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The Impact of Information Transfer and Advice Programmes on Sectors

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The Impact of Information Transfer and Advice Programmes on Sectors

A thesis submitted to the University of Manchester for the degree of Doctor of Philosophy in the Faculty of Social Sciences and Law

2000

Anthony John Rigby

PREST (Policy Research in Engineering, Science and Technology) Table of Contents

LIST OF FIGURES...... 5

LIST OF EQUATIONS ...... 5

LIST OF TABLES...... 6

ABSTRACT ...... 7

DECLARATION ...... 8

NOTES ON COPYRIGHT AND THE OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS ...... 8

GLOSSARY OF TERMS ...... 9

ACKNOWLEDGEMENTS...... 13

CONCERNING THE AUTHOR ...... 14

INTRODUCTION ...... 15 ENERGY EFFICIENCY – A PERENNIAL POLICY CONCERN ...... 15 STRUCTURE OF THE THESIS ...... 16 CHAPTER ONE - CONCEPTUAL ANALYSIS...... 18 1.1 INTRODUCTION ...... 18 1.2 INFORMATION AND AWARENESS POLICY PRINCIPLES AND ANALYSIS ...... 18 1.3 PROGRAMME FOUNDATIONS AND IMPACTS – BROADER PERSPECTIVES ...... 27 1.4 QUANTIFYING EVALUATION STRATEGIES ...... 36 1.5 THE WIDER ISSUES OF PERSISTENCE OF IMPACT...... 43 1.6 CHAPTER SUMMARY ...... 50 CHAPTER TWO – METHODOLOGY...... 51 2.1 INTRODUCTION ...... 51 2.2 RESEARCH CONTEXT AND METHODS ...... 51 2.3 STAGE ONE – CREATION AND OPERATION OF THE PROGRAMME ...... 54 2.4 STAGE TWO – PROGRAMME IMPACT...... 57 2.5 STAGE THREE – PERSISTENCE OF IMPACT...... 63 2.6 RESEARCH STYLE AND GOOD PRACTICE...... 64 2.7 STRUCTURE OF SUBSEQUENT CHAPTERS ...... 67 CHAPTER THREE - THE ENERGY EFFICIENCY BEST PRACTICE PROGRAMME.68 3.1 INTRODUCTION ...... 68 3.2 UK ENERGY EFFICIENCY POLICY POST-WAR ...... 70 3.3 ENERGY EFFICIENCY BEST PRACTICE – AN INFORMATION PROGRAMME ...... 73 3.4 IMPLEMENTATION - PROGRAMME DESIGN AND DELIVERY ...... 80 3.5 TARGETS OF THE PROGRAMME ...... 102 3.6 EVALUATION AND IMPACT ASSESSMENT ...... 104 3.7 SUMMARY...... 111 CHAPTER FOUR – UK HIGHER EDUCATION SECTOR STUDY...... 114 4.1 INTRODUCTION ...... 114 4.2 UNIVERSITY OF LEEDS ...... 115 4.3 UNIVERSITY OF SALFORD...... 126 4.4 THE UNIVERSITY OF CENTRAL LANCASHIRE ...... 137 4.5 VICTORIA UNIVERSITY OF MANCHESTER...... 146 4.6 UNIVERSITY OF EDINBURGH ...... 155 4.7 LIVERPOOL JOHN MOORES UNIVERSITY ...... 164

2 4.8 SECTOR SUMMARY ...... 169 CHAPTER FIVE - UK SECTOR STUDY...... 171 5.1 INTRODUCTION ...... 171 5.2 ...... 172 5.3 STAKIS PLC ...... 181 5.4 FORTE LTD...... 184 5.5 PLC...... 193 5.6 MARRIOTT HOTELS...... 198 5.7 LTD...... 204 5.8 SECTOR SUMMARY ...... 210 CHAPTER SIX – UK RETAIL SECTOR STUDY...... 212 6.1 INTRODUCTION ...... 212 6.2 WOOLWORTH...... 213 6.3 SUPERDRUG ...... 217 6.4 HOUSE OF FRASER PLC ...... 224 6.5 ARCADIA GROUP PLC ...... 227 6.6 SEARS GROUP PROPERTIES ...... 234 6.7 WH SMITH PLC...... 239 6.8 DEBENHAMS PLC ...... 244 6.9 SECTOR SUMMARY ...... 250 CHAPTER SEVEN - COMPARATIVE ANALYSIS ...... 252 7.1 INTRODUCTION ...... 252 7.2 MANAGEMENT STRUCTURE AND ORGANISATIONAL CONTEXT...... 253 7.3 ENERGY EFFICIENCY KNOWLEDGE ...... 266 7.4 IDENTIFYING TECHNOLOGIES FOR IMPLEMENTATION ...... 275 7.5 INSTALLING AND CONFIGURING TECHNOLOGIES AND BEYOND ...... 281 7.6 GENERAL AND SPECIFIC INFLUENCES UPON PROGRAMME IMPACT ...... 288 7.7 INTEGRATION OF STATISTICAL INFORMATION ON PROGRAMME PERSISTENCE...... 290 CHAPTER EIGHT - CONCLUSION ...... 292 8.1 INTRODUCTION ...... 292 8.2 PROGRAMME EMERGENCE – UNITING GOALS...... 292 8.3 IMPACTS IN PRACTICE ...... 298 8.4 PERSISTENCE OF PROGRAMME IMPACTS ...... 303 8.5 POLICY RECOMMENDATIONS ...... 308 8.6 FURTHER RESEARCH WORK...... 310 CONCEPTUAL ANALYSIS APPENDIX A - PERSISTENCE MODELLING...... 312

STATISTICAL APPENDIX A – DATA AND ANALYSIS METHODS...... 320

STATISTICAL APPENDIX B – SENIOR MANAGEMENT AND PROGRAMME USE .332

STATISTICAL APPENDIX C – ENERGY MANAGERS AND PROGRAMME AWARENESS...... 337

STATISTICAL APPENDIX D – ENERGY MANAGERS AND INFORMATION USE....342

STATISTICAL APPENDIX E – SENIOR MANAGERS’ COMMITMENT AND ENERGY MANAGERS...... 349

STATISTICAL APPENDIX F – ENERGY MANAGERS, AUDITS AND MONITORING SYSTEMS ...... 353

STATISTICAL APPENDIX G – TYPES AND FREQUENCY OF INFORMATION USED ...... 357

3 STATISTICAL APPENDIX H – LIGHTING MEASURES INSTALLED AND FORMS OF INFORMATION CONSULTED...... 363

STATISTICAL APPENDIX I – USE OF PROGRAMME INFORMATION AND THE NUMBER OF LIGHTING MEASURES INSTALLED ...... 368

STATISTICAL APPENDIX J – USE OF PROGRAMME INFORMATION AND MANUFACTURER’S INFORMATION ...... 371

STATISTICAL APPENDIX K – CROSSTABULATION SUMMARY TABLES...... 378

QUESTIONNAIRE APPENDIX A – INTERVIEW FRAMEWORK FOR SECTORAL AND NON-SECTORAL INTERVIEWS ...... 391

BIBLIOGRAPHY ...... 394

4

List of Figures

FIGURE 1. CONTEXTS FOR ORGANISATIONAL ENERGY SAVING ...... 48 FIGURE 2. PROGRAMME IMPACT FRAMEWORK ...... 49 FIGURE 3. SCHEMA OF RESEARCH PROCESS...... 54 FIGURE 4. STRUCTURE OF THE DEPARTMENT OF THE ENVIRONMENT ENVIRONMENTAL AND ENERGY MANAGEMENT DIRECTORATE, 1996...... 76 FIGURE 5. OPERATION OF THE ENERGY EFFICIENCY BEST PRACTICE PROGRAMME...... 82 FIGURE 6. SUPPORTING THE COSTS OF TECHNOLOGY ACQUISITION AND DEPLOYMENT...... 309 FIGURE 7. PERSISTENCE RATIO AND CUMULATIVE SAVINGS ...... 317

List of Equations EQUATION 1. SIMPLE DECLINE IN SAVINGS ...... 314 EQUATION 2. SAVINGS DECAY WITH CHANGE IN PROGRAMME IMPACT ...... 318

5 List of Tables TABLE 1. INTERVIEWS WITH PROGRAMME AND OTHER RELEVANT STAFF ...... 69 TABLE 2. EEBPP PROGRAMME BUDGET AND SHARE OF GOVERNMENT PROGRAMME SPEND ...... 74 TABLE 3. MAIN GOVERNMENT INDUSTRY AND COMMERCE ENERGY EFFICIENCY PROGRAMMES OPERATING IN 1996...... 75 TABLE 4. EEBPP PUBLICATIONS FOR SECTORS ONLY ...... 87 TABLE 5. BRECSU STRATEGY AREAS ...... 88 TABLE 6. ENERGY INFORMATION SECTOR COMPANIES’ TURNOVER, 1994-1997 ...... 101 TABLE 7. TARGETS FOR 2000: CUMULATIVE SAVINGS PER ANNUM ...... 103 TABLE 8. ACHIEVEMENTS FOR YEAR END 1995/1996 – CUMULATIVE SAVINGS PER ANNUM ...... 103 TABLE 9. THE CUMULATIVE ANNUAL SAVINGS TARGETS FOR EEBPP...... 104 TABLE 10. TOTAL SAVINGS IN BUILDINGS AND IMPACT OF THE EEBPP IN 1994 ...... 108 TABLE 11. TOTAL SAVINGS IN BUILDINGS AND IMPACT OF THE EEBPP IN 1995 ...... 108 TABLE 12. TOTAL SAVINGS IN BUILDINGS AND IMPACT OF THE EEBPP IN 1996 ...... 109 TABLE 13. PROGRAMME SAVINGS PERCENTAGE OF ALL SAVINGS BY SECTOR, 1994-1996 ...... 109 TABLE 14. INTERVIEWEES AND THEIR ORGANISATIONS – HIGHER EDUCATION SECTOR ...... 114 TABLE 15. OTHER INTERVIEWEES – HIGHER EDUCATION SECTOR ...... 115 TABLE 16. HIGHER EDUCATION SECTOR SUMMARY TABLE ...... 170 TABLE 17. INTERVIEWEES AND THEIR ORGANISATIONS – HOTEL SECTOR...... 171 TABLE 18. OTHER INTERVIEWEES – HOTEL SECTOR...... 172 TABLE 19. HOTEL SECTOR SUMMARY TABLE...... 211 TABLE 20. INTERVIEWEES AND THEIR ORGANISATIONS – RETAIL SECTOR ...... 212 TABLE 21. OTHER INTERVIEWEES – RETAIL SECTOR...... 212 TABLE 22. RETAIL SECTOR SUMMARY TABLE ...... 251 TABLE 23. SAVINGS’ DECAY CASE ONE – MODEL ONE ...... 315 TABLE 24. SAVINGS’ DECAY CASE TWO – MODEL ONE...... 315 TABLE 25. SAVINGS’ DECAY CASE THREE – MODEL ONE...... 315 TABLE 26. SAVINGS’ DECAY CASE ONE – MODEL TWO...... 318 TABLE 27. SAVINGS’ DECAY CASE TWO – MODEL TWO ...... 318 TABLE 28. SAVINGS’ DECAY CASE THREE – MODEL TWO ...... 319

6 Abstract

The purpose of this thesis is to increase understanding of the impacts of information and awareness programmes, of which the Energy Efficiency Best Practice Programme, a programme seeking to improve the energy efficiency of UK buildings and industry, is a notable example. The use of information programmes is increasingly common, both in the United Kingdom and around the world, as part of a trend away from support for organisations and towards approaches that are thought to improve the functioning of markets. An attempt to examine the impacts of a programme based upon such an approach is therefore timely, especially when it is considered that the Programme has now been in operation for around a decade. The aims of the Programme – to increase economic efficiency and to prevent global warming – are further reasons to subject it to a detailed scrutiny, particularly as further strong evidence of global warming is accumulating. The attempt to examine the broader effects of such a programme is also further justified by the work of scholars in energy programme evaluation, innovation studies and the sociology of technology. These rich and diverse literatures point to the presence of many unexpected consequences of programme interventions and they identify a complex range of interdependencies and interrelationships that form a context in which such interventions must take place. It is the conclusion of this research that the Programme delivered in the buildings part of the Programme was in fact two major initiatives: the one providing a general form of information and guidance on energy efficiency technologies to counteract market failures; the other, which was delivered in parallel, was aimed at raising skills and capabilities of would-be programme users from a level where the provision of information was likely to have had little effect. Furthermore, the Programme’s long term effects – its persistence - appear to be highly dependent upon the second initiative, and upon a range of other developments in the market for energy, notably the growth of energy services and the spread of energy metering technologies.

7 Declaration

No portion of the work referred to in this thesis has been submitted in support of an application for another degree or qualification of this or any other university or other institute of learning.

Notes on Copyright and the ownership of intellectual property rights

Copyright in the text of this thesis rests with the Author. Copies (by any process) either in full, or of extracts, may be made only in accordance with instruction given by the Author and lodged in the John Rylands University Library of Manchester, United Kingdom. Details may be obtained from the Librarian. This page must form part of any such copies made. Further copies (by any process) of copies made in accordance with such instructions may not be made without the permission (in writing) of the Author.

The ownership of any intellectual property rights which may be described in this thesis is vested in the University of Manchester, subject to any prior agreement to the contrary, and may not be made available for use by third parties without the written permission of the University, which will prescribe the terms and conditions of any such agreement.

Further information on the conditions under which disclosures and exploitation may take place is available from the Head of Department of PREST (Policy Research in Engineering, Science and Technology).

8 Glossary of Terms

The area of energy efficiency and environmental policy and programme management is one in which abbreviations, acronyms and mnemonics are frequently used. The following table contains the terms that are in use in this text. Where an abbreviation is first mentioned it is accompanied by its full description. To save space, subsequent uses of the term are normally made with the abbreviation only.

ACE Association for the Conservation of Energy

ACEC Advisory Committee on Energy Conservation

AEAT Atomic Energy Authority Technology, now a PLC and owner of ETSU, the Energy Technology Support Unit which runs the industrial side of the Energy Efficiency Best Practice Programme (EEPPp), see later

BEMS Building Energy Management System – an electronic system for controlling the energy use of a building

BRE The Building Research Establishment

BRECSU Building Research (Establishment) Energy Conservation Support Unit

CADDET Centre for the Analysis and Dissemination of Demonstrated Energy Technologies

CBI Confederation of British Industry

CHEEP Consortium for Higher Education Energy Purchasing

9

CHPA Combined Heat and Power Association

DETR The Department of the Environment, Transport and the Regions. The Department created in 1997 from an amalgamation of the Department of the Environment and the Department of Transport

DoE The Department of Energy, abolished in 1992 after absorption into the Department for Trade and Industry

DOE The Department of the Environment. The Department responsible before 1997 for the Energy Efficiency Best Practice Programme

DSM Demand Side Management – an approach to energy efficiency

DTI The Department of Trade and Industry

EAT EATechnology, formerly the Electricity Association Research Centre for the Central Electricity Generating Board

ECEEE European Council for an Energy Efficient Economy

EEBPp The Energy Efficiency Best Practice Programme

EEDS Energy Efficiency Demonstration Scheme

EEMID Energy, Environment and Market Innovation Division, located in the Department of the Environment

EEWD Energy, Environment and Waste Directorate of the Environmental Protection Group within the Department of the Environment

EEO The Energy Efficiency Office. This was originally located in the

10 Department of Energy but after reorganisation it was relocated to the Department of the Environment where it was wound up in a further reorganisation in 1995. Its functions were largely taken over by the Energy, Environment and Market Innovation Division of the Environmental Protection Group

EEPC Energy Efficiency Programme Committee – a body set up to approve proposals for the future of the Energy Efficiency Best Practice Programme, composed of experienced representatives from industry

EPA Energy Policy Analysis – Unit of DTI. Also Environmental Protection Agency of the United States

EST Energy Saving Trust

ETBPP The Environmental Technology Best Practice Programme

HEFCE Higher Education Funding Council for England

IEA International Energy Agency

IHEI International Hotels and Environment Initiative

IRP Integrated Resource Planning

LIF Lighting Industry Federation

MT Market Transformation

MTCE Million Tonnes of Coal Equivalent

MTOE Million Tonnes of Oil Equivalent

N-DEEM Non-Domestic Energy and Emissions Model

11

NFFO The Non-Fossil Fuel Obligation

NPL National Physical Laboratory

OECD Organisation for Economic Cooperation and Development

PJ Petajoules

RME Regional Maintenance Executive

ROAME Rationale, Objectives, Appraisal, Monitoring and Evaluation

SHU Sheffield Hallam University – which conducts energy audits

SIC Standard Industrial Classification

STARK A software programme for performing analysis of energy consumption

TEAM A software programme for measuring energy consumption

TREND A system used for all aspects of buildings control, including energy

UNDP United Nations Development Programme

VfM Value for Money – a HEFCE initiative

WRC Water Research Centre

WTTC World Travel and Tourism Council

12 Acknowledgements

This PhD research has been undertaken through an Economic and Social Research Council Collaborative Studentship (A CASE Award), Award number S00429637064. The partner organisation was the Energy Efficiency Management Directorate of the Department of the Environment, now the Energy, Environment and Market Innovation Division of the Energy, Environment and Waste Directorate (EEWD) of the Environmental Protection Division of the Department of the Environment, Transport and the Regions.

My very sincere thanks are due to Dr David Vincent and Dr Hunter Danskin of the EEWD who supported the initial research proposal and who have provided access to the Department of Transport, Environment and the Regions, and have taken a constructive and helpful interest in the research. At the Building Research Establishment, where the Energy Efficiency Best Practice Programme for buildings has been managed, Dr Paul Davidson of Building Research Energy Conservation Support Unit, and Dr Sue Boyle of BRECSU’s Impact Assessment Section, have helped enormously in providing access to Programme staff, Programme documentation, and setting the Programme in context. Without Dr Boyle’s interest in the area, the research would have been all the harder.

Finally, and most importantly, at Manchester, I am greatly indebted to the help and support of my two supervisors, Professor Luke Georghiou, Director of PREST, and Dr J. Mark Boden, Research Fellow, whose guidance and humour have been instrumental in bringing this work to fruition. I would also like to thank all PREST staff and students, past and present, who have contributed in various ways to make the department such a conducive environment in which to carry out a research project. Lastly, I would like to thank my family for the necessary distractions – “tha knows”.

13 Concerning the Author

Anthony John Rigby came to PREST at Manchester University after working as a computer manager and completing a part time Master of Science Degree at the University of Salford in Technology and Society in the Faculty of Physics. Long before that he gained a degree in history at Cambridge.

Whilst at PREST, John has worked on a number of research projects, including evaluations of the impact assessment methodologies of the Energy Efficiency Best Practice Programme, and more recently on the Research Assessment Exercise of the Higher Education Research System. John also contributes to the monthly British Council publication on United Kingdom research, Science Insight, which is produced by PREST.

In 1998, John gave a seminar on his research into the UK’s energy efficiency policy and programmes at the Centre for the Study of Environmental Change (CSEC) at Lancaster University.

In 1999, John gave a presentation at the Manchester University Federal School Doctoral Conference entitled “How many light bulbs does it take to change a market? – Some perspectives on energy efficiency programme impacts in the United Kingdom”.

14 Introduction

Energy Efficiency – A Perennial Policy Concern The design, the delivery and the evaluation of energy efficiency programmes have seen a widespread and significant policy activity and vigorous academic interest over the last three decades. The threat of fuel shortages, the growing threat perceived from climate change and the privatization and subsequent liberalization of energy markets have provided both strong stimuli for policy and a rapidly changing context in which to carry it out.

This thesis takes as its focus an issue which lies at the heart of many discussions and debates on energy efficiency programme design, delivery and evaluation, namely, whether and how policy makers can achieve significant impacts for their programmes. It addresses the questions of whether such programme impacts can be significant and enduring, and whether an increasingly influential mode of programme intervention - the information dissemination and awareness programme – can deliver significant and sustainable impacts and whether such impacts can be reliably assessed.

The research therefore sets out to take a critical stance towards three distinct but related issues: firstly, why has an interest in and a commitment to information and awareness programmes to promote energy efficiency arisen; secondly, how can information and awareness programmes in the area of energy efficiency lead to impacts, and will such impacts give rise both to changes which endure and to effects which arise only in the longer term; and thirdly and finally, to assess the practicability of demonstrating any such effects through impact assessment. This thesis undertakes to focus on these three issues through the detailed research of a particular energy efficiency programme – the UK’s Energy Efficiency Best Practice Programme, increasingly seen as a model information and awareness programme by the OECD.

As a CASE studentship, the research has been enabled through close collaboration with the UK Government's Energy Efficiency Best Practice Programme Manager, the Building Energy Conservation Support Unit (BRECSU) at the Building Research

15 Establishment (BRE). The CASE arrangement has also provided access to related programmes, including the Environmental Technology Best Practice Programme (ETBPp) and to Civil Servants in the Department of the Environment Transport and the Regions, formerly the Department of the Environment. This level of access provides direct contact with the people responsible for the Programme and to its historical record disclosed through Programme outputs, strategies and other policy documents.

The thesis takes the form of a research evaluation with an emphasis upon understanding processes of impact. It therefore makes a critical examination of the Programme delivery, Programme impacts and the extent of those impacts with the aim of informing both the future direction of policy and programmes, and contributing to a theoretical and critical academic literature.

Structure of the Thesis The thesis contains eight substantive chapters, fourteen appendices and a bibliography. A description of the substantive chapters follows below.

Chapter One introduces an analysis of the theoretical concepts employed in the justification of energy efficiency programmes and particularly those upon which information and advice transfer programmes are based. The chapter includes a discussion of an area of literature that closely concerns policy makers in the area of energy efficiency: the literature of diffusion studies, technology transfer and innovation policy. This first chapter concludes by examining the literature of programme evaluation from an international perspective where the issues of energy programme impact have received thorough treatment. This third section introduces a range of concepts of relevance to energy programme design and evaluation. In this section a simple mathematical model of programme impacts is introduced to illustrate, albeit simplistically, the need for accounting of previous programme impacts, and the broader impacts of programme interventions.

16 Chapter Two outlines the methodology. This introduces and clarifies the research questions and sets out and justifies the methods, including a case study and a statistical approach, which have been chosen to investigate them.

Chapter Three provides a case study of the Programme itself, the United Kingdom’s central energy conservation and energy efficiency policy, with the aim of demonstrating how the UK’s main energy efficiency programme was delivered in practice.

Chapters Four, Five and Six are three empirical sector studies of the contexts in which the Programme has had its impacts.

Chapter Seven provides a comparative analysis of the three sectoral studies and includes relevant material from the case study of how the Programme was intended to operate. Chapter Seven also uses statistical data to substantiate comparisons and contrasts between the different sectors.

Chapter Eight puts forward a number of findings that arise from the study. These are of both academic interest and policy relevance. Some observations are then made about what such findings might imply for future research.

17 Chapter One - Conceptual Analysis

1.1 Introduction This chapter contains a conceptual discussion in three parts. The first focuses upon the theoretical principles that guide intervention in energy efficiency policy. The second considers the social and technical context in which policy and programmes take effect. It includes a discussion of systems and networks perspectives on technological change and addresses the issue of what is known about the contexts in which energy efficiency programmes seek to influence the deployment of technologies. A third section examines the issues of assessing impacts of policy, and focuses upon the task of understanding what impacts have arisen, attributing those impacts, and determining how those impacts can be measured. The third section therefore centres upon the obligation of policy makers and evaluators to assess accurately the role of their programmes so that future policy can be made and resources properly addressed to relevant initiatives. This discussion then leads to a short statement of and a justification for the research questions chosen for investigation by this thesis.

1.2 Information and Awareness Policy Principles and Analysis

1.2.1 Information, Market Barriers and Market Failures The theoretical arguments which have been used extensively to justify information and advice programmes, such as the EEBPp, are based largely on work done in the tradition of neoclassical economics in three principal areas: public goods, transactions costs, and the economics of information. Such insights about the operation of markets and the role of information have been built upon by specialist energy policy makers, such as the International Energy Agency, whose policy prescriptions emphasise the role which governments must play in correcting so- called market failures, see for example IEA (1991) and IEA (1997). In this section, these economic arguments are examined, as is the research which underpins them.

18 As stated above, three major areas of economic theory apply to the use of information and the role of government in the provision of information. The theory of public goods is the most well known area and is based on the Samuelson’s (1954) work in welfare economics and subsequently developed within the two major fields of public finance economics and public choice theory. Secondly, within the tradition of institutional economics, the transaction costs perspective developed by Coase (1937) and more recently formulated by Williamson (1985), provides a series of justifications for the public production of goods and government intervention, including information. Thirdly, within the area of information economics and the insurance literature, the existence of information asymmetries can be held to lead to ineffective exchange relations, providing a justification for government action.

1.2.2 Public Goods In the literatures which bear on the provision of public goods, a variety of theoretical approaches have developed to address a range of concerns. In mainstream welfare economics, the aim has been to set out those conditions in which government may act to maximise the social welfare function. In this analysis, government is perceived as outside the economic process rather than within it. Within the area of public goods economics, various attempts have been made to identify the characteristics of those goods for which government may take the responsibility for provision. More recently, within the public choice school, a more positivistic approach has been taken to the provision of public goods (Cullis and Jones, 1998, page 14) with a significantly different view of the reasons for and scope of government action.

1.2.3 Social Welfare and Discount Rates Work in the field of welfare economics stems from Samuelson’s (1954) work on public goods and from efforts to identify market failures in the area of research and development by Arrow (1962). Within mainstream welfare economics, the aim has been to identify the characteristics of public goods, and to specify those conditions under which government may provide them, and also to identify other actions which government might take to increase social welfare. Within the approach, the objective standard by which to judge possible government interventions within the market is

19 the criterion of allocative efficiency, which states that an economy is efficient where the marginal social benefits are set equal to marginal social costs.

In the energy policy literature, Jaffe and Stavins (1994) consider the problem of comparing different government interventions, an issue of continuing importance and one which requires information about the true social discount rate and the rates of return on different forms of government expenditure.

The use of rate of return studies of energy efficiency technology adoption provides the main evidence for arguments that justify government intervention. The apparent divergence between a firm’s cost of capital and the rate of return on energy efficiency investment – the so-called efficiency paradox upon which Jaffe and Stavins (1994) focus – provides the main evidence of market failure. A long series of studies examining the evidence is well documented in DeCanio (1998).

Such a claim is however hotly contested. Writers such as Sutherland (1991) have argued from a theoretical standpoint that because firms are profit maximisers, high discount rates simply reflect firms’ actual costs of implementation and provide no empirical support for the existence of market failure.

Other commentators are quite prepared to accept the existence of market failures, but they believe that the presence of market failures in the market for energy efficiency technologies is no worse than in other markets. Nichols (1995) for example, states that market barriers, which are routinely cited by DSM supporters to provide the basis for policy intervention, are far from unique to the electricity market and that virtually none qualify as market failures. For him, information is imperfect in energy markets but the problems do not appear to be more significant than in most other markets.

1.2.4 Characteristics of Public Goods In the literature on public goods there are two general conditions which are thought necessary before government should consider the production of public goods. Firstly, where producers cannot appropriate the full return from their investment

20 (so-called imperfect excludability), it is likely that private provision will be less than the social optimal. Secondly, when the consumption of the good does not prevent another’s use of it (non-rivalrous consumption), public provision is thought appropriate. Government’s attempts to produce public goods face the major problem of identifying the extent of a firm’s preparedness to pay by way of taxation. The optimal level of production of public goods requires accurate statements of consumer’s preferences. The incentive which prospective consumers have to free- ride leads to them to understate their true preferences and this leads to an under- provision of the public goods.

Within the literature, one approach has been to consider “private” and “public” as ideal types with most goods exhibiting aspects of each depending upon certain conditions. In the example given by Parkin, Powell and Matthews (1997), a motorway is a non-rival good when traffic levels are low while, when traffic increases, use of the road becomes rival. Further refinements of the argument have come from Cornes and Sandler (1986) who have argued that the public / private dichotomy depends upon local conditions of specialisation.

In their discussion of energy efficiency policy, Jaffe and Stavins (1994) argue that information about energy efficiency has public good attributes, but is not a pure public good. Whether government should step in to produce or to subsidize the production of energy efficiency information is an area of controversy and immense practical difficulty. How government should fund the provision of such goods is a further issue of immense complexity. Such issues as whether quasi-public goods should be funded by general taxation or by specific taxation of the immediate beneficiaries are major issues.

1.2.5 Identifying the Proper Role of Government - Public Choice In public choice economics, government is conceived as made up of self-interested actors operating within an institutional system where choice of policy is made by reference to agreement or political consensus rather than some objective welfare function. Central to the public choice approach is the assumption, based on the work of Lipsey and Lancaster (1956), that government action is limited by imperfect information and self-interested behaviour and constrained to only the “second best”

21 outcome in terms of efficiency. Within this approach, attempts have been made to interpret government action in a range of cases as arising from the self-interest of actors, and to distinguish between what Cullis and Jones (1998) term the “sophisticated case” and the “naïve case” for government action. In this literature, government action is perceived favouring particular interests rather than objective, rational and in the best interests of all. Such an analysis has not been systematically applied to the work of governments in the area of energy efficiency.

1.2.6 The Transactions Costs Perspective Beginning with Coase (1937) whose assertion that the existence of the firm is owed to its capacity to coordinate transactions more effectively than the market, the transactions costs perspective has been developed most notably by Williamson (1985) who examined the conditions for effective exchange behaviour to occur between parties to a transaction. Where exchange transactions are affected by bounded rationality, asset specificity and opportunistic behaviour, a justification may arise for government intervention to reduce the transactions costs experienced by firms and hence to increase exchange efficiency. Such intervention may take the form of publicly produced goods and information, either to cope with limited knowledge of products by parties or to forestall their opportunistic behaviour.

The transactions costs perspective has led to lengthy consideration of the costs which firms experience in their deployment of energy efficient technologies. In their paper of (1994), Jaffe and Stavins, who also use a public goods perspective, discuss the dichotomy for government which arises from the existence of both public information requirements and private information costs associated with “information acquisition and absorption” (Jaffe and Stavins, 1994, page 99). They also consider the presence of “externalities” constituted by the learning experiences of adopters and which comprise a form of benefit which government itself should diffuse. Three difficult questions emerge from this analysis, none of which commentators have addressed directly. These centre around the issue of how government should differentiate in practice between public and private information costs; what level of support should be given to the attempt to “internalize” the externalities arising in the adoption process; and which learning experiences count as externalities and which as private benefits to which only the firm might be entitled.

22 Drawing the line between public and private in respect of goods and externalities remains therefore a highly problematic area of policy.

Buckley and Chapman (1997) remark in their paper on transactions costs and the use of biological and evolutionary metaphors that the area of transactions costs research is one where there has been very little actual measurement: “.. we have come across not one case whatsoever in which a manager involved in decisions had access to or had personally generated for their own purposes, anything like a numerically justified assessment of transaction cost issues.” (Buckley and Chapman 1997, page 138). The difficulties of measurement and the fact that in practice, firms and managers take decisions based on perceptions which are grounded in experience and language entails a limit to what a transactions costs perspective can give to the study of organisations.

1.2.7 Information Economics and Insurance Literature Within the information economics approach and the insurance literature, it has been observed that information asymmetries may prevent the transfer of sufficient information between buyers and sellers leading to inefficient exchange within both organisational and market contexts. A well known example of a case which may be relevant to the market for energy efficient technologies according to Howarth and Andersson (1993) is that given by Akerlof (1970) on the market for second hand cars.

Howarth and Andersson (1993) argue that in the market for energy efficient technologies, as in the market for second hand cars, purchasers are unable to observe the characteristics of the products they intend to buy because the technologies are to be used in complex environments where no applicable performance data can be generated. The use of warranties on equipment or trials may help to ensure that prospective purchasers are able to observe the performance of equipment. However, in relatively new markets and where the performance of technology is highly dependent upon external factors, adverse selection may continue to be a significant problem. Such conditions would seem clearly to apply to the market for energy efficiency products and dependent technologies.

23 Howarth and Sanstad (1995) argue that government can alleviate the problem of adverse selection by taking action to improve the standard and quantity of information available. However, the same problems of complex interactions between technology and its context and the absence of metering systems will make the identification of benefits difficult, thereby undermining the effectiveness of government intervention.

Arrow’s (1985) consideration of information asymmetries or ex ante information problems takes place in the context of a discussion of principals and agents. Despite this, a strong justification for government action to improve the market or exchange mechanism remains in his analysis. Within the same information economics and insurance literature, no studies are reported on whether the problems of moral hazard or ex post opportunistic behaviour by one party apply to the market for energy efficient technologies.

Kempton and Wayne’s (1994) work on the capability of domestic energy consumers to analyze their energy usage and to develop efficiency strategies shows that the users of power – in this case electricity – are limited in their capacity to understand how they use energy. Utilities, by contrast are far more able to work out how energy is used. This gives rise to an information inequality which policy makers should address. Such an imbalance in information could easily arise in commercial markets also.

1.2.8 The Policy View of Market Failure The IEA has supported the use of interventions that improve market function, using the logic outlined in the preceding sections. Its observations on such programmes include the following (IEA 1997):

“Obstacles in the way of technology deployment have come to be referred to as market barriers. Much of the discussion of deployment issues in this study is organised around this concept. As the term is used here, it refers to anything which slows the rate at which a new technology is deployed. Thus the simplest and most important form of market barrier to a new technology is typically its

24 out of pocket cost to the user relative to the costs of technologies currently in use.”

Most other market barriers can also be translated into cost differences between new and old technologies, but it is often useful to identify the barriers more directly. Examples are informational barriers, the risk that a technology may not perform as expected, financial barriers, market price distortions, environmental impacts, inefficient market organisation, excessive regulation, and low capital stock turnover rates.”

“some market barriers involve market failure, where a barrier exists or is strengthened because in some way the market concerned causes resources to be used inefficiently. Within a setting in which governments want to leave technology deployment primarily to market forces, only those barriers that involve some elements of market failure call for government action.”

(Source: IEA/OECD (1997) Energy Policies of OECD Countries, page 18.)

From the point of view of policy, the information and awareness scheme is one of a large range of tools available to governments in the attempt to drive up environmental standards. Other policy tools include fiscal measures, other support and awareness programmes in related areas that might have an impact on energy efficiency, and the use of voluntary agreements. Regulatory action through raising energy efficiency standards within the Building Standards is also proposed in the United Kingdom. In the United Kingdom, government policy on energy efficiency employs all of these mechanisms of policy action.

The form taken by the Building Regulations (The Building Act, 1984) can significantly affect the energy efficiency performance of buildings. Changes to the standards of technology employed, to the type of buildings covered and to the nature of works to be carried out can all increase energy efficiency.1

1 During 1999 and 2000, the DETR, as the responsible government department, undertook a lengthy consultation exercise to consider whether the Building Regulations should be widened to include a range of new practices and to make the regulations more inclusive and retrospective.

25 1.2.9 Technical Potential, Energy Gaps and Discount Rates The attempt to argue that high discount rates imply the existence of market failures requires proof, in economic or cost terms that the presently available technologies are cost-effective and can provide a positive economic benefit for those who install them. The term commonly used in the literature, see Levine et al (1995), and Fisher et al (1998) to define this cost-effectiveness is the technical potential of the technology. Fisher et al also define an economic potential and market potential. Market potential is the less problematic of the latter two to define, being what they (Fisher et al, 1998) call or estimate as realizable under continuing market conditions or business as usual. Economic potential is intended to reflect the profitable investments at a standard rate of discount.

The procedure for defining the technical, economic or market potential is, clearly problematic. The costs and benefits of installing the technology are open to debate, as is the characterisation of the adoption process as one involving a static technology unchanging over time. Complex but well attested effects of economic growth and development such as the issue of how technologies develop during the innovation process, see Rosenberg (1982) and Sahal (1981), can be overlooked as can the issue of "learning by doing" which has a long history, see Arrow, (1962) and more recently Von Hippel and Tyre (1995).

1.2.10 Resource-Based and Evolutionary Views of the Firm Within the institutional tradition of economics, both resource-based views which are most closely associated with Penrose (1959) and which consider firms as “collections of resources” and the evolutionary theories of the firm, developed by Nelson and Winter (1978) (1982) that focus on “routines” as an analogue to the concept of biological “genes”, emphasise heterogeneity within the population of firms in respect of their capacities and capabilities to achieve a competitive advantage.

Within this framework, the costs which different firms face depend mainly upon their routines and the interaction between them and an external environment. Howarth and Sanstad (1995) using a transactions costs framework also observe the

26 importance of firms’ own characteristics: “transactions costs are contingent on institutional context” (page 106).

A central problem of the market failure paradigm is, as Pandit et al (1997) point out, that the solutions tend to be conceived of as static. “In static economic analysis (and most analysis of market failure is essentially static) policy interventions only have effect for as long as they are ‘switched on’. When they are ‘switched off’ again, they stop having any effect” (Pandit et al, 1997 page 300). Intervention has therefore to be permanent, unless some social, cultural or technological change intervenes to reshape the environment. De Almeida (1998) writing on the market for motors and drives in the French buildings energy efficiency context has reached a similar conclusion: if faulty market structures are unaffected, i.e. without change to the system of incentives in markets, energy efficiency choices will remain too expensive.

The analysis by Pandit et al (1997) of policy interventions offers the suggestion that policies which seek to maximise the volume of adoption – what in policy terms is referred to as gross additionality – may be misplaced. With arguments based on work done in evolutionary economics and studies of path dependency, they propose that simply aiming at maximising the gross additional benefits from government investment awareness and information programmes can be a mistake. What interventions should seek to do is to take a strategic view which prevents adoption by organisations for whom the new technologies are inappropriate. Wherever possible, the potential adopting organisations should be made aware of problems so that they do not acquire technology that is inappropriate for their case:

“Broad brush attempts to persuade the sceptics are likely to be counterproductive. The traditional measure of gross additionality makes no distinction between the wrong and the right adopters, and is therefore an imperfect criterion for designing diffusion policy”, (Pandit et al 1997, page 306.)

1.3 Programme Foundations and Impacts – Broader Perspectives While the economic literature has frequently provided the grounds for government intervention in the area of energy efficiency, other areas have also contributed, some

27 of them arising directly within the contexts of energy policy and programme evaluation. However, justifications have often been found in the broader contexts of diffusion studies, the management of technology and the social shaping of technology. This next section introduces these perspectives before which a final section addresses the issue of how programme impacts can be sensibly evaluated, identified and where possible, calculated.

1.3.1 Introduction As stated in the introduction to the first section, this part of the conceptual analysis chapter focuses on the issue of the practicability of assessing impacts created by an energy efficiency initiative based on information and awareness which operate over a sustained period. The reliable assessment of impact depends upon the ability of evaluators to address satisfactorily a range of evaluation issues which present special difficulties because of context, scope, size, and length of operation of the programme.

The chapter begins with an assessment of the work undertaken in the study of technological change and technology adoption which is of relevance to the issue of programme evaluation. This broad literature examines such questions of how new technological systems emerge2, now innovation occurs and what affects the diffusion and spread of technologies. Work in this area has been stimulated not only by the needs of policy makers themselves and technology managers to find ways of improving the process of technological change but of perennial academic controversies surrounding the nature of technology, technological determinism and limits of social constructivism. Once these general literatures, which have significant implications for programme evaluation both ex ante and ex post have been outlined, the more specific methodologies used in the context of impact assessment of information programmes are introduced and analysed.

These two distinct approaches to evaluation of energy programmes are clearly identifiable and are best described as “interpretivist” on the one hand and “auditing

2 Within social constructivism, the shaping of markets and their “performance” through an interplay of theory and practice has received recent attention from Callon (1998) and others.

28 or accounting” on the other. The first seeks an understanding of the operation of initiatives within cultural and institutional frameworks. The second is the auditing or accounting based mode where evaluations are constructed to provide assessments in cost and carbon terms for planning programme initiatives, and to identify the effectiveness and efficiency between and within programme initiatives. Each approach therefore works towards a different end, although both use concepts of impact which are related.

1.3.2 Cultural - Network and Models of Technological Change This subsection examines the sociological and cultural studies which have been undertaken to provide frameworks to explain technological change and the nature of the adoption process.

The following two subsections introduce a gradual broadening of the research agenda on energy efficiency technology innovation from its diffusion study basis of the 1970s and 1980s towards a more inclusive constructivist position as outlined by Shove (1998). The section begins with an examination of the diffusionist literature of technology transfer, including a number of studies carried out on the psychology of energy use. Then the chapter considers later and broader models of technological change.

1.3.3 Programme Delivery and Information – Psychological Studies During the late 1980s and early 1990s, a number of studies were carried out by psychologists on the characteristics of information on energy efficiency and the effect which this played upon its use. These studies covered the perceptions of a self-interested individual or organisational profit seeker unable, for whatever reason, to act rationally. As Shove argues (Shove, 1988), the studies were carried out to support a policy which assumed that technical artefacts with a readily identifiable potential were available and were awaiting transfer to organisational contexts. While these studies arose within such a set of expectations about policy in which the term barriers was used to refer to any form of cultural practice which prevented realization of the technical potential, they provide some insight into the function of information based programmes. Stern's (1992) psychological study of energy

29 conservation effects was part of a more inclusive approach to energy policy making, and built upon an approach outlined in his earlier paper in the Journal of Policy Analysis and Management, Stern (1986).

Stern and Aronson (1984) found in their research that perceptions of government information were generally that it was stilted and dull. Their work concluded that information which had the characteristic of vividness (Stern and Aronson 1984, page 523) and which is of a personalised nature tends to be most effective, a conclusion also reached by Borgid and Nisbett (1977) and Hamill, Wilson and Nisbett (1980). These studies confirmed that analytical information has significantly less impact than case histories. Steps which personalize information by using customer’s own bills was held to be useful, as was information about “superconservers” (Stern and Aronson 1984, page 524) – what we would now know as “champions”. The use of home energy audits was also found to be relevant because of its effect in underscoring the notion of energy use by bringing the process of measurement into the immediate social context of the user.

Psychological research which shows that the threat of loss has a more significant impact upon behaviour than offering the prospect of gain (Kahneman & Tversky 1979 and Tversky and Kahneman 1974). This may not always work to the benefit of those charged with promoting energy efficiency. When energy efficiency investments are made in commercial contexts, they may carry a risk of damaging what is perceived to be the main concern and activity of the business itself – the production process. Energy efficiency investments which can offer significant cost reduction can often be seen to give rise to risks to the main business activities of the firm.

Constanza’s (1996) research on the issue of credibility established that the same information from different sources may have significantly different impacts. His research confirmed the conclusions of a number of others notably, Hovland, Janis & Kelly (1953) and McGuire (1969) and (1985) that the information’s effectiveness depends upon the credibility of the source. Confirming the importance of the perceived author of the information, Aronson, Turner and Carlsmith (1963) observe that “a message attributed to a highly credible source produces greater attitude change than the same message attributed to a less credible source”.

30

A piece of comparative research undertaken by Levine et al (1995), which provides a more general overview of the roles of a variety of measures in relation to market failures, low discount rates, the effects of bounded rationality, capital constraints and split incentives, concluded that information by itself had not been effective in leading to energy savings.

"Experience in the U.S. indicates that information programs by themselves are often not able to promote substantial energy savings. These programmes are most effective when combined with other approaches that directly facilitate the financing and installation of measures." (Levine et al 1995, page 52)

The paradigmatic diffusion research literature focuses on a number of methods which may assist with the spread of technology. One of the most important methods historically is the use of demonstration of technology, in a linear model of innovation as the third stage in a process beginning with research, leading to development and finally to demonstration. Demonstration takes place in commercial or industrial contexts and shows how a technology may be used in practice. It begins the process of increasing the number of users by enhancing the credibility of that which is new. The process of demonstration underwrites most if not all of Rogers’ five stages of adoption (Rogers, 1962). The use of demonstration projects has been shown to be important to the diffusion process by Nisbett et al (1976) who studied the United States agricultural extension programme of the 1930s. Their study describes the Government’s early failed attempts to promote new technologies through pamphlets and information. However, by resorting to demonstration projects, rapid increases in the spread of the new technologies resulted. A study by Darley and Beninger (1981) also suggested that government consultants on energy efficiency would be a useful way of spreading new technologies.

Within the diffusion tradition are a series of models based on the exploration of patterns and regularities in the adoption process that could, in principle, inform a policy approach. One of the more simple is the observation made by Leonard Barton (1981) that the number of acquaintances who owned solar equipment was the most accurate predictor of intention to purchase oneself.

31 1.3.4 Technological Innovation – Systems and Networks Increasingly, the linearity implied by the early diffusion writers has been subjected to question, although the field of diffusion research has developed a wide variety of methods and models, see Grübler (1991) for a broad summary. A number of writers analysing technological change in the area of energy efficiency have used a wider array of sociological research methods to understand the contexts in which energy efficiency measures have been adopted. These have taken place mainly in the United States. Building on the work of Newman and Day (1975), Lutzenhiser (1992) and Shove (1997) are some of the more prominent recent writers to argue for the use of sociological perspectives and cultural models in the study of household energy consumption behaviour. This wider approach had led to the in-depth personal interview based work of Komor and Katzev (1988) which examined decision- making behaviour in the small commercial buildings sector. The breadth of sociological studies of energy use and the insights provided by them could not have occurred without a massive investment in energy efficiency through the demand-side management programmes of United States utilities companies and their regulatory commissions.

This wider approach to energy research included a range of ethnographic work, described by Kempton and Montgomery (1982), Wilk and Wilhite et al (1985), DeCicco and Kempton (1987) and Kempton and Lutzenhiser (1992) on the effects of cultural differences on air-conditioning technology use. This work on the household and industrial uses of energy has provided some insights into the design of programmes, and also, but to a limited extent, the longer term impacts of programmes themselves. The ethnography by Wilk et al (1985) employing ethnosematic techniques on domestic energy conservation behaviour drew attention to the importance of folk myths and the many and conflicting goals pursued by householders.

