The Carbon & Energy Fund Working together In the P/S to improve Carbon & Energy Performance NHS SBS CEF
The CEF Framework Bidder’s Day Agenda 1. Introductions 2. Review of the procurement ( questions and any feedback ) 3. Update on the framework and pipeline 4. Description of upcoming projects and how bidders should choose 5. Financing of schemes 6. Description of how education will run ( Richard Murphy ) 7. Discussion of Scotland and how it will run ( Tom Pye HFS Scotland ) 8. Discussion of iheem October 8th and 9th 9. Discussion of education show November 26th and 27th 10. Teach in on the contract for bidders 11. Info on teach-in on the paymech at iheem 12. Short intro to Heartlands scheme and reflections on having done 3 projects now ( Robert Anderson ) 13. AOB
The CEF Framework Open Day Introductions Clive Nattrass - CEO, The Carbon and Energy Fund David Mackey - Director, The Carbon and Energy Fund Tom Pye – Energy Manager, Health Facilities Scotland Richard Murphy – MD, The Energy Consortium Robert Anderson – Director of Facilities, Heartlands hospitals
Framework Procurement Clive Nattrass CEO Carbon and Energy Fund
Why are we here? • The new framework is live • Have 8 new bidders, 17 in total • We are expanding to the whole public sector in stages, we want you to hear of it from the horses mouth • We have learnt that contractors need support • We want to start some training • We have bidder meetings approx. 2* per year • We have Iheem and the education events coming up
Review of the procurement • CEF 1 had 10/9 bidders • CEF 2 has 17 bidders CEF 3 2-3 years • Links on the website • Two open days have been held ( WWL 12, MEHT 5 ) • All but 1 bidder has signed the framework agreement • Standard was good, more experienced rested on their laurels
CEF Framework 2 Scoring sheet final Results Project Management 15% Approach 75 80 80 70 75 75 50 60 60 65 50 65 60 85 55 70 75 pass clari clari Legal response fail pass pass pass pass pass pass fy pass fy pass pass pass pass pass pass pass pass Financial Response 10% 75 80 75 95 70 75 50 50 55 85 50 65 60 80 50 70 65 Approach to design and 35% construction 75 85 50 50 60 50 75 55 70 70 60 75 75 80 50 60 70 Approach to 25% Service delivery 75 70 60 40 50 50 55 55 55 50 55 60 55 80 50 60 60 Project programme 15% and timescales 75 70 50 45 60 55 40 75 55 50 45 75 75 80 50 55 65 Total 75.0 77.8 59.5 54.3 60.8 57.0 58.5 58.3 61.0 62.8 54.0 68.8 66.3 80.8 50.8 61.8 67.0 Ranking 3 2 11 15 10 14 12 13 9 7 16 4 6 1 17 8 5
Why the scores?
Framework and pipeline David Mackey Director, Carbon and Energy Fund
Current and Future Pipeline NHS £750m to £1bn total Education (September ) C£50-60m pa Local Authority £10m to £20m Public Sector 4 pa £20m – £30m pa £20m to £30m pa • The CEF process is not NHS Specific • Co-Creation has commenced with other sectors and it has led to a new sector launch in June 2013 • £25m of funding has been ring fenced to target smaller scale demand side multi site applications e.g. Local Authority
Review of CEF 1 • Total Value c£48m • 6 Projects • Mean Av Value £8m • Min £1.6m Tranche 1 • Max £35m • Total Value c£28m • 7 Projects • Mean Av Value £3.5m • Min £1m Tranche 2 • Max £6.5m • Total Value c£33m • 8 Projects • Mean Av Value £3.6m • Min £1m Tranche 3 • Max £9m
Pipeline CEF 2 • Total Value c£53m • Est 10 Projects • Mean Av Value TBC • Min £1.6m Tranche 4 • Max £20m (July 13 – Dec 13) • Total Value c£32m • 12 Projects in neg • Mean Av Value TBC • Min £1m Tranche 5 • Max £5m (Jan 14 – July 14) • Education Pilots (3 from over 10 enquires est at £10m) • Local Government (3 pilots est at £9m) New Sector Q3 /Q 4 2013
Pipeline CEF 2 Tranche 4&5 St Johns Hospital. Lothian Ashford and St Peters Tranche 4 Tranche 5 PAH Royal Surrey Leeds Proj 1 Southampton S Central Leeds Proj 2 NHS Scotland*2 Wigan & Leigh Ayrshire & Arran Stoke Mandeville Inverclyde Hospital Glasgow Scarborough W Sussex - Worthing Hospital MEHT The Royal Marsden Chelsea Liverpool Womens Newcross Incinerators Liverpool Walton Nine Wells Hospital Tayside Manchester Central and Imperial College Trafford I of W
Financing of Projects David Mackey Director Carbon and Energy Fund
Review of CEF 3 rd Party Funders • Few sources of 15 year money • Cookie cutter process required • Co-op failure was not anticipated • Discussions with other funders not finalised • Balance Sheet is still an issue for Trusts • Despite this, existing projects are funded
