiated, EU-regulation-compliant contracts that can be procured from a group of 13 pre-qualified specialist Energy Service Companies (ESCos).


The ESCo assesses, designs and installs Energy Conservation Measures (ECMs), rectifying backlog maintenance and increasing facilities reliability, cutting running costs, saving significant amounts of energy and reducing carbon emissions. The RE:FIT ESCo guarantees the level of energy savings, thus offering a secure financial saving over the period of the agreement.


The RE:FIT programme can be used for a broad range of measures to save energy, including simple and more complex technologies, from insulation and building fabric improvements, replacement or upgrading of mechanical and electrical services and the installation of bespoke energy efficiency measures such as combined heat and power (CHP) and voltage optimisation equipment. Renewable technologies are also possible where appropriate. There is no minimum or maximum capital investment threshold for RE:FIT, although the majority of RE:FIT projects exceed £1m.
There are several alternative frameworks and procurement options for the delivery of energy efficiency upgrades within the public sector. The following six facts outline the advantages of using the RE:FIT Framework over other procurement approaches or frameworks:

 

1. Time


Through RE:FIT, it is possible to appoint an ESCo in under three months, thereby halving the normal procurement period associated with public sector procurements. Part of the RE:FIT procurement includes the initial assessment and feasibility by which the ESCo will be chosen and committed to guaranteed savings.


In comparison, the timeframe for OJEU procurement, via the shorter restricted process, is circa six months. In fact, we have tracked OJEU’s issued by local authorities across the UK, where the procurement timeline extends to 9 months before the selected supplier commences assessment and design, let alone the installation of energy saving measures.


RE:FIT is a rolling programme, with the current framework in place until at least December 2015. Unlike other programmes, RE:FIT does not have ‘rounds’, closing dates for applications or any limits on applicant numbers.


RE:FIT will enable you to undertake works earlier than otherwise possible. You will therefore benefit from the associated energy savings and carbon reduction at a far earlier stage.

 

2. Cost


RE:FIT provides a pre-tendered Framework that is OJEU-compliant. There are no charges for London
based public sector clients accessing the Framework. For large scale projects using the RE:FIT
Framework to access the services required will immediately save the costs of tendering through
OJEU, which can range around £70k-£100k for the procurement costs alone.


The RE:FIT suppliers are competitively tendered and there are no hidden fees or costs arising through the RE:FIT procurement process, such as the percentage supplier fees or rebates contained in other schemes.


In addition the GLA has established the RE:FIT Programme Delivery Unit (PDU) to support
organisations through the tender, installation and measurement & verification elements of energy
saving projects. The PDU is jointly funded by the GLA and a grant from the European Investment
Bank so that PDU services, including specialist technical support, are provided at no cost to public
sector organisations in Greater London until spring 2015. Given this funding arrangement RE:FIT
does not seek to recover any administration costs.


When your RE:FIT project is complete and the ECMs are installed you will benefit, in full, from all of
the energy savings realised. Under RE:FIT there is no sharing of any of the guaranteed energy
savings with the programme or with the ESCo.

 

3. Funding and off balance sheet solutions
The RE:FIT Framework recognises that different public sector organisations may require different
approaches to fund energy efficiency projects and has been designed to be flexible when it comes to
finance options. A wide range of finance approaches can be used to determine the most optimal
finance solution for each RE:FIT project, all in an open book manner and regulated under the REF:FIT
framework. These can include:

  • Own funding

  • Borrowing directly:

    • London Energy Efficiency Fund / Salix

    • Banks

  • Finance through a third party, including 'off-balance sheet' options

The chosen overall financing solution may include a blend of the different approaches above to cover
different elements of the project. For example some aspects may be directly funded, some through
borrowing, and the remaining elements funded through the Energy Service Company, via Salix, or a
third party, the final mix blended in an open book and regulated manner.


RE:FIT does not tie you into a single funding solution, nor does it commit you to borrowing from a
single source. The RE:FIT PDU will support you to identify the most appropriate and cost effective
funding solution for your organisation and project.

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