What appear to be highly rational, energy saving investments in weather stripping and caulking, with payback times as short as one year, were often ignored because they were perceived as providing negative gains (they reduce energy loss), they are incompatible with other more important goals such as home improvement, and imply "fault" with the home and parsimoniousness of the homeowner. The authors

32 remark: "It is quite ironic then, that it is just because the benefits of weatherisation are so clearly economic that it is so unpopular!" (Wilk and Wilhite 1985, pages 628- 629).

1.3.5 Network Theories of Innovation and Social Change Newer perspectives on innovation and the emergence of technologies focus upon the circularity, feed back loops and the iterative character of the whole innovation process, arguing for a nested and linked set of activities. The Schumpterian trichotomy of invention, innovation and diffusion has been increasingly dissolved by studies which seek to show that these processes are highly interconnected and often better considered together. Well-known examples of this new format include the chain-linked model of innovation Kline and Rosenberg (1986). These wider studies of innovation focus increasingly upon the creation of new technologies and the systems and context which facilitate them. Some models also include capabilities concepts, see for example the work of Molina (1990). A general account of network theories of innovation is given by Jones et al (1998) and specifically in relation to the Actor Network Approach see Callon et al (1992). Other theorists such as Hughes (1986) have also widely used network models.

Actor Network Theory conceives of stabilisation of networks around new actors with new products as the moment of innovation. Once stabilised, networks are slower to change, and represent paradigms within which developments take place along relatively stable trajectories of innovation. Unlike theorists of technological trajectories such as Dosi (1981), Actor Network theorists stress that the coherence of networks is not born at the point of initiation and must be “continuously renegotiated” (Law and Callon, 1992).

De Laat’s (1996) work has broadened the classification of actors further, and focuses upon the role of regulation as a new “pole” within actor network theory, and upon the development of appropriate foresight techniques to generate coherent scenarios of future technology innovation and deployment. The role of regulation is highly appropriate within the context of energy efficiency, where governments in all countries are now attempting to influence the design of technology.

33 Actor Network analyses in the context of innovation studies are perhaps better known at the more local level with some specific single instance case studies. The most widely known of all work in the field includes that of Law and Callon (1992) on the TSR2 and Latour (1992) on a proposed electric vehicle technology. Studies which focus on innovation processes using the network concept as either mathematical model or as metaphor have tended also to focus on the processes of technological development leading to what is known as “closure” (McKenzie, 1992) rather than on specific transfer and operationalization issues. Recent work within the energy efficiency policy and programme community of the US on market transformation has begun to embrace some of the assumptions of the constructivist position, see for example Kunkle and Lutzenhiser (1997), Blumstein, Goldstone and Lutzenhiser (1997). Keating, Goldstein, Eckman and Miller (1997) rightly point to differences of meaning over its conceptual foundations and the role which government or regulators should play.

Still at the localized level, writers such as Cebon (1992) focus explicitly upon the form of the organisation and the role this plays upon the way in which technologies are considered and developed within the organisation. Cebon’s two case studies on the adoption of energy efficiency technologies argue that institutional structures, in his case within two universities, provide a more powerful explanation of the way in which technologies and energy efficiency schemes are considered and deployed than economic criteria.

Those writing in the evaluation literature have been conscious of the need for programmes to achieve some degree of permanent change to the social context itself in terms of the capabilities in use, see for example Hawe (1997) which will last beyond the duration of the programme. Hawe’s account distinguishes between different levels at which wider and delayed impacts occur. Georghiou (1999) writing on innovation studies focuses on broader socio-economic persistence effects of policies.

1.3.6 Political Science The role of power in networks and interactions in the area of energy efficiency is a theme taken up by Dawkins (1987) writing in the context of political science. His

34 analysis of the development of energy efficiency in the United Kingdom focuses on the creation of the Association for the Conservation of Energy (ACE), its growing influence and subsequent inability to synthesize an effective energy efficiency industry. Dawkins observes that Dr Andrew Warren, brought in from the Road Haulage Association to be the ACE’s Chairman, quickly established the ACE as a leading pressure group for energy efficiency at a time when government energy policy was moving rapidly away from conservation under the influence of a strong belief in a free market ideology. However, during the 1980s, the ACE failed in its attempt to coordinate the diverse interests of energy efficiency. He suggests that conflicts of interest within the membership of the ACE itself could explain why the ACE was unable to pursue energy efficiency and conservation effectively: “Some members of the ACE are subsidiaries of larger companies whose interests extend to other energy fields: GEC for instance, is the parent company of ACE member Satchwell Controls” (Dawkins 1987, page 259). Such conflicts of interest, also arose in the case of Honeywell Controls and Wimpey, which sought to prevent the ACE from giving evidence to the Sizewell B inquiry.

Dawkins argues that there are systemic weaknesses in UK energy conservation in that there are no powerful organisations that promote energy efficiency or conservation. The Department of Energy is held to be weak against the producer or supplier interests, and at the Sizewell enquiry, the Government has been shown to be unwilling to consider demand reductions as well as capacity increases. The DTI submission to the enquiry argued that: “The question of whether conservation investment saves capacity or primary energy and in what amounts, cannot be answered quantitatively in ways useful for planning,” (Association for the Conservation of Energy, 1989).

35

1.4 Quantifying Evaluation Strategies

“The transformation of beneficial outcomes into dollars is often flimsy at best; arguments to double or halve the estimate are as cogent as arguments for the initial estimate.” (Birdsall 1987, pages 109-118)

This final main section of the chapter examines the issue of measurement of energy savings which remains a central obligation of energy policy and programme making. A first, if not the first, fundamental question of impact assessment within the accounting paradigm is the attempt to identify a link between the outputs of the programme and the action of intended targets. This is the issue of attribution or causality which links the programme with both its intermediate and ultimate impacts. Central to the issue of attribution is the issue of net impact – and the attempt to determine how much of a particular activity is the result of programme intervention. The study of the causal properties of a programme entails the highly contested area of which groups should be counted as beneficiaries of the programme. Questions such as how widely the evaluation net be cast to cover the impacts of the programme have theoretical, pragmatic and political dimensions to them.

Also of considerable significance in evaluation of energy programmes is the attempt to assess the carbon mitigation effects and the cost-saving which arises from programme initiatives. Impacts of programmes which can be closely attributed to the programme and which are therefore demonstrable impacts can be directly measured or they can be estimated using a wide variety of models. The reliability of the measurements or estimates is, just as is attribution, a highly problematic area.

In addition to these two fundamental issues are a number of other problems and issues including the decay of impacts over time which can have a significant impact upon the effectiveness of programmes. Such issues arise during evaluations which centre upon processes. Of central importance within this range of issues is the long term effect of the programme upon organisations, including the extent or persistence of actions which organisations have taken in the past. It is with this last issue, which is one of some significance for the evaluation of programmes generally,

36 that the thesis is partly concerned. This third main section of the chapter contains therefore three main sections, and focuses in turn upon attribution, measurement of impacts, and the wider issues of the sustainability of programme impacts or persistence.

1.4.1 Attribution – Assessing Causality and the Scope of Impact The issue of attribution or causation (Train, 1994) determines, fundamentally, what impacts will be measured and counted as legitimate outcomes of the programme. In energy programme evaluation, the earliest large programmes which were subject to evaluation and for which accounts are given in the literature, were evaluated in the most general possible terms with little focus on demonstration of cause and effect and the measurement of savings. The following extract from the US literature gives insight into the limited attempts made to assess the role of programmes on the targets:

“Based on an analytic approach that was developed in the 1930s for agricultural programs and expanded during the 1960s to cover social programs, program evaluation was adapted to energy programs in the late 1970s. The early efforts were directed at Carter-era federal programs such as the State Energy Conservation Program (SECP) and the Energy Extension Service.”

“The original purpose of program evaluation was to see if a program effect could be detected. Simply seeking to determine if the early programs produced statistically significant results was considered a challenge when the programmes were emphasising information and education.” (Fels and Keating, 1993, pages 57-88)

Understanding of what the impacts of programmes might be has grown over time and with experience. Evaluation practice has gradually been enriched with the results of a large range of studies which have taken place as a result of both federal government action and from the action of state utility commissions. These studies have tackled a range of issues which bear on the issue of correct attribution in a variety of ways.

37 This first sub-section examines the attempts made to determine the actual impacts of programmes. It focuses on the attempt to identify the true net impact of programmes, to rule out effects which would have happened anyway and to consider those impacts of the programme which might occur outside what was thought to be the domain of programme activity.

1.4.2 Carbon Mitigation and Economic Growth The role of measurement is of immense significance in energy programmes and the area is rightly one in which much research has been carried out. A long line of work on the effects of carbon mitigation strategies and the impacts upon economic growth emissions abatement targets and timing includes the following, beginning with Nordhaus, (1992), Grubb, Victor, & Hope (1991), Grubb, Chapuis and Duong (1995), Harvey (1996) and Grubb (1997).

The future of emissions policy and therefore programme targets is also very much under discussion currently in this context. Manne (1996) surveys the research emission targets for the period after 2000 while Patterson (1996) and Krause (1996) are major contributors to debates about the definitions of energy efficiency and the methodologies used to identify the wider costs of reducing emissions.

There are also a number of technical discussions about the type of indicators which should be used to allow meaningful comparison of energy usage between different countries (Schipper and Haas, 1997) (Schipper, Bartlett, Hawk & Vine, 1989) (Schipper, 1997). Such action is necessary in order to make progress towards international agreements on emissions reduction and builds upon a long tradition of enquiry into the practical measurement of energy use with some of the best known work being that of Vine (1992) and Schipper and Meyers (1992).

An early and specialised literature focused on the best means of dealing with the threat of global warming and examined the role of energy efficiency in attempts to reduce global warming. Keepin and Kats (1988) (1989 and (1990) argued that greater energy efficiency (end-use efficiency) would reduce emissions far faster than the expansion of the nuclear energy programme. Their work was largely in response to Weinberg (1987) who had earlier proposed a six-fold expansion of world nuclear

38 capacity to reduce greenhouse gas emissions. Brookes (1990), responding to Keepin and Kats’ various papers, argued that their estimates had not priced the energy efficiency option correctly, ignoring the cost of the construction of the conventional power stations needed to generate the increase in energy.

The debate about the role nuclear power could play in reducing carbon emissions has grown almost silent3 in the United States and the United Kingdom. Instead there is a growing interest in and support for renewable energy, see Elliott (1996). A sizeable and significant literature focuses upon the potential of the smaller scale technologies of buildings efficiency themselves. More recently, the need to deliver carbon mitigation through a variety of mechanisms has underscored the need for greater accuracy of measurement and systems which provide a means of comparison of different programme interventions (Vine 1997).

1.4.3 Assessment of Net Impact While early programmes may have struggled to generate evidence of programme impact, later initiatives in the area of demand side management4 have ensured that evaluators of energy efficiency programmes have tried to identify the true impact of programmes. Those working in the field of energy efficiency evaluation could see that while some programmes were large in scale, they might well have a lower net impact than those programmes of small size but large net effect. Controversies over the effectiveness of demand side management activities has led to a series of studies which examine the question of actual impacts with Joskow and Marron (1992) (1993) Ruff (1988)5 arguing that DSM programmes significantly over estimate the real benefits. Other studies have attempted to rebut these claims, notably Parfomak and Lave (1996), claiming that the gains from demand side management are real and positive for all parties, including consumers, government and utility companies.

3 Apart from a few commentators such as Fells, I. (1999) Royal Society Lecture, reported in Times Higher Education Supplement 29 October, 1999, page 20. 4 DSM has relatively high levels of investment in evaluation and evaluation is a formal legal requirement of programmes. 5 It was Ruff (Ruff, L. (1998), “Least-cost Planning and Demand Side Management: Six Common Fallacies and One Simple Truth, Public Utilities Fortnightly April 28th 1988) who initiated the criticism of DSM activities, although Joskow and Marron are more closely associated with it.

39 The attempt to identify the net effect of programmes centres on the search for an answer to the counter-factual question of what would have happened without the programme being present. This is what Fels and Keating (1993) liken to a crystal ball problem in which the attempt is made to identify all the possible positive effects of programmes and all the negative effects and subsequently to perform a comparison between the two.

A recent study by Morgenstern and Al-Jurf (1999) has attempted to identify the impact of information on energy efficient lighting installation in the US commercial office sector. This study employs maximum likelihood analysis to show how much more likely organisations are to install lighting if they have received information of a site-specific kind. The kind of advice is specific rather than general is termed “site specific”. One important finding of the study is that once organisations have one form of energy efficient technology installed, the provision of advice can increase their tendency to install further measures.

The authors radically assert that the provision of information is significantly more cost-effective than other stimuli to energy efficiency, for example increasing the price of energy. Their study also attempts to correct the effect whereby the decision to use information itself determines the decision to install energy efficient equipment, what the authors call endogenous determination. This approach is ambitious. Earlier attempts at measuring information impacts such as Parikh and Dimit (1998) and Bronfman (1998) working on market transformation have not attempted to calculate actual net benefits but have focused on the extent to which barriers are been reduced and new actors enter the scene.

A key issue for evaluators has been the determination of the extent to which programmes subsidize the action of those who would have acted in such a way. This question is the free-ridership problem by another name. In impact assessments of programmes which provide incentives, which includes many in the United States, programme evaluators have sought to find those organisations and individuals who would have made the investment in the energy saving measures themselves without the presence of the programme.

40 This group is known as the free-rider group and is confined to targets of the programme rather than peripheral actors whose action might also have had influence upon the installation of measures. In some United States studies as reported by Vine (1992), free-riders are estimated to be up to 80% of participants with the largest proportion of free-riders occurring in the large scale commercial and industrial business sectors. A study by Wirl (1994) suggests, using insights from game theory, that the beneficiaries of such schemes are the consumers who reduce their own investments in energy efficiency when they see their electric utility subsidizing their investments in energy using technology.

A number of studies focus closely on the identification of free riders and the estimation of the free-rider effect, what Train (1994) calls “naturally occurring savings within the programme”. Train employs a mathematical technique based on logit and probit models. This joins the twin processes of attribution and the assessment of impact into a joint probabilistic calculation of likely savings for the programme. The success of such mathematical models relies upon the presence of control groups, or at least those who were non-users of the programme incentives or information.

1.4.4 Information Programmes and Net Effects In the case of programmes in which incentives are used, the estimation of net effects is a major issue. However, in the case of information programmes, the issue of net effect is problematic. If the information is seen as a form of subsidy towards an expected or possible action, i.e. the introduction of energy saving equipment or management practices, then the decision to use such information, rather than to acquire it oneself through ones own efforts, represents a decision to free-ride. If the organisation has no such choice, and is constituted in such a way as to be incapable of generating the information itself, then the decision to use the information would count as a programme net effect. This latter class of actors or users is the legitimate programme target.

41 Classes of Actor The foregoing analysis, in which two types of actor are described, has led to consideration of a third type of actor or firm which is constituted in such as way as to be capable of generating the information itself and which decides to use this rather than relying upon the publicly provided information. A number of writers have identified this category of actor, terming it the free-driver. Programme evaluation of free-drivers is of course a valuable activity because it uncovers the characteristics of a group which has no need of the programme intervention. Knowing what these characteristics are may help programme managers and designers to find the alternative means of reaching the programme aims and objectives.

Wider Effects – Spillover The wider effects of programmes are any which occur above and beyond those intended by government, programme managers and those delivering the programme. These wider effects or impacts can be numerous, and a classification of these effects is essential to clarify the range and extent of the spillover. Spillover is dependent upon a variety of factors, including the type of programme delivered and the scale on which it is delivered.

Spillover effects are possible between programmes of the same type, between programmes of different types and within a single programme that is, as information programmes can be, subdivided into a number of sub-programmes. Programmes operating at the level of awareness – the initial stage of the Rogers (1962) model – can by the nature of their generality create a wider effect than a technical dissemination programme. The means chosen to distribute information or advice may increase the risk of spillover significantly. Where the awareness or general information provided to organisations stems from other programmes than the one intended, there is clearly doubt about which programme might be responsible for ultimate effects.

42 1.5 The Wider Issues of Persistence of Impact

1.5.1 Introduction The evaluation of programme operation – what is normally termed programme monitoring or sometimes “process evaluation” (Rossi and Freeman 1993, page 165) - aims to focus on the delivery of the programme and to uncover wider effects of programmes. In the course of extensive evaluations of energy demand reduction programmes in the United States, a number of commentators have drawn attention to the temporal and spatial dimension of programmes.

The interest in longer-term performance of programmes is partly the result of extensive analysis by a large and enthusiastic evaluation community in the country’s large state and utility funded energy research centres. But it is also partly the result of the significant size of the programmes which have been run and a growing awareness that variations in the effectiveness of programmes over time could have significant implications for the costs and benefits of programmes. Two writers have focused on the issue with Keating (1991) and Vine (1992) authoring the most significant conceptual papers. The following sections outline the significant issues of variations in programme impact over time as discussed by Vine, Keating and others.

1.5.2 Two Forms of Decay The 1992 Vine paper offered a taxonomy for decay or what Vine called “persistence” which was detailed and comprehensive. It put forward a structure for understanding persistence effects and a range of observations about how persistence could be ensured. The paper argued that sustainability of programme impacts, consisted of two sets of effects, the measure persistence effect and the programme persistence effect. This early work was the first to address the programme evaluation aspects of persistence and it built on a study by McRae, Rufo, Guddat and Baylon (1988) which focused closely on the lifetime of measures.

Measure persistence was a technical issue of how well the technology of energy efficiency worked in practice. Vine proposed that measure persistence could be affected by any of the following nine factors: "the technical lifetime of the measure; the installation of the measure; the measure performance or efficiency decay; the

43 measure operation; the commissioning and repairs to the measure; failures of the measure; removal of the measure; changes in the buildings stock, i.e. renovation, remodels, alterations, additions; and occupancy changes i.e. turnover in occupants; changes in occupancy hours and number of occupants", Vine (1992).

The Vine paper (1992) also defined four factors affecting what he called programme persistence, which combined with measure persistence, comprise the overall programme persistence effect. These four factors Vine names (after Keating, 1991): rebound effects, whereby users increase their energy use following the installation of their energy efficiency measures; the “surge effect” which is where the user adds more measures than the programme recommended, or in the case of demand side management programmes in the United States, sometimes paid for; the replacement effect, which the diffusion literature would call reversion (see Rogers, 1995) whereby efficient measures are replaced with inefficient measures at the end of their lifetime; and changes in use by the control group, which need to be taken into account in order to obtain the net effect of the programme.

Discussion of programme persistence has been limited. Grubb (1990) however has focused on this so-called "rebound effect" whereby greater efficiency in energy use leads to more use of energy. Grubb has been keen to show that the effects of reversion are limited. By contrast, both Brookes (1990) and Greenhalgh (1990) have contended that the “rebound effect” is not only theoretical but a real effect whose implications undermine any case for promoting energy efficiency. In 1995, Goetschel et al (1995) introduced a further category of nugatory effect: “snap-back”, effectively a form of rebound effect whereby the savings from energy efficiency, rather than being used to increase comfort are used to purchase further electrical appliances. Such an effect is, however, only likely to be found in the domestic rather than commercial and industrial contexts.

A number of other writers contributing to conference proceedings and working in the area of energy programme evaluation consultancy have made contributions to the debate on measure persistence, closely focusing on the performance of the equipment and measures installed. These studies include, most notably, those by Skumatz and Hickman (1995) and Bordner, Siegal & Skumatz (1994).

44

1.5.3 A Decay Model The issue of decay of savings is a critical issue for the correct assessment of programmes such as those promoting energy efficiency that aim to achieve a certain minimum level of carbon mitigation. This is particularly so where measures which have been installed in the past continue, often for many years, to contribute energy and cost savings. A mathematical model which greatly simplifies the effect of decay in the effectiveness of measures is outlined in this section, and described in more detail in the Appendices.

A simplified model of programme persistence is introduced to identify the effects on the cumulative savings of the programme of small yearly declines in the effectiveness of measures through mechanical inefficiency, the replacement of measures by inferior and or original products, and market transformation. This highly simplified and abstract model shows the impact on two forms of cumulative totals for programme impact.

It should be noted that cumulative totals of programme impact can exist in two senses. Firstly there is the simple cumulative total of energy savings which is defined here as the savings from all measures installed over the lifetime of the programme during a particular period of time. This amount reflects the energy saving or carbon mitigation effect of the programme in a particular period. As much of carbon mitigation accounting focuses upon the effect of an initiative in a particular period, usually a year, this is a useful measure.

A further measure of the programme’s effect, total cumulative savings is also useful as this measures the total of the energy savings from the programme in all years. It measures the total energy savings from all years of the programme and is a series of measurements of all the energy savings from each period, usually a year, of the programme. This figure, the cumulative total savings of the programme, is a helpful measure in assessing the total energy saving or carbon mitigation effect of the programme for its lifetime, and when compared with the costs of mounting the programme, a useful measure of the cost-effectiveness of the programme.

45

1.5.4 Some Features of the Impacts and Persistence Relationship The simple mathematical models shown in the appendices demonstrate the importance of accounting for the decay of energy savings, especially where the cumulative total of previous savings is maintained. This is particularly so in the case in energy efficiency programme design as the efficiency of technological measures, whether human or mechanical, have a continuing role to play in mitigating carbon emissions. But the wider and broader effects of programmes such as possible interactions with other programmes, the enhancement of capabilities in organisations and related technological networks and markets for technology also have the potential to increase the overall programme impact. While the two models discussed include a reversion and market transformation effect, the models should be seen simply as metaphors for the measurement of such impacts, which in practice are far more difficult to identify and involve a mass of assumptions about individual measures, the length of time installed and their actual operation over long periods of time.

While savings decay at either the measures or behavioural level can have an impact in reducing the amount of cumulative savings, where measures have naturally short life span, the effect of savings decay will be less as the measures will be subject to replacement. Where programmes are operational over long periods of time, accounting for the persistence (or its converse – savings decay) becomes more significant as early savings may be removed altogether.

As is noted in the appendix, the inclusion of a market transformation term attempts to address the issue that some of the changes attributed to a programme might have happened anyway, after a period of time. This strategy tries therefore to identify a net effect for a programme and consequently derives a total that is less than the actual energy savings occurring from the measures (by the rate of market transformation).

1.5.5 Simplified Model of Programme Operation The previous discussions of policy interventions have covered a wide range of possible forms of impact upon the organisation which will ultimately lead to energy

46 saving. The following model below indicates the limit of possible sources of influence upon the organisation and the sites within the organisation where such influence can take effect. The model clearly shows the direct programme influences upon the organisation and the indirect wider effects upon the environment in which the organisation is located. The figure also shows the effects of rival and complementary initiatives upon the organisation. Influences directly originating from a programme initiative are shown coming from above, while those stemming from competing sources are shown coming from below.

47

Figure 1. Contexts for Organisational Energy Saving

Possible Programme Effects

Indirect Direct

Market Agency Transformation Initiatives

Energy Saving in the Organization Outside the Organization Acquire Install Operate Evaluate

Technologies & Services

The Management Cycle

Indirect Direct Autonomous market Rival or Transformation complementary initiatives

External Effects

1.5.6 Impacts and Net Impacts The following figure, which is derived from the literature, provides a model of how to view programme impacts within the organisation. It provides a conceptual framework for looking at the issue of impact and includes three main categories of organisation installing equipment: non-installers; installers not using a programme; installers using a programme but who would have installed anyway; and installers using a programme who would not have installed without it. “Desirable” net effects of a programme can also arise amongst non-installers.

48

Figure 2. Programme Impact Framework

Installed Equipment ?

Yes No

Used Used Programme ? Programme ?

Used Did not use Used Did not use programme programme programme programme

Free Driver

Would not Would have have installed installed anyway ? anyway?

No Yes No Yes

Net Effect Free Rider Net Effect Free Rider

49 1.6 Chapter Summary

• Over the last fifteen years, energy efficiency policy intervention has been increasingly justified by reference to principles of market barriers and market failures derived from the economic literature. The economic literature is increasingly seen as the source of the analysis and, perhaps naturally enough, the source of the policy prescription, especially in the United Kingdom. The success of such policies and the programmes which result from them is thought to depend upon the use of information specifically targeted at those “barriers” and information asymmetries. • The literature of programme intervention is however quite imprecise on the specific form and content of such information programmes. How should such programmes deal with the information barriers is a major issue of policy and research evaluation. How the benefits accruing to adopters should be made available to other adopters is another. • A broader literature including the energy programme evaluation literature itself points to the inter-relatedness and interdependence of the technological and social, and the heterogeneity of actors. How can information by itself act upon such a context and do so significantly? • Both the mathematico-engineering mode of enquiry and the interpretivist mode have highlighted the importance of assessing total net programme impacts, cumulative impacts and the persistence or wider impacts of programmes. If programme interventions in the area of energy efficiency policy based on information create impacts, do these impacts persist in the longer term? Can net impacts be reliably identified? • These several issues point therefore to the three major research questions faced by this thesis: How can information programmes be delivered in practice? What are the impacts of such programmes in practice? Do information programmes give rise to sustained impacts or what might be termed programme or policy persistence?

50 Chapter Two – Methodology

2.1 Introduction The first chapter concluded by outlining three central research questions that emerged from the conceptual analysis, and two conceptual models which provide a basis for considering them. This chapter outlines the way in which these questions were to be answered, beginning with reference to the context in which the research was carried out: the CASE6 Studentship with the Building Research Establishment.

The chapter then deals with the three questions in turn, each of which is a sequential and logical stage of the research (see figure 3 in this chapter). For each question there is a justification of the methods chosen and discussion of the kinds and sources of information consulted. The chapter then defends the use of a mixed methods approach. Finally, the structure of the remaining chapters is outlined.

2.2 Research Context and Methods This research was carried out within the context of a three-year research studentship held with the Economic and Social Research Council (ESRC) and based on a collaboration with the Building Research Establishment’s Energy Conservation Support Unit (BRECSU). BRECSU and the ESRC jointly perceived that a study of the area of the Energy Efficiency Best Practice Programme – the major United Kingdom information programme for energy efficiency - would be both a valuable academic activity and a policy relevant exercise of interest to the UK Government concerned with making progress towards reducing carbon emissions and the general effectiveness of information.

The collaboration between government and research council allowed for far closer involvement with the processes of policy formulation, delivery and evaluation than might have been available to a research student “working from the outside” and

6 Collaborative Award in Science and Engineering.

51 without the interest of a major stakeholder in the programme’s operation. At the same time, a similar collaborative research studentship was also started which aimed to examine the role of environmental technology, a closely related area and one involving the other major contractor responsible for the operation of the Energy Efficiency Best Practice Programme7. Because the buildings side of the Energy Efficiency Best Practice Programme was in any case a coherent organisational whole for which BRECSU was responsible, and in order to prevent disturbance to those operating the programmes, this studentship focused exclusively upon the energy in buildings side of the Programme, leaving the other studentship to focus upon the operation of the Environmental Technology Best Practice Programme through a collaboration with its principal contractor, the Energy Technology Support Unit (ETSU). The research therefore took the operation and impact of the Best Practice Programme as its context as this was the main available and accessible instance of an information programme.

Structuring Research Questions

The structure adopted for the research questions was in three parts.

• The first stage of the research examined the processes involved in the creation, and delivery of the Programme, examining the Programme with case study methods8. This choice of methodology was adopted to achieve an understanding of two social processes, the creation and delivery of a Programme; and secondly to lay the ground for a study of the Programme impact processes which takes place in the subsequent sections.

• The second stage of the research takes the form of a process evaluation, and is exploratory and descriptive in nature. Programme effects are examined and, in order to consider the net effect of the Programme’s activities, attention is focused upon the contexts in which the Programme operates. Here three detailed sectoral

7 This other contractor was the Energy Technology Support Unit (ETSU). The other programme was the Environmental Technology Best Practice Programme. 8 An initial study of the delivery of the Programme employs a case study style method based on “rich description” (Geertz, 1973).

52 perspectives are created which function as self-contained “cases”. These capture the way in which the Programme operates in a particular area of its activity and provide a means of comparison between effects. As separate “cases”, the descriptions of the sectors are intended to be inclusive and to generate authentic and accurate description of the processes involved within the sector, including the role of peripheral actors, such as manufacturers, suppliers, and installers.

• The third stage of the research is also a process evaluation and involves a further consideration of the broader impacts of the Programme with a special focus on whether the Programme has led to long term changes in the organisations which use energy. This stage uses the description of the impacts drawn in the second stage and considers whether such impacts could be said to have represented a permanent change in the organisations affected by the Programme.

It is beyond the scope of a work such as this to aim to measure a Programme’s overall net impact and benefit. Such a task would be the aim of a large-scale impact assessment taking many years and involving many staff. The research aims undertaken here are more modest: to gain an understanding of the processes involved in Programme creation and Programme impact; and to discuss the implications for overall Programme impacts and effectiveness. The following figure outlines the form the research has taken.

53 Figure 3. Schema of Research Process

How was the Programme Possible sites for

delivered in practice? Programme Stage 1

Analysis of an historical process impact

What impacts arose? Identifying A process evaluation with policy impact processes Stage 2 relevance and contexts

Did impacts persist? Identifying wider A process evaluation with policy impact processes Stage 3 relevance and contexts

The previous figure demonstrates the sequential nature of the research questions which are asked within three stages. The following methodological discussion is in three parts, and deals with each stage of the research separately.

2.3 Stage One – Creation and Operation of the Programme The first research question focused on how the Programme operated in practice. It sought to identify the precise ways in which the Programme was conceived and then delivered. This first question logically preceded the others: without undertaking a study of the Programme’s specific aims, attempts to observe and categorize the impacts of a Programme could be misplaced and poorly informed. Moreover, the operation, delivery and performance of the Programme raised issues in their own

54 right, quite apart from providing a basis for the subsequent investigation of Programme impact and the contexts in which they occurred.

The delivery of a government programme involves a large number of individuals and organisations, many of which are part of the government departments nominally responsible for the day to day operation of the programme. Initial scoping for the research identified a range of key staff whose cooperation with the issue of programme delivery would be instrumental to the aim of identifying how the programme was delivered, what steps had been taken to deliver the programme and how the programme had been delivered in practice. The research of the programme delivery employed two research methods: documentary analysis and interviews (of those members of staff responsible for the programme).

2.3.1 Stage One - Interviewees Those interviewed comprised the following: a) Those who had been responsible for the programme during any part of its life but particularly those who had been closely involved in setting up the programme, from the final stages of the programme’s predecessor, EEDS, to those recently joining the programme in 1996-1997 when the research was taking place. These individuals were mostly civil servants or BRE staff working within BRECSU, the unit set up to run government information programmes for buildings energy efficiency. It was hoped also to be able to meet with members of the Energy Efficiency Programme Committee (EEPC) which acted as a government appointed scrutiniser of the programme strategies and which had responsibility for approving funding for them. b) Those acting as consultants to the programme managers and to the government during the lifetime of the programme. c) Those operating similar or competitor programmes in the UK and or abroad who had knowledge of the EEBPp. d) Those providing information sources that were similar in purpose to those provided by the Programme.

55 e) Those representing intended targets of the programme, such as trade associations. f) The intended targets of the programme themselves, principally energy managers and estates staff with responsibility for the efficient use of energy in organisations, both public and private sector. g) The views of organisations which regulated the practices of a particular sector were also taken into account, although these views were of greater relevance to the issue of programme impacts and programme persistence.

2.3.2 Stage One – Documentary Evidence The use of documentary information was particularly important to this section. It was expected that detailed information about the strategies, intentions and actions taken by policy makers, programme managers and those acting as sub-contractors to the programme managers would flow from interaction with these sources. Sources of information on the following were all studied and analysed. a) The EEBPp’s main policy statements and those of Parliamentary Select Committees relating to the programme were collated and analysed. These included the Programme ROAME9 statement and a number of Parliamentary Select Committee Reports from the periods before and during the programme’s operation. b) In addition to official government and Parliamentary papers, the management documents associated with the Programme were also collated and analysed, where possible10. These documents included the business plans of BRE, the strategy documents prepared by BRECSU staff and presented to the Programme’s scrutiny committee, the (EEPC).

9 The Programme ROAME statement identifies the Rationale, Objective, Aim, Monitoring and Evaluation Strategies proposed for the programme. Most major government programmes have ROAME statements to demonstrate a clear justification for their existence and proper procedures for their monitoring and evaluation. 10 During the research, the BRE, which includes BRECSU, was privatized. The privatization of BRE had the effect of restricting a number of documents in the short term. In the long term, the privatization has had impacts upon cultural practices of openness, and this had led, in my view, to a wholly understandable reluctance on the part of the organisation to divulge the content of its business plans.

56 c) The principal documents disseminated by the scheme’s activities were collated, studied and analysed. These documents comprised a wide variety of texts associated with the following activities and events: Seminars, Direct presentations, Piggyback events, the energy mentor scheme, creation and development of training and promotion materials, journal articles, basic information for students. d) The core information guidance material of the Programme, including the Energy Consumption Guides, Good Practice Guides, Good Practice Case Studies, New Practice and Future Practice Studies were examined, where these applied to the three sectoral studies. e) A range of documentation from the EEDS programme was also studied as part of the attempt to determine the level of continuity between the Demonstration Scheme and its successor. f) A small number of documents from the industrial side of the programme, which is run by the Energy Technology Support Unit (ETSU), were also collated and analysed where these were part of combined or joint strategies with the buildings’ side of the programme.

2.4 Stage Two – Programme Impact The first stage of the methodology was intended to provide a means of identifying the kinds of impacts which the Programme sought to deliver. The second stage of the methodology used the outcome of this first stage as a guide as to where Programme effects occurred; but it also used a broad conceptual framework of effects from the literature. The result was a focus on the following four areas which all affected the way in which energy was used within the organisation and all of which could be possible “forms or sites” of Programme impact. These four areas represent a broad conceptual framework used to formulate questions and to explore issues. The questionnaire generated from this framework is shown in Questionnaire Appendix A. The use of an exploratory mode of enquiry requires, as Robson observes, that conceptual frameworks be flexible: “if strong, [they] can blind you to the important features of the case” (Robson 1996 page 69.) Yin (1989) writing on case study methods argued that analyses may be based on conceptual frameworks that are either derived from two sources. Either they may come from the theoretical

57 propositions which are discussed in the literature or from a range of descriptive categories. Here they are derived from the literature.

• The Energy Management Structure of the Organisation • The Understanding of Energy Use by the Organisation – Energy Efficiency Knowledge • Identifying Technologies for Implementation • Installing and Configuring Technologies

2.4.1 Sectoral Approaches – Between Sectors Selection A sectoral approach was taken here in order to reflect the operation of the Programme itself and to provide the means of comparing and contrasting the creation of impacts within and between different sectors. Three sub-sectors of Programme operation were chosen with the following criteria:

Sub-sectors were chosen because major sectors were too broad in scope: the Higher Education Sector was therefore chosen from the Further and Higher Education Sector; the Hotel Sector was chosen from the Hotels and Pubs Sector; and the Department Stores, Non-Food and Retail Services were chosen from the Retail Sector.

The sub-sectors should not be minor but major sub-sectors of sectors of the Programme because conclusions reached would not have major policy relevance. The sectors which were chosen all had a significant role in delivering carbon savings currently and were likely to continue doing so for the foreseeable future;

The sectors were all significant users of the Programme, according to figures produced by the impact assessment unit of the Programme manager;

58 Statistical information about the precise sector groups, broken down into sub-sectors if necessary, was available to allow the use of complementary methods;

The choice of two private sector organisations and one public sector organisation was made so as to allow two forms of comparison, firstly between private sector organisations and between public and private sector organisations – a fourth study to facilitate comparison between public sector organisations was not possible to accomplish in the time allowed for fieldwork, although it was contemplated;

Largely for policy purposes, a sectoral or sub-sectoral comparison provides insight into the cost-effectiveness of the Programme.

2.4.2 Sectoral Approaches – Within Sector Selection The selection of cases (individual organisations) within sectors was made to ensure that similar organisations who were major energy users were chosen. Individual selection for each sector was also not fixed initially but proceed by identifying what appeared to be the most accessible organisations in the sector and asking them to nominate other organisations for inclusion in the study.

The risk that accessibility itself might bias the study – accessible energy managers and estates staff might be pre-disposed towards energy efficiency and or the Programme – required that the principle mode of selection was to include a range of organisations. This meant, in practice that some organisations were unready to participate in an interview. Repeated attempts to gain access were however normally successful in ensuring that the reluctant organisations were included in the study. In some cases, where the initial contact proved to be unwilling to help, other routes into the organisation were found.

Organisations were not excluded from the study if, at initial contact, they did not use the Programme. Inclusion of non-users or those who were very infrequent users of the Programme was important as the decision not to use the Programme might

59 indicate the presence of alternative forms of information and advice from third parties or organisation’s autonomous capabilities for energy efficiency.

2.4.3 Interviewees The main groups interviewed were: a) Energy Managers, Estates Staff, Energy Efficiency Staff or staff with substantial responsibility for energy efficiency in organisations which comprise the sectors targeted by the research. These staff were the principal source of information and the main focus of the interviewing effort. b) BRECSU staff who were responsible for devising and delivering the Programme’s many activities, publicity material and the main programme documentation. c) Suppliers of energy efficiency equipment and services of particular relevance to the sectors which were selected. d) Trade Associations representing groups of suppliers of energy efficiency technology. e) Sector regulatory bodies, such as, in the case of the Higher Education Sector, the Higher Education Funding Council for England. f) Those operating rival and complementary programmes.

2.4.4 Documentary Sources Documentary sources which were identified initially as potentially relevant comprised those which had been examined within the first part of the enquiry. In addition to these, the following were also consulted, where access was allowed: a) Organisations’ own policy documents on energy efficiency. b) Organisation’s material on energy efficiency which they had produced themselves as part of their own initiatives. c) Management information and job descriptions were also sought as a means to identify the extent or organisational commitment to energy efficiency in the longer term.

60 2.4.5 Statistical Data This second stage of the methodology involved the use of a number of pieces of statistical information generated from data collected by the BRECSU Impact Assessment Section for the purposes of their yearly impact assessment of the Programme impact. These tests sought to substantiate or contrast the evidence gained from interview. The precise methods used to measure and assess association are given in Statistical Appendix A.

These methods of assessing association are used in conjunction with simple averages to generate perspectives on three of the four major areas of the conceptual model. A table is provided which shows the issues explored through statistical analysis. For each statistical analysis, the Appendix in which the results of the tests appear is given in the right hand column of the table.

61

Energy Management Structure

Issue Appendix Did Making a Corporate Commitment associate in any way with B the rate of use of Programme material? Were sectoral differences present? Did the presence of an energy manager associate in any way with C the rate of use of Programme material? Were sectoral differences present? Did the presence of an energy manager affect the use of D information in terms of the number of sources consulted? Were sectoral differences present in terms of the mean number of sources consulted? Did Making a Corporate Commitment associate in any way with E the presence of an energy manager? Were sectoral differences present?

Energy Efficiency Knowledge Issue Appendix Does the presence of an energy manager associate with knowledge F about how energy is used? Were sectoral differences present? Which are the most widely used sources of information? What are G the sectoral differences?

Identifying Technologies Issue Appendix

Was more information used the more measures were installed? H What sectoral differences were present? Was use of the Programme associated with the acquisition of I technology? What sectoral differences were present? Were manufacturer’s information and Programme information J considered substitute or complementary forms of information?

62 2.5 Stage Three – Persistence of Impact The outcome of Stage 2 of the research was intended to provide the basis for the study of the longer-term impacts of the Programme in Stage 3. The purpose of this stage of the research was to see if the Programme impacts were enduring changes both within the sector members and amongst those impacting upon the sector members through the provision of rival programmes or services. This part of the research also used a statistical perspective.

2.5.1 Stage Three - Statistical Perspective on Persistence Initial analysis of the key routines and activities for ensuring that an organisation can pursue the goal of energy efficiency suggested that a number of energy efficiency activities would be related. For example, organisations with energy monitoring systems would be more likely to conduct energy audits, while those with energy managers might be more likely to maintain energy monitoring systems. Such relationships would be visible as statistically significant associations, the strength of which could be assessed by the value phi (see Statistical Appendix K ). An indication of the growth of the influence of the Programme – a persistence effect – would be if the Programme increasingly associated with other energy saving management activities and organisational practices.

As the BRECSU impact assessment information contained statistical data about the use of the Programme, it was decided that a perspective upon the Programme’s long term impact within a sector could be determined by comparing the strength of the association between the Programme and a range of organisational routines and practices over a period of time. If the association between the use of the Programme and, for example, the carrying out of an energy audit was strong and grew in strength, this might indicate the growing importance of the Programme. The tests of association carried out in this Stage Three enquiry make two basic assumptions: firstly that organisations noted as Programme users in the first year and the second year are the same actual organisations11; secondly, that over the period of the two years, actual promotion of the Programme activities and the publications of new

11 The BRECSU survey data provided to the research did not uniquely identify individual organisations such that a time-series or cohort style study could be done. Consequently, this assumption, which is not unreasonable, is made about the organisations participating.

63 documents does not change significantly. This second assumption is more questionable than the first and were it not to hold, increasing adoption of energy efficient management practices could result from increased Programme activity (by the Programme manager) rather than from actual changes within the organisations themselves.

In order to assess a growing importance of Programme use for energy efficient management practices, at least two years’ worth of comparable data had to be available. Fortunately, between 1995 and 1996, the data collection methodology of BRECSU had remained relatively unchanged and such a data set could be constructed for the relevant sub-sector groupings. Consequently two years of data was available from which to draw conclusions about the role which the Programme played in sector organisation’s energy efficiency activities. This data is analysed and presented together with the results of a range of cross-tabulations and summaries of statistical data about organisational practices in Appendix K. The results of these analyses are incorporated in the Comparative Analysis chapters and the Conclusions.

Time Lags and Consistency The use of statistical data which are not exactly contemporary with other forms of data such as that gained from interviews and from documents can lead to unreliable comparisons. The data used here for Stage Two were collected around two years before the interviewing of organisations was undertaken. Such a time lag in the date of research findings was not thought likely to lead inconsistencies as the interviews examined processes of impact and energy efficiency over a period of time and were not closely tied to a single historical moment. Within Stage Three, the statistical data were compared not with other forms of data but simply involved comparisons between data from two different years.

2.6 Research Style and Good Practice This research project employs a variety of methods because the research carries out two major functions. In the first instance, a case study based approach to the creation and delivery of the Programme itself is required. Here the aim of the research is to achieve an understanding of a complex social process – the creation of

64 a complex social phenomenon – an energy programme. The methodological paradigm associated with a project of this kind is an interpretivist one. The research examines the issue of construction and performance of a social programme by reference to understanding of those involved; secondly, as a research evaluation with a policy purpose, the research needed to identify the impacts which the Programme had sought to deliver, before looking at those impacts in more detail.

The second function of the research is that of a research evaluation. Again, interpretivist methods are required to understand processes and to explore and describe impacts, effects and to address the issue of net effect. However, the availability of statistical data and the importance of “measurement” to programme evaluation suggested that some statistical analysis would be useful.

A second and more important reason for this study to embrace a mixed methodological style is, following Howe (1988), that statistical methods and mathematical models which form the basis of a quantitative research approach are not so incommensurable with observational and ethnographic approaches that their results cannot be viewed and considered together12. The research approach adopted here aims to employ mainly qualitative methods but also to employ limited quantitative methods in which statistics provide perspectives, descriptions and assessments rather than tests of formal models of human and organisational behaviour. The result of this approach is a mixed methodology that combines different methods to consider different aspects of the same questions in order to give depth and understanding.

2.6.1 Triangulation Within and Between Methods The methodology adopted here attempts to cross-check by using different groups of actors to comment on a specific issue: for example energy managers are asked about their own organisation and their own sector. The views of energy managers and estates staff are considered in conjunction with the views of managers of the

12 Other writers have dealt with this key aspect of methodological debate at a more abstract and philosophical level. Caldwell (1994) for example has written that methodological pluralism is the only valid approach because “it takes as a starting assumption that no universally applicable, logically compelling method of theory appraisal exists.” (Caldwell, 1994, page 245)

65 Programme itself. Supplier representatives are also consulted about the impacts of the Programme to ensure cross-referencing. The use of statistical methods also provides a method of cross-referencing and cross-checking the statements and responses provided in interviews.

2.6.2 Using Interviews to Ensure Reliability of Findings A central research tool of case study research whether undertaken in a realist or phenomenologist/interpretative mode is the interview. Interviews can be used in conjunction with other methods, providing an opportunity to verify or assess one picture given by an interviewee with another or with another form of evidence.

The semi-structured interview provides a means of collecting a broad range of evidence to support the research. Such a range of evidence can include detailed information of a factual nature (which might sometimes come from archival sources) often in terms of providing context but also in response to specific issues within a conceptual framework. At the other extreme, the interview can generate an in depth account or picture of a process hitherto misunderstood or not made explicit. By providing a reflective environment, the interview can fulfil a range of desirable objectives of a research strategy when questions are of the more open kind. It can also serve to test the extent of the interviewee’s knowledge of an area; clarify areas of confusion; and of utmost importance, probe areas which are promising but which were not thought at the outset to be valuable.

Interviews of the semi- or unstructured kind also have the advantage (Easterby Smith et al, 1991) of working around and negotiating over areas which may be commercially sensitive as indeed are both areas of government policy and technological adoption by organisations in competitive environments.

2.6.3 Close Observing of Details and Interactions The use of observational rather than of invasive and questioning approaches is characteristic of ethnocentric, interpretivist styles of investigation. A participant as observer approach has been adopted here to give access to situations in which actors may be more ready to disclose details of their environment. The participant as observer

66 can give a more open and direct engagement with the principal actors and to encourage in them “a more analytic reflection about processes and other aspects of the group’s functioning” (Robson 1996, page 197).

