Phase 5 Low Carbon Skills Fund (Salix Finance) – Heat Decarbonisation Strategy & Feasibility Studies

Ref: PCC/D/2024/06

Executive Summary

The energy costs associated with OPCC West Mercia Estate buildings and premises were more than £3.3million during 2023, the total energy used equated to approximately 4,000 tonnes of carbon emissions being released to the atmosphere.

In order to comply with the Climate Change Act 2008 (2050 Target Amendment) Order 2019, which sets out the UK Governments legally binding target to reduce 100% of greenhouse gas emissions by 2050 (also known as the Net Zero Target), and the subsequent UK Government policy target to reduce 75 percent of its direct carbon emission from public sector buildings by 2037, the PCC will need to reduce the Estate’s energy consumption significantly and replace fossil fuel heating systems with low carbon heating sources e.g. district heat network schemes, air source heat pumps, ground source heat pumps, water source heat pumps, high heat retention storage heaters, adopt renewable energy technology, install site energy storage etc.

To support these targets, the UK Government has committed in the region of £1.8 billion to support decarbonisation projects. Two schemes managed via the Department of Energy Security and Net Zero that provides funding opportunities to public service organisations include:

• The Low Carbon Skill Fund; and
• The Public Sector Decarbonisation Scheme

The PCC West Mercia is seeking to access ‘blended’ funding from Phase 5 of the Low Carbon Skills Fund (Spring 2024) to develop a Heat Decarbonisation Strategy on the highest energy / carbon intensive building stock (Headquarters and District Headquarters) and in addition undertake detailed feasibility studies on buildings where the heating systems, under the funding scheme, are defined as ‘end-of-life’.

The funding will support 34% of the total cost to develop a Heat Decarbonisation Plan and associated feasibility studies.

The table below summaries the costs associated with these works, the proposed funding opportunity, and proposed net cost to the PCC.

The total cost for this work is estimated to be £71,500 for the development of

• a Heat Decarbonisation Strategy for the West Mercia Police Headquarters and District Headquarters, totalling seventeen of the most energy / carbon intensive buildings within the estate portfolio; and
• to carry out detailed feasibility studies for eight qualifying buildings with demonstratable end-of-life boilers. These works are proposed based on successfully securing approval for Phase 5 of the Low Carbon Skills Fund via Salix Finance.
Subject to a successful Phase 5 Low Carbon Skills Fund application and meeting the requirements set by the Salix Finance scheme criteria, the PCC will receive grant funding in the region of £24,310, which equates to a total requirement of £47,040 from the PCC.

This proposal supports the Commissioner’s commitment to “reduce the environmental impact of policing on our environment and ensure that the wider economic, social and environmental wellbeing of our communities is considered when services are commissioned or procured.”

Proposal

For the PCC to approve:

• The development of the Heat Decarbonisation Strategy for the West Mercia Police Headquarters and District Headquarters and detailed feasibility studies for eight buildings.
• The allocation of a maximum of £71,500 of funding from the infrastructure reserve to support the development of the above. The expectation is that match funding will be secured from the application to Low Carbon Skills Funding approval via Salix Finance which will reduce the required draw down from reserves.

Approval Of

West Mercia Police and Crime Commissioner

I hereby approve the above proposal.

Signed

Part 1 – Non-Confidential/Exempt Facts & Figures

Supporting Report

The energy costs associated with the OPCC West Mercia estate buildings and premises were circa £3.3million during 2023, the total energy used equated to approximately 4,000 tonnes of carbon emissions being released to the atmosphere.

In order to comply with the Climate Change Act 2008 (2050 Target Amendment) Order 2019, which sets out the UK Governments legally binding target to reduce 100% of greenhouse gas emissions by 2050 (also known as the Net Zero Target), and the subsequent UK Government policy target to reduce 75 percent of its direct carbon emission from public sector buildings by 2037, the PCC Estates will need to reduce its energy consumption significantly and replace fossil fuel heating systems with low carbon heating sources e.g. district heat network schemes, air source heat pumps, ground source heat pumps, water source heat pumps, high heat retention storage heaters, adopt renewable energy technology, site energy storage etc.

To support these targets the UK Government committed in the region of £1.8 billion to support decarbonisation projects. Two schemes managed via the Department of Energy Security and Net Zero that provides funding opportunities to public service organisations include:

• Low Carbon Skill Fund – Phase 5 (Spring 2024)
• Public Sector Decarbonisation Scheme Phase 4 (Autumn 2024)

The Low Carbon Skills Fund is designed to fund up to 34% of the cost for public sector organisations (a ‘blended’ approach) to develop Heat Decarbonisation Strategies (or high level ‘options appraisal’ and cost benefit analysis); feasibility Studies and detail buildings designs (to RIBA stage 4) to enable the replacement of fossil fuel heating systems with low carbon alternatives.

The modern approach to decarbonising buildings is to focus on ‘Whole Building’ retrofits, adopting the ‘fabric first’ principle to insulating the envelope of the buildings first to reduce heat / energy demand and then incorporating low carbon heating systems e.g. district heating schemes, air source heat pumps, ground source heat pumps, water source heat pumps, high heat retention storage heaters, adopt renewable energy technology, installation of site energy storage etc.

The aim of the Low Carbon Skill Fund is to support the design elements for the required infrastructural interventions required to decarbonise the estate. The Low Carbon Skill Fund process supports access to other potential funding such as the Public Sector Decarbonisation Scheme. The Public Sector Decarbonisation Scheme is design to fund building infrastructure works.

