Gregor Paterson-Jones, Managing Director for energy efficiency at the UK Green Investment Bank explains why energy efficiency is key to reducing costs for public services.

With budgets under continuous pressure and demand for savings across the public sector constantly at the forefront of the news agenda, it can be hard to see the wood from the trees.

However, sometimes the answer can be so close it is overlooked. This is where the case for energy efficiency begins. Energy efficiency is the best kept secret of the green revolution. We should be doing much more to realise the savings that come from using much less energy.

Reducing energy bills for organisations as vast as the NHS and local authorities is a huge priority. It’s a win-win-win, reducing energy use and sourcing energy from renewable technologies will lower the NHS’s and local authorities’ carbon footprint, save money, and can even become a source of revenue.

Both the NHS and local authorities are full-time, highly specialised and energy intensive. Creating energy efficiencies in these sectors is not an easy task and this is where the UK government backed Green Investment Bank (GIB) can help. We can help finance the modernisation of energy infrastructure, leading to significant overall savings from reduced energy demand, protection against rising energy prices, and lower maintenance costs.

In the NHS alone, GIB estimates that energy efficiency measures could cut this bill by up to 20%, saving £150m each year.

For local authorities, simply switching to LED streetlights could bring energy savings of between 50 to 80%. The UK has an old and inefficient street lighting estate. More than £300m is spent annually on energy for streetlights and the costs are rapidly increasing for non-energy efficient lighting. The savings can be huge.

The Green Investment Bank has been created by the UK government and capitalised with £3.8bn of public money, our mission is to help the UK transition to a greener economy by supporting projects that are both green and commercial. One of GIB’s priority areas for investment is public sector energy efficiency, especially in the NHS and local authorities where we have established a track record of activity.

We have developed an innovative offering. The GIB Health Sector Energy Efficiency Programme and Green Loan allows us to use the full spectrum of financing across debt and equity with the ability to fund long-term projects. We have a dedicated team of energy efficiency project and finance experts established to work with private and public sector organisations and co-investors.

In both areas there is a huge opportunity for cost savings through energy efficiency. The time is right, the technology is mature and well proven, we have some very positive case studies showing what’s possible and all public bodies have to face the risks of rising energy costs and on-going budget pressures. In the NHS, funding examples include the UK’s largest health sector energy efficiency project, the energy innovation centre with Cambridge University Hospitals NHS Foundation Trust. Serving Addenbrooke’s and Rosie hospitals, the £36m funding package led by GIB and Aviva Investors is a 25-year contract. Housing a combined heat and power unit, biomass boiler, dual fuel boilers and heat recovery from medical incineration, the centre will reduce costs by £6m a year.

With local authorities, retrofitting of streetlights with LEDs can be financed from savings and can involve no upfront outlay by the authorities.

At GIB, we know there is a funding gap and we are actively working with private finance partner providers to create solutions. We accept there is no ‘one size fits all’ financing solution for NHS and local authority energy efficiency projects.

We focus on 7 key technology clusters. CHP and district heating, outdoor lighting, renewable heat, building retrofit, efficient transport and industrial processes and smart meters, will all be considered.

Each of our finance options are based on consistent principles: Spend to save: finance repayments are lower than, and repaid, from cost savings which means the GIB can fund the upfront expenditure; attractive rates: finance is priced competitively; long-term: we can lend for up to 25 years, and flexible: we can be flexible to meet the project requirements.

Procurement framework consultants can advise the financing solution that best works with the set of measures required. We can then provide a detailed energy efficiency solution and the evaluation and selection of delivery partners.

We will partner with utilities, public authorities, commercial and industrial companies to achieve our aims. Talk to us. We are ready to help.


Gregor Paterson-Jones

Managing Director, Energy Efficiency

UK Green Investment Bank


Please enter your comment!
Please enter your name here