2.6.4 Research Style – A Summary The approach then used here combines a range of methods or techniques that are viewed as complementary rather than providing contradictory views of reality. It is argued that different research styles – whether positivist, post-positivist or naturalistic – mirror the world and the way in which actors live in it. Therefore they should not be used to exclude workable and effective forms of explanation, where these can be found.

2.7 Structure of Subsequent Chapters The four following chapters comprise the report of the empirical work carried out during the fieldwork. Chapter Three identifies the way in which the Programme was delivered. Chapters Four, Five and Six give the Higher Education Sector Study, the Hotel Sector Study and the Retail Sector Study respectively. Chapter Seven analyses the sector studies and, where statistical perspectives are available, these are used to broaden and support the analysis. Chapter Eight concludes with a number of observations about how the programme was delivered – the first research issue - and then moves to the issue of what impacts the Programme led to and how those impacts were sustained in the longer term, which addresses the second and third research questions.

67 Chapter Three - The Energy Efficiency Best Practice Programme

3.1 Introduction This chapter examines how the UK government has pursued the goal of energy efficiency policy through the Energy Efficiency Best Practice Programme. It investigates the aims and objectives assigned to the Programme and seeks to show how this radically new mode of policy delivery sought to deliver its impacts and how government set about assessing its impacts. The chapter relies upon both interviews and upon an extensive survey of Programme literature, including its central strategy documents which outline the priorities for the programme and the rationale which lies behind it, and the publicity material devised by the Programme managers to promote its goals.

The chapter will show how the government’s principal energy efficiency initiatives came to depend upon an information programme, how the Programme created a concept of best practice and how this was shaped and delivered. The chapter also shows how the Programme met two fundamental objectives: the attempt to curb energy consumption in a service sector economy, and the needs of a government eager to demonstrate a commitment to policy based on free-market methods. The chapter then describes how the Programme delivered by the EEO and the Department of the Environment was far wider and more sophisticated in scope than envisioned in official government statements and how the ideology of free market economics caused a tension over the implementation of the programme. Finally, the chapter examines the impact assessment methodology of the programme devised to capture the Programme’s effects.

3.1.1 Programme Study Interviews The following table shows the organisations and their staff who were able to contribute to the research through interview. The list includes those who were consulted about specific aspects of the Programme’s operation whilst the research was at a preparatory stage.

68 Table 1. Interviews with Programme and Other Relevant Staff

Organisation Job Function of Interviewees Association for the Research Director Conservation of Energy Bordass Associates Owner and Managing Partner BRE Former Head of BRECSU BRECSU Energy Management Head BRECSU Former Project Manager, Industrial Buildings BRECSU Head of Technology Section BRECSU Impact Assessment Manager BRECSU Lighting Consultant BRECSU Project Manager, BRECSU Social Housing BRECSU Project Manager, Higher Education BRECSU Project Manager, Higher Education Sector BRECSU Project Manager, Industrial Buildings BRECSU Project Manager, Pubs and Hotel Sector BRECSU Former Project Manager, Energy Management, Author Energy Management Strategies Combined Heat and Power Press Officer Association (CHPA) Croner Publishers Managing Editor DETR Dr Hunter Danskin, Mr Andrew Field, Mr Peter Barton Wood, Dr John Collingwood, Government Office for the Regional Energy and Environmental Officer North West Government Office for the Regional Energy and Environment Officer West Midlands International Hotels and Environmental Advisor and former Director of Environment Initiative Forte Hotels and Gardner Merchant (IHEI) Lighting Industry Federation Director and Assistant-Director Martin Fry Associates Managing Director Programme Review Meeting Senior Programme Staff and Consultants involving Consultants and DETR EEBPp Managers The Energy Saving Trust Impact Assessment Manager Water Research Centre Senior Consultant (WRc)

69 3.2 UK Energy Efficiency Policy Post-War This section provides a short introduction to the aims and methods of energy conservation and efficiency policy since the Second World War, thereby placing the description and analysis of the Programme that follows later in this chapter in a historical and policy context. Since the 1950s, UK energy efficiency policy has undergone two significant transformations, firstly in respect to the specific objectives which the policy has served, and secondly in terms of the methods by which such a policy should be carried out.

3.2.1 Objectives of Post War Policy Standard texts on energy policy written since the last war, while commenting on the difficulty of defining what an energy policy should actually be in practice, make the pursuit of energy efficiency one of the central theoretical aims of government. However, while energy efficiency is economically justified at a theoretical level, it is only the emergence of specific problems which have spurred governments to formulate extensive policy responses. In the immediate aftermath of the war, fuel shortage was the major threat to the development of the UK economy and the government established the Ridley Committee to explore a range of methods to make energy go further. This age of energy conservation was short-lived. A massive increase in supplies of oil and a massive increase in consumption – over the decade of the 1960s, UK oil consumption rose at a rate of around 18% a year, coupled with the promise of limitless nuclear energy “too cheap to meter” - made a policy of conservation appear antiquated and ridiculous.

The oil crises of 1973 and early 1980 called forth new conservation policies and led to the creation of government ministries in both the UK and the US which were specifically tasked with handling all aspects of energy policy. During the second half of the 1980s, a new priority for conservation policy emerged: the reduction of carbon dioxide emissions to prevent or at least to slow the rate of global warming. At the same time though, and in the UK in particular, new privatized and liberalized energy markets were being created with the sale of state owned generating and energy exploitation industries. These developments, coupled with the transformation of the economy to services, altered the UK context for energy policy significantly,

70 leading to the closure of the Department of Energy. Oversight for the area of energy policy was gradually split between the DTI, the competition authorities – the so- called energy regulators – and the Department of the Environment (DOE) later the Department of the Environment, Transport and the Regions (DETR).

3.2.2 Methods of Policy While the concerns of government and the objectives of energy efficiency policy have changed over the last fifty years, so have the methods. During the age of conservation, the government of the UK deployed a wide range of measures including general awareness, information and advice, energy audits, and subsidies of new forms of technology. Desperation was, to an extent, a characteristic of such a response, particularly at the time of the first oil crisis.

The principal methods were technology based with significant improvements to the efficiency of the electricity industry and the railways, the latter achieved partly through the phasing out of steam and the introduction of diesel power. This era of the “white heat of technology” set great store by the progress which could result from the introduction of new technologies. Government intervention therefore took the form of schemes designed to assist with research, development and demonstration. During the late 1970s, the Department of Energy developed its major initiative of technology demonstration for energy efficiency, the Energy Efficiency Demonstration Scheme (EEDS).

EEDS was operated by the Energy Technology Support Unit, part of the Atomic Energy Authority. It was well regarded but evaluation of its activities revealed problems. Work on the cost-effectiveness of EEDS by ETSU and the Building Research Energy Conservation Support Unit (BRECSU), which was responsible for the buildings related projects, showed a high cost of monitoring. (BRECSU Review of EEDS & ETSU Review of EEDS). BRECSU found that the costs of monitoring a single demonstration project were between £50,000 and £100,000 (BRECSU and ETSU Review, 1989).

71 It was also difficult, in the early stages for BRECSU, working in the area of housing to generate interest for demonstration projects. It was said by BRECSU that replicators did not find the projects relevant to them; and that when they did form the intention to invest in projects, limited capabilities restricted their success. BRECSU also felt that the incentives offered by EEDS were inappropriate to the character of the buildings sector, where the costs of the energy efficient technologies were a small part of the total investment.

ETSU reported that 80% of the savings from the scheme came from a small proportion of the demonstrated technologies, about 20% of demonstrations. ETSU also reported that 25% of the projects failed, and although ETSU thought this acceptable, it implied that demonstration schemes carried a commercial risk of which the Government bore the brunt.

While the government funded EEDS, there was nearly always a tension between supporting industry and letting market forces rip. In opposition during the 1970s, Conservative energy spokesmen had argued for free markets in energy and they also attacked the government’s predictions of severe energy shortage (Biffen, 1976). By the time they came into power, the new rhetoric of free markets was beginning to appear in a range of government policies for the energy industry, see for example Nigel Lawson’s speech in Cambridge (Department of Energy, 1982). 1982 also saw the publication of the Armitage Norton Report for the Department of Energy. The report introduced the concept of barriers to energy efficiency and placed enshrined information and awareness programmes as the central modes of policy for energy efficiency. The work of the consultants was also used in a turf war to undermine the old energy policy making committee the Advisory Committee on Energy Conservation (the ACEC) which was not enamoured of the Government’s near- obsession with market forces:

"Leaving the matter to energy pricing signals and market forces alone is unlikely to have the impact desired because there are too many other constraints - institutional, political, financial and behavioural that prevent adequate operation of market forces" (Department of Energy, 1983)

72 The words of the ACEC belonged to an older more genteel world of consultation and negotiation which was being swept away. The new mode of policy and programme delivery was to tackle market barriers.13 The result of the adoption of a new mode of policy was the decision to stop the demonstration scheme and to replace it with a programme based on information and advice which would improve the operation of markets. This new initiative was the Energy Efficiency Best Practice Programme.

3.3 Energy Efficiency Best Practice – An Information Programme

3.3.1 Outline and Policy Emphases The EEBPp was established in 1989 by the Energy Efficiency Office which was at that time located within the Department of Energy14. In April 1992, at the abolition of the Department of Energy, the EEO, with its entire staff, was moved to the Department of the Environment where it remained until it was dissolved in a 1995 reorganisation that placed responsibility for the administration of the programme with a newly created Environmental and Energy Management Directorate whose Energy Efficiency Market Innovation Division was to take charge of most of the functions of the defunct EEO. The budget for the programme over the period 1989 to 1993 is shown in the following table:

13 The associated term “market failure”, which was widely used in the work of International Energy Agency and which derived from policy work in the United States, was avoided by all UK Government documents on energy efficiency, despite its common use in the memoranda of evidence to countless Energy Select Committees over the two decades of Conservative rule. 14 An Energy Minister, Tim Eggar, did however remain, within the DTI.

73 Table 2. EEBPp Programme Budget and Share of Government Programme Spend

1989/1990 1990/1991 1991/1992 1992/1993 1993/1994 Outturn Outturn Outturn Outturn Expected

Energy Efficiency 9.7 11.8 13.2 15.4 15.3 Office Spend on EEBPp (£ million) % of 65% 64% 31% 28% 22% Government spend on Energy Efficiency Programmes taken by EEBPp

(Source: Memorandum to the Environment Select Committee Fourth Report Session 1992-1993 from the Department of the Environment on Energy Efficiency in (1993) Energy Efficiency in Buildings 648-I, : HMSO, page 10.)

The following table shows the way in which the government believed the Programme fitted into the portfolio of initiatives to tackle energy efficiency. The EEBPp was clearly intended as the instrument with which to deal with market failure, perceived as the outcome of an absence of sufficient reliable information on the characteristics and performance of products. Working in tandem with the Programme was the Making a Corporate Commitment Campaign, which aimed to convince industry and business leaders that the investment in energy efficiency technology was profitable.

74

Table 3. Main Government Industry and Commerce Energy Efficiency Programmes Operating in 1996.

Industry and Commerce Programme Characterisation (Type of Barrier - Initiatives Information, Capital or market failure) Energy Efficiency Best Practice Programme Information (EEBPp)

Making a Corporate Commitment (MACC) Capital Energy Design Advice Scheme (EDAS) Capital (Phased out 1995) Business and the Environment Programme Capital (Wales)

Energy Management Assistance Scheme Capital (EMAS) Energy Related Environmental Issues Information Programme (EnREI) - begun in 1993 will assist EEBPp

(Source: The Energy Report, 1996, DTI) (Note 1 – Going for Green – DoE Public Awareness campaign from 1996.) (Note 2 - EMAS phased out March 1995, Energy Report, Department of Energy 1997.)

While the EEBPp management was to be undertaken by the Department of the Environment, now the Department of Environment, Transport and the Regions, the Department of Trade and Industry, through its own Energy Policy and Analysis Unit15, retained a responsibility for Energy Policy. This division of responsibility and coverage extended to the formal presentation of Government energy programmes and their impacts where the Department of Trade and Industry rather than the Department of the Environment published the Energy Report16, the annual guide to the Government's energy policy and programmes, and the Department of the

15 The Energy Policy and Analysis Unit, (EPA) is part of the DTI and is located at No. 1 Victoria Street, London (from the Civil Service Yearbook, 1997). 16 This guide which is in two parts, states, in the first part, Government policy and describes the major events and themes of the year. It also gives the details of most energy programmes including the Energy Efficiency Best Practice Programme. The second part of the Report outlines the oil and gas reserves of the United Kingdom.

75 Environment which reports the effects of energy programmes on emissions levels in the Climate Change series of documents.

The naming and renaming of departmental units reflected the sensitivity of the issue of energy efficiency, and located the policy at the intersection of environmental policy objectives and Government's policy for competitive markets for energy. The review of energy efficiency policy of 1995 replaced the Energy Efficiency Office, and resulted in the creation of a new Directorate, the Environmental and Energy Management Directorate with four divisions as shown below.

Figure 4. Structure of the Department of the Environment Environmental and Energy Management Directorate, 1996.

Environment and Energy Management Directorate

Environmental Energy Energy, Environment Energy and Energy Efficiency and Market Business and Awareness Policy Sponsorship Innovation Management Division Division Division Division

(Source: Civil Service Yearbook, (1997) HMSO: London, pages 258-259)

At the 1995 revision of the department, the promotion of economic efficiency and competitiveness was a major theme with the Programme management located within the Energy, Environment and Innovation Division.

3.3.2 Major Aims and Justifications The main aim of the EEBPp was stated in the EEMD mission statement for the programme, known as the Programme ROAME17 statement, in the following way:

17 ROAME stands for Rationale, Objectives, Appraisal, Monitoring and Evaluation. The Conservative Government began to require that all programmes should have ROAME statements. The EEBPP ROAME statement of 1996 was written therefore retrospectively. ROAME statements can be updated to take account of changing priorities. The acronym can be extended to include a "Feedback" stage to provide further information to policy making process, hence ROAMEF.

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"The Government's policy on energy efficiency is to work with market and price mechanisms to encourage the take up of cost-effective energy efficiency measures which, on their own, are not achieving their market penetration potential. The EEBPp has been designed to help overcome one of the main market barriers inhibiting the successful implementation of this policy - lack of authoritative, targeted and impartial information."18 (DoE, 1995)

The statement employed the familiar concepts of barriers and gaps but also used the terminology of market barriers. During the 1990s, the concept of market barrier was widely used in tandem with the concept of the properly working market.

The terminology of market barriers was introduced in the Armitage Norton Report of 1982, published as an Energy Paper by the DTI. When the March Consulting Group prepared its report for the European Commission in December 1987 on the opportunities for energy efficiency in the North West of England, it too used the terminology of market barriers and market imperfections. In reporting and commenting on the March Group’s study, the Energy Committee of the House of Commons in its Sixth Report said the following:

“A report [the March Consulting Group Report] .. on the potential for energy conservation measures .. showed that the potential to improve the energy efficiency.. is not being realized – and concluded that this was the result of the lack of information, the lack of access to investment capital, the lack of advice and the lack of confidence in new technologies.” (House of Commons Energy Committee, 1989, page li.)

The Committee also reported the words of the Chief Executive of the ACE, Dr Andrew Warren, in support of its position that the government needed to take strong action in support of energy efficiency. His comments were part of the attempt to argue that the market itself was not working properly. On the 19th April 1989, Dr Warren had argued in front of the Energy Committee that, “..perfectly rational investments showing very swift rates of return are not taking place. The market place is not unfortunately working in the way in which ideally it should do.”

18 Environmental and Energy Management Directorate ROAME Statement, October, 1996.

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The Committee also reported, the assertion made by Dr Currie of ETSU19 in a seminar at Downing Street20 that, “..in the absence of further shocks [to oil prices], it is difficult to see how the market by itself, even lubricated by the EEO, will reduce energy consumption.” [House of Commons Energy Select Committee, HC192, 1988-1989, page l.] The Committee underlined the need for urgent action by deploying a passage from the United States Environmental Protection Agency which was quoted by the Association for the Conservation of Energy in their memorandum to the Select Committee: “many energy efficiency measures are cost- effective, but a number of institutional barriers and market failures would need to be overcome to facilitate their adoption.” The use of the term market failure was the first in a UK policy submission document although the term ‘barriers’ had been in widespread use, being introduced in the Armitage Norton Report – published as Energy Paper 50 in 1982.

While the language of market barriers and markets failing to work were readily used by the Department of Energy, the Energy Efficiency Office, and the Programme strategies from BRECSU, there were occasions when their intelligibility and practical usefulness was subject to close and uncomfortable scrutiny. The following episode exemplifies the problems with the official rhetoric of energy efficiency.

The Department of Energy’s submission to the Energy Committee of the House of Commons in 1990-1991 (Third Report, HC 91) laid out the view of the Energy Efficiency Office on the reasons why energy efficient investment failed to go ahead on a scale which research suggested was cost-effective. The submission listed the reasons as residing in six barriers, of which lack of reliable and credible information was top of the list. The submission then outlined the methods that the EEO believed could be used to “tackle” the barriers. The statement then included the familiar affirmation in the efficiency of markets that only when markets fail to work properly does government need to take action:

19 ETSU was BRECSU’s partner organisation in the Energy Efficiency Demonstration Scheme and in the Energy Efficiency Best Practice Programme which followed it. 20 The Downing Street Seminar took place on the 26th April, one week later than the appearance by the Association for the Conservation of Energy before the Select Committee.

78 “The Government here starts from the position that consumers do not need subsidy, regulation of financial incentive or penalty (through the taxation system) to get them to act to improve their energy efficiency, as long as the market is working properly. The general approach of the Energy Efficiency Office has therefore been to examine in detail the specific barriers applying to particular segments of the market, and tackle them on a case by case basis, making sure that the necessary goods and services are available (provided by the energy efficiency industry), and that the relevant techniques and knowledge are to hand.” (Department of Energy, 1990, page 4 in House of Commons Select Committee 3rd Report HC91 1991.)

The following exchange in 1990 between Dr E G Finer, Director General of the EEO and Mr Ted Leadbitter, a member of the Energy Committee, shows how difficult it was for the Energy Efficiency Office to show empirically how it dealt with the barriers and how it knew whether the market was working properly or not in a given instance.

Mr Leadbitter “I have looked at this question, which takes up a full page approximately. You head the first part barriers and the second part as method of tackling the barriers. I want to demonstrate to you that you are not applying any methods at all. First, in the barriers, the six are, lack of reliable and credible information – I am surprised at that, an energy efficiency office that has been set up for so long and has a lack of reliable and credible information; another barrier is the relative insignificance of energy costs - good gracious, what have we been talking about all morning; then the question of inertia created by established systems - that is understandable, but you should comprehend it, the nature of decision taking – well, of course in your department we understand that very well because you are par excellence the professional exponents of inertia; that financial constraints, and then – the coup d’etat of your nonsense here – method of tackling the barriers and here you say, “ the Government therefore starts from the position consumers do not need subsidy”, and they do not need anything else done either about anything, and there come your words “as long as the market is working properly”. What on earth does that mean? What do you mean by “as long as the market is working properly?” You have given no solution to the barriers, you have fed us with a lot of reading material which is self-evident and even short of constraints – rather pathetic really – and then you say how to tackle the barriers and you proceed to say why you are not going to tackle them. I find that difficult to understand.

Dr Finer “I thought in my previous answer I had gone through the barriers one by one … and explained what we were doing to tackle each barrier.”

Mr Leadbitter “But you are saying that you are not tackling them. You use the words, there is no need to do anything – that is what your paragraph says –‘as long as the market is working properly’. Those are your words, not mine.”

79 Dr Finer “I think we say that that is the position from which the Government starts. It recognises that the market does not work properly in many instances. The list of barriers shows that, those are the barriers that we tackle.”

Mr Leadbitter “If I might ask the question then, first of all, I have asked you what you mean by “as long as the market is working properly”. That is where you say you start from. How then, tell me, when do you reach a point when you understand that the market is not working properly so that you can do something?”

Dr Finer “The market is not working properly when people are not taking actions which are clearly in their own interests to take. Something has gone wrong with the market. Since energy efficiency by definition is in the interests of the consumer, if your market were working properly, the consumer would take the necessary action.”

Mr Leadbitter “..I want to know, will you please say in specific terms, .. would you say to this Committee at what point would you be able to sit down on any particular day of any particular year when you could say honestly, ‘I know the market is not working properly here; therefore, we will invoke the subsidies and will invoke other things’; or will you sit down and say, ‘I do understand quite clearly the market is working properly and we do not need subsidies and we do not need to tackle the barriers’.” (Energy Select Committee, HC91, 1991, pages 16-17)

Despite the difficulty of demonstrating in any particular case whether a market barrier existed or not, the terminology was in wide use and was ingrained in the strategies and approaches of the programme. BRECSU strategy documents adopted the term. All proposals for action had to be addressed towards some kind of barrier.

3.4 Implementation - Programme Design and Delivery

3.4.1 Management of the Programme The Programme was therefore seen as dealing with barriers to action, and the chosen path for the Programme to achieve its impact was to issue information to the right groups in a timely fashion. Dissemination of the information became the basic function of the Programme although the subject of the information and those the Programme sought to influence grew as BRECSU refined its approach and attempted to use its unrivalled knowledge of the buildings and construction sector. The management of the EEBPp was to be undertaken by two contractors, ETSU and BRECSU. Under the Energy, Environment and Market Innovation Division's (EEMI) Research and Development management policy, ETSU and BRECSU had day to day management responsibility for the programme with EEMD retaining the

80 ability to act as an "intelligent customer"21. ETSU was responsible for the transport and industrial sides of the programme while BRECSU took charge of the buildings side. In 1996 a formal contract existed between the Government and ETSU, part of the recently privatised AEAT, while an exchange of letters formed the basis for the agreement with BRECSU.

3.4.2 Structure of the Programme The key features of the programme structure were to be the sectoral, cross-sectoral and technology strategies and the fourfold programme instruments, consisting of Energy Consumption Guides, Good Practice, New Practice and Future Practice, the two latter instruments being developed from the EEDS. This section deals with the programme structure while the next section focuses on the programme instruments and modes of dissemination. The following figure identifies the principal activities of the Programme, including the industrial and the buildings related activities, the main strategies and the sectoral divisions of the Programme.

21 EEMD ROAME Statement, 1996, page 1.

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Figure 5. Operation of the Energy Efficiency Best Practice Programme

(Source, BRECSU Programme Outline, 1995)

Buildings

Housing Industrial and Commercial New build, self-build, low- Industrial, offices, hotels, restaurants, pubs, retail income, social housing

Public Sector Cross-Sectoral Hospitals, schools, further and Heating, ventilation, lighting, AC higher education, offices, MOD SME / CHP / Energy Mgt.

Industry

High Energy Manufacturing Cross Sectoral

Bricks, metals, glass, ceramics SME / CHP / Energy Mgt.

Heat recovery, training, drying, water

Engineering and Utilities Process Industry Transport Electricity supply, Textiles, paper & compressed air, motors board, food and drink and drives

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3.4.3 Setting the Standard – Defining Best Practice While the purpose of the Programme was to overcome problems with the transfer of information, the Programme itself needed clearly to identify and to articulate a concept of what was good or best practice in energy efficiency. Central to this strategy was the development by the BRE of a series of comprehensive records and models of energy use for the different sub-sectors of the service economy. Around half-way through the Programme’s initial ten year phase22, a new project to subsume the models under the Non Domestic Energy and Emissions Model (N-DEEM) took place.

Based on over 100 databases of energy use in buildings, N-DEEM provided a means to identify the cost-effectiveness and, just as importantly, the effect on emissions of 25 main energy using technologies used in buildings23. Changes to such technologies and their effect on costs could be modelled with N-DEEM, giving an assessment of the costs and benefits and the interactions between the different technologies and the overall impact of measures. The model was a highly comprehensive resource built up from observations of the energy efficiency performance of a wide variety of measures in a wide range of contexts. The main sources of data included the following major sources of information about the buildings of the United Kingdom and their energy use:

Firstly, the Rating Valuation Office’s Ratings List of properties in the United Kingdom was used. In addition to the RVO Rating list, the Valuation Support Application (VSA) which is also generated by the Rating Valuation Office was also used. This database includes more detailed information, including rateable floor area, of the majority of the properties of the Ratings List database (1.4 million compared to 1.7 million for the Ratings List). The N-DEEM also made use of the Sheffield Hallam University (SHU) Energy Audits, which consist of detailed energy audits for 535 properties. Accuracy of the database was ensured by reconciling the energy

22 N-DEEM development began in 1994-1995. 23 Jonathan Fisher Associates et al. (1998) Prospects for Energy Saving and Reducing Energy Demand in the UK, Final Report for the Royal Commission on Environmental Pollution.

83 consumption data with the fuel bills of the properties. The Open University 4 Towns Database was also analysed as a means of attempting to ensure a balanced coverage of building types which reflect the national stock. A further set of data was collected by BRE itself from a variety of sources. This information was less detailed than that provided by the Sheffield Hallam data but contained the information of around 15,000 non-domestic buildings.

The N-DEEM model and its precursors therefore provided a detailed model of the way in which energy was used in the UK building stock. The model also provided a way of assessing how new technologies might affect the costs of energy use (and emissions). From N-DEEM and other surveys, a variety of information was prepared about energy consumption and cost per unit of floor area which defined best practice24. Energy consumption guides produced by the Programme contained comparisons of typical energy consumptions with those defined as good or best practice (see for example Energy Consumption Guide No 19, Energy Efficiency in Offices). Case Studies of energy efficient building types also contained such information. Good practice energy consumption was normally in the range of 30% to 50 % below average values. To achieve such reductions of around half to a third of the energy consumption, organisations were expected to use technology that was commonly available and not necessarily the very latest and therefore unproven technology.

Three general categories of technology choice were developed from an analysis carried out by the EEO in its projections for energy saving in 1988 and published within its Energy Efficiency Series. The analysis adopted by the EEO in 198825 identified two categories of technology choice: a technical, which equates with a technological limit of effectiveness; and a cost-effective level, which is what firms would be expected to purchase, given the assumption of pay back periods of between three and six years in the case of major projects and new plant, and pay backs of three years in the case of minor changes to plant and equipment. Under

24 Energy consumption was normally given in the form of the delivered energy consumption per annum – kilowatt hours per metre square (kWh/m2). The cost of energy was similarly presented as the annual costs per square metre (£/m2). 25 EEO (1988) Energy Use and Energy Efficiency in UK Commercial and Public buildings up to the Year 2000, HMSO: London, pages 2-4, 12, 64-66.

84 such estimates, BRE and ETSU estimates were broadly similar in predicting between 35% and 55% energy savings for buildings related technologies by 2000.

Such general categories remained in general use in scenario planning for energy efficiency and emissions reduction during the 1990s with a division of the cost- effective category into two and the introduction of discount rates to assess profitability of savings rather than payback systems. The new categories comprised: technical potential savings; economic potential savings; and market potential, what is also referred to as business as usual (BAU)26. Technical potential savings accrue from technologies which are those at the forefront of efficient operation. The actual costs of changing to the technical optimum were ignored, and the case was therefore highly idealized. Economic potential technologies comprised those which were profitable if a broad range of costs were included, although management costs were omitted. The market potential level of technology adoption relied upon expert judgements by BRECSU and other industry experts of how individual firms in specific service sectors were likely to act in practice.

The level of profitability was based on an assessment of likely energy savings and a higher discount rate than was used to value future benefit streams in either of the other two categories. The higher discount rate employed reflected the higher perceived risks and costs incurred in making technological change. Best Practice technologies consisted of those with economic potential rather than those at the forefront of technology. The concept of best practice was therefore not some remote idealized condition but was worked out with reference to what organisations could achieve in practice: i.e. it was empirically based or inductive. Consequently, the best practice standard reflected what individual energy managers and their organisations were able to achieve.

In some cases therefore, according to one member of BRECSU’s technical staff [Interview with CA, 2 10 98], the standards were set lower than what was actually achievable. This setting of an artificially low standard arose because the data set – the selection of buildings used to define the standard – included many buildings without

26 Jonathan Fisher Associates et al. (1998) Prospects for Energy Saving and Reducing Energy Demand in the UK, Final Report for the Royal Commission on Environmental Pollution, page 3-5.

85 effective control systems. The energy consumption of this set of buildings could be higher than it might be, had controls been present. Secondly, the poor commissioning practices could lead to many of the buildings which are apparently running better than the average to be still too high. The resulting standard could therefore under-represent the possible gains from best practice.

Where the Programme outlines the contribution which could be made by the introduction of single technologies to an existing building, the BRECSU interviewee argued that while the component level savings could be high, in fact, when the technologies were combined with other equipment, the overall level of savings was often likely to be less than the amount implied by the assessment of the component level. In this instance, the level of savings defined as best practice could exceed, sometimes significantly, what was practically achievable. While the difficulties of establishing a best practice standard had, in the view of the interviewee, led to some loss of credibility in the best practice concept, they had not undermined the Programme’s central purpose of establishing realisable goals for energy saving.

3.4.4 Sectoral Strategies Both BRECSU and ETSU employ a sectoral-based approach to strategy formation to focus their activities. Sectors are generally derived from the Standard Industrial Classification (SIC) where the principal common characteristic was firm type. Sectoral strategy documents define the approach to a sector in terms of the energy and cost savings possible, the principal actors within the sector and the steps required, in terms of initial research and programme instruments and promotion and dissemination activities, to reach those targets. New strategies are developed in response to changes within sectors or to the emergence of a new area of activity which possesses significant potential for energy saving, such as the emergence of new build housing. Some sectors grow so large that they begin to loose their common characteristics and need to be subdivided, such as the retail sector.

86 Table 4. EEBPp Publications for Sectors Only

Sector Number of Specific EEBPp Publications Social Housing 4 Multi residential Housing 11 New Private Housing 37 Health Care 17 Schools 14 Higher and Further Education 5 Sports and Recreation 14 Pubs 24 Retail 7 Commercial officers and Public 27 Offices (2 sectors) Hotels 12 Industrial Buildings 21

3.4.5 Other Strategies In addition to the sector based strategies, the civil servants at DETR and the managers and staff of the BRE also proposed a number of other strategies which were meant to be generally applicable. Such strategies fell into two groups. On the one hand there were a number of technological strategies, termed cross-sectoral strategies which covered new technologies. Such technologies as combined heat and power (CHP)27 which are highly significant in terms of their energy efficiency and which are deployed widely across sectors are treated as sectors in their own right in EEBPp.

In addition to the technology based strategies which specifically focused on the issues of how certain technologies were developing and might be further developed, thereby keeping the project officers and staff at BRECSU in close proximity to the technology, there were also a number of training and behavioural strategies which were to grow in significance in the years to come. These behavioural and capability

27 Combined Heat and Power is the use of the waste heat by-products from oil or gas fuelled electricity generation for space or water heating. The utilisation of CHP can be on a relatively small scale, and EEBPP Good Practice Guides describe the use of CHP in hospitals (GPG 54), school swimming pools (GPG 56), universities (GPG 204), in the Government Estate (GPG 117) and generally in buildings (GPG 176).

87 building strategies were eventually to take a vital role in the programme under the umbrella term “energy management”.

The use of different types of sectoral strategies which are effectively cross-cutting attempts to ensure full coverage of the whole UK market. If a firm based information strategy fails to impact upon a firm, the technology based information strategy may succeed. This matrix approach to the sectoral strategy is also one feature of the design of the programme instruments discussed below.

The BRECSU strategy areas comprise the following28:

Table 5. BRECSU Strategy Areas

Housing Public Sector Industrial and Energy Management Buildings Commercial Buildings New-build Housing Hospitals Industrial Buildings Practical Energy Management Low Income Housing Schools Offices Energy Management of Buildings Movers and Improvers Sports and Recreation Retail Integration of EEO Monitoring and Targeting Programme with the EEBPp Cavity Wall Insulation Further and Higher Hotels, Restaurants and Energy Management Education Pubs Multi-residential Government Estate Energy Services Housing and MOD Domestic Heating, Air Local Authorities & Infiltration and Public Sector Offices Ventilation Lighting CHP in Buildings Self-build Housing

3.4.6 The Four Principal Programme Instruments The four principal EEBPp programme instruments are: Energy Consumption Guides, Good Practice, New Practice and Future Practice.29 While the first two

28 PREST (1996) Review of EEBPP, page 21. 29 Within the four main types of information there are a small number of sub-types of documents, such as the New Practice Initial Profiles and New Practice Final Reports within the overall area of New Practice. In addition to the four main programme instruments there are a number of other information instruments, which include General Information Leaflets, Flyers and Maxibrochures.

88 elements collate, focus and disseminate reliable information, the second two elements are concerned with developing and establishing energy efficient technologies as Good Practice through meeting the monitoring costs of new technology demonstrations and through pre-competitive R&D.

The differences between the programme elements makes them suitable in varying combinations for different types of markets and sectors, depending upon the extent of technological development in the sector and the range of efficiencies within the sector. For example, in sectors where energy efficiency standards and the extent of technological development are low, New Practice and Future Practice are appropriate techniques. In sectors where a wide range of efficiencies occurs, but where some firms are reaching high levels of efficiency in their use of energy, the sector is seen to need information rather than R&D. Energy Consumption Guides and Good Practice are therefore emphasised. The relevance of a fourfold typology for information and advice has been underlined by observations of sectors by the programme managers. Wide intra-sectoral variations in energy consumption have been seen to reduce when consumption guides and good practice are made available widely within the sector.

The programme instruments can also be seen to cross cut, in a similar way to the sectoral strategies. This matrix of instruments provides fuller coverage and increases the likelihood of programme impact.

3.4.7 Consumption Guides and Good Practice - Information Activities The first two elements of EEBPp are the information dissemination activities. The Energy Consumption Guides provide a set of benchmarks which allows firms in a sector to compare their performance in terms of their energy usage with the sectoral norms. Information comes from a variety of sources, including the EEO itself and its regional network of offices. Good Practice information consists of two sets of documentation: Good Practice Guides and Good Practice Case Studies in which the detailed monitoring information is reported. Good Practice aims to provide information about which combination of measures can be adopted to ensure high standards of energy efficiency. The Case Studies report on the basis of a number of

89 examples, the significant cost savings of particular kinds of technology. The Good Practice Case Study 102 'Lighting Controls in Industrial Stores' focuses on the actual savings of the technology30 and the payback periods.

Dissemination of the information takes place through a large range of routes intended to provide maximum coverage of the sector. Professional bodies play a formal role in the dissemination of the information. The EEBPp has used the Chartered Institute of Building Services Engineers (CIBSE), the Royal Association of British Architects (RIBA), the Royal Institute of Chartered Surveyors (RICS), and the Heating Ventilating and Combustion Association (HVCA) to promote the EEBPp Good Practice information.

3.4.8 New and Future Practice - Continued Importance of Demonstrations The demonstration of technologies was still seen to be a function of the EEBPp, albeit with a considerably reduced emphasis. New technologies were covered by the New and Future Practice sections of the programme. The support of New Practice takes the form of the monitoring of demonstrations where the full costs were to be recouped from the Government. This approach retains one of the key elements of EEDS, and the conservation programmes of the 1970s. The Future Practice section of the programme gives 49% support for pre-competitive multi-client R&D projects. Small and Medium sized companies (SMEs) receive special funding. However, the number of developments in new and future practice has been low.

3.4.9 Other Activities of Contractors Both ETSU and BRECSU were also undertaking other work, rather than being solely engaged with the programme. As privatised businesses they were aware that Government could choose to make use of other contractors, although this was unlikely in practice as both ETSU and BRECSU have established a wide range of links with many of the central organisations in the area of work. Notably both

30 EEO Good Practice Case Study 102 'Lighting Controls in Industrial Stores' features the Heavy Stores building owned by PowerGen at Fiddler's Ferry Power Station at Warrington Cheshire. Timed push button controls are said to cut high bay lighting costs by 80% and sensor based lighting cuts costs in rack lighting by 90%. Pay back costs of six months on controls costs are emphasised.

90 contractors work on programmes on environmental technology which are related to EEBPp and feed the results of demonstrations and research into the New and Future Practice parts of EEBPp. BRECSU works on the Energy Related Environmental Issues (EnREI) and ETSU works on a joint Department of Trade and Industry and Department of the Environment programme on environmental technology, the Environmental Technology Best Practice Programme (ETBPp).

Box 1. Key Dimensions of Programme Balance31

The type of activity, e.g. technical projects, literature generation and promotional campaigns

sectoral and cross sectoral activities

emphasis placed on particular sectors or technologies

policy objectives, e.g. support for SMEs and social housing at greater expense than working with large companies or organisations

market replication potential. e.g. low-risk projects with modest returns as against more ambitious projects with high potential savings to cost ratios

delivery timescale i.e. short-term low cost measures as against longer-term support for innovative technologies.

3.4.10 The Rise of Energy Management Within months of the start of the Programme, BRECSU had commissioned two market research exercises from the energy consulting company, Eclipse Consultants. These studies investigated the performance of over 150 staff who took principal responsibility for the selection, installation and operation of energy using equipment in larger industrial and commercial firms where the annual energy bills were in excess of £1 million. The results of the surveys showed that many of the staff were not fully aware of the ways in which they should have performed their roles.

31 EEPC (1997) Impact Assessment - A Review of EEBPP Savings and Implications for Future Programme Targets, page 15.

91 The sectoral strategy for Energy Management in March 1991 which reported the findings of the market research stated that: “The majority of energy management staff were found to have an activity profile that omitted one or more important areas.” The strategy observed that professional training was partly at fault, but the extent of energy managers’ shortcomings in their practical knowledge was of considerable concern to the author of the proposed strategy. The author of the report continued to diagnose the problems that arose more from the capabilities of staff than from the properties of energy efficient equipment:

“ ..in many cases, some of the more productive techniques were only known by a few energy staff. The objective of this proposal is therefore to provide wide- ranging guidance on the practical aspects of energy management, and thus increase the energy savings achieved.” (BRECSU/ETSU Sectoral Strategy for Energy Management 1991)

Even senior staff with experience and qualifications were often unable to take advantage of the opportunities to increase the energy efficiency of their organisations. Undergoing professional training was no guarantee of acquiring the knowledge of how to improve the energy efficiency of the business in which you worked. At lower levels of expertise, the level of achievement was unlikely to be satisfactory.

“Many senior energy staff will be professionally qualified, unfortunately this does not imply the existence of comprehensive knowledge and experience relevant to energy efficiency. Indeed, professional training still omits the relevant knowledge, or promotes practices that conflict with energy efficient design and operation of buildings. Technician and clerical staff often work within the experience limits of the energy manager and have limited access to techniques in use by other energy teams. The end result is that the majority of organisations have significant gaps in their energy efficiency activity. Thus opportunities remain to be exploited.” (BRECSU/ETSU Sectoral Strategy for Energy Management 1991)

The strategy for energy management used the term “barriers” to describe what was perceived to be a shortage of technical and analytical skills in the area of identifying where opportunities for energy efficiency lay and what were the best means to achieve them. But the description of the problem in the BRECSU strategy document found the nature of the problem difficult to analyse: “This is a complex barrier, mainly composed of sequential actions where lack of knowledge in one small area inhibits the rational setting of energy efficient priorities”. (BRECSU, 1991, page 5.)

92

In addition to the problem that organisations did not know how to save energy, it was also shown by market research studies carried out for BRECSU that organisations did not know how to assess the economic potential of their investments in energy efficiency. The weaknesses in the financial methodologies used by energy managers and estates departments for estimating the profitability of energy efficient criteria principally included making errors in the estimate of the inflation rate and changes to future fuel prices. The result of these errors was to render “many investment appraisal analyses meaningless.” (BRECSU 1991, page 6.)

In common with all strategies, this first strategy to address the deficiencies in the skills and knowledge of energy managers outlined the benefits likely to result from the spending of government money. The strategy clearly indicated that money spent in this manner was likely to secure a very successful return for the government’s investment. For every pound which the government spent on the programme activities recommended by the strategy, BRECSU forecast that £43 would result in savings of energy.

The rationale for the estimates was based on a brief analysis of the costs of energy used by businesses, the estimated take up the of the suggestions by business, and the typical savings achieved as a proportion of the energy costs used. For example, in the case of larger premises, which spent around £1.6 billion a year on energy, the take up of the Programme’s suggestions was likely to be around fifteen percent. The fifteen percent of firms who took up the suggestions would, it was estimated, make savings on their energy of around ten percent. In the first year of operation therefore, the savings would be:

(total energy bill =£1.6 billion) . ( the take up rate = .15) . (savings estimate =.1) giving a yearly saving of £24 million a year. Assuming that the savings continued – that the effectiveness of the knowledge did not decay, stable prices, the £24 million was there to be saved, and claimed, every year into the future.

This first strategy was written by one of the BRECSU project officers who had himself been an energy manager for a number of public sector organisations and was aware of the detailed knowledge required to identify the potential for savings before

93 taking steps. The strategy of which he was the principal author gave considerable weight to this issue of how savings could be defended without the need for any further major installation of new equipment. The strategy also noted that many organisations preferred to invest in large scale projects that would get public notice rather than in making small changes to the operation of existing equipment.

“Very few energy units realise that there are both insurance and proactive aspects to energy efficiency. The insurance aspect of energy efficiency preserves existing savings, (sic) many energy units pay lip service to this aspect. The majority concentrate (sic) on the more publicity worthy proactive aspects such as the amount of capital spent on new works, when far greater savings would be achieved for a smaller investment by resurrecting and preserving existing savings. (BRECSU, 1991)

3.4.11 Pre-Cursors of the Energy Management Strategy Recognition of the role of energy managers in delivering energy efficiency in the economy was not new however. Throughout the 1980s, the Energy Efficiency Office had been aware of the potential role which energy managers might take in delivering energy efficiency. The Confederation of British Industry had testified to the Select Committee on Energy in 1984 about “a strong and identifiable energy manager movement” (CBI, 1984, quoted in House of Commons Select Committee, Eight Report, The Energy Efficiency Office, H87, page xii) and the EEO had established a presence at the National Energy Management Conference in November 1984. When appearing before the Select Committee, the Director General of the EEO in 1984, asserted his belief, based on a large scale survey which the EEO was currently running, that the presence of an energy manager in a company significantly improved its energy efficiency, on average by a about ten per cent.

“I tend to see energy managers as an integral part of energy management, indeed the best way of looking at that is to say what is the evidence from monitoring and targeting their programme of cost-effective management. What we have seen is you get a 10 per cent improvement in the energy efficiency in a company directly as a result of instituting good energy management techniques.” (MacIntyre, 1985)

The impetus to the development of a specialization also came from the International Energy Agency. A pamphlet published in 1980 entitled ‘Energy Management Guide’ gave support from an international standpoint to the idea that energy managers were

94 instrumental in controlling energy. The pamphlet outlined twelve specific responsibilities for energy managers, with suggestions about what types of steps might be appropriate. The guide recommended that energy managers be seen as of “sufficient status to report directly to the Board of Directors or Chief Executive Officer” [IEA, 1980 page 12]. The guide depicted a typical energy manager as a technical expert or scientist, donned in white coat, carrying a measuring device with which to meter energy use and control waste.

3.4.12 Broadening “Energy Management” During the early 1990s, the attempts to broaden the skills and capabilities of those operating in the energy management area grew in number and sophistication. Five further strategy documents in 1992, 1993, 1995 and two in 1997 focused on how to raise the levels of skills of energy efficiency staff. The forecast cost of these five strategies was estimated at just under four million pounds. The quest for energy efficiency through energy management became a major activity for BRECSU, building on its previous experience with buildings and the buildings sector. A significant literature of guides and case studies was produced which outlined both for the individual sectors and more generally the techniques and skills required to identify where energy efficiency opportunities lay and what techniques might be appropriate to reach them.

The publications which resulted from these strategies were numerous. During the lifetime of the Programme, 32 guidance publications and 37 case study publications on energy management were created. The 37 case studies on energy management sought to drive home the important general points in relevant contexts. Some sectors were the subject of significant interest from the Programme. In the retail sector, for example, there were five separate case studies on energy management.

3.4.13 Abandoning Technical Product Related Information? In the 1995 Energy Management Strategy, the results of a review of the programme’s marketing activities for the EEO showed that the key to improved energy efficiency

95 lay not with information but with the behaviour and attitudes of energy managers and related staff.

“The EEO has recently undertaken a review of its marketing activities. One important conclusion is that the EEO should “focus on behaviour, and motivations to change behaviour, rather than getting information out there; although dissemination of information will, of course, continue to be important.” (EEO/BRECSU, 1995)

Not long after the review took place, the decision was taken to close down the EEO and to re-locate its functions to the Department of the Environment.

3.4.14 Education for Energy Efficiency The programme managers also sought to diffuse knowledge of energy efficiency techniques such as benchmarking and the relevant technologies through the educational system. Building industry representatives were asked to assist in devising suitable teaching material and coursework for the various educational bodies whose students would go on to work in some aspect of the industry.

To this end, BRECSU developed the BICEPS programme (Building Industry Coordinated Education Packages). The BICEPS initiative had the aim of ensuring that the Programme touched all the relevant fields of professional expertise to energy efficiency, including architects, engineers, surveyors, buildings and facilities managers. The close cooperation of the Royal Institution of British Architects (RIBA) and the Chartered Institute of Building Services Engineers (CIBSE) was sought in designing coursework and open learning modules.

A wide ranging educational strategy was adopted on both sides of the Programme. National Standards for Managing Energy were developed under the Energy Management Training Strategy in 1991. Training information on energy efficiency was devised for a whole range of educational courses at different levels from National Vocational Qualifications up to MBA level, and including continuous professional development. The Programme drew from existing interest in energy

96 efficiency management training which universities met by offering a range of courses, including post-graduate degrees32.