Funding would include but not limited to, fabric improvement works (insulating walls & roofs, replacement windows & doors etc); replacement of fossil fuel heating systems with low carbon heating systems; replacement of energy inefficient lighting and mechanical & electrical equipment; and installation of renewables such as PV Solar and battery storage. However, to gain the Public Sector Decarbonisation Scheme the process and technical requirements of Figure 1 need to be demonstrated.

As a result of the short delivery window to deliver the Low Carbon Skill Fund project works (<10 months from funding approval) and to deliver the best value for money with the biggest energy/carbon impact, the PCC is targeting the most energy / carbon intensive buildings, with some of the oldest fossil fuel heating systems and greatest opportunity to improve stock and M&E conditions:

• Headquarters at Hindlip Hall = 12 Buildings
• District Headquarters (5 buildings): Telford, Shrewsbury Worcester, Kidderminster, and Hereford.
These buildings account for approximately 65% of the total energy consumption from the PCC estate.

Three initiative proposals have been sought from consultancies experienced with Low Carbon Skill Fund, via the Professional Services Public Contract Regulations 2015 compliant framework contracts. It is proposed the PCC use the most cost-effective proposal.

1. The total cost to develop a Heat Decarbonisation Strategy for 17 (seventeen) buildings = £40,714
2. The total cost to develop detailed feasibility studies for 8 (eight) buildings with demonstratable end-of-life boilers = £30,786
3. This is a total cost of £71,500.

The request is for funding of £71,500 for the development of the Heat Decarbonisation Strategy for the West Mercia Police Headquarters and 5 x District Headquarters and associated detailed feasibility studies for eight qualifying buildings, subject to successfully securing Phase 5 Low Carbon Skills Funding via Salix Finance.

Subject to meeting the Salix Finance scheme criteria and agreement to the proposed buildings included within the application, the PCC would expect to receive grant funding of:

1. £13,843 for the development of a Heat Decarbonisation Strategy for 17 (seventeen) buildings.
2. £10,467 for the development of detailed feasibility studies for 8 (eight) buildings.
3. This is a total funding opportunity of £24,310.

Therefore the expected total cost to the PCC would be (total cost minus funding) £47,040.

Not only would the Heat Decarbonisation Strategy and feasibility studies support the PCC & Force in developing detailed investment strategies for its estate, but also opens up greater opportunities for significant infrastructural funding opportunities via the Public Sector Decarbonisation Scheme; delivers a plan to significantly reduce energy costs that could be reinvested into frontline services, the estate or into reserves; and significantly reduce carbon emissions that contribute to climate change, which directly impact on frontline services and our communities.

Strategic Considerations

Reforming West Mercia

Reassuring West Mercia’s Communities

The decision supports this/ these objective(s) through the following:

• Support and challenge West Mercia Police to reduce its corporate carbon footprint.
• Reducing our impact on Climate Change and minimising the associated effects that extreme weather events have on frontline services, the estate portfolio and our communities. Reduces civil unrests in relation to the impacts of climate change and or associated events.
• Mange resources to maximise value, maximises efficiency, reduces costs to reinvest into frontline services.
• The PCC & Force would be able to demonstrate how they conduct themselves in line with the public’s ‘morals’, such as reducing its impact on climate change. Leading to greater community engagement and contribution to happier / healthier communities.
• Ensuring West Mercia Police contributes to reducing its impact on the environment.

Benefits and their Realisations

• Access to public funding to support the professional development of key decarbonisation strategies and technical studies / reports to deliver on our legal responsibilities and public sector targets.
• Develop key strategies/studies/reports to:

• Access significant infrastructural funding opportunities.
• To decarbonise the estate and significantly reduce energy and energy capacity infrastructural costs.
• To reduce annual revenue operating utility costs
• To aid energy security of the estate. To help minimise the PCC Estates & West Mercia Police environmental impact and minimise the impact of climate change and effects on frontline services and local communities

Author

Chris O’Hara – Head of Estates OPCC Date: 17/04/2024

Financial and Treasurer Comments

The total cost of the work is estimated to be £71,500. The proposal is to draw the funding from the infrastructure reserve to fund this one-off project. The plan is that there will be Low Carbon Skill Fund of up to £24,310 in match funding which would reduce the required draw down of funding.

There is currently an estimated balance of £585k on the reserve, which is sufficient to meet the total funding requested.

The use of the reserve would reduce the available funding for other projects such as LED lighting, however as a one of project which has benefits for the future use of the estate it can be considered a reasonable use of the reserve.

Signed Date: 24/04/2024

Legal Considerations

By virtue of schedule 11, paragraph 14 of the Police Reform and Social Responsibility Act 2011 the Police and Crime Commissioner may do anything which is calculated to facilitate, or is conducive or incidental to, the exercise of the functions of commissioner. That includes entering into contracts and other agreements (whether legally binding or not) and acquiring and disposing of property (including land).

Public Access to Information

Information in this form is subject to the Freedom of Information Act 2000 (FOI Act) and other legislation. Part 1 of this form will be made available on the West Mercia Commissioner’s website. Any facts and advice that should not be made automatically available on request are not included in Part 1 but instead in a separate Part 2 report.

Officer Approval

Deputy Chief Executive Officer

Signed, Date: 24/04/2024