Securing the Future Government Green Investment Pension Funds Bank Aviva Investors NHS DoH EE Fund Lending Banks SocGen Rabobank Contractor Funded CEF Poss Santander Pos Return of Co-op Project
What does this mean to you? Medium Term • By the end of the process the CEF panel of funders will have increased • There will be a greater diversity in the type of finance available Short Term • Greater diversity can create issues, e.g. is it asset backed, receivables backed or is it an investor seeking a long term inflation backed return? • A one size fits all contract will take time • Some contracts may be longer than 15 years • Funders take time to get comfortable with a new sector • If you are introducing a new funder please ensure that your funder is fully aware of the contract and that your bid is compliant e.g. • There is no Deed of Safeguard from a Trust • Hell and High Water Clauses have a financial impact on your bid
Winning Projects David Mackey & Clive Nattrass
Projects are not won on price • Innovation is key • Listen to the client to work out what it is they want • Play to your strengths • CHP in a box is normally not enough • Put in demand side measures and look for investments that unlock savings
Projects in Further education Richard Murphy MD The Energy Consortium
The Energy Consortium are; - A ‘Not for Profit’ Public Sector Buying Organisation, initially formed as an off-shoot of AUDE. - Governed by its membership. Primarily UK Universities Transparency - Full member of English National Purchasing & UKUPC Referenced in the Diamond Report - Delivers OJEU compliant solutions. - Delivers Cabinet Office ERG ‘Recommended Solutions’ - Involved management and procurement of energy purchases for best value. Over £165 Million of Gas & Electricity Contracts.
Core Services ‘Flexible Managed’ Energy Contracts Recognised as providing ‘Best Value for Money’ Unique to ‘The Energy Consortium’ Data Cleansing and Validation Post Tender Negotiation and Dispute Resolution Full Contract Management & Reporting Service Annual Risk Management Forum ‘Managed Non-flexible Fixed Term’ Energy Contracts Data Cleansing and Validation Optimisation of time to market E-tender Platform. Post Tender Negotiation and Dispute Resolution Carbon Management Services EU-ETS Phase II CRC Help Desk
Other Services - Bill Validation & Bureau Services - Best Practice Guides Guide to Renewable Generation Project Managers Guide for Energy Efficiency in Buildings - Electricity & Gas Retrospective Cost Auditing (PCMG) - Water Retrospective Cost Auditing (M&C Energy) - Biomass Fuel Supply - Other services connected to energy based on sector demand and procurement resource.
Membership Benefits • TEC also provide the following member benefits including: – Daily/weekly market updates – Newsletters and legislative updates – Annual Member Conferences – Preferential Seminar rates – Advice and assistance on markets and dispute resolution – Access to Utilyx Knowledge Hub – Dedicated Account Management – Access to members area at www.energyconsortium.org.uk
4 Cornerstones of an Effective Energy Strategy • In order to provide effective energy (carbon) management you must: – Buy at the right price or against the right strategy. – Only pay for what you use – validate bills. – Only use what you have to – energy efficiency. The cheapest unit of energy is the one you never use. – Report – Make sure everyone who has an influence over the energy usage on the estate understands how they influence both cost and usage. You can only manage what you can measure (and report).
Energy Performance Contracts offers our sector A solution to part 3 on the previous slide via a co-created (TEC and • CEF) framework – initial stage is pilot only. The opportunity to support achievement of challenging carbon • targets which have links to funding. Further support for the collaborative agenda (Diamond Target of • 30%) An OJEU procured approach consistent with all our other • frameworks, without having to recruit and employ technical specialists to define schemes and evaluate bids. A strong link to flexible procurement. • Access to funding (if required) and joined up thinking with GIB and • HEFCE being part of the same department.
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