In the BRECSU EEO Energy Management Strategy document of 1995, the authors were concerned to show that while they were trying to deal with the problem of a lack of energy management skills, their “workshops were not intended to train energy managers.” (EEO/BRECSU, 1995 page 14). However, on the same page, the tasks which the strategy document suggested were appropriate for the Programme gave the impression of significant training input:

“A second priority for this strategy is therefore to continue to help energy managers develop their skills. The skills that they need include the abilities to: - Gain management support and resources for their work - Monitor and control energy consumption - Identify opportunities for saving energy, including no-cost measures, those requiring investment, and those which require changes in the behaviour of staff” (EEO/BRECSU, 1995 page 14)

The impacts of the energy management initiative were intended not to perfect some abstract market mechanism but as a means to change the way in which actors behaved:

“The impact of the work will therefore be “soft” in that it will bring about attitudinal and behavioural change rather than directly result in specific technical solutions being adopted.” (EEO/BRECSU, 1995, page 14)

The result of this approach was a gradually broadening array of publications emphasising the theme of training and development and the operation of a large number of seminars and road shows. The seminars conveyed basic energy management information and were aimed at drawing those unfamiliar with the issues of energy management into a closer appreciation of what was involved. The level of courses was low. One energy manager commented that “once you have been to ten, you have been to them all”33. A representative of one of the trade associations also commented on the level at which his seminars were directed, confirming the

32 The University of Cranfield MSc in Applied Energy offering qualifications in Energy in Buildings and Energy Systems and Thermal Processes was established in the early 1970s and produced around thirty graduates each year. 33 Hotel Sector Case Study. Interview with Energy Manager, Debenhams PLC.

97 rationale of the Programme managers in designing their seminars for a relatively low skilled group of staff:

“We have been running the same series of regional seminars for the last 15 years – you can keep covering the same topics and it is as if you’ve never told anyone about them before and the main reason is such a rapid turnover of staff”. Generally those firms who keep their staff tend to do better. EE expertise is often picked up ad hoc. “You always seem to be educating so many people from scratch.”

“The times when we have taken the presentations to a higher level of sophistication, we find that there is nobody following us. You can put out the same old boring set of information and you can get mass audiences”.

(Trade Association Representative comment, August, 1998)

At the level of technical and trades education, the Programme’s Energy Efficiency Primer publication broadens the approach further, offering information, advice and technical information to those who were not directly employed by the target sector organisations. Some of the initiatives to enhance the skills of those in maintenance and installation services businesses were extremely popular. Good Practice Guide 143 entitled Upgrading Controls in Domestic Wet Central Heating Systems – a guide for installers was a highly regarded and heavily used publication.

3.4.15 Energy Efficiency Best Practice Programme and Other Actors The BRECSU and EEO approaches were to enlist as many organisations as possible in the network of actors with an interest in the promotion of energy efficiency in order to ensure that Programme publications were present wherever energy efficiency was an issue34. This is a strategy which continues to the present day. In 1998, a new trade body, the Federation of Authorised Energy Rating Organisations (FAERO) was launched to represent those bodies offering energy rating services (Energy & Environmental Management July/August 1998). Close collaboration was also intended to take place with other government and semi-government organisations and agencies. The relationship of the Programme with the EST, which was established in November 1992 under a former head of ETSU, Dr. E.W. Lees, to promote energy efficiency amongst domestic and small business users was an important one. Staff have moved between the two and strategies on such areas as

34 Interview with Programme Manager, 20th December 1996.

98 combined heat and power have been developed jointly. Funding for the EST has come partly from the Government and partly from the electricity supply industry and the gas industry.35

Participation in European Community schemes such as SAVE have also taken place. Within the context of the OECD, the UK's membership of CADDET (Centre for the Analysis and Dissemination of Demonstrated End-use Technologies) ensures access to information from over 1600 projects which are taking place within the member countries of the International Energy Agency36. The EEBPp should also be seen within the context of the United Kingdom's Technology Foresight exercise. Foresight develops strategic perspectives and attempts to identify and rank research and development priorities. Three panels closely related to the issue of energy efficiency are Construction, Environment and in particular Energy. Each panel can influence Government and business technology priorities and perspectives.

3.4.16 Transforming Markets – Energy Services The evidence that organisations were themselves often unable to increase their own energy efficiency gave rise to the search for other actors who might be able to provide energy efficiency as a profit making service. Wherever customers could specify a service standard, in terms of lighting or heating levels, an energy services company (ESCO) could, in principle, step in to provide the service with the ESCO’s specialist knowledge and expertise allowing it to make a profit. The Energy Services Sector, it was thought, would provide a means to exploit the numerous opportunities for profit which were thought to exist but which the presence of the information barrier made it difficult for ordinary organisations to overcome.

35 The EST was begun on the 17th November 1992. Its membership at foundation consisted of the Department of Environment, the Scottish Office, the 12 regional electricity companies of England and Wales, Scottish Power, Scottish Hydro-Electric and British Gas. Its function was to promote energy efficiency to the small business and domestic sectors and by working with the Electricity Regulator and British Gas to increase the resources available for increasing energy efficiency through a levy on fuel bills, the so-called "E" factor. There were, however, significant problems with the funding of the EST from the outset that prompted the Environment Select Committee to recommend urgent review in 1993 of its resourcing. 36 Memorandum to the Environment Select Committee Fourth Report Session 1992-1993 from the Department of the Environment on Energy Efficiency in (1993) Energy Efficiency in Buildings 648- I, London: HMSO, page 10.

99

The existence of such energy services arrangements had been noted earlier and was known to operate well in both France and the United States (DoE, 1988) and the Demonstration Scheme had supported the use of CHP during the 1980s. The Programme had already generated a substantial amount of information and a number of publications about the forerunner of energy services – contract energy management – and it was well placed to develop the theme further.

By 1995, BRECSU had begun to develop an Energy Services Strategy which would help existing sectors to work with the emergent energy services companies. The strategy was based on two main principles: firstly the Programme managers would find ways of ensuring that the different actors could exchange information about their activities, helping energy service companies identify the needs of prospective users; secondly, the Programme would generate a range of material of the “traditional”37 best practice type, defining the potential energy savings which could arise from using energy services companies.

A range of government initiatives with specific consequences for building users – PFI38 and market liberalization to the below 100kW sites – ensured that the framework in which energy services would develop would be difficulty to identify. Furthermore, the contractual and legal complexities involved in establishing energy services arrangements led the Programme managers to develop a range of tutorial and briefing material for energy managers. While the private sector was seen as having the resources internally to set up and maintain energy services contracts, the public sector was perceived as without the necessary managerial, technical and legal resources39. The energy services strategy showed the Programme managers were prepared quickly to develop a range of skills and networks needed to support the development of a new business sector.

37 The BRECSU Energy Services Strategy (1997) uses the word traditional to refer to the guides and case studies which it proposed to use to disseminate information about good practice in energy services. 38 The Bates Review of PFI. 39 BRECSU Energy Services Strategy, page 10.

100 In addition to the new energy services sector, a number of information and training organisations within the business services sector have also offered advice, training and consultancy comparable with the Programme material. This sector, comprising a handful of firms in the United Kingdom, has often worked with BRECSU and the DETR in developing Programme material. This is a difficult sector to identify. The following analysis of turnover of this small business sector as identified using the FAME database of company information shows some growth during the period with the average turnover for the seven organisations rising by around 21% over three years.

Table 6. Energy Information Sector Companies’ Turnover, 1994-1997

Company Name Turnover £ Million 97-98 96-97 95-96 94-95 NIFES 5.70 6.40 4.00 4.00 Ashgrove 0.10 0.12 0.07 0.08 March Consulting 5.30 4.80 5.70 5.30 National Utility Services 0.01 0.01 0.02 0.02 EONLINE 0.06 0.06 0.11 0.08 Williams Learning 0.33 0.00 Network Innovative Technical 0.50 0.25 0.23 0.13 Services Average 1.94 1.71 1.45 1.60

(Source: Fame Database of Company and Sector Information 2000)

101 3.5 Targets of the Programme The targets of the programme were set out in both cash terms and in carbon terms. The use of carbon targets rather than in energy equivalent terms40 was done for the first time to reflect the new priority of reducing carbon emissions. The money value targets for the programme's effectiveness were to generate £800 million worth of energy savings per year at 1990 prices by the year 200041. The carbon target was that savings of 5 million tonnes of carbon or 18 million tonnes of carbon dioxide42 per annum should be made. The original target for the programme set in 1989 was for savings of £500 million a year and this subsequently increased in 1992 to £700 million.43

Planning what savings could be expected from intervention in the form of information was just as problematic as working out what savings had resulted ex post. The main target setting for the programme was done in an ad hoc manner, described by Dr Tony Birtles of BRECSU when appearing before the House of Commons Environment Select Committee in June 1993:

“The target of £450 million a year was established in 1992…The calculation of what the targets should be for the Best Practice programme and the target at that stage was set at £700 million a year by the year 2000 for the programme as a whole of which our share in BRECSU was £350 million. That figure was set on the basis of a respectable NPV for the Programme as a whole with a projected level of expenditure on the EEBPp, and the criterion was that there should be a NPV of savings due to the programme, less market investment, less government investment, divided by the present value of government investment, of 10:1.” (Environment Select Committee, 1993, page 163.)

The targets were set on the basis of what looked efficient in terms of the money which could be spent and were therefore a measure of the Programme’s intended cost-effectiveness. The 1996 ROAME statement which stated the efficiency target

40 Petajoules are often used as are MTCE (million tonnes of coal equivalent) and MTOE (million tonnes of oil equivalent). 41 In 1997. 42 EEO, (1994) EEBPp, promotional material, Department of the Environment. 43 Memorandum to the Environment Select Committee Fourth Report Session 1992-1993 from the Department of the Environment on Energy Efficiency in (1993) Energy Efficiency in Buildings 648- I, London: HMSO, page 3.

102 for the programme management was to achieve a net present value of £10 of energy savings for every £1 of Government money spent.44

Table 7. Targets for 2000: Cumulative Savings per Annum

Cost CO2 Gas Carbon Primary Energy

£800 M 18MtCO2 4.8MtC 250PJ

Table 8. Achievements for year end 1995/1996 – Cumulative Savings per Annum

Cost CO2 Gas Carbon Primary Energy

£490 M 7MtCO2 1.8MtC 153PJ

Source: (Amounts generated from the analysis of IA Reports, ROAME Statements and IA Methodology Paper, 1997.

3.5.1 Carbon and Cost Targets – Problems of Conversion The issue of equating cost and carbon savings is difficult and depends upon the type of fuels used in different contexts. Depending upon whether gas rather than coal is used, the amount of carbon emissions per unit of energy and or unit of cost can vary. The following table shows the annual savings achieved and target for the programme in carbon and energy terms.

44 Environmental and Energy Management Directorate ROAME Statement, October 1996.

103

Table 9. The Cumulative Annual Savings Targets for EEBPp

Year £M (@1990 prices) Primary Energy PJ Total Buildings Industry Total Buildings Industry 1992 120 68 52 38 17 21 1993 180 101 79 56 25 32 1994 260 146 114 81 36 46 1995 365 205 160 114 50 64 1996 490 276 214 153 67 86 1997 600 337 263 188 83 105 1998 690 388 302 216 95 121 1999 760 427 333 238 105 133 2000 800 450 350 250 110 140

(Source: Boyle, S. and Collingwood J. (1997) Paper on EEBPp Impact Assessment)

Energy and carbon savings of programmes have been recorded by the Government so that their performance can be measured. The emissions have been published notably in Energy Paper 59 in 1992, which gives scenarios for growth and subsequently in the Climate Change Series.

3.6 Evaluation and Impact Assessment The government commitment to identify the effects of the Programme and to demonstrate the efficiency of its administration led to the development of an extensive mechanism for the impact assessment of the programme. At BRECSU, an impact assessment section was created as a separate unit to specialize in the assessment of the Programme’s impacts. The evaluation strategy proposed was of a form of ex post top-down evaluation or continuous monitoring of Programme impacts, what was later termed real time evaluation. The main priority of the evaluation was to identify the savings installed ex-post and the role of the Programme. While this top-down evaluation was the main activity undertaken by the Impact Assessment Section of BRECSU, the use of bottom-up and ex ante assessments involving the assessment of very specific aspects of Programme operation became more usual towards the end of the first decade of the Programme’s life.

104 The main ex post evaluation process took place in three main stages: identification of the energy efficiency measures installed, as part of an attempt to look at all the measures installed in the UK; attribution of the measures installed to the Programme itself in that year; and a complex assessment of the resulting impact measure to take account of a variety of issues, including the attempt to identify true net effects, and the proper level of cumulative savings. During the lifetime of the Programme, the impact assessment methodology was subject to a number of changes to improve its accuracy and coverage.

3.6.1 Identifying the Measures Installed and Energy Savings By the middle of the decade, the impact assessment methodology had been developed to survey each of the thirteen building sectors in each year. Both new buildings, i.e. buildings completed within the year of the survey and existing buildings were surveyed by way of a written questionnaire survey sent out to a stratified sample of organisations in each of the thirteen buildings sectors covered by the buildings’ side of the Programme. Stratification of the sample was required as the variation within each of the 13 sectors was often significant with very different kinds of buildings in use and or under construction. As new buildings were surveyed twice, once by questionnaire to the designers and once by questionnaire to the owners and occupiers, installations of energy efficiency technologies and management measures were more reliably measured in new buildings than in the existing buildings.

Written questionnaires sought to identify the types of measures installed during that year for a number of types of measure in four major categories – energy management, heating, lighting and cooling - and the floor area to which those measures were thought to apply. Questionnaires were created specifically for the sector and referred to the types of measures most typical for the sector. Those kinds of measure which were required by Building Regulations were removed from the questionnaire as the questionnaire sought to identify those measures taken above and beyond those required by the law.

From the BRECSU data on typical efficiencies for a specific measure in a specific sector, each measure installed was given an improvement factor, showing the saving normally associated with it. Savings were then assessed by major category and their

105 impact upon the individual building energy consumption identified. Where multiple measures were installed, individual improvements in energy consumption were not simply summed as the net effect of multiple measures was nearly always less than the sum of the individual component level savings. This new combined total of floor area to which the package of measures is applied is multiplied by a grossing up factor. The grossing up factor consists of the proportion of the total UK floor space area for that type of building divided by the floor space of the sample to give the sector measure of energy saved. Individual sectors were summed to give an overall saving for the whole of the UK. Actual energy savings were converted to costs and measures of primary energy were also calculated.

3.6.2 Attribution Within the grand total of energy savings, the Programme was assumed to have been responsible for a proportion which varies from organisation to organisation and from sector to sector. The first step in the process of attributing the influence45 of the Programme to a decision to install measures was to identify those who have used information from a variety of sources. This is carried out by finding the mean energy savings level of those who have a) have used information from any one of the main governmental sources: BRECSU, EEO, or the Programme itself and b) the energy savings of respondents who have used one or more EEBPp series of publications. This generates a first estimate of attributable energy savings or survey attribution level46 which can be grossed up for the whole sector and summed across sectors to give the Programme total impact.

However, during the building audits analysis, which follows up the top-down statistical survey, a further attempt at attribution is made by interviewing a selection of building owners within each sector. Depending upon the nature of their average responses, the sector’s first estimate of attributable savings or survey attribution level is amended at the sectoral level. In 1995, the effect of the building audit attribution

45 The details of the method of estimating impact and attributing the influence of the Programme were published in 1997 at the ECEEE Conference, which took place at Spinderluv Mlyn, in the Czech Republic. 46 Survey attribution level is the BRECSU Impact Assessment Section term for this first figure.

106 check was to reduce the actual Programme impact on savings to 62% of the survey attribution level.

The mechanism of amending the first estimate of attributable savings was to question the owners of the building about their use of the Programme. A weighted scale for the value placed by the owner on the role of the Programme was used. This worked in the following way:

If no value was assigned to Programme publications, the weighting given was 0 If, when shown Programme material, the individual gave a low value to the Programme, the weighting was 0.1 If, without being shown Programme material, the individual gave a low value to the Programme, the weighting given was 0.25 If, when shown Programme material, the individual gave a high value to the Programme, the weighting given was 0.75. If, without being shown the Programme material, the individual gave a high value to the Programme, the weighting given was 1.0.

In a further development of the attempt to measure the additional effect of the Programme, in 1996-1997, the Programme managers sought to compare the energy savings with those who had used BRECSU for advice or had used the Programme publications with those who had not used either of these forms of information and advice. Taking the difference between the savings achieved by each category was thought to improve the accuracy of the measurement of the additional effect.

3.6.3 Measurement of Impact Once the final assessments of impact have been made, the Programme impact assessment sums the savings for each sector and calculates the Programme impact for the year for both new buildings and existing buildings. The following table shows the savings measured in all thirteen of the building sectors surveyed, for new and for existing buildings for three years, 1994, 1995 and 1996. The table also shows the share of savings attributable to the Programme calculated by the BRECSU impact assessment method.

107 Table 10. Total Savings in Buildings and Impact of the EEBPp in 1994

Programme Savings Total Savings Sector £M £M Social Housing 5.15 68.74 Multi-Residential Housing 1.94 5.98 Private Housing 1.8 12.69 Health Care 13.4 30.82 Schools 2.71 19.54 Higher and Further Education 0.66 11.95 Sports and Recreation 0.85 24.8 Commercial Offices 3.49 34.93 Public Offices 2.36 6.55 Pubs 1.71 57.02 Retail 1.85 23.39 Hotels 1.62 23.82 Industrial 8.1 73.61 Average 3.51 30.30

(Source BRECSU Impact Assessment Figures, 1997.)

Table 11. Total Savings in Buildings and Impact of the EEBPp in 1995

Programme Savings Total Savings Sector £M £M Social Housing 64.2 86.5 Multi-Residential Housing 10.11 20.23 Private Housing 0 13.88 Health Care 18.61 26.76 Schools 4.72 25.89 Higher and Further Education 8.65 16.78 Sports and Recreation 4.7 17.33 Commercial Offices 5.87 27.49 Public Offices 6 7.26 Pubs 1.71 4.41 Retail 12.71 67.28 Hotels 3.61 8 Industrial 13.27 86.26 Average 11.86 31.39

(Source BRECSU Impact Assessment Figures, 1997.)

108

Table 12. Total Savings in Buildings and Impact of the EEBPp in 1996

Programme Total Savings Savings Sector Total Savings Total £M £M Social Housing 10.33 44.91 Multi-Residential Housing 3.47 13.73 Private Housing 1.95 16.77 Health Care 7.84 15.28 Schools 5.20 37.61 Higher and Further 4.06 19.53 Education Sports and Recreation 1.74 18.99 Commercial Offices 11.70 30.39 Public Offices 4.11 9.03 Pubs 0.71 2.34 Retail 17.34 33.42 Hotels 0.95 3.64 Industrial 11.12 56.32 Average 6.19 23.23

(Source BRECSU Impact Assessment Figures, 1997.)

Table 13. Programme Savings Percentage of All Savings by Sector, 1994-1996

EEBPp Share of EEBPp Share of EEBPp Share of Total Savings for Total Savings for Total Savings for Year Year Year Sector 1994 1995 1996 Social Housing 7.49 % 74.22 % 23.00 % Multi-Residential Housing 32.44 % 49.98 % 25.27 % Private Housing 14.18 % 0.00 % 11.63 % Health Care 43.48 % 69.54 % 51.31 % Schools 13.87 % 18.23 % 13.83 % Higher and Further Education 5.52 % 51.55 % 20.79 % Sports and Recreation 3.43 % 27.12 % 9.16 % Commercial Offices 9.99 % 21.35 % 38.50 % Public Offices 36.03 % 82.64 % 45.51 % Pubs 3.00 % 38.78 % 30.13 % Retail 7.91 % 18.89 % 51.89 % Hotels 6.80 % 45.13 % 26.04 % Industrial 11.00 % 15.38 % 19.74 % Average 15.01 % 31.39 % 28.22 %

109

The impact assessment results show that significant amounts of the energy efficiency savings arising within the buildings sectors are seen to occur as a result of Programme action. There is also a significant change from year to year in the amount of the Programme effect upon savings installed. For example, in Higher and Further Education Sector in 1994, the proportion of savings from the Programme rises from 5.25% in 1994 to 51.55% in the following year, a ten fold increase in the amount of savings attributable to the Programme as a proportion of the total and a real terms increase in savings attributable in cost terms of over 13 times. The overall average of savings claimed for the Programme over the three years in the three sectors examined within the case studies are as follows:

1. Higher (and Further Education) 27% 2. Hotels 25% 3. Retail 17%

The model of the Programme impact saw the Programme as both a source of influence upon those making decisions about the installation of energy efficiency equipment and also as a effective cause, in that, without it, the impacts would not have happened. When Programme strategies were prepared, their authors employed the term “resulting”47 in referring to the energy savings associated with use of the Programme material, thereby suggesting a cause and effect relationship.

While the modelling of Programme impact might suggest that the Programme sought to influence savings, it was also the case that the DETR considered that the savings were in fact being purchased as a result of an investment in energy efficiency through an investment in the Programme.

3.6.4 Further Netting of Effects and Cumulative Savings Each yearly total of Programme savings was added to an existing total to create a cumulative total of Programme savings. The Programme was, as stated above, to be

47 See for example the Energy Services Strategy, page II, and the Domestic Heating and Ventilation Strategy, page I, use the term resulting while other strategies use the word stimulate, see for example Energy Efficiency in Sports and Recreation Buildings, page i.

110 assessed in terms of the savings arising in each yearly period from the measures installed as a result of it. This total was effectively a running total of the contribution made by measures installed since the Programme began.

It was apparent to the Programme managers that a number of the savings which had arisen in the past might at some time cease to contribute to the running total of savings. The demolition of buildings was one area in which previous measures might still be recorded as contributing to the Programme savings even when the measures had been disposed of.

Where previous savings which were attributable to classes of technology which had become mandatory under changes to the Building Regulations were part of the total, these were removed. Previous savings could also be expected to be reduced by the extent of technical deterioration. The yearly impact assessment began to focus on the extent to which savings might reduce in the middle of the decade with an internal study on the extent of the effect of savings’ decay and a renewed modelling of these effects on previous savings’ estimates.

Awareness of possible wider impacts of the Programme beyond the use of the information gradually developed and led to the creation of a new government initiative, the DETR’s Market Transformation Programme. Indeed, as changes recommended and amplified by the Programme became accepted, Programme managers48 could observe that the effects of the Programme could be seen upon the Building Regulations themselves in terms of driving up energy efficiency standards.

3.7 Summary The Energy Efficiency Best Practice Programme is one of the first government programmes of its type devised specifically to improve the operation of markets through the relatively low-cost policy mechanism of information. The Government’s use of information as a primary policy mechanism stems from the acceptance of a

48 BRECSU Programme Manager commenting on the Programme and its effects at a workshop on impact assessment on 25th February 1998.

111 framework of policy methods developed within the context of liberalized energy markets. A fundamental assumption of the Programme, which was never systematically tested by a government survey, was that, in the case of energy efficiency technologies, confusion over the cost-effectiveness of new technologies was leading individual organisations to fail to make the investments which would guarantee their competitiveness and desirable social outcomes49.

The Best Practice Programme was developed to provide a set of identifiable optima in energy efficiency technology and management techniques at which organisations could aim. Extensive model building based on an empirical programme of building research was meant to guarantee the definitions of technological performance outlined in Best Practice and inspire confidence.

The presence of information barriers and the resulting market failures have been notoriously difficult concepts to consider in practical terms. Empirical evidence of problems of information specific to the energy market has not been gathered. Policy makers have worked not with actual costs of acquiring information borne by organisations but with assumptions about costs based on inferences from the discount rates calculated for particular technologies.

While the Programme was styled as an information Programme, taking up the theme of benchmarking developed during the Energy Efficiency Demonstration Scheme (EEDS), the Programme’s delivery mechanisms broadened in scope. Eventually, the Programme would provide a range of training and capacity building activities, which BRECSU, with its long experience of the building sector, saw as essential in dealing with the often chronic skills shortages of managements buying energy efficiency technologies and those amongst the supplier and consultants base seeking to provide and configure them.

The Programme has focused extensively on the availability of existing technologies. While such a focus may bring home to potential users the ease with which such technologies could be procured and operationalized, such an emphasis may fail to

49 The social and environmental benefit of the Programme is its mitigation of carbon dioxide emissions (and other global warming gases).

112 convey the fact of continuous innovation in all basic technologies during the first decade of the Programme’s life, and the consequent opportunities to achieve a technological lead over competitors by installing the latest technologies. The comparatively small resources allocated to the demonstration of new energy efficiency technologies may have hampered actual new technology development; but it may also have implied a low priority for the area of policy.

The evaluation methodologies of the Programme have developed over time to take account of scrutiny from a number of sources. On the buildings’ side, a top-down questionnaire based system, results in significant energy savings attributable to the Programme. The savings from the Programme in relation to the savings occurring without the effect of the Programme when expressed as a ratio is 1:350. Such a ratio is evidence of a highly effective energy efficiency policy mechanism.

50 Programme savings in new build and existing buildings introduced over three year 1994-1996 inclusive are therefore around 25% of the total savings arising.

113 Chapter Four – UK Higher Education Sector Study

4.1 Introduction This chapter contains the sector study of United Kingdom Higher Education institutions. The chapter focuses on examples of universities in the United Kingdom and Scotland and involved interviews of their energy efficiency and estates staff. Also interviewed were the representatives of a number of organisations that have had a significant impact upon the sector members’ energy efficiency and environmental performance.

4.1.1 Sectoral Organisations

Table 14. Interviewees and their Organisations – Higher Education Sector

Organisation Job Function of Interviewee The University of Leeds Estates Maintenance Manager The University of Salford University Engineer Energy Technician51 The University of Central Lancashire Head of Estate Management, Department of Property Services52 Principal Design Officer, Department of Property Services The Victoria University of Manchester Energy Efficiency Engineer Assistant to Energy Efficiency Engineer The University of Edinburgh Energy and Environment Manager Liverpool John Moores University University Engineer

51 These two job titles changed during 1999 to Deputy Head of Estates and Utilities Engineer respectively. 52 The Head of Estate Management moved to the University of Southampton during late 1998.

114 4.1.2 Other Interviews

Table 15. Other Interviewees – Higher Education Sector

Organisation Job Function of Interviewees BRECSU Higher Education Sector Project Managers (2) Share Fair Networks Managing Director HEFCE Head of Audit and Director of Estates & Project Co-ordinator, Energy Management Study

Econergy – Energy Consulting53 Consultant and Sole Practitioner Going for Green Sustainable Communities Project Manager & Environmental Projects Officer University of Arizona Estates Manager

4.2 University of Leeds

4.2.1 Introduction The University of Leeds is one of the foremost Universities in Northern England with a student population of over 20,000. The University is based in the centre of Leeds but has a number of sites outside the centre of the city. There is a diversity of buildings with a significant recent building programme. The University campus contains a large teaching hospital and medical school.

The University has experienced significant growth in the last ten years with student numbers doubling. New work and retrofit across the whole estate has entailed capital expenditure of around £30 million. Accommodation needs are increasingly of higher standards to cater for larger scale sophisticated and sensitive new equipment, particularly in the biological sciences.

53 Econergy was renamed in 1998 to Economic Energy. It is a specialist consultancy service run by a single individual and provides help to higher education institutions.

115 4.2.2 Management Structure for Energy Efficiency At the University of Leeds, energy efficiency is currently dealt with by the Maintenance Manager who is head of the maintenance group of the Estates Department. The Estates Department is one of four departments comprising the Facilities Management Team (FMT) of the University. The Estates Department contains two principal groups, Asset Maintenance and New Works. The FMT also includes Services, which is responsible for portering, mail and cleaning, the Direct Labour Organisation (DLO) and University Security. A Pro-Vice Chancellor is a member of the FMT and provides the link with the senior managers of the University.

The University was at the time of the interview54 on the point of recruiting an energy manager who was to be, ideally, a qualified electrical engineer and part of the Asset Maintenance team of the Estates Department. The post of energy manager was first advertised in 1997 but the successful candidate was offered another energy manager’s position outside the Higher Education sector and no one was appointed. The new energy manager position is intended to have a broad range of functions which combine the dual roles of electrical services engineer and energy manager. The electrical services role includes responsibility for a 11kV local distribution system on campus, while the energy management role will focus upon energy procurement, monitoring, and targeting, and the introduction of schemes to save energy55.

Support for energy efficiency from senior management has weakened over recent years. During the early 1990s, an energy committee was in existence but in 1995, the committee ceased to meet. This was the result of senior management indifference.

Devolved Budgeting & Local Management of Energy Efficiency Universities have been required to create cost centres within their management system to improve the efficiency with which resources are used. Devolved budgeting has been introduced as good practice in the sector in a range of areas. It aims to provide university cost centres with income streams over which they must exercise

54 January, 1998. 55 See Job Description of post: Electrical Services/Energy Manager, University of Leeds, 1998.

116 control. The University of Leeds is currently reviewing the proposal to devolve energy budgets to cost centres, usually academic departments, but the proposal is proving difficult to implement for a number of reasons.

Firstly, the exact financial costs which are incurred are difficult to identify, as are the amounts of energy used. The identification of the exact financial costs is problematic because, as a result of the privatisation and liberalisation of the energy supply sector, bills have not arrived when they should. Many bills have been estimated.

Secondly, measurement of electricity by departments is also difficult because the number of meters is low. Metering which does exist does not conform to the organisational sub-divisions. The most common example of meters failing to conform to the organisation’s functional divisions is where a building is shared by two or more departments. In such a situation, further metering is required to measure actual usage. The Maintenance Manager accepted that without the installation of metering, estimation of energy use is possible by reference to formulae such as those produced in the EEBPp Energy Consumption Guides or to previous consumption records. The use of estimated bills in devolved budgeting does not however fully introduce the incentive to curb energy costs.

Thirdly, in addition to departments’ or faculties’ own building spaces, there are areas which are in genuine common use: the University Precinct is one such example. Here there is no set rule which can be used to determine how to bill cost centres for the energy use of common resources.

Fourthly, the university produces its own electricity and uses its own local grid and transformers to move the electricity around. In such a system, losses of electricity occur which need to be accounted for. However, such losses vary in an unpredictable way and there is consequently no easily available mechanism to allocate costs to departments.

Finally, the Estates Department may also be reluctant to loose control of a large budget – the organisation’s energy budget - over which it has historically had control. The Maintenance Manager, who has budgetary authority for paying the

117 University’s electricity bills, believes that there is a risk that departments would not by themselves, be able to control their energy consumption and coordinate efforts to tackle energy waste.

Alternative courses of action to devolved budgeting could involve the central Estates Department acting in the form of an energy services company, installing measures at the request of a department and taking a share of the surplus savings. The Estates department has in fact already partly assumed such a role by entering into workable compromises about the installation of new technologies that are central to the support of academic activity.

Where a department decides to purchase technologies which have a lower cost in use which is partly or solely attributable to greater energy efficiency, but which may have a higher capital cost, the Estates Department have agreed to part-fund the purchase. The existence of ad hoc agreements may reduce the justification for the systematic devolution of budgets as such agreements may be less costly to implement in the short term and do not involve what may be considerable recurring costs of administration.

Nevertheless, the Maintenance Manager is aware that in the present system, the work of the Estates Department to increase energy efficiency easily goes unnoticed. Consequently there is little financial incentive for departments to conserve energy. Despite the difficulties with the creation of accurate bills, the Estates Department does prepare a so-called “shadow bill” for each department which is used solely to advise and encourage energy conservation efforts.

4.2.3 Energy Efficiency Knowledge Energy Efficiency Knowledge in the University is constituted from a large array of sources and activities, including the EEBPp, but also from the professional development and networking activities with staff both inside and outside their own organisations and occupational specialities. Knowledge of technical and policy matters also comes from contact with a number of intra and inter-sectoral groups. The regulatory role played by the funding councils and by the NAO also significantly

118 affects the available knowledge and awareness of energy efficiency technology and the priority which the University gives to energy efficiency.

Role of the EEBPp The current Maintenance Manager is the most senior person in the organisation responsible for energy efficiency. His use of the EEBPp is very limited, and he believes that many of the steps which have been taken in the University to improve energy efficiency have resulted simply from “common sense” and engineering good practice.

The University has been involved in energy saving and energy efficiency initiatives for a long period of time. According to the Maintenance Manager, CHP was installed twenty years ago and the University has been and remains, regardless of the EEBPp, sufficiently aware of how to optimise energy use. In his view, the recent closure of the University central steam generation facilities and the subsequent de- centralisation of the University’s hot water generation took place principally because it was good engineering practice. It did not occur because it was recommended by EEBPp.

The EEBPp material has however been used at times, but not extensively. One problem was that the information needed “quite a lot of understanding” and the Maintenance Manager was aware that his organisation did not make best use of it. The Maintenance Manager’s impression of the programme material was that it was more focused on the introduction of new equipment than on the maintenance of existing equipment and was a separate and distinct form of expertise from that required by his own organisational role. The Maintenance Manager stressed that there was a significant difference to the subject and the form of the information produced by the programme. The Maintenance Manager did however believe that the EEBPp information would be very useful to the University’s energy manager, when (or if) he was appointed.

119 Professional Networking in the Sector The University sector contains a large number of professional and issue centred groups and official bodies offering the opportunity to share and trade information and experience in the areas of energy efficiency, environmental compliance and policy making as well as engineering and building services related matters. The principal organisations which provide such networks for interaction are: the University Directors of Estates (AUDE); the University Engineers Association (UEA); and a new opportunity for networking between members of university estates departments operating by the name “Share Fair” which is supported by BRECSU and is partly based on the membership of the University Engineers’ Association.

The Maintenance Manager said that the UEA was the most useful group for the sharing of ideas and information for those concerned with the day to day management of energy efficiency in Higher Education institutions. He said he found it so useful that he would prefer it met more often. Of considerable use also to him had been the North East Energy Purchasing Group at which he had met a number of other energy managers with similar problems and concerns and from whom he had learned significantly about products and problems of installation.

Share Fair Networking The Energy Share Fair is a continuing series of workshop events to which all energy managers from the sector are invited. It also provides a framework for email interactions between energy managers. Attendees at the workshop events, which are arranged every three or four months, are encouraged to bring news of their successes and their failures or their problems in the area of energy efficiency and water efficiency. Between workshops, university energy managers are able to exchange information by email with their colleagues. Coordination of the messages is undertaken by the Project Manager for the Higher Education Sector at BRECSU.56

56 The Share Fair principle is copyright to a German firm based London, operating under the name Share Fair Networks Limited. Share Fair workshops have been organised for a variety of businesses in the UK, and for a range of managerial levels, from line managers to board level directors.

120 Leeds University, in common with all other universities investigated as part of this research,57 were participants in the Share Fair events. The University’s Maintenance Manager did not attend the first meetings of the group but began to attend later. He used the email list of members once in January 1999 in order to find answers to a technical question on underground mapping services for drainage and cable survey.

Use of Other Information Facilities Further opportunities to share information on a range of issues are provided within the higher education sector by the Mailbase service run by UKERNA58. The Mailbase service supports a computerised information exchange between professional or subject interest groups and includes an archive of messages sent by members. The “energy-management” list service has a membership of 61 members drawn from across the Higher Education Sector. The Maintenance Manager at the University of Leeds is not a member of the list and does not scan the service for information and advice.

Impact of Sectoral Regulation In the UK Higher Education system, HEFCE, acting on behalf of the Secretary of State for Education and Employment, has a major role in the supervision and regulation of the sector’s activities59. The sector is also overseen by the National Audit Office (NAO)60 which examines the ways in which public money is spent and accounted for. Both bodies have been concerned with value for money in the area of public spending, HEFCE launching a number of initiatives under the value for money umbrella (VfM), and the NAO making a number of enquiries into the sector,

57 The selection of cases for inclusion in this sector study had been completed by the time that the Share Fair networking events programme began. 58 UKERNA is the United Kingdom Educational Research Networking Association and is funded by the Joint Information Systems Committee (JISC) on behalf of the United Kingdom’s Higher Education sector. 59 The Higher Education Funding Council for England is the major regulatory organisation for the Higher Education Sector of the UK. The Higher Education Council for England is responsible for the sector and its Chief Executive and Council Board report to the Secretary of State for Education and Employment. Similar funding councils also exist for Wales, HEFCW and Scotland SHFC. 60 The NAO has a remit to enquire into how government money is spent and to report “to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.” (NAO, 1997a, page i)

121 particularly its “Management of Building Projects at English Higher Education Institutions” in December 1997.

The VFM61 gave rise in 1995-6 to a major attempt to advise the universities on how they could best improve their energy efficiency. The resulting guide was published and circulated to all institutions and aimed to help them adopt the management structures and policies that would promote energy efficiency. The Maintenance Manager believed that principles set out in the VfM guides were sound, but that they were already widely known and the presence of the report did not have any tangible impact upon his organisation’s attempts to improve energy efficiency.

Measurement and Analysis The University is able to measure its consumption of gas, electricity and steam with a computerised TREND Building Management system which collates the information about consumption from over 190 meters, including 40 steam meters, distributed across the main campus. The TREND system however has only limited storage capacities being mainly a control rather than measurement and analysis product and the data is backed out of the TREND system every 36 hours to a STARK system on a computer for storage and analysis.

The STARK system, which is capable of virtually infinite storage, according to the Maintenance Manager, is essential to the task of analysing energy use patterns and the generation of bills to be used within the University as “shadow bills”. The only person who is capable of using the STARK is a former employee of the University’s Estates Department and the work of analysis is carried out under a special arrangement with him.

61 The VfM first initiative was the Energy Management Study in the Higher Education Sector. This was carried out by all four of the Funding Councils, HEFCE in England, SHEFC in Scotland, HEFCW for Wales and DENI in Northern Ireland. Professor Tom Husband, Vice Chancellor of the University of Salford was chair of the steering group. Two reports were published, one a formal policy document – the National Report aimed at heads of institutions, and the other a Management Review Guide aimed at estates staff charged with the implementation of the proposals.

122 Understanding Energy Use The generation of “shadow bills” to inform departments of their energy usage is one of the outcomes of the collation and analysis which is performed with the STARK system. The Maintenance Manager commented that departments do act upon the information which is passed to them, but only when their energy consumption rises significantly. The steady and apparently inexorable rise in energy consumption which stems from the growing use of computers and other electrical testing devices does not, according to the Maintenance Manager, lead to any significant local, i.e. department, based attempts to control energy use.

A further attempt to relate energy use to building occupancy and the activities which take place within is taking place with the Department of Chemistry, one of the few academic departments which is based in one building. The Estates Department is scrutinising the energy consumption patterns to assess the impact of an energy awareness scheme. This scheme, which aims to encourage energy efficiency through the turning off of lights, had only recently begun and the Estates Department had no results at the time of interview.

4.2.4 Identifying Technologies for Implementation As discussed in the earlier subsection 3, the identification of suitable technologies for implementation takes place without any systematic use of the EEBPp information, although there is some use of the Share Fair Networking which is provided under the auspices of the programme. There is therefore a strong tradition within the University of making significant investments in energy technologies, such as CHP, without reference to the EEBPp. An example of a recent major investment is the decision to replace the central boiler-house with a large CHP plant in an energy services contract. A contractor has invested £7 million in the construction of the new plant and will sell power and heat to the University and to the Hospital for a period of 20 years, after which the ownership of the facility will revert to the University. 62

62 The Maintenance Manager was concerned to point out that this arrangement between the University and the Hospital was described in different ways by the two parties, the former considering it contract energy management while the Hospital considers it a public finance initiative.

123 While the University and its contractors may be able to identify technologies which promise significant energy efficiency when installed in new buildings, the practice of cost-cutting during installation often leads to the decision not to fit them because they are high capital cost items. However, the pressure to cut costs is less than it was ten years ago when buildings were built to a formula supplied by HEFCE and there was considerable emphasis upon the first cost of the project. The rush to increase the number of University buildings to cope with sectoral expansion did nevertheless lead to a failure to consider the criterion of cost in use and sectoral regulators investigated the issue, particularly the NAO.

In this enquiry, the NAO noted that at the planning stage “in only a few cases was there consideration of the relationship between initial capital costs and running costs over the whole life of the building.” (NAO, 1997, page 3.) Whole life or lifecycle costing ensures that the costs associated with running the building are factored into the financial forecasts of the universities, usually at the prevailing market discount rate. The NAO also reported that:

“the technique of value engineering, which takes into account factors such as whole-life costs and the trade-off between quality and cost, was not widely applied to the design process. The full scope for savings in this areas was therefore not realized.” (NAO, 1997, page 3.)

Leeds University was one of ten higher education institutions63 that were chosen as major case studies in the research project undertaken by NAO to identify institutional performance. Institutions were all provided with a confidential report on their management practice with a list of recommendations if improvement was thought necessary.

63 The others were the University of Bath, Bolton Institute, Cheltenham and Gloucester College of Higher Education, University of North London, the Royal Northern College of Music, Sheffield Hallam.

124 4.2.5 Installing and Configuring Technologies The University has made extensive use of energy consultants in optimizing its energy production and transfer systems over a number of years. Although the University has significantly reduced the number and capacity of its steam mains, it does still use them and it has employed the international energy consulting firm, the National Industrial Fuel Efficiency Service (NIFES), to improve their energy efficiency.64

4.2.6 Summary of Points

• The Maintenance Manager is not a regular user of the programme information. He believes that the information will be useful to a specialist energy manager but he does not believe that he should be using the information himself. This is because he sees energy efficiency as a separate and distinct area of expertise from the area of expertise which is his professional speciality and with which he is familiar. • The Estates Department believes that there is a need to appoint a person to control energy but the appointment of a suitable person has been delayed owing to a general block on the creation of new posts. • The University Energy Committee declined because of a lack of support from senior management. This took place during the middle of the decade – around 1995. • Specialist help from consultants such as NIFES has been available for the University. A wide range of other sources of information and advice are available to the Facilities Manager • The appointment of an energy manager has been very slow to progress. • Sector regulation has had some impact upon the energy efficiency of the organisation.

64 This was achieved by lowering the pressures in the mains from 10 to 4 bar.

125 4.3 University of Salford

4.3.1 Introduction The University of Salford is a city-centre based university with over 15,000 students and was created in 1967 from a local technical college. It has around forty buildings and its annual energy budget is over £1.5 million. Its recent merger with Salford College has significantly increased its size in terms of land area and buildings.

4.3.2 Management Structure for Energy Efficiency One member of staff, formerly termed “Energy Technician" but now with the job title “Utilities Engineer”, is responsible for the University’s attempts accurately to measure energy consumption, to control energy use, and to procure energy cheaply. The Utilities Engineer reports to the Assistant Director of Building Services rather than to the Assistant Director of Maintenance. All Assistant Directors report to the Director of Estates. In 1997 when the interview took place, energy efficiency was also the special responsibility of the University Engineer, a title which is no longer used in the Salford Estates management hierarchy. The University Engineer is now the Deputy Director of Estates.

Energy Committee In the mid 1990s, the University’s Energy Committee was formed to consider energy efficiency. In common with many other university committees, it was also in possession of a budget. However, during the latter half of the decade, the Vice- Chancellor began to dismantle many of the traditional governance structures, particularly committees, and to replace them with managerial forms of decision making. Single managers and departments were given oversight or control for whole areas of policy.

As a result of this process, a number of areas of policy making, including energy efficiency, were relegated in importance by removal from the formal university agenda. The management and coordination of initiatives in this area almost ceased altogether until HEFCE began to re-emphasise the importance of such action in its

126 guidance to universities in 1996. Committee structures which were essential to coordinate action on energy efficiency were lost.

4.3.3 Energy Efficiency Knowledge Knowledge and awareness of how energy is used within the organisation comes from a large number of sources including the university’s analysis of its own energy use which it undertakes with its metering systems and software. The widespread introduction of metering in the University arose from the need to control energy costs and in response to the privatization and liberalization of the energy markets. According to the Deputy Head of Estates, this has been the single most important reason why the University now has a better understanding of its energy use.

Role of the EEBPp The EEBPp contributes in a very limited way to the general awareness of how energy is used within the University. EEBPp publications are kept on site but are not routinely consulted. Nor do they form an essential reference point when seeking to understand energy use or potential technologies.

Professional Networking in the Sector Both the Utilities Engineer and the Deputy Head of Buildings have tried to ensure that they have access to professional networks and groups with which to exchange ideas and information. The Deputy Head of Buildings is a member of the Chartered Institute of Building Services Engineers (CIBSE). CIBSE’s publication service for its members contains a large number of works on energy efficiency related issues.

Share Fair Networking

The Deputy Head of Buildings believes that the kind of interactions which take place under the auspices of Share Fair contribute significantly to the knowledge which estates departments have of products, suppliers and techniques to improve energy efficiency. Both he and the Utilities Engineer have visited Share Fair events.

127 The Utilities Engineer has supplied details of the problems of drawing up utilities contracts and possible solutions to other members of the Share Fair network.

Other Information Facilities The Utilities Engineer, in common with all the other energy related estates staff within the six universities studied, is a member of the Mailbase list “energy management” but does not make extensive use of the list by sending in requests for information.

Impact of Sector Regulation Sector regulation in the form of guidance from HEFCE has had a small impact upon the University, despite the fact that the Chairman of the HEFCE working party on Energy Management was the University’s Vice-Chancellor. The material was regarded as good – it was a useful form of advice and was highly respected by the Estates staff.

However, Salford Estates staff found that the energy audit software which accompanied the Value for Money study was of little help. The software failed to take into account the specific characteristics of the Salford campus on which extensive local generation of power takes place. Although Salford approached HEFCE with a proposal that the software should be re-written, they were told that the costs of modification would be too great.

Comparable Policies – The Toyne Report In addition to the information provided under the EEBPp, within the Higher Education sector a number of sectoral bodies are also encouraging energy efficiency and environmental best practice. One such body is the Forum for the Future.

Another and equally important source of information on energy efficiency performance as the Energy Consumption Guides has been the Cambridge University Energy Survey of Higher Education Institutions. Although these tables are widely cited, they are the subject of considerable scepticism as to their reliability and

128 therefore the comparisons which can be made between institutions. Salford Estates staff knew of the Cambridge survey, but did not believe that the information which was collected was reliable.

