The city of Cambridge is to launch its own version of the Green Deal next month, with the Royal Bank of Scotland and a City finance firm funding non-domestic retrofit projects then earning a return from the savings made in clients’ energy bills.
The two financers aim to target large estates within the city, owned by the NHS, housing associations, the council, commercial companies or educational institutions.
[Clarification June 24: the Cambridge Retrofit Project has asked us to make clear that other finance routes – yet to be clarified – will also be available to clients].
State-backed RBS is committed to assist in national carbon-reduction targets, while Day One Energy Solutions aims to finance green retrofits to make a commercial return.
The Cambridge Retrofit Project is driven by a consortium made up of the city council , the property and construction sectors, the university, RBS and Day One Energy Solutions. Around 30 private and public sector organisations are so far signed up to take part.
The aim is to retrofit every public and commercial building in the city by 2050 – approximately 40,000 properties. CRP estimates that £1bn could be invested in energy-saving measures, which will result in energy savings of £1.5bn.
“If we are going to achieve the ambitious carbon reduction targets the UK has set, then we are going to have to learn how to run projects of this scale. Crucially, our plan is to ensure that the business of retrofitting Cambridge’s buildings is demand-driven.”
Prof Douglas Crawford-Brown, director of the Cambridge Centre for Climate Change Mitigation Research
CRP is currently working on aggregating properties into larger retrofit projects to achieve economies of scale which will drive down costs and attract favourable financing rates. The first project is likely to be the University Library, designed by Giles Gilbert Scott and opened in 1934.
The projects will be handled by a Programme Management Unit, whose members so far include eastern region property consultancy Bidwells, national firm Savills and 5th Studio, a Cambridge-based architect.
Contractor Skanska and consultants Aecom and Pell Frischmann and builder’s merchant Ridgeons have also expressed interest in delivering projects.
Prof Douglas Crawford-Brown, director of the Cambridge Centre for Climate Change Mitigation Research, said: “If we are going to achieve the ambitious carbon reduction targets the UK has set, then we are going to have to learn how to run projects of this scale. Crucially, our plan is to ensure that the business of retrofitting Cambridge’s buildings is demand-driven.
“Other attempts at initiatives like this have tended to work on the assumption that if a programme to make large-scale changes like this is created, people will use it.
“Our view is that you don’t start supplying until you’ve got the demand. Our first objective is to get big estate-holders involved.”
Alan Wright MCIOB, a partner at Bidwells, says the firm is still establishing the details of the CRP approach. “Our client base is quite interested in the concept of investment funds providing the upfront funding, although clearly there has to be a reason to go down this route [rather than paying for the retrofit out of their own resources]. RBS and Day One Energy are looking for large scale estates and we believe they also plan to bring in their own supply chains.”
He added: “The CRP is very interested in what the ‘green premium’ might be – the payback could be the increase in property values. For instance, can it be proved that a zero carbon building with very low fuel bills is more valuable? However, at the moment we haven’t seen a huge gain in value in older buildings [after retrofit].”
The CRP will also establish an online consultation service, Consense, which will mobilise interest from businesses and property owners. Supporting research and monitoring will be undertaken by the University of Cambridge’s Centre for Climate Change Mitigation Research and its academic partners.
The city’s current carbon footprint of 830,000 tonnes of CO2 a year could fall to about 500,000, says the CRP group.
Main photograph: James Bowe/Flickr
