Energy performance and public assets: a new breed of fat cats?

Energy performance is at the heart of the recent normative agenda affecting public infrastructure, amongst which health assets. In a nutshell, increasingly stringent norms are enshrined in legislation and regulations to ensure that public buildings contribute to a greener planet: drop in CO2 emissions, use of more environmentally-friendly sources of fuel, reduction of waste.... energy efficiency is the relatively new kid on the block when it comes to global contracts.

Capital investment in health is of course playing an important part in these dynamics and public budget availability stimulates investment in global contracts for the design, building, operations and/or maintenance of energy production units for hospitals, care networks, or for the whole asset operating under energy efficiency standards.

This area translate in massive investments. As an illustration, the Greater London Authority and Local Partnerships are launching the 4th iteration of the Energy Performance framework contract for public assets.

The national Re:fit Energy Performance Contract framework is a procurement initiative for public bodies wishing to implement energy efficiency measures and local energy generation projects on their assets.

An expected £500 million worth of contracts is expected under this framework. In fact:

Over £180m of works has been procured across more than 1,000 buildings saving in excess of 52,000 tonnes of CO2 and £10m of energy costs each year. The current pipeline is over £91m and growing.

Engie is one of the main companies engaged in these contracts. PBC Today, the Planning and Construction publication, contextualises the economic opportunities in a detailed article.

One of the areas of attention for public authorities could be: is this going to turn out to be an oligopolistic market again (as is the case with the PPP market), with the major players in the building construction sector in a very strong position? Could this hamper local economic and social development? Could it ultimately hinder value for money for public health stewards....and the taxpayer?

The next blog entry on energy performance will contextualisation the stakes and challenges, but also the opportunities of energy norms for health stewards, before underscoring the benefits of the additional revenue that can be generated by energy surplus sold by public assets. Don’t miss out!