Measurement and Analysis The Estates Department believes that it has made significant progress in extending the metering of energy in the university, especially electricity. By the middle of 1999, all buildings’ energy consumption was being measured using TEAM energy management software with meters linked to new and existing building management systems. However, because of the large number of buildings which were shared by departments, devolved budgeting had still not taken place. The Deputy Head of the Estates Department thought it would be a mistake to devolve budgeting for energy without full installation of metering.

The reason which the Deputy Head of the Estates Department gave for his general opposition to devolved energy budgeting without full coverage of an area with meters was that without full metering of all rooms, there would always be disagreement about exactly how much energy was being used. He argued that: “metering ends argument”. Investment in metering is essential to this process of devolved budgeting: “Unless you put the money in, all you get is hassle.” (Deputy Head of the Estates Department, January 1998). The installation of metering has significantly improved the Estates Department’s knowledge of how the University uses energy. It has been one of the major achievements of the Estates Department in recent years.

New Demands on Energy Managers During the early 1990s, the effects of privatisation and liberalization on the electricity markets began to have impacts within the estates and financial departments of many universities. Liberalization meant that universities were able to change their supplier, buying their energy from the cheapest source. The opportunity to purchase energy more cheaply brought significant administrative burdens however.

129 At Salford, no new staff were appointed and the administrative burden of identifying the best contract fell to the Utilities Engineer and the Deputy Head of the Estates Department, in conjunction with the purchasing group in the finance department. This administrative burden was not a single event but a new permanent and substantial management responsibility.

Effective contracting for energy requires the purchaser to collect information on their own energy needs and forecasts. Cheaper interruptible supplies can be procured but only when the purchaser has the means to switch in other forms of power, should the interruptible supply be stopped. The collection of such information is a significant and continuous management function.

Changes to the university building stock, the installation of new equipment with its implications for energy usage and the re-negotiation of contracts ensures that the estates and purchasing departments are continuously involved in the process of tariff analysis. A University such as Salford, with a significant building programme, faces the major challenge of constantly trying to match a varying energy requirement with the best possible supply.

The following information, provided through Share Fair to university energy managers and estates staff, sets out the minimum level of preparedness which organisations must reach in order to be able to set up and operate interruptible gas contracts:

“Under the conditions of the Network Code and its stringent requirements for daily balancing, interruptible consumers must be ready to interrupt supply at short notice. Therefore institutions must:

Ensure adequate stocks of alternative fuel (at least seven days supply is advisable)

Ensure that alternative fuel lines, pumps and burners are maintained and tested regularly, and are available for use at short notice.

130 In the event of a need to interrupt being identified by TransCo, the following steps occur:

Transco informs the Shipper of the need to interrupt - a minimum of five hours notice must be given, and wherever possible the shipper will decide which customers should be affected.

The Shipper contacts Interruptible customers - once notification is received from TransCo the Shipper will issue instructions to their customers regarding the need to interrupt. Exceptionally Transco may contact the customer directly.

Shippers confirm Interruptions to TransCo - within five hours of the original notice being given, Shippers must confirm to TransCo that their customers have interrupted, or the time at which they will do so.

When TransCo has determined that supplies can be restored, Shippers will be informed of the exact time that customers may resume gas usage.

If a consumer should fail to interrupt when requested to do so by the Shipper, TransCo may impose certain punitive sanctions; either through disconnection or even strict financial penalties.” (Mike Eastwood, of CHEEP, in email to Share Fair List 25th May 1998)

Performance of Contracts When contracts are signed and have taken effect, estates departments have needed to spend far more time and effort than was anticipated ensuring that suppliers are carrying out their contractual responsibilities. The Utilities Engineer and the Deputy Head of Buildings have experienced significant problems arising from the infrequency in the provision of bills; incorrect contract details on documentation; and incorrect meter readings. They confirmed that these extra responsibilities had diverted them from making any major awareness initiatives on energy saving. It was also clear to them that far more money could be saved in the early phase of liberalisation when energy prices were falling significantly by tariff analysis and changing their suppliers.

131 The privatization and liberalization process entailed the half-hourly billing of electricity at large sites and the installation of billing meters, although these meters were costly to install. However, for the University of Salford, in common with most other universities, such metering was at too large a scale for it to provide a means of measuring the energy use of different buildings and different administrative units. An extensive programme of sub-meter installation funded by the University itself was required to provide the network of meters that could measure departmental use of energy.

Assistance from Sectoral Bodies University energy efficiency staff have been assisted in their attempts to take part or all of the role for energy procurement by a sectoral organisation which acts to use the combined size of the universities in securing discounted energy purchases. The Consortium for Higher Education Energy Purchasing (now known as the Energy Consortium) based at the University of Birmingham, takes a role in putting together large joint bids from Universities and providing help and advice to member institutions on contracting and tariff management. CHEEP also publishes a newsletter, Energy Matters.

4.3.4 Identifying Technologies for Implementation The range of energy using technology in the University is diverse, with air- conditioning, air management, lighting, heating and ventilation being major uses of energy. The Estates Department believed that its knowledge of the best technologies in all of these areas – best practice - was good and that professional pride to do a “damn good job” was a major stimulus to energy efficiency. Major steps towards energy efficiency, such as the use of local generation around the campus, have arisen from what the Utilities Manager called – “common sense”.

It was not the belief of any of the relevant members of staff that technologies were difficult to identify, or their potential hard to evaluate, from the information available about them from suppliers and consultants. Certain technologies, they said, such as CHP, were clearly not suitable in the Salford case as the daytime load for

132 heat and power was a strong peak and there was not the opportunity to use such a system during the vacation65. The Estates staff considered that their understanding of these technologies was a vital part of their professional expertise.

The Estates Department argued however that while they had significant control over the functional building technologies – the heating, ventilation, air-conditioning and controls and monitoring systems - there were technologies, particularly in the area of information technology, over which they had very little influence and which had the potential to use significant amounts of energy.

Computer and information technology products are often purchased by other departments and have significant implications for University energy usage. Usually delivered to the University with the power saving features switched off, computers can use very significant amounts of energy and the use of a large number of them in a confined area has significant implications for thermal comfort, requiring the installation of measures to cool or vent.

Within the Share Fair network workshops, there has been significant discussion of the issue of computer purchase and an emphasis upon ensuring that computers are set up with their energy saving features enabled as soon as possible. At Salford, the University has now turned on all energy saving features on its computer monitors and system units.

Spillover from US Standards – Energy Star During the 1980s, the US Environmental Protection Agency launched a number of voluntary initiatives to promote energy efficiency. One of these initiatives, Energy Star, aimed to persuade the manufacturers of electrical equipment, particularly computer equipment, to adopt simple changes to their designs so as to reduce energy consumption. Equipment became more efficient in normal use and a new mode of operation was introduced in which the equipment was dormant but which consumed far less power. The standard was taken up widely by manufacturers, partly

65 In 1998, BRECSU and ETSU material recommended that CHP be considered in such a situation only if the system could be used for more than 4500 hours a year.

133 helped by the decision of the government of the United States to use only Energy Star compliant technology on federal premises. So widespread has the standard become that the European Union now aims to operate a similar programme itself.

The majority of information technology equipment now installed in UK universities is now compliant with the US Energy Star standard66. The potential energy savings which arise in universities from the adoption of the Energy Star standard have been significant.

Role of EEBPp The Estates staff took the view that the EEBPp material was general rather than specific and did not provide information about specific products. However, through the Share Fair Networking part of the EEBPp, estates staff were able to find out not only which product ranges might be suitable, but which specific products might be more suitable and which products might be better to avoid altogether.

4.3.5 Installing and Configuring Technologies The technologies used in university buildings are diverse and include many over which estates departments have little influence, whether on their purchase, commissioning or operation. Such technologies include those which are widely distributed across university departments, such as computer systems. But they also include specialist equipment such as fume cupboards which can be used in such a way as to significantly reduce their energy efficiency. The installation and configuration of technologies have significant implications for the energy efficiency of the organisation. As will be discussed in the next sub-section on the use of the energy saving features of computer systems, even when technologies come with energy saving potential, the realisation of this potential is often difficult to achieve and cannot be achieved without enrolling other groups and through awareness schemes.

66 Monitors supplied to the Sector have been fitted with the Energy Star features since early 1993.

134 Setting Computers to Energy Saving Mode While most of the computing equipment which the University now purchases is energy efficient, there have been some difficulties in persuading computer staff to set up the equipment to work in energy saving mode. The Estates Department at Salford University has had to work closely with the Academic Information Service (AIS), which is responsible for most of the University’s public clusters of computers, to overcome the unease that setting computer equipment to work in the energy saving mode could cause equipment breakdown, computer networking faults and power surges.

Computer staff have been reluctant to use power-saving features because of the belief which developed during the age when electrical technologies used valves instead of integrated circuits that repeated cycling could significantly reduce the lifespan of electrical devices. Although computer technologies use other switching systems and power saving circuitry reduces the amount of energy which is used, information technology staff at Salford were reluctant to set their technology into an energy saving mode because of the perceived risk of causing damage.

Awareness Programmes The Estates Department has considered awareness programmes which encouraged the University’s staff and students to economise in their use of energy, but has decided that the best approach, in the short term, has been to publicise information about how much energy is used and the University’s web page is used for this purpose. An awareness scheme has been planned but this has been slow to launch. The indirect approach, based on a general publicity campaign, is seen as a bridge to the larger scale awareness programme intended for students beginning their career in Autumn 2000.

Both members of the Estates staff believed that awareness schemes of the type which might encourage people to turn lights off may be useful but that their influence significantly declines over time. Although they had not done any studies of Salford’s energy use patterns, the Deputy Director of Estates said of such programmes that: “They are only as good as the day that they are done”.

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4.3.6 Summary of Points

• Privatization and Liberalization of the energy markets have had a dual effect. Firstly they have caused an immense amount of administrative and managerial work. But secondly, the introduction of metering which came about as a result of privatization and liberalization has led to the University increasing significantly its understanding of how it used its energy. • Metering of the University’s buildings is now well underway. Analysis of the results of metering are now undertaken with a suitable software system (TEAM). • During the early 1990s, the University senior management discouraged the committee based consensual approach to energy efficiency, regarding it as an almost entirely technical and managerial matter. The University Energy Committee ceased to function during this period. It has not yet been re- instituted. • The University Engineer and the Energy Technician both believe in networking and are active in professional and sector based networks. CIBSE publications and professional activities have been very effective in raising the awareness of the University Engineer. • The staff believe that benchmarking activities in the sector undertaken by the Cambridge University Energy Survey have not used accurate data. In a sector characterized by systematic benchmarking between institutions of a wide variety of functions, unfair comparisons based on inaccurate data have caused suspicions. Benchmarking as an activity has been brought into disrepute. • There is a disinclination to use awareness schemes as they are perceived to reduce in effectiveness quickly. The University’s staff who have been responsible for the way in which energy is used have spent most of their time introducing metering and dealing with the effects of liberalization. Awareness schemes to modify behaviour have been shelved until the end of the decade. • The devolution of energy budgets to cost centres is still proving difficult to achieve because of the cost of full coverage metering. Without such metering, disagreements are always likely to occur. • Substantial savings in the university can occur through indirect policy initiatives undertaken in other countries. The energy saving features of computer monitors

136 and other computer peripherals were introduced under schemes in the United States. Nevertheless, their effects have been experienced in the UK. • Persuading the computing staff to use the energy efficiency features of their equipment has been difficult. Beliefs about the adverse effects of switching off electrical systems have discouraged computing staff from fully exploiting the energy efficiency capabilities of their equipment.

4.4 The University of Central Lancashire

4.4.1 Introduction The University of Central Lancashire is the former Preston Polytechnic and an educational establishment has been on the current Preston site from 1828 when an Institution for the Diffusion of Knowledge was founded. The University is based on a city centre site with a large number of buildings. There are 20,000 students and a yearly energy bill of £1.8 million. The last five years have seen significant growth in the number of students and building programmes on the main sites, involving the construction of new student accommodation buildings and academic facilities. Enhancements to the University’s Library and learning resources, to student accommodation and to the specialist academic departments, particularly those involved in teaching clinical services such as the Faculty of Health have also taken place.

4.4.2 Management Structure for Energy Efficiency The University Head of Estates Management is currently responsible for the energy efficiency of the University Estate. The Head of Estates Management67 reports to the Head of Property Services. Also reporting to the Head of Property Services is the Head of the Buildings and Design Service which is responsible for the design and liaison with contractors working on University building projects. The University has employed an Energy Manager but he left the University during 1997. His post

67 At the end of 1998, the Head of Property Services left the University to take up the position of Assistant Director of University Estates at the University of Southampton.

137 had not been filled by the end of 1998 although the senior management of the University stated in March 1998 that the post would soon be advertised. Senior management of the institution have been reluctant to make funds available for the post because of the belief that the expenditure would not be matched by energy cost savings. Discussion about whether the post should be filled continues.

During the latter half of 1998, a senior Buildings Engineer was recruited and energy efficiency became a small part of his responsibilities. He was assisted in this by the Environmental Projects Officer of the Campus Services team, who visited a number of Share Fair events and also by the University’s Health, Safety and Environmental Officer, all of whom share responsibilities for the energy efficiency awareness scheme.

The University has yet to introduce any form of devolved energy budgeting and no plans have been made to assess its practicability. A metering and monitoring regime has been working for some time but this is extremely limited, being restricted to just two buildings.

4.4.3 Energy Efficiency Knowledge The Head of Estates Services receives information on how to improve the organisation’s energy efficiency from a large range of sources, including his own professional development, use of the EEBPp publications, membership of Share Fair, networking with professional colleagues within and outside the organisation, from organisations and groups from within the sector and from other comparable policies, one of which, Going for Green, is part funded by the UK Government. The University Estates Department also is closely involved with its own Department of the Built Environment with which it collaborates, mainly through the carrying out of student research projects.

Role of the EEBPp The Energy Consumption Guides of the EEBPp have been frequently consulted by the Head of Estates Services in his seven years in post. The Guides have provided the basis for an extensive benchmarking exercise of the University estate. The Good

138 Practice Guides and General Information leaflets have, he believes, been less useful to him.

Share Fair Networking The Head of Estates Services was not immediately interested when Share Fair was inaugurated in 1997 and did not register with Share Fair for information from the meetings. However, after conversation with the interviewer in January 1998, he did write to BRECSU, becoming a member after the third Share Fair event in October 1998. He attended his first meeting but no subsequent meetings.

As soon as he was appointed in late 1998, the new Senior Buildings Engineer began to attend Share Fair events, and quickly began to share information with his colleagues. He has found Share Fair most useful, making requests about monitoring systems and joining the special interest group on writing specifications at the Fifth Energy Share Fair in February 199968. He has also attended other events in the sector, including those organised by CHEEP (The Consortium on Higher Education Energy Purchasing).

Collaboration in the Organisation The Head of Estates Services shares an office with the Head of the Design Office. The design team is a useful source of information and advice on energy efficiency and they take a leading role in all new building. Much of the work of the Property Services since the onset of University expansion has been work on new buildings.

Other parts of the organisation are involved in the attempt to improve energy efficiency. At the University of Central Lancashire, an attempt to coordinate the approach to energy efficiency has led to collaboration with the student services organisation, Campus Services.

68 Energy Share Fair Workbook, Fifth Event, 4th February 1999, page 4.

139 Professional Networking The Head of Estates Services engages in professional networking on a number of fronts, and takes particular interest in developments with the University’s sister institution in the United States where energy services have been widely used. During 1997, the Head of Estates Services made a fact finding visit to the US institution but believes that the arrangements which the US University has come to in terms of working with energy equipment suppliers are more advanced than could be applied in the UK69.

Impacts of Sector Regulator The Higher Education Sector Value for Money Study (VfM) publications and software have fulfilled two roles: firstly to provide guidance to the Head of Estates Management on how to create management systems to promote energy efficiency; and secondly to encourage the University’s senior managers that they should play a role in promoting energy efficiency.

The VfM study provided a concise set of guidelines on the management systems with which organisations of the sector should aim to reach the goal of energy efficiency. The Head of Estates Management said that he tended to use it more as a source of reference on energy management than the EEBPp material because the EEBPp, while more comprehensive is spread over a large number of publications. He further observed that the VfM material was beginning to displace the EEBPp material on energy management.

The VfM study also acted to publicize energy management at the level of senior managers. However, while the Head of Estates and Services knew that the senior managers of the University were aware of the VfM study, it was not the case that

69 On this visit, the Head of Property Services found that the university he visited had a facilities management deal with a major lighting company, Osram Sylvania. He does not believe that this kind of arrangement could operate in the UK because manufacturers and suppliers are not ready for it, nor are purchasers.

140 they had acted upon all the advice contained within it, particularly in respect of recruiting a new energy manager to fill the vacancy70.

Comparable Policies – Going for Green The University is also open to the influence of a large scale environmental awareness and action campaign named Going for Green. Going for Green was set up in April 1994 and was known first as the Citizens’ Initiative. It was one of the three organisations created to address the issue of sustainable development raised by the Rio Conference in 1992.71

The overall aim of the Initiative was to: “make the British public aware that by personal lifestyle changes they can make the environmental impact of ‘development’ sustainable”72. The Going for Green programme combined both awareness raising with an attempt to explore how communities could develop environmentally sustainable living73.

Of the twenty projects which Going for Green commissioned to explore the idea of sustainability, two of the eight sustainable communities projects were based in universities. One was located at the University of Middlesex and the other at the University of Central Lancashire. At the UCL, the Going for Green project was co- ordinated by a temporary member of staff working with the University’s Student Services Department.

While the sustainable communities projects have wider remits than energy efficiency, including waste minimisation and recovery, water conservation and transport, they have influenced senior management by raising the issue of energy efficiency onto a more public and formal agenda within the University. By adding an emphasis to the

70 The VfM study by HEFCE recommends at least three members of an energy efficiency staff in an institution with an energy bill the size of that of the University of Central Lancashire. 71 Initially an advisory committee, the Citizens’ Initiative was one of three bodies brought into being by the government, the other two being the UK Panel on Sustainable Development and the UK Round Table on Sustainable Development. 72 The remarks of the Project Manager at the Manchester Headquarters of Going for Green 73 Within two years of its inception, the initiative was found to be failing to make significant impacts. The scheme was extended then re-launched in April 1996.

141 issues of energy efficiency and environmental protection, Going for Green has extended and deepened the impacts of the EEBPp to a small degree.

Measurement and Analysis The University’s own efforts to measure and analyse its own energy use have been slow to improve according to the Head of Estates Services. The current state of metering is highly restricted with little immediate prospect of an accurate and complete coverage of the University estate. “We cannot hand on heart make metering fair at the moment”, remarked the Head of Estates. Instead the University proposes more of a focus on awareness schemes to encourage energy efficiency.

The problems with metering which are faced are three-fold. Their intractability largely undermines the justification for the introduction of metering software such as TEAM to work with the TREND building management system, which would then make benchmarking, exception reporting and thorough analysis of energy saving alternatives possible. The three main problems are extent of metering, the rapid change in the building stock, including significant re-building work, and the adoption of modular courses.

The University site has a significant shortfall of meters, with some meters serving a number of buildings. One meter in fact serves three large buildings with shared Faculty and departmental usage. Measurement of exact building use is difficult, as is the attribution of particular costs to departments.

The period of Higher Education expansion which has taken place since 1994 not only led to a significant growth in the number of buildings but also to re-design, re- construction and refurbishment of significant numbers of existing buildings at the University of Central Lancashire. Buildings usage patterns changed during this period, making comparison between different periods of time problematic, if not meaningless. The setting of an energy budget for a department was seen as a minor technical distraction from the major organisational goal of expansion of the educational provision, particularly when the cost of energy had not figured in the expansion plans. Issues of fairness were also raised by the expansion, with some

142 departments benefiting significantly in energy cost terms from the changes which were made to their buildings, while others did less well.

Thirdly, the Head of Estates Services argued that development of modular courses brought the principle of devolution of energy budgets to departments seriously into question. In the modular system - at the University of Central Lancashire this is known as the MODCAT system – students do not belong to any particular department as they take courses in a large number of different departments and faculties. In conventional university devolved budgeting scenario, the income stream which a student brings flows to the department in which the student is located. The costs which the department incurs in the educational provision of the student are matched against the incoming income streams from all its students. This process is difficult, but it can be managed when both the income and cost streams are measurable. By contrast, in the MODCAT scheme the student does not belong to any particular department. Consequently, while the student’s income stream may be simple to identify, the costs which arise during the course of the student’s tuition are difficult if not impossible to isolate.

A number of significant incentives are present to encourage the University to introduce energy accounting. At present, a number of independent and semi- independent businesses trade on the University campus, such as bookshops and food outlets. These organisations are fully commercial but pay for their utilities’ use through the University which charges them in proportion to their floor area.

Although significant incentives to create and operate an energy accounting system are present at the University of Central Lancashire, they are too small in comparison with the costs of setting up such a system.

4.4.4 Identifying Technologies for Implementation At the University of Central Lancashire, the University’s own design staff are able to influence design of individual buildings according to the Principal Design Officer in Building Services. However, there are limits to the extent of their influence and external consultants and architects can determine the final form of buildings even when this is not the most efficient.

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An example was given of how when Building Services engineers put forward a design for an exterior window shield74 to save lighting costs of running the new Harrington Building, the design was altered by the contractors and architects.

The Head of Estates Services thought that energy efficiency choices were also still heavily constrained by the requirement to keep capital cost at a minimum. While he could see that there was some greater interest in cost in use of building projects and the use of public/private partnerships in investment, capital cost of projects was, for the University of Central Lancashire, the single most important criterion with which to assess buildings proposals. Furthermore, it was noted by a member of the Energy Management Working Group75 that there were no formal procedures or policy on the purchasing of energy efficient goods and services from the Department of Purchasing, in spite of the adoption by the University of a Formal Environmental Effectiveness and Efficiency Policy in March 1996.

By contrast with staff in areas of the University where compliance with the Environmental Effectiveness and Efficiency Policy is difficult because of the absence of technical information, the staff of the Property Services Department are aware of the effects of purchasing energy inefficient equipment and also have the theoretical knowledge with which to calculate payback periods. The Principal Building Design Officer was able to give the paybacks on a variety of investments undertaken by the University and stated that the payback period for energy efficiency investments undertaken by Property Services was generally intended to be in the range of five to ten years, which is in excess of the sector mean of 2.3 years.76

The adoption of energy efficient designs occurs not only when the primary goal is to save energy costs. The University’s new hall of residence which has been constructed next to the West Coast railway line – the Ronan Building - has high levels of insulation and triple glazing in order to comply with planning requirements. So high

74 The exterior window shield is known as a “brise soleil” in building design terminology. 75 This meeting of the Energy Management Review Group took place on the 11th March, 1998. 76 BRE (1997) “1995 Impact Evaluation of the EEBPp for Buildings”, Volume One, page 24.

144 are the levels of insulation that the University has decided there is no need to install a wet heating system and electric fan heaters are used instead.

4.4.5 Installing and Configuring Technologies The Head of Estates Services believes that the University can significantly affect its level of energy efficiency by modifying the behaviour of staff and students through appealing to their goals and aspirations. He believes that the impact of such changes can be enhanced by effective publicity which highlights the successes which have been made, but the introduction of such schemes is awaiting senior management approval.

The problems with the devolved budgeting approach which undermine attempts to create incentives to energy consumption have made the introduction of energy efficiency schemes a higher priority. In the Autumn of 1999, a large energy awareness scheme was launched which aimed to involve students in reducing unnecessary energy consumption.

4.4.6 Summary of Points

• The Head of Estates services has made extensive use of parts of the Programme material which focus on benchmarking and assessing consumption. He has not used the material for technology acquisition. • The Going for Green Sustainable Communities Project has given environmental and energy efficiency issues greater prominence within the organisation than might have been achieved otherwise. This shows that policies can have spill over effects, raising the level of commitment and providing administrative structures with which the Programme can make a greater effect. • The current metering of energy use cannot allocate energy costs fairly to cost centres. This goal is still some distance away. There is as yet no metering regime in place to support the introduction of devolved budgeting based on actual energy measurements.

145 • There are a number of difficulties with the concept of devolved budgeting in a University system where students are seen as individual cost centres as is the case with the MODCAT (modular) scheme. • The Higher Education sector quasi-regulator – HEFCE – has pushed the issue of energy efficiency up the agenda. HEFCE’s information is highly regarded by this University.

4.5 Victoria University of Manchester

4.5.1 Introduction The Victoria University of Manchester is one of the oldest civic universities in the country and was established in the same period as the University of Leeds. Like the University of Leeds, Manchester University has a substantial city centre campus with around 40 buildings on the main site and a number of large departments with high energy use, including a medical school and the computing services department which houses a regional centre for high-end computing. There is a substantial programme of building work in progress at any one time and the yearly energy bill for the University is around £2.2 million or 1.5% of turnover.

4.5.2 Management Structure for Energy Efficiency Manchester77 was one of the first institutions to appoint a specialist energy manager – termed an Energy Efficiency Engineer – in 1985. The current Energy Efficiency Engineer is only the second to hold the post, having come to the University in 1990. The Energy Efficiency Engineer is located within his own unit, the Energy Unit. He has a permanent staff of one full-time person and one part-time employee. The Energy Efficiency Engineer reports to the Director of Estates and Services.

The Energy Efficiency Engineer’s Energy Unit is responsible for a range of activities, which include the tariff analysis side and preparation of data for the procurement of energy, the metering and measurement of energy consumption,

77 The Manchester University was featured in the Good Practice Case Study 150.

146 energy awareness schemes, the introduction of energy efficient technologies and the creation of a budgetary and accounting system which can be used to ensure that departments are billed for their energy costs. The knowledge of how energy is used and what steps might be appropriate to improve the efficiency with which it is used is centred in the Energy Unit. There are also formal contacts with other buildings staff working on building design and maintenance.

The Energy Efficiency Engineer was frustrated that in recent years, the focus of his activity had been on energy procurement issues rather than establishing measures to control energy use. The Engineer believes that energy efficiency is an environmental priority whose importance has declined through a focus on the effects of liberalization of energy markets.

Devolved Budgeting The University has attempted to create a devolved budgeting system with individual utilities budgets devolved to departments since 1985. Despite extensive efforts by the estates department however, complete devolution of budgets has still not taken place78.

In 1990, under the previous energy efficiency engineer, a pilot project was instituted which used a formula to set budgets for each department. A target was set for each department. At the end of year, an assessment was made of the extent to which the target, which was based on a formula, had been achieved. The measured energy use was also based on a number of assumptions about energy use because meters did not correspond exactly with different organisational entities and therefore exact measurement of consumption was not achievable.

If a department made its target, it was allowed to keep the money which remained in the budget allocated to it. When targets were overshot, virement of funds was possible from a department’s other budgets, effectively a form of financial penalty. This introduced financial incentives for the first time into University energy usage.

78 The EEBPp Good Practice Case Study 150 “Energy management Manchester University” states that electricity budgets have been devolved to user departments. This is not in fact the case, according to the current University Energy Efficiency Engineer.

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The formula used during the pilot project was however strongly criticised by a number of departments because it penalised those undergoing growth in student numbers. Departments which were, on the other hand, reducing their student numbers benefited under the formula. Other departments such as the medical school79 were also opposed to devolution because their energy usage was steadily increasing despite constant student numbers. The medical school’s energy consumption has been significantly affected by the growing use of medical information technology, which includes both the gradual spread of computers to desktops and the use of high technology facilities such as magnetic resonance imaging. The computer centre, Manchester Computing, also faced similar developments which led to increased energy consumption year on year.

As the moment for devolution of budgets drew near, it became clear to the Estates Department that there would be difficulties setting up individual bills for cost centres. This was because electricity and gas markets were undergoing a chaotic transformation to competition. Suppliers of energy suddenly found themselves with massively increased numbers of customers80 and transactions. Many did not have the administrative systems to deal with the new volumes of business. For a whole year, the University of Manchester did not receive any energy bills.

The absence of bills meant that internal readings, when they were made could not be reconciled with the records of suppliers. All bills which would have been sent to departments were now estimates. Those departments which were opposed to the devolution of budgets now claimed that the new system was unworkable. It was a justifiable claim. Heads of Department re-iterated the view that the errors implicit in the formula based charging system were unfair. Some argued for the first time that budgeting could only proceed on the basis of accurate metering of energy consumption with meters fitted “in every room”. The Vice-Chancellor instructed the Director of Estates that the devolution was to be abandoned. He was also told to develop a new system based on accurate measurement. Currently, a new system is

79 The medical school at the University of Manchester is the Faculty of Medicine. 80 The Energy Efficiency Engineer assumes a hundred fold increase in the number of customers for the average utilities supplier.

148 being investigated with enhanced metering. The devolved budgeting process is stalled and all energy bills are still paid by the finance department.

The problems of obtaining accurate meter readings remain. Disagreements arise over the location of meters and occasionally whether meters do in fact exist. Contracting out of the metering reading service by the energy companies does not appear, in the view of the Energy Efficiency Engineer, to have helped as the meter reading staff often do not know where to find the meters. These staff have to be conducted around University premises personally by the Energy Efficiency Engineer or another member of the Estates staff.

Organisational Hierarchy – The Relationship with Other Departments The Energy Unit is closely focused on the energy efficiency of existing equipment and particularly with the attempt to extend metering and measurement of energy to support the University policy of devolved budgeting. The Energy Efficiency Engineer believes that this role is restricted and could be wider and more closely integrated with other parts of the University.

The Energy Efficiency Engineer gave the example of how a major contract to survey the University estate by external contractors81, including the floor area of all rooms, did not specify the collection of other valuable information such as room height. The collection of this extra information, which would have added very little to the cost of the survey, would have been essential in helping to establish energy efficiency benchmarks for the University. The Energy Efficiency Engineer believes this example represents a failure to align fully the Estates Department, and in particular the Energy Efficiency Unit, with the goals of the University.

4.5.3 Energy Efficiency Knowledge The knowledge of how to achieve energy efficiency and its benefits comes from a variety of sources, including the EEBPp, HEFCE, from a number of professional

81 The survey took place in response to HEFCE guidelines and measured the entire floor area of all rooms in the University so that departments could be charged (a so called “space-tax”) for their share of university accommodation.

149 networking groups, and from the professional development and previous experience of staff.

Role of the EEBPp In developing their knowledge of energy efficiency, the staff of the Energy Unit have referred to the EEBPp but they have not made extensive use of the material which the programme provides. The Energy Efficiency Engineer had not used the material recently when interviewed, nor had his staff. The Engineer had some concerns from his own experience of Good practice Case study 150 that the programme material might contain inaccuracies over how successful some of the initiatives and technologies were in practice.

Share Fair Networking The Energy Efficiency Engineer has attended the Share Fair Networks from inception and has provided information to other members and also sought help from other members. He believes Share Fair is effective because it can provide a highly effective means of exchanging information on relevant subjects, ranging from technology procurement to thematic issues such as environmental reporting. He has used Share Fair particularly to gather information about metering and measurement of energy consumption.

Aims of Metering and Measurement The development of metering and measurement systems, which is a major priority for the Energy Unit at Manchester, can lead to a significantly increased understanding of energy usage which may then provide a basis for energy saving schemes and the deployment of the appropriate technology. However, the principal reason to start metering and measurement at Manchester has been the attempt to devolve energy budgets.

During 1996, a new member of staff was employed to look after the tariff analysis activities which had fully engaged the Energy Efficiency Engineer. His

150 responsibilities have been to develop computer software and adapt existing packages in order to identify suitable tariffs and analyse the university energy usage.

Impact of Sector Regulation The Sector regulator, HEFCE, has had a limited role in terms of providing information and advice to the university on energy efficiency as many of the proposals within the VfM study had already been carried out at Manchester. The Energy Management Matrix for example, which was introduced in the HEFCE VfM Study on Energy Management was already part of the EEBPp material, being introduced in the early 1990s in the EEO Practical Energy Management Strategy82. The VfM might have given some re-enforcement to the energy management issue, particularly at the higher reaches of the institution where it attempted to create a wider constituency for energy efficiency, but the Energy Efficiency Engineer does not believe that there was a significant impact on the University.

More recently though, HEFCE, through its Environmental Review of 1998, has begun to encourage universities to consider and improve their environmental monitoring and compliance. All Higher Education institutions, including Manchester, have received guidelines on reporting emissions, including those arising from the use of energy. The review was based on a pilot study which took place in 1997-1998 and produced a workbook of guidelines.

While monitoring and targeting software often has the facility to provide CO2 returns and many universities already possess such systems, the influence of the HEFCE Review has increased awareness of and the need for further reporting on emissions and more sophisticated monitoring. At Manchester, the Energy Efficiency Engineer has begun to investigate further monitoring and the assessment of emissions, making requests through Share Fair for information and advice.

82 Ashford, C. (1991) Strategy Proposal for Practical Energy Management – EEPC(91)GP037. This strategy led to General Information Reports 12 and 13, which were commissioned in 1991 and completed in 1994 and were the first time the matrix had been used. The matrix was devised by P.S. Harris in 1984 who developed it from the Armitage Norton Report, published as Energy Paper 50. The matrix was subsequently modified by Eclipse Consultants, working on contract to BRECSU, for use in Best Practice Programme publications.

151 Policies Comparable With EEBPp The HEFCE Environmental Report re-focuses a number of the concerns which have existed within the sector about its environmental performance and about the role which the sector plays in education and research on the environment, energy and sustainability. Such concerns have been articulated at the level of the Committee of the Vice-Chancellors and Principals (CVCP) which led in 1993 to the “Environmental Responsibility Report”, also known as the Toyne Report, its subsequent review and to the Government’s Environmental Education Strategy.

Below the level of university senior management, university staff have also articulated their interest and commitment to improvements in environmental practice and have created their own networks and to share information and develop expertise. One such example of a new institution formed recently is the Environmental Association for Universities and Colleges which came into being in 1996. With 132 members in 1999, the EAUC acts to promote good practice in the area of environmental management, including energy management.

A number of publications have been produced by the EAUC, including an environmental management systems guide for the Higher Education Sector. This guide received funding from the Local Government Management Board (LGMB) and received the support of a number of major groups representing interests within the sector and beyond, including the HEFCE, The Association of University Directors of Estates (AUDE) and the British Standards Institute (BSI). Manchester has participated in activities organised by the EAUC and in December 1998, the University won a prize for its achievements in energy efficiency, one of four83 universities to receive an award from the Energy Systems Trade Association.

One consequence of the failure to devolve budgets in 1996-1997 was that there is still a large budget for energy efficiency of around £4 million84 which is still under central university control. It is from this budget that schemes to save utilities costs are still financed. The Energy Efficiency Engineer believes that were the devolution

83 The other universities were Liverpool John Moores University, Warwick University, and Glasgow University. 84 This amount is distinct from the energy budget which is spent on energy – gas, oil, electricity and coal.

152 to have taken place, the coordination of such activities would not have been so easy to achieve.

Further Aims of Metering - Accounting Systems Further pressure on universities to improve their metering and monitoring of energy comes from the adoption by the research councils of decision to allow research bids to include utility costs, including water, gas and electricity. This decision encourages academic departments to demand from university central administration the ability to monitor and measure their utility costs.

Here, an economic incentive to utility monitoring arises from the fact that if the bid is successful, costs can be recovered from the research council, i.e. from outside the university. However, other forms of utility cost recovery have far fewer incentives. In research based universities, such as the large civic and historic universities like Manchester85 where the revenue from research is significant, the incentive to identify utility costs is high.

4.5.4 Identifying Technologies for Implementation The Energy Efficiency Engineer came to his current position from an engineering post in the National Health Service. He brought with him a significant knowledge of energy efficiency techniques and technologies. It was in this previous role that he made most use of the EEBPp material, principally as a source of reference about what kinds of technology were suitable. At Manchester, he makes very little reference to the EEBPp material.

The Energy Efficiency Engineer acts in an advisory capacity to other members of the Estates Department, through participation in the Project Design Group which focuses on both retrofitting and new buildings construction. The Energy Efficiency Engineer’s main role in acquisition is for controls, buildings energy monitoring systems and the procurement of energy.

85 At the University of Cambridge, 43% of the University’s funding comes from non-business related research, where the VAT on utilities is charged at 5%.

153

4.5.5 Installing and Configuring Technologies The Energy Efficiency Engineer was aware of a whole range of steps which could be taken to save energy through correct installation and re-commissioning of equipment and the use of energy saving schemes which encourage energy saving behaviour on the part of users of technology.

The University has run a number of schemes to encourage energy efficiency. In 1994, all students were given information about how they could save energy, but more recently, the traditional inclusive information and awareness campaigns which have been run to target energy consumption on a University-wide basis have been dropped. A principal reason for the decision has been that the time available to the Energy Unit to devise and mount schemes has been limited. Metering, measurement and energy procurement have been a higher priority, because they have been thought to be more cost-effective.

Where schemes have been retained, they have been of a more specialised form, and have identified specific areas of energy use. Such initiatives have been regarded as more likely to be cost-effective, and some promising results have emerged. One such example of a cost-saving initiative has taken place within the University Library. In common with many 1960s buildings, the Library and its adjoining buildings contain a large number of rooms which are of low thermal efficiency, largely as a result of air leakage and poor insulation. In addition, there are a limited number of sensors to control heating. University staff have traditionally brought in electric fires and fan- heaters to keep their own rooms warm.

The use of electric fires and electric fan-heaters however poses problems. Effective control of building temperatures is impossible because of the disturbance to existing heating zone sensors. The building’s own heating system is often turned off because a fire is located close to a sensor. Other staff elsewhere then turn on their own fires,

154 dramatically increasing the University’s electricity costs86. Electric fires also present a serious safety hazard.

The University Library and the Estates Department appointed a person to be responsible for curtailing electric fire and fan-heater use in the Library by 10%. Over the course of a year, the member of staff went into rooms within the Library and its adjacent buildings and with the authority of the senior management of the Library he persuaded staff to turn their fires off. The savings which resulted were significant: 13% of the electricity bill for the building was saved, at a cost saving of £12,000.

4.5.6 Summary of Points

• The present and much of the past appears to be overshadowed by the attempt which has so far been unsuccessful to implement the devolution of energy budgeting to cost centres. The metering of University energy usage has provided the Energy Unit and the University with some significant improvement in its understanding of how its energy is used. But this attempt at metering has taken place largely as part of the attempt to give local control to cost centres. • The Estates Department and the Energy Unit have produced little by way of publicity and schemes to encourage the efficient use of energy. • The Energy Efficiency Engineer, as his job title suggests, is focused far more closely on the development of engineering solutions to energy efficiency. He is less concerned with policy and the energy efficiency of building designs. • The Energy Efficiency Engineer acts as an advisor in the Estates Department on issues of energy efficiency. He is a specialist rather than a departmental manager. His unit is a technical one.

4.6 University of Edinburgh

4.6.1 Introduction The University of Edinburgh is one of the two major universities of Scotland in terms of size with a total of 16,000 students spread over three large campuses. The

86 The costs of heating with electricity are normally significantly greater than heating with a wet system which is fuelled by gas or oil.

155 university has a large number of energy intensive departments, including a medical school. There is a continuous building programme involving substantial new build and re-building work. The University’s energy bill is £3 million pounds per annum.

The University has a long-standing commitment to energy efficiency and environmental concern. Its energy and environmental policy statement dates from 1989 although it was only in 1993 that the University Court formally adopted the policy.

4.6.2 Management Structure for Energy Efficiency The responsibility for energy efficiency lies with the University’s Energy and Environmental Manager who is based in a special unit, the Energy and Environmental Office, which is part of the Estates and Buildings Division. The current Energy and Environmental Manager was appointed in 1989 as the Energy Manager and was given the wider responsibilities for environmental management in 1994 following the University’s review of environmental issues.

The Estates and Buildings Division is a large department with three divisions: Development and Factoring, which looks after the purchasing of equipment, including furniture, the Works Division which includes the Energy and Environmental Office, the Drawing Office and a large number of building managers, mechanical and electrical engineers and the Support Services which includes portering and cleaning. The Energy and Environmental Manager has a staff of two control engineers and one environmental advisor.

The University has a significant building programme of major new work and refurbishment which, during the period 1998 to 2002, will result in expenditure of around £63 million on buildings works. The University has also installed, and plans to install in the future, significant amounts of controls equipment to a value of around £150,000 a year.

156 Organisational Hierarchy – The Relationship with Other Departments The position of the Estates and Buildings Department is an important one within a University which undertakes significant building works and which, given the expansion of the sector, is often at the forefront of attempts to improve the working environment of staff and students. Despite the size and significance of the estates function, the Energy and Environmental Manager believes that a bias exists against the work of the Energy and Environmental Office. This bias is revealed, he believes, by the way in which the Finance Department accounts for expenditure on energy efficiency staffing which is regarded in a different light than other management costs87.

4.6.3 Energy Efficiency Knowledge The Energy and Environmental Manager and his staff have acquired their knowledge of energy efficiency from a variety of sources, including the EEBPp, extensive work experience in the area, from professional organisations such as CIBSE, from the VfM study, from professional networking and from the trade literature on energy efficiency and products. In addition, the recruitment of staff with specific skills on controls, see later, plays a part in enhancing the knowledge available in the energy and environment group.

Role of the EEBPp The Energy and Environmental Manager regards the EEBPp information as a “fairly low level form of professional development” which keeps him aware of developments in the area of energy efficiency and which complements other forms of information which he acquires through a variety of other sources.

He does not regard it as a definitive guide to energy efficiency but believes the EEBPp information provides an excellent introduction for those who are new to the area. For this reason he chooses to circulate EEBPp information, rather than any other, within his own organisation when he feels that staff do not properly

87 Energy efficiency staffing is regarded as a separate “on-cost” in the accounts, giving the impression that it is optional and therefore unnecessary.

157 understand any of the basic principles. The response to the material is generally very good, but for those who are already very experienced, the information is usually familiar. The Energy and Environmental Manager circulates both case study information on specific technologies and on energy management issues.

Share Fair Networking The Energy and Environmental Manager is an active member of Share Fair from its beginning. Over the 18 months of Share Fair on which observations have been made, particularly of the summary documents of Share Fair meetings88, the Energy and Environmental Manager has made growing use of the group, making requests for help through the group and offering information to his colleagues.

During the first three Share Fair events, the Energy and Environmental Manager made a total of just six offers and requests to colleagues in the group, while in the two Share Fairs of 1999, he made a total of eleven requests and participated in two special interest groups on specifications and energy monitoring.

The experience which the Energy and Environmental Manager has in running other organisations outside the Share Fair has been useful both to him and to Share Fair. He currently manages and administers the Environmental Association for Universities and Colleges (EAUC) mailbase list. This allows members of the EAUC to use electronic mail to exchange ideas with colleagues. He has used the Share Fair list to advertise the EAUC and encourages university energy managers to join the EAUC. The EAUC has a wider remit, encompassing a whole range of environmental issues, including energy management and waste.

88 The proceedings of Energy Share Fair events are written up in booklet form and circulated to all members of the group whether present or not at the event. The proceedings include all offers and requests made at the event and the details of presentations made on special subjects such as devolved budgeting.

158 Contribution of Work Experience The Energy and Environment Manager has worked in this area for a significant period, in common with the other energy managers who were interviewed. Within his Energy and Environmental Office there are two controls engineers both of whom have brought a background of technical experience to their current role. One of the two controls engineers is a former Satchwell89 employee. He has been recruited because of the significant investment in controls systems which the University is making.

Professional Networking – In the Sector Professional networking amongst fellow estates staff has provided the Energy and Environmental Manager with a significant amount of information which has helped him formulate answers to his own problems. The Energy and Environmental Manager works at a personal level closely with a colleague in the Estates and Buildings Office of the University of Glasgow. He also takes an influential role in the EAUC, monitoring the mailbase information sharing system for members. The Energy and Environmental Manager is also a member of the energy management mailbase list, a list partly owned and administered by two staff from BRECSU. A strong belief in the societal importance of energy efficiency underlies the energy manager’s commitment to his role.

Professional Networking – Outside the Sector The Energy and Environmental Manager has developed contacts with a large number of groups of people, including members of CIBSE and the sales staff of firms producing boiler equipment, particularly Atlantic Boilers and Hamworthy. Such close contact has allowed him to keep abreast of developments in boiler technology, particularly as the reduction in the price of condensing boilers has led to significant change to the design of efficient boiler configuration and the use of lead boilers.

89 Satchwell is one of the leading firms in the market for controls, selling products for building management, including a wide range for energy and environmental management.

159 Sector Regulation The VfM study has acted as a minor spur to the sector, and has amplified a number of the lessons and principles which the EEBPp had developed and presented in its publications. However, the Energy and Environmental Manager asserted that the Government did not appear to be exercising a strong influence upon the sector in terms of setting targets for energy efficiency, waste reduction and general environmental performance.

The role of HEFCE and SHEFC in Scotland was limited to the provision of advice and recommendations on environmental performance. No information was being collected by the sector regulators, on behalf of government, about the energy efficiency of the sector organisations. The attempt to create an accurate set of benchmarks on energy utilisation across the sector was further hampered by the closure of the Cambridge University Energy Survey.

Comparable Policies with EEBPp Organisations such as “Going for Green” can have an effect upon Universities, making their environmental initiatives wider and more inclusive. However, the view of the Energy and Environmental Manager at Edinburgh was that the Going for Green initiative, which in Scotland was incorporated into “Forward Scotland”, was too simplistic and patronising. He thought that the effects of such a programme, in a university might be “at best wholly irrelevant and at worst positively harmful” because they risked trivialization of the green and sustainability message.

An initiative which has arisen directly in the sector and which promotes the goal of sustainability, including energy efficiency, is the HE21 project managed by Forum for the Future and which is funded by the DETR90. The HE21 Project, which is led by Dr. Shirley Ali Khan who conducted the 1996 review of the Toyne Report91, aimed to establish initiatives to improve environmental management by creating sector specific sustainability indicators.

