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Firms to embrace simple energy efficiency savings

On Green Corporate Energy event in London a new research was unveiled showing that 51% of companies estimate they have tapped into less than a third of the potential energy savings that can result from improving their buildings or processes. This is despite the fact that more than half of the companies surveyed thought potential energy efficiency improvements would pay for themselves in less than three years.

Experts suggested that many firms ignored energy efficiency projects because they tend to differ from typical capital investments. "If you're building Bluewater [shopping centre] you don't expect a return in three years," said Michael Liebreich, chief executive of Bloomberg New Energy Finance, arguing that businesses needed to take a different approach to efficiency investments. 

Earlier, Liebreich had revealed clean energy investments including energy efficiency had risen to $243bn last year, a leap of 30 per cent from 2009's $186bn. But energy efficiency made up a relatively small proportion of the total investment.

Experts said the case for energy efficiency should be made alongside any other business investment rather than in the context of capital investment programmes. As such companies should be more open to considering outside capital as a means of getting efficiency projects off the ground.

 

However, Patrick Butcher, group finance director of Network Rail, advised that boardrooms needed to be convinced of the rates of return associated with energy efficiency if they are to turn to external financingoptions.

"It's not good enough to say that if everyone switched off their lights we'd save the planet," he said. "We need to find a way of making the investment process, and the extent to which energy efficiency is embedded in that process, easy to do. It does not start with an ideological debate."

 

But delegates revealed considerable opposition remains to external energy efficiency finance options, despite the growing number of Energy Service Companies (ESCOs) that provide efficiency upgrades at no upfront cost in return for a leasing fee.

Almost half of those polled expected to have to fund energy efficiency improvements themselves and thought government support would decrease in the future, while only eight per cent thought off-balance sheet third party financing would fund future projects.

However, whether investments were funded by internal or external capital, it is crucial to get on with making improvements, according to Jon Miles, director of sustainable energy finance at RBS.

"People think [energy savings are] too good to be true, [but] there's an awful lot of navel gazing and not a lot of doing," he said. "People are always looking for a problem – it's not there. Just go do it."