Introduction

The study involved an assessment of the viability of the use of energy service companies (ESCO’s) and other third party financing mechanisms to reduce CO2 emissions from public buildings.

Objectives and target audience

In the UK the operation of buildings accounts for approximately 50% of CO2 emissions.  In the public estates there is a significant opportunity to improve the energy performance of buildings and reduce CO2 emissions.  The project aimed to identify the opportunities for using innovative third party financing mechanisms and ESCO type approaches to improve the energy performance of buildings in the public sector estates in Greater Manchester and elsewhere in the NW of England.  It involved the identification of opportunities, the evaluation of the viability of ESCO models, the identification of specific projects that could be taken forward as pilots, and the identification of barriers and enablers.
The results were disseminated through a roll out report and dissemination workshop held by the NW development agency.

Financial Resources and Partners involved

The project was managed by Manchester: Knowledge Capital and received funding from the NW regional development agency.  The work was carried out by the technical consultancy TNEI.
Process
The following tasks were undertaken:-

• Identification of opportunities;
• Stakeholder Workshop;
• Evaluation of interest in ESCO models;
• Identification of specific pilot projects and stakeholders;
• Assessment of existing entities;
• Identification of barriers and enablers;
• Recommendations for establishing ESCO’s;
• Roll out report and dissemination workshop.

Results

The project helped to raise awareness and increase understanding of the opportunities provided by third party financial models and ESCO’s.  Pilot projects in Greater Manchester were identified and the stakeholders encouraged to evaluate the opportunities for the use of ESCO’s.  Further work is being taken forward by the local authorities in Manchester to evaluate the use of ESCO’s as a means of enabling low and zero carbon targets to be met in the context of new developments in order to meet the requirements of the Code for Sustainable Homes.  Work is ongoing investigating the feasibility on specific pilot initiatives at Bickershaw in Wigan and at Maine Road in Manchester.

Critical Success Factors / Challenges

Whilst local authorities were receptive to the ESCO concept, it became clear that capacity for further developing this model of financing relied on the finding of additional resources, typically consultancy support.  This has limited the uptake of the ESCO model.