90 This was funded by money from the DETR Environmental Action Fund. The project was started in 1997 and was to last two years. 91 The Toyne Report, after Professor Peter Toyne, the Vice-Chancellor of the Liverpool John Moores University was published in 1993.

160

Metering and Analysis The installation of metering systems for energy and the measurement and analysis of meter readings (monitoring and targeting) is a central part of the activities of the Energy and Environmental Office. Without such metering and analysis, the Energy and Environmental Manager believes that it is difficult to benchmark his buildings. A large programme of pulse meter installation has taken place. While software and remote cable and wireless meters have made metering reading and data collection more easy to undertake, the different BEMS manufacturers have traditionally worked to different standards and protocols for communication. This has made it essential to have a clearly defined BEMS strategy at the University.

At present he has sufficient pulse metering installed to generate significant volumes of data. A gradual reduction in the prices of meters has allowed a wider introduction of metering technology for self-monitoring. However, there is now in fact such a volume of data generated by his systems - “we are awash with data” - that analysis of it is proving difficult within the management software which is available.

The TEAM and STARK systems which he has used were designed to do a monthly analysis of data. The new metering systems, which can be set to generate half hourly data, produce significant amounts of information which could be very useful if there was sufficient management software with which to analyse it.92

New Demands on Energy Managers The liberalisation of the energy market has, he believes, significantly changed the way in which energy managers work. There is far more emphasis today on finding the best way to buy energy: where organisations have large numbers of buildings and sites, their work load is often limited to procurement issues: “With multi-site campuses the major thing is just housekeeping, chasing gas companies to get us

92 He believes that many building users (he includes himself) cannot do the level of analysis that they would like because the half-hourly data cannot be incorporated it into the analysis software. He is able to carry out monthly reporting, which includes exception reporting and some detection of waste, but the full analysis of energy usage from the new metering is not possible.

161 transferred.” Changing tariffs not only entails changing contracts but moving from one supplier to another.

He has not yet been able, he feels, to delegate low-grade tasks because of continual changes to the way in which the energy market operates. He comments that problems arise from trying “to get us transferred” and “getting power supplies onto contract as the thresholds have dropped”. “It’s a disaster” “getting them to recognise whether there is a meter in this building or not,”.

He has particular concerns over the reliability of the administrative systems operated by the gas pipeline network manager, Transco. They have, he commented, “been as the proper agency should, getting their information onto new systems”. However, his experience of the process of gathering the customer details has not been positive.

4.6.4 Identifying Technologies for Implementation The Energy and Environmental Manager believes while the information produced under the EEBPp is an excellent introduction to particular types of technology and its general performance limits, the information is not sufficiently precise to help with specific investment decisions. In two respects more might be expected from the information, he believes.

Firstly, there could be more exact information about the technical specification of the equipment. Far more detailed information is often available from manufacturers about products and this is often, he observes, of very high quality indeed. Secondly, when purchasers (universities) are ordering equipment, they are not always aware of which questions and general points – he termed them “heuristics” - they should ask about the product. He observes that: “Certain rules of thumb are not coming through .. the difference between gross and net calorific value on condensing boilers or the key determinant of the efficiency of a plate heat exchanger.”

While more help is needed from the EEBPp information with the “pointed questions which shine the light on the technology”, the management information which the programme produces has always been “outstandingly good”.

162 4.6.5 Installing and Configuring Technologies The installation of equipment is a problem of immense significance for the Energy and Environmental Manager both in the context of his own work and, he believes, within the sector itself. Commissioning is a problem in both the case of energy using technologies such as boilers, lights, ventilation systems and pumps and in the case of the controls which are intended to optimize them.

The protection of savings depends, he believes, crucially upon the correct commissioning of equipment of both types. There are however also problems at the design stage. Often, designs are wrongly conceived. More usual though are problems which arise during the carrying out of work by Mechanical Services Consultants and their engineers. On the capabilities of M&E (mechanical and electrical) consultants in respect of BEMS, his reaction was: “My God - practically none of the M&E consultants understand them at all.”

There are also significant problems with heating and ventilation systems where the dependence upon accurate controls systems is essential. He says of one major heating and ventilation system which is intended to optimise energy use: “Pumps have been put in a particular way and because they are back-siphoning all the way round you can’t get any control over them”. Amongst the installers of equipment he believes that there is a significant deficit of technological knowledge of their product and how to set it up to work correctly: “There is quite a lot of first base engineering which is not that well understood.”

When the University uses building management systems specialists to write tenders in order to ensure that the specifications are precise and in the terms in which they will be understood, the M&E consultants carrying out the work regularly fail to understand the designs: “the M&E don’t have the wherewithal or the knowledge”. The result is large quantities of equipment and systems which are not properly optimized and a large amount of snagging work for the Estates and Buildings Department.

The Energy and Environmental manager believes that it was the discussions with fellow energy management staff and press articles about one particular building -

163 One Bridewell Street, Bristol93 used by the Accountants Ernst and Young – which have brought home the importance and the difficulty involved with commissioning a modern office building. While the Good Practice Case Study focused on the low energy costs of the building which is air conditioned, the Energy and Environmental Manager believed that the more important lesson from the development was the length of time taken to remove snags and fully commission all the buildings control systems.

4.6.6 Summary of Points

• The EEBPp material on energy management is highly regarded. • The technical information is also highly regarded but is less use to a manager who is already highly skilled and knowledgeable. The product and technological information is more useful for other employees who are being introduced to energy efficiency for the first time. For them it one of the most appropriate information. • The EEBPp information is widely circulated within the organisation with the authority of the Energy and Environmental Manager. It is also used to inform architects employed by the University and those contracted by the University.

4.7 Liverpool John Moores University

4.7.1 Introduction The Liverpool John Moores University is one of the two major educational institutions on Merseyside and was formerly Liverpool Polytechnic. It is a city centre University with 51 sites of varying size within the centre of Liverpool on three major locations. Many of the buildings are grade two listed. There are 20,500 students in the University in total. A significant building programme has taken place within the University since conversion to University status in 1992. The University spends

93 The building is featured in Good Practice Case Study 21. It demonstrates that an air-conditioned building can have low energy consumption.

164 £1.01 million a year on energy expenses, with 78% on electricity, 21 % on gas and 1 % on oil.

4.7.2 Management Structure for Energy Efficiency Responsibility for energy management is with the University Engineer who is also known, within the University as the Energy Manager although his job title is University Engineer. He is based in the Estate Management Department of the University and reports directly to the Head of the Department, the Director of Estates. Estates Management is located within the Office of the Bursar and is one of four service departments under his control. The other departments are: Financial Services, Computing and Information Services and Operational Services. Operational Services is the facilities management department and looks after portering, cleaning and security.

The University has previously employed an energy manager but in 1996 he was made an offer of another job and left the University94. The University Engineer, at the request of the Vice Chancellor, took on the role and retains responsibility for the area, although some of the work is delegated to other members of staff. The University Engineer still has plans to advertise for a replacement energy manager and has spent considerable time on devising a new job specification, but there is still no permission from the University senior management to make the appointment. The University Engineer also takes responsibility for water conservation issues as part of a wider environmental brief. He also takes a leading role in consultations on the University’s new building projects.

4.7.3 Energy Efficiency Knowledge Knowledge and awareness of energy efficiency comes to the organisation from a variety of sources, comprising the use of the EEBPp, including participation in Share Fair activities, professional networking, professional knowledge, and organisations within and beyond the sector, including sector regulators, and from government policies in the area of energy and environment. Informal but frequent contacts with

94 Mr Keith Maloney left the University in 1996.

165 members of the academic staff of the Department of the Built Environment also play a part in enhancing the knowledge of the Estates Management.

Role of the EEBPp The University Engineer has referred to the EEBPp material and has some of the material in the office, but he believes that he has not used the material to provide either background or specific advice for particular projects. His own technical knowledge and awareness have developed from his work experience rather than from the EEBPp.

Share Fair Networking The University Engineer has been a strong supporter of Share Fair, attending the second meeting and thereafter being a regular contributor at meetings. He has used the group as a way of discussing the development of the University energy efficiency policy which was announced in 1998.

His contributions to the group have also included feedback on the problems affecting the operation of some versions of one of the major building energy management software systems. He has also advised members of the group about energy procurement.

Participation of Academic Departments The University’s Department of the Built Environment has agreed to participate in the attempt to improve the energy and environmental performance of the University’s buildings projects. In 1998 the Department, as part of the University’s environmental review, agreed to work with Estates Management on the development of a code of practice on environmental design.

Professional Expertise The University Engineer is an electrical engineer by training and this has provided him with much of the expertise which he brings to an area of energy management

166 which he believes is much in need of development within the University, namely, the deployment and maintenance of control systems for energy using equipment. Control systems lie, he believes, at the heart of effective buildings operation and measurement.

Role of Comparable Policies – The Toyne Report The Vice-Chancellor of the University is Professor Peter Toyne, author of the 1993 Environmental Responsibility Report – Greening Further and Higher Education. Professor Toyne is closely associated nationally with the issue of the environmental performance of universities. His influence within his own university has been significant in terms of the adoption of policy and the development of initiatives.

The University has acted to support and join other projects taking place within the sector, such as the HE21 Project and support of Going for Green’s activities in 1997. The University was, in addition, a founder member of the Environmental Association for Universities and Colleges.

Health, Safety and Environment Unit In 1997, the University amalgamated the Environment Unit and the Health and Safety group. This change was part of an attempt to establish a coherent and powerful body which could more effectively coordinate and publicize the work the University undertakes on compliance issues in accordance with the principles of ISO 14000, the influential environmental management standard. The Health, Safety and Environmental Unit published the University’s first Environmental Performance Report in 1997 and delivers information on the University environmental, energy and health and safety issues through a newsletter which is distributed to staff and which is also available on line95.

95 The title of the newsletter is “Greenfile”.

167 Sector Organisations At a national level there have been a number of initiatives which have aimed to raise the profile of energy and environmental management within the sector. Of particular note is the Forum for the Future’s HE21 sustainable universities challenge to which the university is a signatory.

Use of Consultants The departure of the University’s energy manager in 1997 coincided with a need to respond to a number of initiatives in the sector and from the University’s own senior management. In order to fill the gap left by the energy manager’s departure, Estates Management began to use the services of an energy consultant who had a very good knowledge of the sector, having been a consultant to the HEFCE Value for Money study. The consultant, based at Economic Energy, an energy consulting organisation, was asked by the University Engineer to devise awareness schemes for staff and students.

4.7.4 Identifying Technologies for Implementation The University Engineer aims to install a large number of energy efficient technologies in the coming years. He has long been aware of the types of technologies which will increase energy efficiency and does not particularly attribute the Programme information to his knowledge of what are suitable choices.

4.7.5 Installing and Configuring Technologies The University Engineer is heavily involved with new buildings and retrofitting of existing University premises. His experience is that the energy efficiency performance of buildings suffers from the failure to install individual equipment correctly and to ensure that the whole building performance is optimized. Building commissioning is an area of estates activity which he believes is immensely significant. His awareness of the area derives in part from a detailed knowledge of some of the technologies which he has seen misapplied; but also from studies in the professional press, particularly the work done by Dr Bill Bordass in the CIBSE

168 Journal. He believes that organisations such as universities have not controlled their contractors sufficiently well in the past.

4.7.6 Summary of Points

• The EEBPp material has not influenced specific building design measures. • While there are plans to appoint a new energy manager, the appointment of a new member of staff whose sole responsibility is energy management has not taken place. • Although the University Engineer has a large range of responsibilities, he has greater influence over the organisation than in other universities. Higher Education appears able to become involved in the building work, taking a role in contractual negotiations. • The presence of a dedicated energy manager may in fact not lead to the introduction of successful policies and practices of energy management than when a more senior member of the estates staff is involved.

4.8 Sector Summary The following table consolidates the impacts of the Programme as seen through the organisational context, and shows the principal influences upon the way in which the Programme has taken effect.

169 Table 16. Higher Education Sector Summary Table

Energy Energy Identifying Installing and Management Efficiency Technologies Configuring Structure Knowledge for Technologies Implementation University of - Low Programme - Low Programme - Low Programme - Low Programme Leeds Use Use Use Use - Well established - Metering level - Professional - Info not - Hybrid Energy - high Expertise based perceived as good Manager to be on protecting appointed savings - Staff turnover - Use of problem consultants - Weak top level support University of - Low Programme - High Programme - Low Programme - Low Programme Salford Use Use Use use - Well established - Metering level - Professional high Expertise based - Benchmarking medium University of - Low Programme - Medium - Low Programme - Low Programme Central Use Programme Use Use use Lancashire - Established - Metering level low - Low awareness of - High Staff - Academic input commissioning turnover into energy - Awareness efficiency strategy schemes priority - Benchmarking - Top Level low support also from Going for Green Victoria - Very well - Metering level - Low Programme - Low Programme University of established medium Use use Manchester - High level - Environmental - Professional - Aware of support from reporting pressure Expertise based commissioning Programme & - Benchmarking - Wide links MACC medium University of - Very well - Metering level - Medium - Low Programme Edinburgh established system high Programme Use use - High level - Academic input - Professional - Aware of support into energy Expertise based commissioning - Controls Strategy efficiency strategy - Links to - Links to - Role developed by - Benchmarking manufacturers manufacturers post-holder good and colleagues Liverpool John - Staff turnover - Metering level - Medium - Low Programme Moores - Awareness low Programme Use use University schemes priority - Academic input - Professional - Aware of - Consultants used into energy Expertise based commissioning - Top level support efficiency strategy - Severe problems - Few Controls - Benchmarking with sub-contractor low quality

170 Chapter Five - UK Hotel Sector Study

5.1 Introduction This chapter contains the Hotel sector study for the United Kingdom. The chapter focuses on examples of Hotels in the United Kingdom and Scotland and involved interviews of their energy efficiency and estates staff. Also interviewed were the representatives of a number organisations which have had a significant impact upon the sector’s energy efficiency and environmental performance.

5.1.1 Sector Organisations

Table 17. Interviewees and their Organisations – Hotel Sector

Organisation Job Function of Interviewee Holiday Inn Crowne Plaza Chief Engineer Holiday Inn Crowne Plaza West Drayton Stakis PLC Contracts Manager Stakis Headquarters Maintenance Manager Bath Stakis

Swallow Hotels Ltd. Technical Manager Central Estates Services Group

Forte Hotels Ltd. Regional Maintenance Executive Electrical Regional Maintenance Executive Energy Efficiency Regional Maintenance Executive Chartered Surveyor Thistle Hotels Regional Building Manager Southern Region Maintenance Manager Cheltenham Thistle Maintenance Manager Donnington Thistle and Former Thistle Group Energy Manager Marriott Golf Course and Facilities Manager Marriott Hotel, Worsley, Manchester Utilities Projects Manager Whitbread Purchasing and Procurement Department

171

Table 18. Other Interviewees – Hotel Sector

Organisation Job Function of Interviewee BRECSU BRECSU Hotel Sector Project Manager to 7/98 BRECSU BRECSU Hotel Sector Project Manager from 8/98 International Hotels and Environment Environmental Advisor and former Director Initiative (IHEI) of Forte Hotels and Gardner Merchant Green Globe Lecturer at Oxford Brookes University and Consultant to Green Globe

5.2 Holiday Inn Crowne Plaza

5.2.1 Introduction Holiday Inn Crowne Plaza is an international hotel franchise business owned by the Hotels and Resorts Division of BASS PLC which operates from Atlanta in the United States. The Hotels and Resorts Division owns or franchises a large number of hotels around the world. Within the UK, three major brands operate: Holiday Inn, and Crowne Plaza. Crowne Plaza hotels are the larger hotels in select and capital city locations, the Holiday Inn hotels being the city and major metropolitan area hotels.

5.2.2 Management Structure for Energy Efficiency Energy efficiency is the responsibility of individual Chief Engineers based at each of the seven Crowne Plaza hotels in the UK. One of the Chief Engineers, the Chief Engineer at West Drayton, of the Heathrow Crowne Plaza at West Drayton, also has responsibility for the coordination of the energy efficiency performance by the other hotel chief engineers within the chain. Energy efficiency is a significant part of the remit of the Chief Engineer and a Chief Engineer is a member of the senior management team of every one of the Crowne Plaza hotels96.

96 Chief Engineers are often services trained and are usually qualified to HND level with engineering expertise. They do not have specific energy management training. They report to the Hotel General Manager, the most senior manager on any hotel site.

172 Chief Engineers are encouraged to develop their own proposals for energy efficiency, including both technologies and techniques. Proposals are then presented to The Chief Engineer at West Drayton who can authorise them and pay for them from his budget. This is a development budget and is used to identify and test new technologies. The Chief Engineer’s criteria at West Drayton for support from his budget is that of the level of innovation proposed. A low energy bulbs project proposal is not regarded an innovative enough scheme, but the use of inverters (variable speed drives) would be more acceptable and might receive funding. Once new technologies are identified, they are recommended to the other hotels in the chain and information about their use within the chain is disseminated throughout the chain.

5.2.3 Energy Efficiency Knowledge The Chief Engineer uses the EEBPp energy management information to develop his energy policy and energy schemes and campaigns amongst the hotel staff. A member of the BRECSU Programme staff subsequently noted at interview that the Energy Management Guide produced by the Chief Engineer at West Drayton for the Chief Engineers of the Crowne Plaza chain was extensively based on Energy Efficiency Best Practice Programme material, particularly GIR 12 and GPG 186.

Role of Green Globe Crowne Plaza also uses an environmental and energy consultancy service provided by Green Globe which is an initiative of the World Travel and Tourism Council. The programme disseminates information and advice to the hotel industry and also supports an environmental management standard.

The WTTC, which set up Green Globe, is a global coalition of chief executives from the international tourist industry97 which came into being in the wake of the Rio Conference and Agenda 21. The objectives of the group are to coordinate a

97 The World Travel and Tourism Council (WTTC) is “global coalition of nearly 100 Chief Executive Officers from all sectors of the Travel and Tourism industry, including accommodation, catering cruises, entertainment, recreation, transportation and travel-related services” – Green Globe Annual Review 1997-1998, page 26.

173 response to Agenda 21 and to improve the industry’s environmental performance in recognition of the fact that regulation both nationally and internationally might be inevitable,98 even if the industry is able to demonstrate publicly that the industry is responsible. Green Globe projects are in some cases supported by funding from the United Nations Development Programme (UNDP).

The Green Globe’s information and advice service to hotel businesses ranges from simple signs and stickers to a telephone advice service. In addition, the Green Globe web-site also includes comprehensive references to the other environmental programmes around the world, including extensive references to EEBPp documents. While there is no link to the BRECSU web-site, and no formal or informal links to the EEBPp, there is a full account of the EEBPp material on the Green Globe web- server with copies of the descriptions of EEBPp publications as used by BRECSU99.

Once organisations or particular hotels within a chain have joined Green Globe they are free to make use of the information provided by the programme and to apply for certification. The certification process lasts one year during which time organisations are able to use the information and advice provided by Green Globe. Green Globe requires that the audit is carried out by SGS, an environmental auditing and consultants firm. The certificate is awarded after what is normally a two day inspection of the hotel’s management systems. At the end of 1998, the management of the West Drayton Crowne Plaza had yet to apply for Green Globe certification, but this was planned for 1999100.

Understanding Energy Use The Chief Engineer at West Drayton has attempted to ensure that the analysis of energy use across the chain is carried out to a highly sophisticated level with measurement, monitoring, comparison (benchmarking), and analysis taking place continuously as a matter of a normal management cycle. The Chief Engineer at West

98 Green Globe Annual Review 1997-1998, page 26. 99 Neither EEBPp nor BRECSU managers have been directly informed that their material is being indexed in this way and made accessible to the hotel sector both in the UK and abroad. 100 Membership of Green Globe costs £3500 for a large company and £200 for every operating unit (hotel). The costs of certification depend upon the operational details of the hotel.

174 Drayton believes that the measurement of energy use is an essential step in the attempt to control energy use. Repeating the well known principle from monitoring and targeting good practice, the Chief Engineer at West Drayton stressed that, “If you can’t measure it, you can’t monitor it.” He believes that the leaders in energy measurement in the sector are the Intercontinental chain and that he should be aiming to measure energy usage at least as well as they have done.

Use of the benchmarking information provided by the EEBPp’s Energy Consumption Guide No. 36 was one of the first steps for The Chief Engineer at West Drayton when he began the project to benchmark the energy consumption of the hotel chain. Increasingly, benchmarking takes place using the hotels’ own data rather than sector wide data as collected and disseminated by the EEBPp. Some sectoral comparison does however still occur. More recently, The Chief Engineer at West Drayton has been able to involve academics from the University of Cardiff in benchmarking the hotel chain. The Chief Engineer at West Drayton notes that energy usage is highly context specific: different hotels, different weather conditions and different trading conditions all affect energy usage and make comparisons (benchmarking) between large number of hotels misleading. Comparison is far more meaningful where there is some understanding of the underlying reasons for use and where time series data for a number of years is available.

The Chief Engineer’s current energy measurement comes from the half-hourly electricity meter readings from the electricity suppliers and other meter readings from within the hotels of their gas and electricity consumption. This data is collected from all the Crowne Plaza hotels and The Chief Engineer has the records of two years’ worth of energy consumption in a spreadsheet on his office computer. Analysis of the meter readings provides some insight into the usage patterns. Hot water consumption is measured in this system and the Chief Engineer at West Drayton was able to see variations in usage pattern and relate this to the type of occupancy of the hotel. For example, earlier in the year (1998) a conference of sales representatives from Estee Lauder took place at the 125 bedroom Leeds Holiday Inn Crowne Plaza. Hot water usage was very high during the period of the conference from about 7.00pm to 8.30pm every day. This was according to his analysis, the

175 result of a high proportion of the sales representatives taking a bath before going to dinner.

Analysis of hot water usage also gives indications of staff use of energy. The Chief Engineer at West Drayton had assumed that much of the energy which is used within the hotel was used by guests. Observations of the hot water usage pattern had shown that significant amounts of energy were, after all, used by staff. The Chief Engineer at West Drayton had estimated that nearly 25% of the energy used within the hotel was used by staff. One type of activity which was thought to be responsible for a significant proportion of the hot water usage was the cleaning of guests rooms.

Whenever a guests room is cleaned, special attention is given to the cleanliness of the bathroom. Hotel bathrooms are fitted with large mirrors and the cleaner [the maid] must clean the mirrors thoroughly. Most maids, whether they are working in the UK or another European country according to The Chief Engineer at West Drayton, appear to know that by turning the taps of the bath full on they can generate steam which will help them to clean the polished tiled and mirrored surfaces far more effectively. While this technique results in clean bathrooms, the resulting use of hot water is high.

Extending Measurement and Analysis Although metering is a high priority for The Chief Engineer at West Drayton, it is a costly exercise to install metering in each room. The Chief Engineer at West Drayton observed that: “One of the battles I have got on – they have no physical return on investment.” Once measured, energy use can be far more effectively controlled. Appropriate metering technology could cost up to £3,000 per room and this is not cost-effective over even five years.

The Chief Engineer’s assistant manager at the West Drayton Crowne Plaza confirmed that despite the fact that they were not able to monitor individual rooms, they were able to work out an average utilities cost (for electricity and gas) for each room sold. This figure for utilities per room sold per day was £2.87. The benchmarking exercise for the hotels was however temporarily suspended while Intercontinental was being acquired by BASS.

176 5.2.4 Identifying Technologies for Implementation The identification of energy efficiency technologies is a process which is helped to a limited extent by the case studies published by the EEBPp which outline particular technologies and methods. These EEBPp documents are “very general” observes the Chief Engineer at West Drayton, and are helpful in terms of awareness raising but never detailed enough to make the installation of particular technologies or techniques easier in practice. The Chief Engineer at West Drayton said that “EEBPp is very general. I find it general enough to give me the insight to go and do something more specific”. While the case studies achieve the task of awareness raising, The Chief Engineer at West Drayton did not believe that the information which is presented by the EEBPp significantly reduced the costs of installing energy efficiency technology.

Energy Services Crowne Plaza are now major users of combined heat and power systems (CHP). Their use of CHP is through a contract energy management arrangement through which Crowne Plaza pays for the energy which they consume from a generation set installed on their premises. Crowne Plaza do not own or operate the equipment. The operation and maintenance of the CHP system is dealt with by a third party.

The Chief Engineer at West Drayton believes that the use of CHP by Crowne Plaza has been made far easier for him because the Crowne Plaza has its own legal department which he has been able to consult when drawing up the contact between the hotel and the energy service company. Without such a resource, Crowne Plaza might not have been able to make use of CHP.

5.2.5 Installing and Configuring Technologies The installation and configuration of technology within the context of the organisation is a difficult issue on which to obtain information. Senior managers are reluctant to compromise their position by admitting to failures in this area. The assistant to The Chief Engineer at West Drayton, described that there were some problems with the boiler control systems which the hotel had installed. Boiler

177 controls aim to optimise boiler firing and running temperatures, minimising and re- using waste heat. The assistant engineer claimed that the hotel’s attempt to get boiler controls to work had failed. Because the controls had failed to give any significant benefits they had been set to be non-operational: “They are on bypass at the moment because they work so badly”.

Funding of Energy Efficiency Initiatives The funding of energy efficiency takes place through two routes, one of which is just recently established. The first route is through the budget which The Chief Engineer at West Drayton himself controls. Proposals to draw on this Crowne Plaza central budget must meet the criteria set out by The Chief Engineer at West Drayton for a degree of innovation. All proposals must be costed and must meet a payback of three years in the first instance. It is unusual for proposals to be accepted for longer paybacks. Where expected paybacks are longer, The Chief Engineer at West Drayton stated that “a stronger paper must be written” to outline the costs and benefits and to justify the scheme.

During 1997, the hotel group accepted the need for a permanent commitment to energy efficiency investments in each hotel to be given greater emphasis by the inclusion in the hotel’s capital budget of a specific energy efficiency item. The Chief Engineer at West Drayton, as an advocate of energy efficiency, has been a strong supporter of the change. The change to capital budgeting practice “create[s] a specific line in the capital budgets for energy saving so that they [ - the hotel general managers - ] can’t spend it [capital] on curtains”. The effects of such a change have not had time to occur.

Recent Funding Practice Crowne Plaza, in common with the majority of hotel businesses, is subject to a rise and fall in turnover as a result of the business cycle. This rise and fall in turnover creates different conditions for investment at different times. When hotel revenues are strong, capital is available for investment, including investment in energy efficiency technologies. In the mid 1990s, Crowne Plaza had been able to make significant investments in energy efficiency technologies, but in the latter part of

178 1998, a period of reducing revenues and financial stringency was, he thought, likely to restrict energy efficiency investments to the so-called “no-cost” and “low-cost” choices.

Deployment of Controls and Automatic Systems Controls and automatic systems provide a way of automating energy efficiency within a variety of operational contexts. Crowne Plaza have installed a number of control systems such as passive infra-red detectors to reduce energy consumption in their hotel rooms. All main lights are on a four to five minute delay, after which they automatically turn off. Air conditioning is also set to switch off automatically after two hours of use. Few problems have been discovered with these technologies. Crowne Plaza is a high-end chain and such energy intensive technologies as air- conditioning are widely used.

5.2.6 Summary of Points

• EEBPp information has been used in the organisation in a number of ways: it has helped the chief engineer of the hotel chain develop a strategy for involving the staff of the hotel in energy efficiency activities; and the benchmarking the estate began with data and guidance supplied by the Programme. • After significant lobbying by the Chief Engineer at West Drayton of the chain’s general managers, all financial forecasts for a hotel’s capital spend now contain a separate item for energy efficiency. Energy efficiency is no longer considered to be a revenue item, forming a necessary part of any hotel’s capital investment programme. While the EEBPp recommends that energy managers attempt to follow this course, there is no evidence that HICP adopted this practice because of EEBPp. • While the procurement of energy services is partly a technical matter, there are often significant legal and administrative issues with which to deal. The installation of CHP is significantly easier for the HICP’s engineering and energy efficiency staff because of the presence of a large in-house legal department. Its expertise is instrumental in negotiating complex agreements for electricity and heat that are vital business services.

179 • HICP have established systematic procedures for considering and funding energy efficiency proposals. Proposals to install technology which may already exist in the other hotels or which may be regarded as standard practice are funded from each hotel’s capital budget. Proposals which are novel receive central support and are trialled before being designated as best practice for the group. Central to this procedure are the designation of what is normal practice for the group and the presence of an effective dissemination strategy for successful or promising ideas. • While there is no metering of utilities on a room by room basis, the Chief Engineer and his staff have made estimates of actual utilities cost per room. • Metering at a room basis level is unlikely to occur because of the costs of metering equipment which remain very high. • Collaboration with academics specializing in construction and buildings energy efficiency has led to a benchmarking project which may reduce energy consumption across the whole group.

180

5.3 Stakis PLC

5.3.1 Introduction Stakis PLC is a UK based hotel chain with 54 hotels in 1997, comprising a majority of two and three star hotels and five four star hotels which became part of the company with the takeover of Metropole hotels during 1997. The chain also owns and operates a number of casinos and health clubs, but only a small number are located within the hotels. The Headquarters of the company is in Glasgow. Most of the hotels in the Stakis chain are leaseback deals in which Stakis operates and manages the hotel but does not own it.

5.3.2 Management Structure for Energy Efficiency The management of energy efficiency is coordinated by a Contracts Manager who is responsible for the fitting out of new hotels and major refurbishment schemes. Within the hotels, maintenance managers at each site have responsibility for energy management, but this is only intended to be a small part of their overall responsibility.

There is little formal or informal contact between the maintenance managers and the Contracts Manager, as the Contracts Manager takes a major role in the building programme of the hotel chain. The maintenance manager of the Bath hotel perceived the management of energy efficiency “to be a little haphazard”. He felt that there was comparatively little direction from the centre: while the centre organised the installation of such things as building energy management systems at new build or refurbishment stages, the existing hotels were normally “left to get on with it”.

5.3.3 Energy Efficiency Knowledge While the contracts manager does not believe that the EEBPp has raised his skill levels, he does believe that the EEBPp could improve the skills of those responsible for energy management within the chain. The Bath hotel’s Maintenance Manager

181 had found the EEBPp material useful in helping him train his staff to use energy more efficiently. The Bath Hotel Maintenance Manager has trained the various heads of department in the Bath hotel and they have subsequently instructed their own staff. Training is particularly important in the Autumn before the winter season when heating losses can be avoided by reducing thermostat settings and keeping doors and windows closed. Some handouts are issued based on the advice given in the energy management publications.

Understanding Energy Use Energy consumption is measured by the Contracts Manager once a year by hotel and by building. The local maintenance management staff do not see the measurements taken once a year and are only aware of the exceptions if they are flagged at the bill payment stage. No half-hourly meter readings are therefore available to analyse. The contracts manager assumes however that 20% of the energy use is by the hotel’s own staff and contractors.

Because there are no usable figures for energy consumption, there is no systematic and frequent benchmarking of the hotels. However, some of the investments which the organisation has made in energy efficiency have been seen retrospectively to give a return. The attribution of steps which the organisation takes to save energy is therefore achieved, albeit only when the scale of the investments are large and the time span for the payback is long, i.e. at least a year. Auditing of energy use is a “once in a blue moon”101 activity therefore, occurring only when exceptions are noted. In the Bath hotel, no half-hourly electricity meter readings are available, and the centre does not perform any exception reporting function to the site.

5.3.4 Identifying Technologies for Implementation Technology procurement is arranged centrally through the contracts manager at new build or refurbishment. The contracts manager does make some use of the EEBPp material but relies far more on his own experience and that of his colleagues in identifying, installing and commissioning equipment. Maintenance managers play

101 The Hotel Engineer of the Bath Stakis.

182 little role in the specification of equipment. At the Bath hotel a rolling fluorescent light replacement scheme is in progress which has been initiated locally. When older lights fail, these are replaced by new more efficient lighting. Interaction between those mounting local initiatives and central building services and design function appears to be weak.

5.3.5 Installing and Configuring Technologies Apart from lighting, which is seen as a simple replacement activity, all major changes to the technology used in the Bath hotel have been managed by the centre. Such major technological changes are the installation of building energy management systems to control air-conditioning and the new 1.5kW room heaters installed in the Bath hotel and throughout the group after an initial trial.

At the level of new-build and refurbishment, Stakis use specialist commissioning consultants to assist with the task of installing and configuring new technologies. The contracts manager believes that the benefits of correct commissioning outweigh the costs of not doing the work. However, once equipment is installed or new working procedures for staff implemented, no systematic attempts are made to re- commission.

Deployment of Controls and Automatic Systems These are used in the form of time-clocks on the new 1.5kW electric room heaters. Building energy management system from TREND has recently been introduced, but the impacts of this on energy saving have yet to be identified. The Bath Hotel Engineer regards his organisation’s use of TREND as “nothing more than as if was a glorified time clock”. TREND is simply used by Stakis to turn heaters off.

5.3.6 Summary of Points

• Coordination of energy efficiency is relatively poor. Hotel engineers are not directed by head office staff. Some of these staff are critical of the policy of the group.

183 • EEBPp is useful to one of the hotel engineers, however. • There is relatively little understanding of how energy is used. Auditing of energy use was described as a “once in a blue moon activity”. • While EEBPp is used, colleagues’ information and advice is thought to be more important in providing insight into energy efficiency technologies. • Commissioning, recommissioning and maintenance of energy using equipment is not widespread despite the presence of the belief that it may save significant amounts of energy on a recurrent basis.

5.4 Forte Hotels Ltd.

5.4.1 Introduction The Forte hotel chain was founded by the Forte family and built up into one of the largest hotel groups in the UK. The chain was taken over by Granada, the entertainment group. Within the current Granada group there are now four major brands of hotel, the , Forte Posthouses, Forte Heritage, and Le Meridien. The two chains of Forte hotels comprise the majority of the hotels with 149 hotels and nearly 15,000 rooms in the UK. Posthouses and Heritage are mid- range hotels. Their overall management is undertaken by General Managers each with control of a geographically based cluster of from two to six hotels in number.

5.4.2 Management Structure for Energy Efficiency Energy efficiency management takes place at three levels within the Forte hotel chains. The board level Development Director, Graham Craddock, is responsible for general policy and large scale expenditures on new build and major refurbishment. Within the UK there is a team of five Regional Maintenance Executives, part of whose responsibility is to ensure the energy efficient operation of the hotels through fault finding of equipment and through working with hotels based staff, particularly the hotel engineer. Regional Maintenance Executives have dual reporting relationships, to the Development Director and to the Regional Brand Director. RMEs are also responsible for a number of health and safety issues, particularly where these require changes to the building fabric, structure and signage. Regional

184 Maintenance Executives have financial responsibility for building works and retrofits up to a financial limit of £100,000.

Within each hotel, a hotel engineer takes some responsibility for energy efficiency, but this is only one part of a wide ranging role. The hotel engineer’s experience and training is usually practical with many having experience as bricklayers or carpenters. There are no energy managers within the Forte system. Energy efficiency issues are always therefore handled by those with other responsibilities.

Both RMEs and Hotel Engineers are responsible for ensuring that staff in the hotels are aware of how they can improve the energy efficiency of their hotel. The RMEs take the leading role in this activity, preparing job descriptions for the hotel engineer who is regarded as the “custodian of energy efficiency” on site. Staff training in energy efficiency does take place. In addition to the three major managerial levels where energy efficiency is dealt with, Granada’s facilities management company ECA takes a group wide role in the procurement of energy in the form of both electricity and gas. ECA’s responsibilities in the area of tariff analysis and procurement directly affect the RMEs to whom information on energy usage is directed from the current energy suppliers.

Continuing Influence of the Forte Model Under the previous owners of the hotel group, John Forte, a member of the Forte family, was Director of Environmental Services. It was his decision to set up environment groups for each of the Forte businesses in catering, hotels and airports. Representatives from the various Forte sites would meet and discuss practical ways of improving environmental performance four times a year. Plant managers and surveyors employed by the company would normally attend.

After the Granada takeover, the groups were abandoned. However, all the regional maintenance executives joined the group before the takeover and the three of the six who were interviewed all thought that the environment groups had allowed the organisation to achieve a significant lead over competitors in terms of energy efficiency performance. All the regional maintenance executives routinely

185 collaborated with each other and shared information between themselves about energy efficiency and their other work.

Forte has long been associated with concern for environmental issues and particularly with energy efficiency. Under John Forte’s management of the group’s environmental policy, Forte was the first hotel chain to use CHP for discounted electricity purchase, a procedure better known today as contract energy management and now widespread in the hotels and leisure industry102.

Forte’s Use of CHP – Linking Innovation During the 1970s, Forte hotels began to build close links with Dr. Julian Packer, a researcher based at the University of Manchester Institute for Science and Technology. Dr Packer’s research was into the development of combined heat and power systems for industry and commerce.

The result of the collaboration was that Forte were the first UK hotel company to install a commercial prototype version of CHP. This was done at the Castle Hotel at Windsor and the equipment was built to the FIAT Totem design. The Castle Hotel system was not, however, economic as its payback period of five years exceeded the design life by three years.

Subsequently, Forte Hotels sought to deploy CHP systems in such a way as to guarantee their financial viability. Interest was sought from engineering companies which could carry the financial risk of the CHP systems and which would sell some or all of the electricity to the hotel chain. This new form of arrangement became known as “discounted electricity purchase [DEP]” and provided the basis for all subsequent CHP installations in the Forte estate and was first used at the Manchester Posthouse with a 38kW system. Eventually, 60 hotels were equipped with CHP, the largest being the Heathrow Posthouse with a system rated at 500kW.

The use of CHP still however presents some problems and difficulties at a small number of the hotels. Restrictions on the location of the CHP unit within a hotel

102 The hotel also pioneered the use of plate heat exchangers during this phase.

186 may prevent waste heat from being diverted to the point where it can be used best, normally the hotel swimming pool. Although these systems fail to make optimal use of all the available waste heat, they are largely cost-effective still because of the relative cheapness of gas.

Forte Collaboration with Government and Other Organisations While John Forte was Environmental Services Director of Forte Hotels, there was extensive collaboration with the energy efficiency initiatives of the government, particularly with the Energy Efficiency Demonstration Scheme and its contractors, ETSU. As a member of a panel to advise ETSU on how best to produce energy efficiency leaflets for industry, John Forte played a significant role in advising government on the content and form of government publications, and at the same time working with ESTU on how best to present information to his own staff within the hotel chain.

The take over of the hotel chain led to the departure of all members of the Forte family from the business and broke some of the long established links with government. However, there are still links with external organisations which promote energy efficiency such as the International Hotels Environment Initiative from which John Forte now works as the Environmental Advisor. Examples of energy efficient technology use at Forte appear regularly in the press and in the newsletter of the IHEI, Green Hotelier.103

5.4.3 Energy Efficiency Knowledge The RMEs interviewed all thought that their work experience was of most importance in developing their knowledge of energy efficiency. They had all heard of the EEBPp. The longest serving RME said that he did not use the EEBPp, but the other RMEs said that they did find some useful information within the programme. None said that they used the programme specifically to answer questions and for information. Their awareness and understanding of energy efficiency was built up by contact with each other through energy groups and by networking extensively with

103 In issue 9 of Green Hotelier, the use of a CHP system at Forte’s Strand Palace Hotel in London is described.

187 each other on an ad hoc basis and with contacts in another hotel chain (Hilton), again in an ad hoc fashion.

Of the six Regional Maintenance Executives (RMEs) who cover the country, the three interviewed believed themselves to be well skilled and knowledgeable in the area of energy efficiency. Two of the RMEs, one a chartered surveyor by training and the other, an electrical engineer, both deferred to an older more experienced colleague in the area of energy efficiency. This colleague is the most long-serving of the six RMEs with 15 years work experience in the area of energy efficiency with Forte.

Views of the Function of EEBPp While all the RMEs viewed energy efficiency as a relatively low priority of the organisation which was pursued largely for the sake of its effect upon the profitability of the firm, all thought that government should be doing more by forcing firms to be more efficient through legislation. All believed that energy efficiency was a legitimate goal of government policy and that more should be done by government to force organisations to achieve it. One of the RMEs stated that he would like to see the Building Research Establishment promoting energy efficiency more strongly: “I’d like to see BRE far more closely allied with the energy efficiency lobby,”.

Understanding Energy Use – Measurement and Attribution The monitoring of electricity is regarded as far more important for Forte than the monitoring of gas as the price is higher and the amounts used are higher. The measurement of the energy consumption of the Forte hotels has been improved through the availability of half-hourly electricity meter readings provided by the energy supplier. While the current electricity supplier provides these readings in paper form to the RMEs, under a previous arrangement with Eastern Electricity as the supplier, this information was available via a dedicated computer link to each of the RMEs for their respective regional group of hotels. The information was also faxed to all hotel general managers.

188 5.4.4 Identifying Technologies for Implementation Energy efficiency technology procurement takes place at two main levels within the firm: at the level of the central group led by the Development Director and at the level of the regions where it is dealt with by the Regional Maintenance Executives. Consideration of energy efficiency performance of technologies takes place at both levels. The RMEs were not aware if the EEBPp was used by the central team.

While none of the three RMEs interviewed were members of CIBSE, they did use CIBSE publications and information in making their decisions. The major form of information about energy efficient technologies however, was supplier material provided directly by supplier representatives and through the trade press. None of the RMEs gave any special place to the EEBPp information, regarding it as another source of information and advice among many on which they draw from time to time.

Both of the younger RMEs believed that good ideas would be adopted eventually and they both believed that they were capable of identifying, in conjunction with the other RMEs in the group, the best available technologies. “The good always comes to the surface”, was one comment from the RME with electrical experience. Both of the younger RMEs believed that they had good product knowledge, based on knowing what the market for building services was providing and that this extensive knowledge derived from an almost continuous stream of supplier visits to the organisation. “We could see 100 control [building control systems] guys during the year”.104 The RMEs used the same contacts within the firm and outside to identify technologies as they used in building up their skills and capabilities.

The specification of technologies was an issue which they thought still gave rise to significant problems. The use of air-cooling systems instead of air conditioning through which control of humidity is possible, could they believed, give rise to greater energy use than planned. The RMEs had often observed that air- management systems failed to deliver sufficient humidity control particularly in conference facilities.

104 Comment from the RME with the electrical engineering experience.

189

5.4.5 Installing and Configuring Technologies Proper installation of equipment and commissioning were recognised by all three RMEs as significant issues for buildings performance. These were areas in which the two RMEs interviewed recognised that the performance of the organisation was normally far less than optimal or good practice. One of the RMEs, who had the most experience of dealing with electrical equipment, said that the scheduled commissioning stage of a new hotel was nearly always ignored. The RME said that “the week’s commissioning always went out of the door.” “Commissioning [took place] while there were bodies in the site.” All knew of the general procedures involved in correct commissioning but these procedures were rarely followed: “You should have all the doors closed, no body heat whatsoever, and commission the goddam thing. It was all done on an ad hoc, as the doors were open, basis…”.

Two of the RMEs were aware of the costs involved and that once a building was opened, no management was ever likely to close the business down to perform what was seen as a peripheral activity. One of the RMEs said that “We pay lip service to it”. The costs of not commissioning could run to large amounts: “5 to 15% is probably fair off your bottom line”. “And it’s gone, it’s gone on day one – because you’ll never get it again, because you never dare shut the thing to do it properly”.

Role of Users Energy use is dependent not only upon the equipment employed in the hotel but upon the way in which it is used by both staff and by guests. The RMEs believed that tackling energy use by staff was more important than to curb energy use by guests. The most senior of the RMEs suggests said that Forte had learned the lessons of energy efficiency long ago and that the organisation has been taking the necessary steps to improve energy efficiency ever since. “We have thrashed the old chestnuts to bits”. Many of the steps which had been taken were “Jack and Jill stuff – not rocket science”. Under John Forte, the use of incentives for energy efficiency was widespread and the most senior of the RMEs confirmed that this was continuing.

190 While a range of steps can be taken to enlist guests in the attempt to reduce energy consumption, such as turning off lights, heaters, televisions, taps and showers, the RMEs were ready to point out the serious risks to the organisation’s reputation which could arise if such steps threatened consumer satisfaction. One of the RMEs commented that “..As soon as you start giving them less, they think you’re on the make”. The attempt to reduce the laundry bill by requesting guests to put those towels which they had used in the bath and to leave those which they had not used on the towel rail had often antagonized guests. A common reaction to their policy was summarised by one of the RMEs who reported one guest’s words: “I just chuck them all in the bath and turn the taps on them”. Eventually Forte had decided to put single occupancy towels in single occupancy rooms rather than trusting to the willingness of the guests to follow the guidelines suggested by the hotel.

The expectations of guests also have significant implications for hotel energy use in the longer term. The RME who had trained as a chartered surveyor suggested that the advent of air-conditioning in motor cars was likely to make it difficult for Forte, and other hotel chains, to avoid installing air-conditioning, in some form or other, in their hotels. The design of rooms was however an area which the central property group would deal with, rather than at the level of the RMEs.

Deployment of Controls Automatic controls were seen to be an important technology in the pursuit of energy efficiency but their use caused problems because they were often difficult to access and therefore difficult to snag and eventually to re-commission. The use of relatively simple technologies such as time-clocks for light, pump and boiler switching is widespread across the hotel estate in a diversity of locations.

The more complicated control systems were however, as one of the RMEs suggested “more like formula one cars” with a requirement for a high level of maintenance and re-calibration. This heavy maintenance burden was one that they were prepared to carry as the consequences of not undertaking the maintenance could lead to an adverse effect upon customer comfort. Where greater client satisfaction entailed energy efficiency investment, that investment was far more likely to be carried out.

191 5.4.6 Summary of Points

• Forte’s Regional Maintenance Executive do use the Programme material, but the greater their experience of energy efficiency, the less they use the Programme. The most experienced member of the RME staff no longer uses the Programme. The RMEs interviewed believed that they already had good knowledge of energy efficiency and how to pursue it. • RMEs assume that their own skills are high and that they are able to judge the suppliers’ information accurately. Extensive reliance is placed on supplier information. • Forte regard themselves as pioneers in the area of energy efficiency. Indeed, independently, they have been one of the first organisations to explore combined heat and power in order to gain a competitive edge in utilities cost control. • There is strong evidence still of energy efficiency expertise persisting which was developed before the takeover by Granada. Despite the disruption caused by the take over and the changes to the management structures, there are still a number of staff knowledgeable about energy efficiency. • Staff share their information about energy efficiency with each other. The RMEs form a natural discussion group for the development of new approaches to energy efficiency. • The organisation is large enough to have created its own specialist energy purchasing company. Consequently, RMEs are not involved in the purchasing of utilities and are only involved in monitoring consumption, benchmarking and control of consumption. • Responsibility for the control of energy efficiency is distributed within the organisation. Those responsible for energy efficiency also perform other activities. • Individual hotels often have low levels of knowledge and skills in the area of energy management.

• Incentives are used to encourage staff to operate equipment efficiently in order to save energy.

192 • The organisation has had policies on energy efficiency continuously since John Forte and consequently, the measurement of energy consumption and understanding of how energy is used are well developed. • Despite knowing that commissioning of buildings plays an important role in protecting energy savings, very little commissioning of new buildings is taking place to a high standard with the consequent expected loss of efficiency. • Clients may appear hostile to energy efficiency and environmentalism if they believe that they are being short-changed.

5.5 Thistle Hotels PLC

5.5.1 Introduction Thistle Hotels Ltd is a UK based hotel chain with mostly four and some five star hotels. It has a large proportion of its hotels in Scotland and is the second largest hotel group in the UK with 95 hotels with over 13,000 rooms.105 The Thistle Hotels Group includes the Thistle brand hotels of which there were 58 in 1997, the Mount Charlotte Chain which contains 30 hotels, a small budget hotel chain named Mercury and a number of other minor hotel companies numbering seven.

5.5.2 Management Structure for Energy Efficiency Support at the level of the Thistle board for energy efficiency has been spasmodic. During 1997 the hotel chain had a Group Energy Manager, who was promoted to the position as a result of his own achievements and activities at the Donnington Thistle Hotel in the East Midlands. However, owing to conflict with the Thistle Chief Executive, the Group Energy Manager resigned from his post to take up a position as hospital engineer. However, later that year the Chief Executive106 resigned and the board began to give a higher priority to energy efficiency and compliance issues, appointing the regional hotels director to the position of Director of Standards. The Director of Standards subsequently approached the former Group

105 Annual Report and Accounts, 1997. During 1998, a plan was put into effect to dispose of around 30 of the hotels. 106 The Thistle Chief Executive was Mr Robert Peel.

193 Energy Manager and re-appointed him to the position of Hotel Engineer at the Donnington Thistle in early 1999 with the aim, in the longer-term, of using him as an energy consultant across the whole group.

Before Autumn 1998, head office led attempts to reduce energy costs centred on energy purchasing. These activities were managed by the procurement section of the company. However, because of the long term illness of the energy buyer, energy efficiency was dealt with by the group Chief Accountant on an ad hoc basis. The energy buyer’s extended sick-leave culminated after a prolonged absence in his leaving the company in late summer 1998. Towards the end of his absence from work, a new person was appointed to the position of buyer starting work on the 6th July 1998. This new appointee was with the company for just one week before leaving.

Within each hotel, energy efficiency has been an issue for hotel maintenance staff and chief engineers in a small number of the larger hotels, but there has been little emphasis until the middle of 1999. The regional building manager interviewed in October 1998 stated that an enquiry he had made about energy efficiency had resulted in the response from the group’s head office that there should be no emphasis on energy efficiency for the foreseeable future. It was however at that time that the group was beginning to coordinate a response to energy efficiency with the appointment of the Director of Standards.

5.5.3 Energy Efficiency Knowledge Until recently, energy efficiency expertise was not a high priority for the company. Individual hotel engineers functioned entirely without direction or help from Head Office on energy efficiency issues. Most hotel maintenance managers were relatively poorly skilled, with few trained to HNC or HND level in engineering subjects. In only one hotel, the Donnington Thistle, did the hotel engineer develop significant expertise in energy efficiency.

194 This manager began to use EEBPp material and to develop a professional interest in energy efficiency as a result of attending a NIFES107 course at Durham in the early 1990s. Following the course, where he found out about the EEBPp and other forms of advice such as the NIFES information published by GEE108, the manager began to introduce both technologies and schemes into his hotel. This was done without any support from Head Office and only by convincing the Hotel’s General Manager of the economic effectiveness of such technologies.

In developing the role of energy efficiency in the hotel chain, the Donnington Chief Engineer found that he had very little support over the last seven years from senior staff. Energy efficiency is, consequently, seen by him as “a lonely place” – as a proper management and professional activity with a significant link to the cost- effectiveness of the organisation, but with little understanding and credibility with the directors. The organisation did not have an energy policy until 1999.

Understanding Energy Use Understanding how energy is used has not been until 1999 a priority of the group. During 1997 when the group possessed an Energy Manager, a series of audits was carried out of energy usage across the hotel chain. The results of this analysis and a number of proposals from the Group Energy Manager about how to reduce energy consumption were forwarded to the Chief Executive of the group but failed to receive any support.

The Chief Engineer of the Donnington Thistle assumes that the bulk of the utilities costs of running the hotels are from hotel kitchens. These are separately metered. However, the process of comparing similar sites is not advanced, the data from comparison only being available from mid 1999 and therefore only a few months of data have been analysed.

107 The NIFES Consulting Group was established as the National Industrial Fuel Efficiency Service. Until recently a business owned by its partners NIFES was bought out by the Phoenix Group and is now one of the most significant energy and environmental consulting firms in the UK. 108 See the Swallow Hotels study later in this chapter for further details of the GEE publications.

195 Measurement and Analysis The measurement of energy consumption of each hotel on a systematic basis through a monitoring and targeting regime has occurred only in a few cases and where this has occurred, this has been without the knowledge of the directors of the group. The Donnington Thistle hotel and the Golden Valley Hotel at Cheltenham are the only two sites where systematic monitoring and targeting have taken place. The comparison of the energy usage of these two almost identical hotels revealed considerable differences in costs of about £30,000 a year. It was partly as a result of this exercise in comparison that the Director of Standards has moved energy efficiency back onto the agenda of the board.

5.5.4 Identifying Technologies for Implementation Prior to the appointment of the Director of Standards, energy efficiency technologies were considered if at all by the individual hotel’s general manager. In only one hotel, major investments in energy efficiency were made. Following the appointment of a Director of Standards, hotel chief engineers, in particular the Donnington Thistle Chief Engineer, submit ideas for energy efficiency investments to the Director of Standards who will assess the proposals and then decide on a trial and subsequent deployment around the estate.

Discussion of suitable technologies and awareness raising schemes also take place in a newly formed Energy Committee, created by the Director of Standards.109 The Energy Committee consists of the Director of Standards and four chief engineers from two London hotels, the Cheltenham hotel and the Donnington hotel.

Promotion of Energy Efficiency The Chief Engineer of the Donnington hotel has been asked by the Director of Standards to give a presentation to the organisation’s general managers – the general managers are the most senior managers in each hotel – in September 1999. The aim of the presentation is to convince general managers that substantial energy savings

109 The Energy Committee was formed by the Director of Standards shortly after he took up his post.

196 can be made within their hotels and that they should be spending some of their capital on energy efficient appliances and awareness schemes.

5.5.5 Installing and Configuring Technologies While there is some awareness of the importance of commissioning and re- commissioning, there are currently few steps taken in the majority of the hotels to re-commission the controls systems which provide the information to the building management systems. This problem arises from the fact that in the majority of the hotels, the maintenance manager is insufficiently skilled to persuade the general manager to commit funds to re-commissioning equipment.

Role of Staff – Programme Spillover At the Donnington hotel a number of schemes have been run by the management to increase the awareness amongst hotel staff of the benefits of energy and other utilities saving. The Chief Engineer created an awareness scheme which used his surname as a mnemonic to encourage energy efficiency and to reduce waste.110 A video was also made to encourage hotel staff to reduce energy costs.

The hotel also wrote to the Department of the Environment in the early 1990s to request information produced under the “Wasting Energy Costs the Earth” programme and used the material to encourage their staff to cut energy consumption. Although this material was not intended for use in a commercial setting, it was seen by Thistle managers to be far more likely to influence their employees than the normal energy saving signs.

5.5.6 Summary of Points

• EEBPp material has been extensively consulted but its use arose initially from contact with a third party which introduced the material to a chief engineer. • The group has an uneven record of energy efficiency with an isolated case of significant expertise in one hotel.

110 The awareness scheme was “Save Waste and Preserve Power” – the Chief Engineer’s name is Mr Swapp.

197 • There has been no central coordination of energy efficiency policy until 1999. There is still no energy manager for the group. An energy policy was only adopted in 1999. • A previous attempt to employ a group energy manager failed because of opposition from the Chief Executive. • Auditing energy use and benchmarking are only being established with board support towards the end of 1999. • A preference for energy efficiency technology is only policy in 1999 following the support of the Director of Standards. • There is little interest in environmental compliance to enhance company image. • Evidence of spillover from one programme’s area of influence to another. Staff of the organisation have used material from “Wasting Energy Costs the Earth” to promote energy efficiency amongst their staff.

5.6 Marriott Hotels

5.6.1 Introduction The Marriott chain of hotels is an international franchised hotel business owned by the Marriott Corporation of the United States. In the UK, Marriott hotels are operated by the Whitbread Hotel company, a subsidiary of Whitbread PLC111. There are 37 hotels in the UK of which 26 are four star hotels. Whitbread operate the brand in the UK for which they pay a franchise fee to the US company. The Whitbread Hotel Company Ltd. owns the hotels.

5.6.2 Management of Energy Efficiency At the Head Office Level in the UK, the Property Director of the Hotel Company takes responsibility for setting policy about new hotel construction and the operation of the existing hotels. The Purchasing and Procurement Department employs an energy buyer whose responsibility is the most cost effective purchasing of energy. In

111 The Whitbread Hotel Company also operates 10 hotels in the Courtyard chain and 207 Travel Inns. During 1998, nearly one new hotel was opened in the Travel Inn range every ten days.

198 1999, the Purchasing and Procurement Department, which operates group wide, appointed a Utilities Projects Manager to coordinate energy and other cost saving activities. The appointment came about principally as a result of corporate awareness of rising energy costs and the belief that current levels of energy efficiency could be improved giving substantial benefits with comparatively little cost.

At the level of the hotel, a property manager has responsibility for energy efficiency and environmental compliance although at the new Manchester Marriott, the hotel’s Golf Course and Facilities Manager is responsible currently. The Golf Course Manager reports to the Hotel General Manager and it is the General Manager who sets priorities for different areas of responsibility, including energy and environmental management.

5.6.3 Energy Efficiency Knowledge

Utilities Projects Manager The appointment of the Utilities Projects Manager to focus on efficient end use of energy is intended to result in substantial savings to all of the divisions of the company, including WHC and its brands. The Utilities Projects Manager is intended to coordinate actions taken locally by hotel engineers and their staff. The Utilities Projects Manager is from a buying background rather than a civil, electrical or buildings services engineering background. When interviewed, he was newly appointed and was, he admitted, unfamiliar with many potentially energy saving technologies and techniques. Although he had never been aware of the EEBPp, he had obtained the programme material and was about to read it and collate information from comparable sources.

Hotels and Involvement with Green Globe The EEBPp material is not used by the staff of the Manchester Hotel to enhance skills and knowledge in the area of energy efficiency112. Of major significance to the

112 The Hotel does however have a large number of DETR energy efficiency stickers which are in use in the staff areas of the hotel, see the later section Configuring Technology.

199 management and staff, however, is the organisation’s membership of Green Globe, a body referred to earlier in the case study of the Crowne Plaza chain.

In September 1997, the directors of the Whitbread Hotel Company (WHC), which owns and operates the Marriott franchise in the UK, decided to join the Green Globe programme. Available to Marriott management at that time was a range of information and advice delivered by consultants operating in the areas of energy and environmental management. During 1998, Green Globe launched their own environmental certification service which was to be operated by SGS, their contracted environmental consultancy and information company. Whitbread chose their new hotel in Manchester to be the first in the group to apply for the certification.

After an initial registration with Green Globe, the Manchester hotel prepared for inspection and environmental audit by SGS, Green Globe’s contracted environmental auditing company. The audit took place over a two day period during April 1998, and the hotel was subsequently successful in obtaining the certificate113. During the period after registration and before the audit, WHC senior management had a very limited role in coordinating the activities of the Manchester Marriott. The certification process currently takes the hotel itself as the unit of audit rather than the hotel group.

The process of certification required more management time than was initially planned. The golf course manager’s role in the Manchester audit resulted from the importance of a large water conservation system for the hotel golf course. Prior to the audit, extensive use of information provided by Green Globe was made and the environmental consultant, Dr Rebecca Hawkins, was regularly consulted.

Linking Expertise Together Dr Hawkins is an academic based at Oxford Brookes University and collaborates on a variety of projects with other hotel companies through Green Globe and independently of it. She also works with other organisations that seek to promote

113 Retaining the certificate is subject to yearly review by SGS

200 higher environmental standards such as the International Hotels Environment Initiative where John Forte, the former Director of Environment at Forte Hotels and Gardener Merchant, is the environmental adviser.

Understanding Energy Use The use of metering is restricted to total hotel electricity use. No other forms of measurement are taken. Since the hotel was only working since April, when the Golf Course Manager was interviewed, there were just four months of data on which to do analysis. This amount of data was not thought to be sufficient for any meaningful analysis.

The Utilities Projects Manager noted in interview that right at the start of his employment, he realised that the Hotel company’s central services had little idea about how much energy was being used within the brands, including the Marriott chain, and that a central part of his role would be to address the issue.

Measurement and Analysis Currently, the management of the Manchester Marriott only measure energy consumption at the main meter and only four months’ of data existed when the interview took place in May 1999. The management of the hotel may begin to do some analysis of the information towards the end of the first year of operation. Information about energy consumption is however being sent to Green Globe on a confidential basis, according to the Golf Course Manager and Green Globe is collating the data for its own records.

The Green Globe inspection focused very closely on the collection of data on energy consumption. The auditors were concerned to see that there were technical methods to measure energy consumption and management procedures for monitoring it. Green Globe’s focuses on an area of management which is clearly under-resourced at the Manchester hotel.

201 5.6.4 Identifying Technologies for Implementation Whitbread Hotel Company has had a large R&D section based at Luton which set policy for the whole company. This has now been scaled down significantly and hotel staff now routinely make enquiries to Green Globe and its consultants whose advice, once the initial fees have been paid to Green Globe, is given without subsequent charges. The advice is also relatively easy to access and is delivered by consultants such as Dr Rebecca Hawkins114 of Oxford Brookes University.

The Manchester Marriott has two bedrooms which provide a test site for what are a limited number of new energy efficiency and environmental technologies. Currently, energy saving light bulbs are under test, the hotel having been fitted out without energy efficiency lighting. At the level of the hotel there are some steps which are taken to improve the energy efficiency of the technologies used in the hotel.

5.6.5 Installing and Configuring Technologies The Golf Course manager was not aware of what commissioning procedures for the hotel had been followed or whether there was a re-commissioning regime in place. The Golf Course Manager’s technical expertise was related to that of water and environmental efficiency rather than energy and buildings. The Golf Course Manager was aware that much of the technology employed by the organisation was not of an energy efficient design. He gave the example of shower heads which were of the normal flow design.

Role of Users of Technologies With the help of Green Globe, all the Marriott hotels in the UK have been setting up and running energy efficiency awareness campaigns during 1997 and 1998. All hotels have appointed energy monitors and the Manchester Marriott created an environmental committee to comply with the requirements of the Green Globe certification process.

114 Dr. Rebecca Hawkins also advises BRECSU, IHEI and HCIMA

202 The environment committee of the Manchester Marriott worked on a number of energy efficiency procedures. In the area of lighting, staff had identified three different categories of lighting which they subsequently colour coded. The three types were where lights could be turned off if the room was not in use; lights which should be on for a particular part of the day and lights which should not be turned off at all. A simple coloured sticker next to each light switch aimed to inform staff what action to take. The hotel makes little use of automatic (i.e.) time-clock or sensor controlled lighting.

In addition to the signs created by the staff, the management have used a number of small stickers and posters, which are similar in design to those produced by the EEBPp. The “What A Turn Off” posters and stickers are used throughout the back- office areas of the hotel.

The Golf Course Manager believed that the work which employees had undertaken to reach the goal of certification had led to increased satisfaction with their work. The Golf Course Manager himself however was concerned that he was spending far more time on energy and environmental management than the time suggested by his manager who is the hotel general manager. The exercise of certification while useful had led the Golf Course Manager to the view that some direct help from head office with the running of awareness schemes and the coordination of energy and environmental policy would be helpful.

Use of Controls A variety of automatic controls are in use on lights and on heating but there is no BEMS installed at the new Hotel.

5.6.6 Summary of Points

• Green Globe significant influence upon the environmental and energy performance of the organisation. • Energy is seen as one element of environmental awareness. • Green Globe involvement only took place following the construction and commissioning of the hotel. This might be too late to effect significant influence upon the energy efficiency performance of the hotel.

203 • Organisations with an international presence require a certification process which is meaningful within the context in which they operate, i.e. meets a standard which is international. • Staff response to the environmental message has been stronger because the information and advice programme is clearly linked to the certification process, giving a greater sense of achievement for employees of the firm. • Organisational changes and changes to technology have been brought about by the introduction of the climate change levy and also by the awareness at the level of the directors that there are a range of techniques – what might be termed energy management - which can be used to reduce substantially the costs of energy use. The development of and the presence of such technology and the management techniques is a powerful influence upon firms which have not yet adopted them but which are seeking to reduce costs significantly.

5.7 Swallow Hotels Ltd.

5.7.1 Introduction Swallow Hotels Ltd was part of the Vaux Brewing Group until 1999 when the brewing interests of the company were sold and the main business of the group became hotels, with the group renaming itself Swallow Group PLC. The business has 32 hotels which are mostly of the three and four star variety with a small number of luxury five star ones. There are 4300 bedrooms in the estate. Prior to the demerger of the brewing interests, the company’s hotel business accounted for one third of Group turnover of £300 million and two thirds of the capital employed by the business.115

5.7.2 Management Structure for Energy Efficiency The setting of policy on energy efficiency is undertaken by the Manager of the central Technical Services Group (TSG) of the organisation based at the company Head Office at Washington, Tyne and Wear. The TSG operates in the area of facilities management and bids for work in competition with outside contractors.

115 Vaux Group PLC, (1998) Report and Accounts 1997, page 37

204 The current manager of the group, who reports to a board level director, has been in the post for 15 years, which is as long has the TSG has existed.116

Responsibility for energy efficiency within an individual hotel has been part of the duties of each hotel’s hotel engineer since 1989. Before 1989, assistant managers were responsible but were increasingly not in post long enough to provide the continuity of management effort for the task of energy efficiency.

The TSG Technical Manager believes that the directors of the company are aware of the importance of energy efficiency to company profitability and in reducing the organisation’s environmental impacts. He believes that the support which he receives from the Board for energy efficiency investments is significantly affected by the decision to sign up to the Making A Corporate Commitment scheme. Proposals for energy efficiency schemes are regarded positively and are encouraged by the Managing Director.

5.7.3 Energy Efficiency Knowledge Swallow Hotels are regular and frequent users of EEBPp material. The current Technical Services Manager is very focused on energy efficiency and considers it to be an important part of his role. He uses EEBPp publications for his own guidance and also often re-uses the contents and the material in his company guidance for employees.

Use is also made of Croner’s Guide and the energy consultant’s GEE. Croner’s Guide on Energy Management, in A4 ring binder format, gives extensive coverage of the EEBPp, including how to obtain the material provided under the programme, the purpose of the programme and access to a significant array of other resources on energy management.117 A monthly newsletter on energy efficiency entitled “Energy Management” is also produced. This is also available from the Croner web site.

116 The central Technical Services Group of Swallow Hotels was formed in 1984. 117 Croner is the business, legal and educational publishing subsidiary of Wolters Kluwer, the international publishing house.

205 The information available from the GEE business network is a similarly comprehensive survey of information for managers facing compliance requirements in the areas of environment and energy. GEE publish guides written by the NIFES Consulting Group, a small 120 person specialist energy consulting organisation, based in Altrincham near Manchester with strong links through their managing director with BRECSU, the contractors for the buildings side of the EEBPp.118

Also available from GEE is an “Environmental Risk Manager” software package which provides advice on a range of steps which managers may take to comply with legal regulation and environmental reporting requirements. The software is provided through courses given by NIFES themselves at their training department based in Nottingham.

EEBPp Collaboration The Technical Services Manager has also contributed to EEBPp publications and guides in the past himself. In two of the guides, Swallow Hotels are themselves featured.119 Swallow’s collaboration with BRECSU and ETSU is one of long- standing and follows a meeting between the current Technical Services Manager and the Facilities Manager of the then Trusthouse Forte Hotels, thereby ensuring discussion on the use of CHP in the hotel sector. The meeting took place after an EEO (Energy Efficiency Office) event. Forte were installing CHP at the time in a small number of hotels and their experience and readiness to demonstrate their new technology was instrumental in Swallow Hotel’s decision to install CHP themselves.

Understanding Energy Use The measurement of energy consumption is tightly controlled within the hotel business. Energy monitoring of electricity is done in real-time as is that of CHP. Energy usage and costs can be given to the hotel General Manager the next day. Electricity consumption can be measured on a room by room basis as the result of

118 The Managing Director of the NIFES Consulting Group, John Mulholland, has written in a number of EEBPp case studies and guides and works closely with BRECSU. 119 Good Practice Case Study 279 features the energy management of the Swallow Hotels Group, while Good Practice Case Study 260 describes occupancy linked controls in the Swallow Royal Hotel, Bristol.

206 individual metering. All measurement systems in any hotel can be viewed from the Technical Services Headquarters in Sunderland.

The Technical Services Manager is able to relate the energy usage of the hotels to the energy efficiency schemes which he introduces into the hotel chain. When energy usage begins to rise, he knows that the effectiveness of the schemes he has run is declining and that new initiatives to save energy must be introduced.

5.7.4 Identifying Technologies for Implementation Sharing information about technology choice and post implementation issues is, according to the Technical Services Manager, a feature of the sector. Certainly, the installation of CHP systems across the Swallow estate owes much to the readiness of the Trusthouse Forte group to demonstrate their implementation of the technology in the mid 1980s. The Technical Services Manager at Swallow has been able to share information readily at meetings of other professionals in the North East about technologies and about which suppliers are the best to deal with. He characterises the exchange of information within the sector as “fairly open”.

The North East Energy Purchasers User Group, of which the Technical Services Manager is a member, provides a means of extending formal and informal networks of contacts within the sector and beyond it. Within such networks, similar business problems have been discussed. Collective opposition to what members saw as the threat of a “possible cartelization” of the energy market in the North East has resulted in greater trust between members and increased their readiness to share information on a range of subjects including energy efficiency.

The EEBPp information on costs has provided the Technical Services Manager with a number of useful bases upon which to assess competing products. While the information is of a general nature, it is, in his opinion, sufficient for him to assess what he regards as the often unreliable and misleading estimates of product performance which suppliers provide.

207 5.7.5 Installing and Configuring Technologies The Technical Services Manager believes that the installation and configuration of technologies is complex and difficult and increasingly time-consuming and frustrating for him and other building services managers. He regards commissioning as a “massive area” of activity for buildings energy efficiency and an area where “things go drastically wrong very often”.

Commissioning of buildings and specific services and technologies requires, according to the Technical Services Manager, the use of specialist contractors on site to ensure that buildings function to the level of operational efficiency envisaged in the design. Swallow Hotels do use such specialist contractors but even so, significant problems still arise. The problems can be so severe that legal action is contemplated and significant amounts of management time are wasted. Swallow try to ensure that contracts with the building contractors stipulate that all excess costs arising from faulty commissioning can be counter-charged. Such provisions are unpopular with contractors, are difficult to frame and are also difficult to enforce in practice.

A recent inspection by the Technical Services Manager discovered that some of the pieces of sophisticated control mechanisms which were required to improve the energy efficiency of the hotel had not been installed at this crucial stage and could not be retrofitted.120 A further example given by the TSM concerned a new hotel with conference facilities where a 100%121 hot water system had been specified. The contractors had followed CIBSE guidelines on energy efficiency and fitted an 85% system which failed to meet a maximum demand of the kind typical of a conference hotel.

120 The example given by the Technical Services Manager is one where occupancy controls which linked to fresh air inlets on windows were clearly in the design but none had been fitted in the hotel under construction. 121 Hot water systems normally include a specification for the amount of hot water required from them for guests’ use. Where the maximum demand for hot water is likely to be frequent and could have to meet the needs of all guests requiring hot water at the same time, a so-called 100% system is deemed necessary. Conference hotels normally require a 100% system as guests’ demands for hot water may be synchronised and result in a very high maximum demand. An 85% system fitted in such a hotel would fail to deliver sufficient hot water.

208 Role of Staff – Programme Spillovers The cooperation of hotel engineers is essential to the goal of greater energy efficiency. Swallow base their guidance on the management of energy efficient equipment for their hotel engineers on EEBPp material. This is a successful strategy for Swallow but in one case described by the Manager of the Technical Services Group, it was a wholly different government programme - Wasting Energy Costs the Earth - intended for a wider non-technical audience which convinced a hotel engineer that energy efficiency should be a company goal.

5.7.6 Summary of Points

• Extensive use of EEBPp material but also other material particularly from NIFES and GEE publishers. • NIFES information updated frequently and viewed as important. • TSG very knowledgeable about techniques and schemes. TSG manager believes that the Programme identifies a standard by which energy efficiency technologies can be judged. Confident in the reliability and accuracy of the Programme standards. • Some spillover from one government programme to another’s area of operation. • Long tradition of expertise and credibility for TSG with the TSG manager being in post for a long period. Swallow were pioneers in the area of energy efficiency and in the use of energy saving technologies such as combined heat and power. • Support from senior management for energy efficiency initiatives is strong. • The area of building commissioning and equipment installation are a “massive area” with significance for energy efficiency. Despite the TSG knowledge and experience of installations and controls, it is not possible for the TSG to ensure that the equipment which is installed by contractors is installed at all, and if it is installed, that it works as it should. There has been such concern with the work done by contractors that Swallow now have penalty clauses and contractual arrangements which seek to guarantee that the installations are carried out properly. These arrangements are, however, difficult to enforce.

209 5.8 Sector Summary The following sector summary table consolidates the impacts of the Programme as seen through the organisational context, and shows the principal influences upon the way in which the Programme has taken effect.

210

Table 19. Hotel Sector Summary Table

Energy Energy Identifying Installing and Management Efficiency Technologies Configuring Structure Knowledge Technologies Holiday Inn - Distributed with - Medium - Low Programme - No Programme Crowne Plaza some centralized Programme Use Use use direction - Metering High - In-house resources - Commissioning - Controls - High knowledge strong, particularly aware - Role developed by - Benchmarking for energy services post-holder good Stakis PLC - Distributed with - Metering level - Not centrally - Low Programme low coordination low - Low Programme Use and few local - No feedback of use locally - Commissioning initiatives energy use aware - Centre focuses on information re-fits - Benchmarking - Low use of not done controls Swallow Hotels - Well established - Programme users - High Programme - Medium Ltd. central facility and contributor users Programme use - Role developed by - Wide use of - Believes that - Commissioning post-holder information (GEE Programme aware & NIFES) establishes a - Commissioning - Programme standard major problem spillover seen specialists used - Benchmarking good

Forte Hotels - Well established - Programme users - Early strong links - No Programme Ltd. central facility, and contributor to manufacturers Use modified by - Benchmarking and energy services - Commissioning takeover but medium firms problems admitted effectiveness - Re-comm. Occurs continues mainly for comfort Thistle Hotels - Previous top - Low level of - Medium management metering Programme Use - antagonistic; now - Benchmarking - Commissioning energy committee and comparisons and re- begun at low level commissioning rare - Environmental - Medium compliance “gain” Programme use is low results from - Role developed by contact with post-holder NIFES

Marriott - Reduced central - Green Globe role - Green Globe role - No Programme coordination important important use - Green Globe role - Low level of - Green Globe role important metering important - Benchmarking - No Programme and comparisons use at low level - Little understanding of importance of commissioning

211 Chapter Six – UK Retail Sector Study

6.1 Introduction This chapter contains the study of the retail sector, including department stores and high street retailers. This study examines two of the EEBPp retail subsectors of a total of five subsectors that make up the total retail sector.

6.1.1 The Sector Organisations

Table 20. Interviewees and Their Organisations – Retail Sector

Organisation Job Function of Interviewee Woolworth Energy Manager Estates Manager Superdrug Energy Manager House of Fraser Energy Manager Arcadia Group Energy Manager Sears Group Properties Group Building Surveyor WH Smith Group Energy Manager Debenhams Energy Manager

Table 21. Other Interviewees – Retail Sector

Organisation Job Function of Interviewee EA Technology Limited Head of Demand Side Management Group BRECSU Lighting Consultant Retail and Office Sectors Retail Sector Project Manager Energy Management Section Manager Lighting Industry Federation Director & Assistant Director WRC Senior Consultant EST Programme Manager Energy Saving Trust Initiatives in Shops and Offices NIFES Consulting Group Operations Director

212 6.2 Woolworth

6.2.1 Introduction Woolworth is part of the Kingfisher group of companies which also includes B&Q, Comet and Superdrug. There are 800 stores of varying sizes in the group.

6.2.2 Management Structure for Energy Efficiency Until the middle of 1999, Woolworth did not have an energy manager. In early June 1999, the company appointed an energy manager to be responsible for energy efficiency and to have a role in energy procurement and tariff analysis. Until June 1999, one of the members of the estates staff, who was responsible for relations with the consultants employed by Woolworth to install electrical equipment, covered the area of energy efficiency with frequent use of consultants to advise on energy efficiency. The consultants were responsible for initiating all energy efficiency activities, but this did not include awareness schemes for employees or customers.

Superdrug and B&Q, which are separate businesses within the same group, already have an energy manager each. Woolworths is seen to be less closely connected to the other group companies. The first interviewee believed that there was no board member with any responsibility for energy efficiency although he thought that might change in the medium term. It was perceived at board level, according to the second interviewee, who was the newly appointed energy manager, that there were opportunities to save substantial amounts of money and that the retained consultants were not able to work at the level required by the board.

On coming into post, the new energy manager had concluded that many of the savings which the consultants claimed to have generated were exaggerated. Changes to tariffs which resulted in savings over the previous levels were assumed to continue in perpetuity. This led the consultants to overstate the savings and to register them as genuine cost-cutting for which they were responsible in all subsequent periods. The new energy manager regarded it as legitimate to count the savings for one period but not for more than one period, in this case a quarter. The energy manager explained that the consultants were eager to claim these savings as

213 they were being paid a percentage of the cost savings which they achieved122. The greater the savings which they could argue were attributable to their work, the greater was their income from Woolworths.

6.2.3 Energy Efficiency Knowledge The existing knowledge within the firm is chiefly derived from the technical backgrounds of the staff and their work histories. Both the estates manager and the new energy manager were aware that the firm had not “looked very closely” at energy efficiency in the past and there was consequently a large effort required to develop an in-house expertise. The estates manager who had been responsible for energy efficiency until the appointment of the energy manager was a member of the Institute of Mechanical Engineers. Although he was interested in the area of energy efficiency, the current estates manager did not wish to move into the position of energy manager as he felt he did not have the expertise.

The metering and analysis of energy consumption from around the organisation is not at an advanced stage. The estates manager did not have much experience of metering. The newly appointed energy manager had tried to obtain information about the energy which the stores were using. Even the energy consumption from the 100kW sites was difficult to find. The energy consumption of the smaller stores was almost impossible to locate. The estates manager thought that in the longer term, Woolworth would attempt to have remote metering for all its stores.

6.2.4 Identifying Technologies for Implementation At present, the organisation’s retained M&E consultants are largely responsible for the identification of new equipment for energy efficiency. However, in the area of lighting, the existing estates staff have been able to develop their knowledge of the products available in the market. In other areas of technology, there has been far less development of expertise.

122 This situation is parallel to the way in which the impacts of the EEBPp are calculated: savings from one period are assumed, subject to certain assumptions, to continue in subsequent periods without decay.

214 Through the use of consultants, the estates staff have been able to determine which lighting technologies they have thought most suitable for the organisation. They have found that “much of the suppliers’ information is quite misleading” in respect to the savings which particular lighting technologies can generate. Potential savings are overstated and are generally not realizable at the level when the technology is used in the stores: “If you look at the information about T5’s123 the savings are supposed to be 30%, but you’d never make that the way they use them in the stores.”124

This judgement about the performance of the technologies has been made possible by comparisons with the maintenance contractor’s data rather than through any information which Woolworth’s itself has assembled.

The use of Programme information has not given much help in the case of lighting, which is the area that the estates manager is most familiar with. He believes that the Programme information has been too general to be effective in terms of identifying the costs of operating the equipment. He has found that the Programme has just provided him with a “train of thought” rather than substantive evidence on which to make a purchasing decision on lighting. Genuine comparative information would have been more useful, he thought.

Retail Energy Club More recently, the organisation has shown an interest in the Retail Energy Club, a service offered by EAT Ltd. The Retail Energy Efficiency Club – REEC - is open to firms in the retail sector. Members are able to commission research from EAT on specific products so as to defray the costs of testing. The club is not open to manufacturers, a step taken to secure the impartiality of findings and also to avoid legal action, according to the project director of EAT responsible for the REEC.

EAT allows those organisations which are paying members of the Club to decide which types of technology are tested as testing is a costly procedure. Organisations

123 A new particularly energy efficient form of in-store lighting. 124 Estates Manager comment at interview.

215 pay £3500 to join the Club and the decisions about which pieces of technology are tested are made by a majority vote of members only. Retailers are, in the view of the project manager, relatively open about which technologies they are using, although there is a slight reluctance to divulge information about which technologies are in development. The REEC is however completely open – to members – about which type of technology is under test. Woolworth’s membership of the REEC comes about because it is a member of the Kingfisher Group of companies. Energy managers from other parts of the group are also allowed access to the information provided by the REEC.

6.2.5 Installing and Configuring Technologies The estates manager stressed that the opportunities for commissioning and configuring technologies were limited by the scale of the business. Consequently, equipment was not checked from year to year and considerable inefficiencies could arise over time. The estates manager observed that the boiler switchgear did not get checked from one year to the next.

The newly appointed energy manager discovered within a few weeks of joining the organisation that refrigerator cabinets controls which could have been used to reduce the cooling load of the stores had never been set correctly. Throughout the group, all the equipment had been left with the factory settings. The lack of commissioning procedures was therefore likely, she thought, to be a general characteristic of the organisation although the picture might be better elsewhere in the group.

6.2.6 Summary of Points

• Woolworth’s own staff have perceived it to be “outside the loop” of energy efficiency expertise within the Kingfisher Group. • Metering of energy consumption is at a very low level. • M&E Consultants have, in the past taken the role of defining energy efficiency standards and installing equipment. • Commission of equipment has not usually been carried out.

216

• Energy efficiency increasingly seen as an opportunity to make significant savings on costs. • Consultants who save energy through tariff analysis and other activities believe that they are entitled to a share of the savings in perpetuity. The energy manager does not believe that this is acceptable.

6.3 Superdrug

6.3.1 Introduction Superdrug, like Woolworth, is a business owned by Kingfisher, the retail group. It has around 700 medium sized stores throughout the UK located in mostly high street positions. These are normally smaller in size than the Woolworth chain. Superdrug is in direct competition with the other major chemist chains in the UK, particularly Boots the Chemist.

Superdrug owns the majority of the stores. There are a small number which are rented and where the cost of heating and lighting is a flat fee, independent of use. In these cases, which are a small proportion of the overall number of stores, according to the energy manager, “saving energy is simply a waste of time”.

6.3.2 Management Structure for Energy Efficiency Until 1997, the Facilities Manager of Superdrug was responsible for addressing the energy efficiency of the stores. The Facilities Manager gradually formed the view that there might be some significant savings to be made if an energy manager was appointed. The view that energy savings could be made was very much an estimate – there was no hard evidence that the recruitment of a new person would result in savings. The current energy manager is therefore the first Superdrug has had and was recruited from a job in consultancy and sales and before that as an energy manager at

217 Iceland Frozen Foods where he was a colleague of the Arcadia Group energy manager, also interviewed in this study125.

Major initiatives and policies which have been introduced as a result of the appointment of the energy manager include a re-lamping policy. The stores had a large number of inefficient 8 foot fluorescent tubes but these are now being phased out in a rolling programme which, the energy manager believes, has cut the bill for lighting by 60%. The changes which Superdrug have made to its lighting have had effects beyond the organisation. The re-lamping policy has been adopted within other businesses of the Kingfisher Group.

Tariff Analysis When the energy manager was appointed to Superdrug, his first major responsibility was to examine the way in which energy was purchased rather than the technology which the group was using. The tariff analysis which he undertook was extensive and led to the organisation changing its energy suppliers, in the case of gas supply, a number of times. Only when the tariff analysis had been carried out did the energy manager begin to focus on the equipment which the organisation was using.

Responsibilities of In-Store Technicians The store maintenance technicians have been given a significant role by the energy manager in ensuring the energy efficiency of the stores. They are responsible for setting the controls and thermostats within their own stores and they take a role in training the staff in the store to use the equipment efficiently. The maintenance technicians fill out records of consumption and meter readings and put them in the control of risks file. The energy manager does not see this as a very sophisticated approach but the observations made by the technicians have been “very useful in ironing out problems”.

125 See the study of the Arcadia Group later in this section on the Retail sector.

218 Use of Incentives The energy manager believes that the best way to encourage staff to operate their stores efficiently in terms of energy consumption is to offer them incentives. He has therefore re-established an old scheme which operated without incentives named Save-a-Watt and renamed it “Kill-a-Watt”. This scheme involves some substantial cash prizes for the staff who save the most and has had some sponsorship from a large electrical equipment goods manufacturer.

6.3.3 Energy Efficiency Knowledge The energy manager has learned about how to improve the organisation’s energy management from a variety of sources. His previous employment at Iceland was important in developing his knowledge of energy efficiency. His membership of the Institute of Energy is also important, giving him information about how to promote energy efficiency and a knowledge of the latest technological developments in the field.

Understanding Energy Use The energy manager believes that the EEBPp information is extremely useful to him in his current work. The benchmarking activities which the organisation now undertakes are significant in terms of the amount of money which they have saved and in terms of the amount of time required to undertake them. The analytical benchmarking approach which he follows is one recommended by the Programme and involves classifying the organisation’s stores into four groups. These groups of similar stores provide the opportunity for meaningful comparisons on energy usage. Comparison using the groupings which he has created has allowed him to identify the worst cases and to take remedial action.

Measurement and Analysis By installing a large number of meters in the stores, the energy manager is now able to make far more measurements and assessments of energy usage than occurred before his appointment. With electricity, the energy manager believes that the measurements have been accurate although the processing of bills has been poor.

219 None of the stores are at the 100kW level so there is no automatic metering of electricity through the use of half-hourly meters. The energy manager is keen to install real time metering of electricity but the costs of doing so are likely to be high. The actual cost of installing or hiring meters was, he thought, uncertain as different suppliers came up with different figures. This made it difficult and possibly even pointless working out the benefits of metering. He felt though that within three years, the costs of metering would be more predictable and lower and the cost- effectiveness of widely installing meters in the stores would be much greater.

The increasing use of gas for in-store heating by Superdrug has seen difficulties126. Most of the bills which have been received have been estimates, making the task of measuring the exact costs of the transition to gas heating of the stores problematic. In fact, by changing suppliers so often, there has been a direct effect upon knowing exactly how much would be charged for gas as “the bills stopped coming for a while”.

In-store maintenance technicians are responsible currently for taking readings of the electricity and gas meters. This work is normally done well and accurate self- estimates have been helpful in the benchmarking of the stores. The cooperation of the technicians has been essential in developing overall company wide energy management. Experience of a direct phone link up to sixty of the stores TREND building management systems has led the energy manager to consider remote meter reading although the current cost of this is still too high.

Sharing Information in the Sector The energy manager also receives information about energy efficiency from other energy managers within the group and from other businesses outside with which Superdrug is in competition. The energy manager commented that while retail might be characterized by a relatively high degree of secrecy, the energy management side of the sector’s business was quite open. He gave the example of how he had been genuinely surprised by an approach from staff at Boots, which is Superdrug’s main

126 In common with a small number of other stores, Superdrug has begun to use small scale condensing boilers in its stores to provide heating. The price differential between gas and electricity has made the use of gas a cost-effective alternative for in store heating.

220 rival in the high street pharmacy business, who had proposed a sharing of information on the energy efficiency of existing and new equipment.

6.3.4 Identifying Technologies for Implementation

Role of Suppliers’ Information The energy manager is very suspicious of the information which is available on the energy efficiency of equipment. There is in his opinion, great variability in the quality of information given by suppliers. Claims of large savings are made often without a sufficient basis. “If you believed everybody, you’d be saving 20% all over the place.” However, in his view, the quality of information is not universally bad and no worse than for other industrial goods and products with which he is familiar.

Recently, he believes that there has been a notable improvement in the quality of information provided. He believes that the reasons for this are that both suppliers and purchasers are becoming better informed and placing higher demands upon each other. This is in part owing to the increase in the number of shared saving deals which are being negotiated between energy service companies and their clients, the energy using organisations such as retail stores. Superdrug itself has not entered any of these deals and does not intend in the short term to work with any energy services companies – ESCOs. Where he has doubts about the information which is available on a particular piece of equipment, the energy manager will insist on a test of the equipment before adopting the equipment for the group.

Retail Energy Club Superdrug have been members of the Retail Energy Club from its inception. The services which the club provide are thought to be very well worthwhile. The use of the club by Superdrug has encouraged other businesses within the Kingfisher group to become members.127

127 In early 1998, the following were members of the club: Alliance and Leicester, Clarkes, Iceland, John Lewis, Birmingham Midshires, John Sainsbury, Safeway, Superdrug, WH Smith

221 The use of small-scale gas boilers and air-curtain controllers by Superdrug has stemmed from work done by the Retail Energy Club which trialled the equipment. The new over door heaters, which replace equipment which has traditionally had no form of temperature control, have been found by the survey to have an average saving of about 28%. This has led, in the cases observed in the research to savings on the store electricity consumption of between 9% and 15%. The effects of the new controllers on the comfort of staff and the customers of the shops was also assessed by EATL and found not to have had any adverse effects.128

6.3.5 Installing and Configuring Technologies Before he came to Superdrug, “nothing was commissioned here at all”, according to the energy manager. The energy manager is aware that the use of control and sensor technologies can easily lead to greater energy use and inefficiency. The use of a specialist firm of consultants to commission equipment in the stores was being planned at the time of the interview.

Deployment of Controls and Automatic Systems The installation of TREND building management systems, which can be controlled remotely in the latest new 60 large stores, gives the energy manager the opportunity to control the energy efficiency of individual stores in a way which has never been possible before. The TREND system, which is used to control the heating services and the lighting of the stores, has an artificial intelligence component, making automatic adjustments when changes occur in the environment of the stores, such as the sunlight levels, temperature and time of day.

6.3.6 Summary of Points

• The energy manager is a recently appointed employee. There have however been a limited number of schemes in the past. • The energy manager was appointed after the estates manager made the case that money could be saved if an energy manager was recruited. The estates manager

128 Source is EATL in a presentation given on 17th June 1999 by Anthony Heywood, Programme Director – Energy Saving Trust Initiatives in Shops and Offices.

222 had only a very general assessment of how much energy could be saved by recruiting an energy manager. • The amount of saving which has been possible has been larger than expected by both the facilities manager and the energy manager himself. • Superdrug is one of the most active firms in the Kingfisher Group. This may be because they were the first to recruit an energy manager. Energy saving practices which are trialled at Superdrug then spread to the other businesses within the Kingfisher Group. • The first major responsibility of the energy manager when taking up his post was tariff analysis. Once this was accomplished, the energy manager began to examine the energy usage of the organisation, the technology which was used by the group, the staffing arrangements and to make changes to them. • The efficient operation of energy using equipment in the stores has been helped by training the in-store technicians. The in-store technicians also play an essential role in reporting energy use to the energy manager, helping the energy manager to benchmark the stores. An incentive scheme has encouraged the in-store technicians to report energy use accurately and frequently and this had led to a saving in energy consumption. • The transition to competition in the energy supply sector has had both positive and negative effects for the organisation. The positive effects have been that the costs of fuel have declined significantly. Also, the installation of half-hourly metering has improved the measurement of energy consumption in those stores which are large enough to justify the cost of such metering. In the smaller stores, where there is no metering, there has been little effect. One consequence of changing gas suppliers has been that measurement and budgeting of gas usage has become far more difficult as the bills have often failed to arrive. • Information about forthcoming technological developments within the organisation is liable to be shared with competitors. The Superdrug energy manager perceives himself to be a sharer of information with firms which are in direct commercial competition. The Retail Energy Club, of which Superdrug is a member, takes advantage of the preparedness of retail sector organisations to share information about energy efficiency technologies. • Before the arrival of the energy manager, the commissioning of energy using equipment was very rarely undertaken. Commissioning of equipment is now set

223 to take on a major role in delivering energy efficiency for Superdrug. However, because the energy manager has 700 stores within his responsibility, the energy manager is considering using a specialist consultancy firm to carry out the work of commissioning new equipment and re-commissioning old equipment.

6.4 House of Fraser PLC

6.4.1 Introduction House of Fraser PLC is a major department store chain operating in the United Kingdom with mainly large high street premises. Originally a large private company it was floated on the stock exchange in the late 1980s. There are forty-nine stores in the group. The energy bill across the whole group is about £5 million a year. Before the energy manager was appointed, the highest recorded energy costs for a year was £8 million. While the majority of the stores are older buildings, there are now a limited number of newly built stores such as Nottingham, Bluewater Park in Kent and Reading. Retro-fitting and refurbishment of stores takes place frequently.

6.4.2 Management Structure for Energy Efficiency The interviewee was the energy manager of the whole House of Fraser Group. He was the first energy manager appointed by the firm and he moved into the position from a role in facilities management. At the time of interview, he had been in post for five years. Before his appointment, House of Fraser did employ a member of staff whose responsibilities included the energy efficiency of the five largest sites. This employee, who was responsible for just five sites, was not interested in a career in energy management. Consequently, when the organisation’s directors began to consider an energy efficiency strategy for the whole company, it was the current energy manager who put himself forward for the position. His suitability for the post, he feels, was based partly on his commitment to energy efficiency and partly on some successes he had had in introducing energy efficiency technologies in some of the stores.

224 There is no formal energy policy in the organisation. The company is looking at an energy accreditation scheme which would be a way of demonstrating energy efficiency to outsiders. The reports which the energy manager produces on energy consumption, energy costs and proposals for energy saving schemes are shown to the directors of the company, but they are not used as the basis for strategy.

Tariff Analysis The energy manager believed that tariff analysis, although mostly his responsibility, did not take a large amount of his time and prevent him from addressing other aspects of the organisations energy usage as it was simply a yearly activity.

6.4.3 Energy Efficiency Knowledge The energy manager has used the EEBPp material in the past on a regular basis, but he uses it far less now as he feels that he has a good grasp of the ways in which energy can be saved. He has also regularly attended seminars on energy efficiency which have been run by the Programme, but he now finds that he has less time in which to attend these. He also feels that his technical knowledge, particularly in relation to the context in which he works is greater and that he has less to learn.

The energy manager believes that the measurement of the individual store’s energy consumption is the best way to gain an understanding of energy use and to plan strategies to reduce energy usage. Benchmarking of the stores’ consumption is therefore an important activity for him. At present he is able to find out the store’s electricity consumption for every store with just one day’s delay. There is little requirement for gas as the lighting in the stores is the main source of heat. Every month, the energy manager compares the energy costs of the stores in a benchmarking exercise. An energy accounting software package is also used to estimate costs on the basis of the consumption measured. Benchmarking has proved to be an vital management tool in identifying cost saving opportunities. As discussed above, the overall bill for energy – gas and electricity – has been reduced from £8million to £5 million during the five years which the energy manager has been in post.

225 6.4.4 Identifying Technologies for Implementation The energy manager believes that it is his professional knowledge and accumulated experience which now help him most in deciding which technologies are likely to produce the greatest energy savings for the organisation. The energy manager believes that the information which suppliers produce about the energy efficiency of their products is mostly of good quality. In most cases, the quality of the information was as good and no worse than other forms of information for capital goods.

However, the energy manager did accept that he did not have as good a way of assessing the claims which the suppliers made as he was unable to perform sufficient tests of the equipment. Had he more resources, then more tests could be mounted. Overall, though he had confidence that the suppliers of lighting and air conditioning equipment were reliable.

6.4.5 Installing and Configuring Technologies The energy manager does not have sole responsibility for the specification or commissioning of equipment used in the stores. He must work with the organisation’s mechanical and electrical contractors on the specifications. Although he does try to ensure that the equipment and the stores are commissioned, this is difficult to achieve in practice as the contractors are not usually prepared to undertake commissioning at the level which the energy manager thinks is appropriate. Re-commissioning of the stores belonging to the organisation is carried out by the energy manager himself on an ad hoc, opportunistic basis. This often reveals problems of all kinds, ranging from incorrect installations, sensor drift and systems working in opposition to each other – i.e. heating running against cooling.

This last problem is particularly significant in terms of wastage of energy, but is surprisingly common. Service visits which are undertaken by the electrical or equipment contractors of air-conditioning equipment or sensors – which are essentially a form of re-commissioning at the appliance or measure level - do not always result in the detection of the problems. This is a disappointment to the energy manager but he is aware that the savings which he is able to generate as a result of his work is a clear vindication of his role.

226

6.4.6 Summary of Points

• Once an energy manager becomes experienced, it is difficult for him to attribute specific buying decisions to EEBPp material. The knowledge which the programme has conveyed to the energy manager is now internalized and part of what might be termed the skill set of the employee. Although, the programme still plays a role in the decisions and actions taken by the energy manager, the programme is not seen as influencing the decision. • The House of Fraser energy manager has had extensive use of the programme in the early years of his involvement with energy management. Gradually though he has found that the benefits of going to events arranged by the programme have declined in proportion to the costs of going. • The tariff analysis responsibility did not take up a large amount of the energy manager’s time: he did not feel that this responsibility prevented him from attending to the energy efficiency performance of the stores. • The servicing and maintenance of building appliances and systems which use energy or which aim to control energy use is not generally performed to a high standard. Consequently, the energy manager has constantly to review the condition of the equipment where he can. • The new stores are far easier to benchmark than the older stores as the older stores are neither similar in terms of building design nor in terms of the active equipment which is installed. Comparisons between the same building over time may be the only form of meaningful benchmark.

6.5 Arcadia Group PLC

6.5.1 Introduction The Arcadia Group PLC is comprised of the former Burton Group of companies excluding Debenhams which was demerged in 1998. The new group was named the Arcadia Group PLC and, like the other demerged half of the Burton Group, it was listed on the stock market. After the demerger, the energy manager went into the newly created Debenhams, while a new person was appointed to the role of energy

227 manager for the remaining stores. De-merger diverted senior management attention from energy efficiency, but following the de-merger process, an extensive review of the organisation’s buildings and estates has begun.

The Arcadia Group is comprised of six high street shopping chains, Burton, Evans, Top-Shop, Racing Green, Dorothy Perkins, Principles with around thirteen hundred retail premises in the UK at demerger.129 Subsequently, a large number of disposals was to occur, a process which was continuing during the period of the research. Turnover for the entire group was of the order of £1.5 billion per annum with an energy spend of around £10 million per annum.

6.5.2 Management Structure for Energy Efficiency The energy manager of the group had only been in post for two months before interview, having been appointed in September 1998. He was, however, an experienced energy manager, having worked at Sears Group immediately before, where he was made redundant, and before that, at Iceland Frozen Foods. The energy manager is one of the most well known energy managers in the sector, having worked with the Superdrug energy manager at Iceland Frozen Foods, and through his work at Sears.

The management of the energy efficiency of such a large estate – approximately thirteen hundred stores – presents significant problems of control. The view of the energy manager was that the capital costs of equipping each store with metering significantly outweighs the benefits across the whole estates. The energy manager had estimated the costs of fitting any store with a main meter was at least £500 while the costs of keeping the meter working and calibrated could be around £200 per year. This cost did not justify the attempt to measure the energy consumption within the smaller stores.

129 Burton Group PLC Report and Accounts for 1997 published in Autumn 1997 listed 1291 separate stores within what would become the subsidiaries of the Arcadia Group on demerger. A further 438 shops were located within the retail premises of other companies, either within the Debenhams group or within other so-called “Shop in shops”, see page 11.

228 Many of the larger stores do possess energy saving equipment over which the stores’ individual managers have control. However, in the view of the energy manager, it is rare for the store managers to use the controls at all as there is far greater emphasis upon using staff time for sales activities rather than for cost-control. In a business which the energy manager asserted was characterized by “cut-throat competition” staff time was almost never thought suitable for attending to equipment or monitoring the energy efficiency of the smaller shops. The pressure within the business to reduce the number of staff in the stores was also liable to make the control of energy efficiency in the stores, particularly the smaller ones, difficult to achieve.

The larger stores could though receive more attention because they might have some engineering staff. Within the pre-demerged group, most of the efforts to control the energy efficiency of the stores occurred in the Debenhams side of the business which comprised around 80 larger stores in the UK. High levels of staff turnover also make it difficult to address the issues of controlling energy use. The new energy manager also asserted that the demerger activities appeared to have prevented any form of monitoring and targeting of energy consumption for at least a couple of years.

His recent experience of redundancy at Sears Group has confirmed his view though that energy management is regarded by many organisational senior managers as a optional extra. His previous line manager at Sears, see the Sears case study, commented that his redundancy was partly the result of the energy manager having done his job too well130, although the decision by Sears to divest a number of stores131, reducing the size of the group was also responsible.

The energy manager believes that he will need the support of other groups within the management structure to further the goal of increasing organisational energy efficiency. His strategy at Sears was to seek to create a separate energy budget of

130 According to the former Sears energy manager – now at Arcadia Group – the Sears estate was at least 20% better than the sector average. 131 The number of Sears stores dropped from around 3000 to around 700 as a result of this consolidation.

229 ring-fenced money for energy efficiency132. This budget, which was available to the store’s business, could only be used for energy efficiency investments133. His aim at Arcadia is to achieve control of energy efficiency investments in a similar way. However, he had not, by the time that the interview was done, managed to secure the cooperation of the finance department.

He was determined however to build a consensus on energy management and was pleased to note that one of the senior directors of Arcadia had been tasked with an investigation into heat, light and power requirements of the group’s stores. This, coupled with his own attempts to persuade the finance department to allocate specific funds to energy efficiency, was, he hoped, likely to lead to improved energy efficiency within a couple of years.

At the time of the interview there was no formal policy on energy efficiency nor was there any formal group which considered energy efficiency. However, there was a discussion group on energy efficiency which included members of retail and finance departments. He hoped to be able to use the group to align the interests of the finance department with that of energy efficiency, and eventually, a formal policy on energy might emerge which had a basis in a wide organisational consensus.

6.5.3 Energy Efficiency Knowledge The energy manager is widely experienced in the field, having worked at a number of organisations in the retail sector. During his career, he has participated in the creation of three EEBPp guides, and therefore has worked closely with the Programme and those responsible for creating its publicity material. His desire to participate in the writing of the guide - Good Practice Case Study 327 “Energy

132 In the Sears organisation, a subsidiary named Sears Group Properties Ltd. owned many of the freeholds in which the groups retail and mail order operations took place. This property company therefore effectively acted as a landlord for the group’s businesses. Its separation from the retail businesses of the group, led, in the view of the energy manager, to greater energy efficiency of the estates and buildings of the group. Investment in energy efficiency was easier to protect and manage. Arcadia is not however constituted in the same way and there is no separation of businesses. 133 The degree of control of individual stores use of energy and lighting in the Sears group was significantly greater than what he had observed at Arcadia. The level of control is instanced by an example: at Sears, if a store manager wished to illuminate a part of the store beyond the normal working pattern, he had to ring Sears’ head office and request permission. This permission was then relayed to the store manager by the regional office.

230 Management, Staff Awareness and Motivation” – was as a result of a belief that staff could play a significant role in increasing the energy efficiency of an organisation. Since his work on the guide and the awareness schemes in the Iceland chain, he has consistently tried to ensure that the organisations in which he has worked have involved staff in energy saving initiatives.

After two months at Arcadia, the energy manager was beginning to consider when he could best introduce an initiative that would successfully involve staff in saving energy for the organisation. His experience of such schemes at Iceland and also at Sears has convinced him that the introduction of such a scheme requires staff involvement from the start. At Arcadia, the energy manager is likely to let the staff design the logo that will be used to publicize the scheme.

Metering and Analysis Following the demerger of the Debenhams business and the appointment of the energy manager, the group began an extensive survey of its properties, and an area usage survey of all the floor areas, including retail sales area, back office and storage. Until this data is collected, the energy manager did not feel confident that he could accurately benchmark the energy efficiency of the stores which he would like to be able to do every six months.

The most practicable and cost-effective option is not to measure energy use through real-time metering in all the stores but to introduce metering in the larger stores only. In the smaller stores, energy efficiency can be promoted and delivered through gaining the attention of an interested and responsible person. One option which he thought might be appropriate was to create an energy monitor who would look, at a basic level, at the energy efficiency of the group’s stores in each town as the group often has three or four separate shops in the high street of many towns and cities in the UK.

The reading of meters at the level of the stores has become more difficult as the meters themselves have become more sophisticated. The in-store meters, which are used to report on energy use in the smaller stores not covered by real-time metering, have become, according to the energy manager “too complicated and technical” for

231 the store managers to read. For the vast majority of the smaller stores, the records of energy use are compiled from bills which are read quarterly or at the worst, once a year. The time-lag between energy use and measurement results in benchmarks being outdated and ineffective. Analyses which are based on the readings taken a year ago are wholly inapplicable if the store has undergone a refit in the intervening months.

Retail Open Door Trading and Energy Use The energy manager also referred to the practice of open shop fronts – the open door trading policy - as leading to very high levels of energy use. In the UK, fashion shops on the high street normally have their doors open to the street, even in cold weather. This practice is seen as the one of the best ways of encouraging shoppers to enter the store. The practice is particularly wasteful of energy in cold or windy weather where the cooling effect is large. Whilst at Sears, his former employment, the Arcadia energy manager had calculated that the company spent around £2000 per hour across the whole of its UK operations on over-door heating alone every winter’s day134. However, the practice is difficult to stop. Retail managers are reluctant to take any action which might harm sales and the only way, he sees which might bring a halt to the practice is through the compulsion of building regulations.

6.5.4 Identifying Technologies for Implementation The role which the EEBPp plays in helping the energy manager to identify relevant technologies and specific products is very limited. He uses his own expertise rather than using the programme as the programme is not sufficiently specific enough to address the precise needs of the installer. He uses conventional advertising media such as magazines to identify suitable suppliers of equipment. In general, though, he believes that the need for information is strong as there is often confusion about how effective energy efficiency devices can be. Energy consultants do not always help: their advice about individual products can be unreliable and their advice is often costly. However, there is, so far as he is aware, no difference between the

134 This is equivalent to adding around £160,000 to the winter quarter electricity bill.

232 quality of advice in the market for energy efficiency goods and the market for other forms of industrial goods with which he is familiar.

The energy manager believes that some form of demonstration of technologies would be more effective and that if the Programme could operate demonstrations of technology, this would be far more helpful to energy managers. His experience suggests that organisations in his sector are ready to share information about technology and when installing equipment, they would like to hear from those who had already installed similar equipment. Seminars which were specific and which were based round the introduction of particular technologies would be more appropriate than general advice.

6.5.5 Installing and Configuring Technologies

Controls Installation Presents Problems The energy manager believes that the Arcadia group is installing equipment of a high standard but that the installation itself is not being done properly. Poor installation of equipment is particularly widespread in the area of controls. This gives the energy manager some concern as controls are meant to underpin the energy efficient operation of the stores.

Involvement and Incentives The use of incentive schemes to deliver energy savings can have a place in the overall approach to energy efficiency. There are however, some risks and problems which can occur when incentives are not wisely introduced. The energy manager gave the example of Leeds City Council’s incentive scheme to reduce energy consumption in the City’s schools. Caretakers responded by turning off boilers over a Christmas and New Year holiday with the result that many schools suffered broken pipes. The cost of the repairs to the burst pipes was very significant, and far more than what might have been saved from reduced energy consumption. The energy manager claimed that he would introduce more schemes after the end of year busy period.

233

6.5.6 Summary of Points

• The achievement of energy efficiency is done by involving staff and appealing to their sense of environmental concern. This is likely to be particularly effective where the staff are younger women whom, he feels, have a greater environmental awareness. • The energy manager is highly experienced with a background in energy management in the retail sector. His need for general guidance about energy efficiency is small. What would be more useful to him would be information about specific kinds of equipment and their installation. • The deployment of controls is widespread in the organisation. But the energy manager feels that the use of controls may fail to give the benefits which are envisaged because of poor quality of installation.

6.6 Sears Group Properties

6.6.1 Introduction Sears Group Properties is the property company for Sears Holdings, a large high street and mail order chain operating in the UK Retail Sector. At the time of interview, the organisation had just made its energy manager redundant. The interview took place with the Group Building Surveyor. The former energy manager was also interviewed as part of the Arcadia Group study and his comments about Sears were noted for inclusion in this account of the Sears Group. The organisation began a significant scaling down of its activities in 1997-98, demerging two major retail businesses, Selfridges and Freemans. This action reduced the number of stores in the group from around 3000 to around 750 and the scaling down provided the main reason for the redundancy of the energy manager.

234 6.6.2 Management Structure for Energy Efficiency The management structure for energy efficiency lies within the property subsidiary of Sears, Sears Group Properties. Until the demerger of the Selfridges business, an energy manager reported to the Property Services Director, who was also an influential member of a number of policy groups in the field of property management, including the Property Committee of the British Retail Consortium and the Government’s Property Advisory Group. Once the demerger had taken place and the energy manager had been made redundant, responsibility for energy efficiency was assigned to the Group Building Surveyors Office. In addition, the responsibilities of an “energy analyst”, who had been appointed earlier to perform tariff analysis and benchmarking of the stores, were enlarged to take account of the fact that there was no longer an energy manager.

The group building surveyor was of the view that the decision to remove the energy manager was unlikely to have a serious impact upon the energy efficiency of the organisation and could be easily justified on grounds of cost-effectiveness. The energy manager had in fact so improved the organisation’s use of its energy – through adoption of new purchasing policies, monitoring systems, equipment standards, and staff awareness, that he was clearly “the victim of his own success”. The group building surveyor continued: “If you get systems in place and set standards and then revisit it every year, it is not cost-effective to retain an energy manager.” The view of the redundant energy manager about the approach which had been taken at Sears was also positive. His view of how progress had been made was that “at Sears we got it very right”. Against industry benchmarks, the company was at least 20% better in terms of cost of energy per square foot of sales [floorspace].

6.6.3 Energy Efficiency Knowledge The level of the knowledge about energy efficiency is high, according to both the previous energy manager and the current group building surveyor. A cost model of the energy use of the business has been created which can be used to estimate the effects of installing different forms of energy efficiency technology. Most of the sites are on half hourly billing and the energy analyst is employed to monitor the readings and the energy bills to note discrepancies and to report these to the group building

235 surveyor who then alerts the stores themselves. While there are TREND systems in a large number of the stores, these are only checked monthly via remote dial-up. It is therefore on the basis of an analysis of the energy bills that action is taken to address energy use which is unusual, whether high or low, rather than through real-time monitoring of the stores’ building management systems.

Benchmarking is a routine activity and takes place within the brands rather than across the range of shops as different kinds of shops have wholly different usage patterns, rendering comparisons questionable. Miss Selfridge, for example, has an in store interactive sound system installed which significantly affects the energy consumption of the store. Brands are subdivided further into categories such as stand-alone store, high street, part of shopping mall and “shed”. The term shed is used to describe the smallest and most basic of the retail units. At this level, the benchmarking and comparison of energy use is meant to be most effect as changes in energy usage are more likely to be identifiable as the result of single, isolatable effects.

6.6.4 Identifying Technologies for Implementation The staff who are responsible for the energy efficiency of the stores do not now use the Programme as a source of reference with which to identify the most suitable technologies. The purchasing manager, who is now responsible for buying the major energy using equipment used within the stores, acquires most of his information about products from visits to suppliers. The Programme material has however been used as a basis for their “Earth Wise” campaign aimed at persuading the staff of the stores to reduce energy consumption. The performance characteristics of the energy efficiency equipment which they buy are identified mainly from suppliers’ information, rather than from the Programme advice.

Supplier information is generally seen to be reliable and equally reliable as other forms of information on products in other areas. There are problems though with suppliers’ information generally on all kinds of goods. The wide limits which suppliers set when they test their equipment ensure that testing by end users and their consultants is time well spent. “There is so much variance in what they take as

236 their parameters when they test their products” was the group surveyor’s comment on the validity of the information produced by suppliers.

In order to ensure that the equipment is appropriate, the use of consultants is necessary. A specialist air-conditioning installation company is employed by Sears to test and monitor their air-conditioning equipment and controls. Sears believe they can exchange information about their operational needs with this company135 and receive accurate information about the energy efficiency performance of their air- conditioning equipment and anything which they might be planning to install.

6.6.5 Installing and Configuring Technologies The demerger of large parts of the business has also led to reductions in the number of technical and maintenance staff. Consequently, a large shop-refitting programme which was to take place shortly after the interview with the group buildings surveyor was to rely heavily on outside contractors. A consultancy firm which specializes in commissioning equipment had been approached and it was likely that this firm was going to ensure that the energy efficiency equipment of the stores was correctly installed.

After every installation, a six monthly inspection visit is made to the store to ensure that all the equipment is in good working order. All stores are inspected annually to ensure correct operation of equipment and to analyse the pattern of faults. The group buildings surveyor stressed the importance of the programme of visits which are made to the stores, and was convinced that this was the best way of ensuring continued high levels of energy efficiency.

6.6.6 Controls The use of controls within the Sears Group is widespread as is the use of the very latest energy efficiency technologies. The use of controls ensures that while the staff of the stores have some flexibility in the way in which they use their lighting and air- conditioning, they are limited in their use of the equipment. At certain times of day

135 This was Air-Dale, based locally in Leeds.

237 however, strict control of energy usage is applied. In this respect, i.e. at out of hours periods, each store in principle controlled by staff at the organisation’s headquarters. If a store’s management wished to depart from the pattern of energy use previously agreed upon, the permission of the area manager had to be sought “before the lights could go on.”136

6.6.7 Summary of Points

• The performance of the Sears stores in terms of energy efficiency is substantially better than the sector norms. • The Programme information on products is rarely consulted. • Close relationships with consultants and technology providing companies are the basis for knowledge of the most effective energy efficiency products, techniques and operational issues. • The staff responsible for energy efficiency attribute their success to a systematic and long term commitment to energy efficiency. • This systematic approach applies to staff training, commissioning of equipment, re-commissioning of the stores and inspection visits, and remote monthly checks through dial-up of each store’s building management system usually TREND. • The effectiveness of these management systems, coupled with a reduction in the size of the business and the number of stores, has allowed the senior management of the organisation to make the energy manager redundant. • This level of commitment is evident at the level of the top management, which has signed the Making a Corporate Commitment to improve energy efficiency. • An energy analyst is employed to monitor the energy use of the group. • Energy efficiency performance is assessed through bill data provided frequently as a result of the half-hourly metering available with new electricity tariffs.

136 Interview with Kevin Thompson, energy manager at Arcadia Group and formerly energy manager at Sears Group Properties.

238 6.7 WH Smith PLC

6.7.1 Introduction WH Smith is a long established retail group with mainly high street shops selling stationery and books. The organisation is undergoing significant changes, in terms of pressures on its retail activities. In the area of book selling, it took over and then subsequently sold off Waterstones, the up-market bookseller. The company has also divested itself of the Our Price record chain. However, recent acquisitions are John Menzies Ltd, a Scottish based newsagent and high street stationery chain. There are also a travel business and a retail business in the group. The newsagency business which serves the wholesale market for newspapers, is located in around 60 sites in the UK and operates from standard, low-cost warehousing facilities known fondly in the trade as “tin sheds”. Most of the property in which the group trades is owned rather than rented. The organisation spends around £9 million a year on energy alone.

6.7.1 Management Structure for Energy Efficiency The interview was conducted with the group energy manager who is responsible for energy efficiency across all parts of the business. The individual businesses within WH Smith have signed up to MACC rather than the group itself signing on their behalves. This, the energy manager thinks, is a mistake as it gave the wrong impression to the individual businesses that energy efficiency was somehow an option. However, the decision to allow the individual businesses to sign up was, he thought, the result of tension between them and the group management. Giving the individual businesses the chance to sign up was a political act.

There is no formal energy policy although there are references to energy efficiency within the organisation’s environmental policy. While signing MACC did lead to a debate about the greater formalization of energy efficiency, it did not lead to any significant organisational changes.

Meetings between the energy manager and the estates and buildings staff from the other businesses in the group have been used in the past to ensure that information about energy efficient products is diffused throughout the group. These meetings

239 have, as the group has undergone substantial changes, become less frequent, a fact which the energy manager regrets but can’t say whether has affected the energy efficiency of the group.

Liberalisation – Changes to Markets for Energy The energy manager was formerly the plant engineer of the group. He said of the process of becoming an energy manager, “I sort of fell into this and never quite managed to work out how.” While his working experience has been with energy efficiency equipment, the liberalisation of the energy market has led him to do far more work on energy purchasing.

He commented that liberalization had had been a double blow to the energy efficiency of organisations. On the one hand there had been cheaper energy, which led to a reduction in the incentives to use energy more efficiently. But at the same time, the energy manager’s role had changed from a focus on the technology of energy efficiency and the creation of awareness schemes, to a concern almost exclusively with tariff management. Getting the best price has become the main activity of many energy managers and has taken them away from their original function.

The targets which the group had set for energy efficiency were in cost terms rather than in usage terms. This was regrettable, he thought, but was simply the result of the financial pressures upon the way the business worked.

Budgets for Energy Efficiency There is no specific budget for energy efficiency investment in the group or within the individual companies owned by the group. Investments are made when the energy efficiency staff can argue a strong case with the senior management of the individual companies owned by the group. Whether the lack of formalized specific budgets for energy efficiency leads to an under-utilization of energy efficiency equipment and a failure to maintain existing energy efficiency resources, the energy manager could not say. He did, however, accept the current position in which the individual business managers were given the ultimate authority to make investments.

240 6.7.2 Energy Efficiency Knowledge Knowledge of how energy efficiency should be pursued and how to deliver energy efficiency in an organisation like WH Smith was present in the estates department, in the knowledge and expertise of estates staff. A number of written sources of information about how energy efficiency could be achieved were available to him from publications from the Chartered Institute of Building Service Engineers (CIBSE) and from the Royal Institution of Chartered Surveyors. Croner’s Guide, a high quality publication on energy efficiency which contains information about energy efficiency management strategies and links to other detailed publications to help with technology choices, was also available in the office, although it was not consulted by the energy manager very often.

Knowledge of how the organisation used its energy was, in the view of the energy manager, not as good as they would like, as much of the information on energy usage came from billing data which was usually three months late. Half-hourly metering was only installed in a limited number of sites. Projections of savings from the wider deployment of technologies was limited in accuracy.

The reading of meters was a difficult area. Many of the 800 sites which the group has are too small for real-time electricity metering to be installed. Consequently, measurement has to be through bills and from manual metering reading. The group energy manager commented that the “if you did try to obtain a meter reading from each shop, you would probably have to spend a great deal of time correcting those readings.” While they do have some half-hourly data, there is not very much of this and the most accurate readings they have from stores are three months old. The energy manager would like to be able to provide information to the stores themselves – “detecting the problems before the store managers themselves notice them” – but this is far from being realized in the system they have at present.

The Programme has made its most significant contribution to the way in which the energy manager works by publicizing the use of energy performance indicators. The promotion of monitoring, (benchmarking) and targeting has led him to understand energy use in the group’s businesses.

241 6.7.3 Identifying Technologies for Implementation When the group energy manager wishes to identify the most suitable products to install in the business, he believes that, on the whole, there is enough information available within the organisation, from consultancy services and from the manufacturers and retailers of energy efficiency products to help him make the best choice. For this reason, so far as he could tell, WH Smith had never used the Programme to help with a specific investment.

Meeting with suppliers is, in the view of the group energy manager, the most effective means of identifying products and assessing their performance. When WH Smith tests the products, they usually do so for reasons of reliability rather than because they believe that the information which the manufacturers put out will give misleading information as to the energy efficient performance. Manufacturers tend, in his view, not to promote information about the performance of equipment, but this does not mean that they are trying to dissimulate: rather, they are including what they believe to be the relevant information about a product – a lighting fixture – which is not primarily an energy product. Consequently, the information about the watts per lumen – the amount of energy required to deliver a given light level – is often “hidden away”.

The group energy manager believed that membership of a number of groups had been effective in promoting energy efficiency but also in reducing energy costs. Belonging to the Large Energy Users Council, and through the Confederation of British Industry, the organisation had been working to try to reduce its energy costs. At the same time, membership of the Retail Energy Efficiency Club, run by EA Technologies, was giving some insight into saving energy costs through product testing and demonstration. Membership of the REEC also led to links with other energy users and a small amount of informal knowledge trading.

6.7.4 Installing and Configuring Technologies The installation of technology and its commissioning is an area in which they have some experience but their practice is not very well advanced. No assessment of the costs of poor commissioning practices has been attempted. No specialist

242 commissioning contractors have been used. The group energy manager believes that while mechanical engineers are often aware of the need for commissioning plant and equipment, electrical engineering staff employed by the firm under sub-contract are often far less aware of its importance.

6.7.5 Summary of Points

• The Programme has not only to persuade organisations that investing in energy efficiency is successful, it has also to persuade those who may work in energy management that it is a worth while area in which to make a career. To this extent, it is a career guidance and development activity or service. • Within this organisation, there are a large number of sources of information on energy efficiency, including Croner’s Guide, professional information from CIBSE and from the Royal Institute of Chartered Surveyors. The Programme information is only one resource which staff concerned with energy efficiency can use. • Energy efficiency expertise is more widely distributed within this organisation. There are a number of staff within the estates area who are knowledgeable about energy efficiency and who can be relied upon for advice by the group energy manager. • Energy use in buildings is complex and often little understood by outsiders, including suppliers and consultants. This leads many of the forecasts of equipment performance and buildings performance to be inaccurate. The example which the group energy manager gives is of night cooling in the stores. During the day, heat from heating and lighting is absorbed into the stock. Depending upon the levels of stock in the store, and the levels of trade, the night-time cooling of the stock and therefore the building can vary significantly from day to day. The attempts to model the performance of a building with such variations is difficult. • The interviewee assumed the functions of group energy manager almost by accident. While he comes to the role from the estates and services area where he was a plant engineer, he did not move into the work as the result of long-term career planning.

243 6.8 Debenhams PLC

6.8.1 Introduction Debenhams is the large stores business of the demerged Burton Group, the other part of the original company being now known as the Arcadia Group comprising the multiples businesses operating from smaller stores. The organisation has around 50 stores in the UK. Some of the stores are new build, such as the premises in the Trafford Centre. Most are large with over 100kW electricity supplies making half hourly metering possible. The interviewee was the energy manager of Debenhams. He has been with Debenhams and the Burton Group working in facilities management since 1988. In 1993 he became energy manager.

6.8.2 Management Structure for Energy Efficiency The principal responsibilities of the energy manager are for the management and control of existing systems. Rather than having a formal responsibility for purchasing the major energy using technologies which are used by the organisation therefore, he consults with those in the estates department who have the purchasing role.

His responsibilities therefore extend to the control of energy efficiency equipment and the instigation of energy saving schemes. Despite restrictions in his involvement with the purchasing of energy efficiency equipment, the energy manager believes that the energy efficiency technologies which Debenhams are using are very advanced, compared with the other firms in the market. The re-lamping policy of the organisation is not handled by the energy manager but by the purchasing department. 137

At the centre of the organisation, the Design and Development department, which is responsible for the appearance of the stores, also has a view on energy efficiency. They are included in discussions of energy efficiency but energy efficiency is not

137 He gave the example of how in the Trafford Centre, the Debenhams store was using metal halide light fittings and two foot square light fixtures while some of the other retailers such as Selfridges were using fixtures which were five years older.

244 always the highest priority for them. The individual stores are large enough to support a service manager. The service managers’ responsibilities for efficient use of the energy using equipment of the stores are outlined by the energy manager, who is based at the organisation’s headquarters.

The energy manager described that about five years ago – in around 1992, the stores were given control of their energy using equipment. They were allowed to control their own building management systems, which gave them complete authority over their lighting and heating levels. This was not completely successful, according to the energy manager and control of the stores’ BMS was taken back. In 1998, when the interview was carried out, 60% of the stores had their heating, lighting and cooling controlled remotely from the energy manager’s facilities management bureau in Leeds.

The adoption by the organisation of an energy policy occurred when the energy manager joined the company in 1988 although he was working in facilities management at that time. This attempt to address energy efficiency was part of a company wide initiative with a general environmental message. Since the energy manager has occupied his current role, energy efficiency has had its own separate policy statement and set of objectives.

The allocation of expenditure by the organisation to energy efficiency projects, technology and schemes is done on a case by case basis. There is no specific allocation of capital to energy efficiency within the financial plan of the organisation.

6.8.3 Energy Efficiency Knowledge The energy manager used the Programme extensively when he took up his role in energy efficiency. He observes that “he was constantly applying for information” when he first assumed the responsibilities of energy management. He still uses the Programme but to a far smaller extent than in the first couple of years of working in this area. He still finds that the information does help him identify likely types of technology that can help improve the energy efficiency of the organisation.

245 Because the energy manager is not involved directly in technology procurement, his knowledge of the detail of particular technologies is dependent upon the work which is done by the purchasing and estates departments. He relies on them for information about the most effective technologies. He also does not have the opportunity to develop his energy efficiency knowledge.

He is sceptical about the effect of an energy policy. He observes that the clear objectives of the organisation are customer satisfaction and sales. In recent years, he noted with an air of apology, that the installation of air-condition in all the new stores which have been built have sacrificed energy efficiency for customer comfort.

The energy manager had used the Programme material significantly in the year before the interview took place. In particular he had used the Good Practice Case Study Guide 324 produced by the Programme on energy efficiency at British Telecom. He had also used the Good Practice Case Study 327 on energy efficiency at Sears and the Energy Efficiency Action Pack for Retail Premises – Good Practice Guide 190 - published by the Programme as a basis for the large energy awareness scheme which he had run recently. The scheme, which he had called “Energy Wise Week”, aimed to improve the awareness of energy saving amongst the staff of the stores.

The energy manager is able to measure the electricity consumption of the stores on a half-hourly basis. Only two of the stores are omitted from the half-hourly electricity metering reading as they are not connected to the above 100kW supply. The measurement of gas supply is by self-read meter readings and by billing. Gas billing is based on a mixture of quarterly and monthly meter readings.

In addition to the meter readings, the use of a profiler (clip on meter) provides a separate source of data for individual small scale energy use. The profiler can measure the amount of energy used on a particular floor of a store, or the energy required to power lifts or other energy intensive operations such as chiller plant. The energy manager has only got one profiler and would like to be able to use it in many different places within the organisation.

246 The result of extensive meter reading is a monthly benchmarking exercise. In addition to this monthly process, there is an exception reporting which flags excessive consumption to the stores. The benchmarks against which the stores are compared are within the group, and with other stores in the same sector but which are owned by other organisations. The energy manager does not benchmark against other organisations outside the sector as he thinks the nature of the comparisons are misplaced. Sears, he noted, had carried out the practice, but he did not think it led to valid comparisons for Debenhams.

Benchmarking is a problematic activity for the energy manager in that a very large number of confounding factors can make comparisons misleading. The weather has a significant impact on the amount of energy used by a store, but the effects of temperature, wind speed and humidity are often difficult to attribute at the level of the individual store. The footfall – the number of visitors to the store – is also a major factor, and can affect the amount of energy used driving escalators and lifts.

Activity in the stores during the night – chiefly stock filling – can have a significant effect upon the amount of energy which is used. Although lighting can be set to a lower level for re-stocking activities, night-time lighting needs can lead to significant energy consumption which is unpredictable. Half hourly metering does however make it easier to see when energy is used, even if the energy is being used in the middle of the night.

Benchmarking of stores provides not only a means to compare stores but also an implied target of what energy should be used and how much can be saved. However, the energy manager was very reluctant to impose targets for stores: “It sounds terrible coming from an energy manager, but we put a far higher priority on customer comfort – we will put air conditioning in”. He has no brief from senior management to curb energy consumption and to promote low energy technologies as the organisational priority is to ensure that the volume of business increases. This is assumed throughout the organisation to be dependent upon the use of high energy use equipment, particularly air-conditioning in all the new stores.

247 6.8.4 Identifying Technologies for Implementation The energy manager has made extensive use of the Programme material in identifying suitable technologies when he was new to his job. He now uses the material far less as a way of detecting the most appropriate technologies and products for the organisation. He believes that some of the experience from his previous job as an energy manager has helped him to identify technologies and products which he has used in his current position at Debenhams.

In his current role, he does not have complete responsibility for identifying and testing technologies. This responsibility mostly lies with the Purchasing Department which is taking charge of the re-lamping of the entire chain of stores in the UK. His role is to consult with the purchasing department, but they have primary responsibility for selection of the technology, identification of the product, and installation.

He believes that the sector is very open and information is routinely shared between different retail firms about energy efficiency. His view is that in retail “you can’t keep secrets for long” and “if you do want to know what others are doing, you can easily find out” as the technology which organisations use is nearly all visible to visitors to the stores.

His most useful source of technology and product advice is the trade shows such as NEMEX – the National Energy Management Exhibition. He does not feel that seminars on energy efficiency which are given by various organisations including the EEBPp are useful to him at his level of experience. “Once you have been to ten or so of these, you have been to them all.” His view is that the seminars tend to repeat the same information time and again and that his time is better spent attending to his organisation’s specific problems and difficulties.

When asked if Debenhams had plans to use the experience of outside contractors to run energy management in the form of “contract energy management” or an “energy services contract” – ESCO – he commented that he thought that Debenhams was a big enough organisation to be able to manage energy efficiency itself.

248 One of the major sources of information which he uses on energy efficiency is the Building Services Journal which he receives through affiliate membership of the Chartered Institute of Building Services. The latest BSJ contained a CD with a large amount of product information specifically on energy efficiency technologies. Heating and Ventilating News also provides him with significant amounts of information about the energy efficiency performance of a large range of equipment.

6.8.5 Installing and Configuring Technologies The energy manager was not aware of immense difficulties with the installation of technologies in the organisation. The Purchasing Department as the responsible department dealt with the installation of equipment and its commissioning. However, the energy manager felt that when the piloting of new equipment was taking place, this was not done adequately and that the information about the performance of the equipment given by the suppliers was not sufficiently detailed. If the energy manager was more closely involved with the purchasing function, he felt that he would be able to insist on seeing more detailed performance information about the equipment.

The protection of savings is a matter, in the view of the energy manager, of educating the staff of the store. However, there is a significant turnover of retail staff and attitudes are difficult to affect and control. Business practice in the stores also tends to make it difficult to ensure that equipment is being operated correctly. Many of the stores contain franchises. Franchise businesses often bring in staff who are not under the control of Debenhams. These franchise staff can often move equipment and fixtures around which affect the way in which energy is used. The impact of such activity on the energy consumption of the stores is not yet quantified.

6.8.6 Summary of Points

• The energy manager was an avid user of the Programme material when he first entered the field of energy management. He now uses the material far less. He does not use the material to obtain a detailed picture of particular products. This

249 is done through supplier information, through the trade press, informal networks of contacts and the piloting of particular products within a store. • The energy manager is not as closely involved with the acquisition of technology as he would like. If he were more closely involved, he feels that Debenhams might be able to acquire equipment at a higher standard of energy efficiency. • While Debenhams gave control of electrical power, lighting and heating levels to stores, this control has now been taken back as problems arose with wastage of electricity and correct operation of the systems. Control was taken back with the assent of the stores. • The staff of the stores wish to have heating, ventilation air-conditioning and lighting controlled by a central service as they see their role as a strictly sales and marketing activity. • The use of an energy services contract for lighting or heating is not likely as the energy manager believes that the organisation is large enough to meet its own needs.

6.9 Sector Summary The following table consolidates the impacts of the Programme as seen through the organisational context, and shows the principal influences upon the way in which the Programme has taken effect.

250 Table 22. Retail Sector Summary Table

Energy Energy Identifying Installing and Management Efficiency Technologies for Configuring Structure Knowledge Implementation Technologies Woolworth - Early stages - Programme - Low Programme Use - No Programme - Controls low Use Low - Using REEC Use - Used Consultants - Metering good - Commissioning - Tariff Analysis a but information rarely achieved burden high flow poor Superdrug - Established - Medium - Used Programme but - Programme use - Controls low Programme Use not much now Medium - Some remote - Metering low - Manufacturers and - Commissioning access - Benchm’king REEC useful: belief in poor until E. Man - Local staff low rising standards of appointed involved & - Professional information awareness associations & - Tariff Analysis links strong burden high House of Fraser - Emerging - Programme use - High Programme use - No Programme - Central and local Medium - initially but low now use staff Metering Good - Manufacturers and - Aware of - Role developed by - Benchm’king suppliers information commissioning post-holder frequent good - Done ad hoc Arcadia Group - Emerging - High - Initially high - No Programme - central and local Programme Use Programme use but use staff - Metering and now low - Commissioning - E. Man ex Sears benchmk’ng - REEC used & would poor with big difficult as sites like to see more effect on energy too small demonstration efficiency Sears Group - High Programme - High - No Programme - No Programme Properties use Programme Use - Consultants and use - Established initially contractors - Special system including - Metering Very consultants Energy Analyst Good employed - Protected budget - Cost model of - 6 monthly checks business WH Smith - MACC leads to - Programme use - No use of - No use of Group minor changes now, was high Programme Programme - Post holder - Metering low - REEC seen as good - Commissioning established role aware but no - Tariff Analysis strategy burden high Debenhams - Established - Metering Good - Low Programme Use - Little programme - Central control Profiler used - CIBSE & press use - Post-holder - Programme use source of product info - Aware of developed role high initially - Professional links problems but role - Benchm’kng - Procurement by restricted advanced purchasing department

251 Chapter Seven - Comparative Analysis

7.1 Introduction The Energy Efficiency Best Practice Programme has been established to supplement and improve existing information flows and to influence the creation of new actors, thereby aiming to facilitate decisions made by organisations about the energy use and the acquisition, installation, operation and maintenance of energy efficiency equipment, techniques and practices. This chapter provides a comparison of the ways in which the Programme has operated within the three different sectors. It examines the way the Programme has affected organisational decisions and practices, whether impacts have been sustained, and the practicability of demonstrating the presence of such impacts for the purposes of impact assessment and monitoring. The chapter follows the structure of the sectoral studies using the categories and sites of activity in which decisions were taken on energy efficiency within the organisation as a framework in which to consider the role played by the Programme material and Programme activities.

The chapter compares and contrasts the way in which different organisations have operated within each of the three sectors. The chapter includes references to a number of statistical appendices in which descriptive statistics have been gathered to show differences between the sectors as a way of building on and confirming the work carried out in interviews and documentary analyses. The statistical information relates to differences between sectoral management behaviours, types of information used, the extent of information use as a whole and in relation to particular technological installations, and the relationship between the presence of an energy manager and the number of types of information used. The relationship between the installation of measures and the use of information is problematic as noted in the methodology.

The chapter also integrates observations made within the study of the effects of the Best Practice Programme with the individual sectoral studies to emphasise and elucidate specific issues. The chapter also seeks to indicate through comparison

252 within the sector studies a number of general and specific issues which affect Programme impact.

7.2 Management Structure and Organisational Context The role which the senior management of an organisation plays in establishing an energy efficiency capability is significant and affects staffing, resources and equipment and the extent to which the rest of the organisation contributes to the goal of increased energy efficiency. The energy manager or staff responsible for energy efficiency operate within a context which is often significantly determined by the senior managers of the organisation, usually either the managing director or other board level director with responsibility for property, estates or business wide standards of performance. This section identifies the ways in which those who take responsibility for energy efficiency in the organisation – usually the energy manager – and who subsequently use the information provided by the Best Practice Programme are influenced by senior management and developments outside the organisation. This section considers the contexts in which organisational goals for energy efficiency are set.

7.2.1 Macro-Economic Contexts A number of influences come to bear on senior managers which encourage them to develop the energy efficiency capability of the organisation. Most recently, the introduction of the Climate Change Levy (CCL) in the Finance Act of 1999 appears to have stimulated considerable interest on the part of senior managers in improving the energy efficiency of their organisations.

The responsibilities which staff are given are defined by senior managers: the need to establish energy procurement procedures and capabilities has resulted in many energy efficiency staff having to focus on an area with which they did not, if they had been in energy management for a long period, have any familiarity. This is particularly the case in the Higher Education Sector, where a number of energy management staff have been in their current organisations over ten years. However, there were also energy managers in the retail sector whose involvement with energy

253 efficiency pre-dates the privatization and liberalisation of the energy market and whose responsibilities in their early career in energy efficiency and energy management were not concerned with energy procurement. Both of these groups saw energy procurement as a distraction from the main purpose of their work which was to reduce energy usage.

All staff involved in energy management in all three sectors report a growing concern during the 1990s with the issue of energy procurement and, towards the end of the decade, with the introduction of (further) taxation on the use of energy. In all sectors, this has led to the appointment of extra staff, and greater efforts to control, monitor and curb energy use.

7.2.2 Organisational Change In the Higher Education sector, senior managers have played an ambiguous role in relation to promoting energy efficiency within their own communities. In the search for more direct modes of management, university senior managers have attempted to remove what might be perceived as cumbersome committee systems. At two of the universities interviewed, energy and environmental committees have been allowed to run down in the early 1990s. This decision to allow these committees to decline in influence was perceived by the estates staff to have taken place with the tacit agreement of the senior management. By 1996 however, with the publication of the Toyne Report and the HEFCE review, the commitment of the senior managers was beginning to increase as the sector as a whole moved towards the systematic adoption of environmental policies. The decline and then subsequent rise in the support for such committees and groups is paralleled in the Hotel and the Retail sectors where consultative groups have declined in influence in the 1990s but become more common towards the end of the decade.

Considering all sectors, the effect is more noticeable in the Hotel sector, where senior managers have considered energy efficiency to be a possible distraction for the organisation, taking attention away from the delivery of a service to customers and leading to a wastage of capital. In one instance, the person responsible for promoting energy efficiency met with hostility and resistance from the managing director of the group.

254

7.2.3 Other Major Government Initiatives - MACC On the assumption that to secure the support of senior managements for energy efficiency would lead organisations to make greater investments in energy efficiency, the Government launched the Making a Corporate Commitment Campaign in 1989. Organisations which signed up to energy efficiency were awarded a certification which demonstrated their readiness to carry out investment in energy efficiency, to launch energy awareness schemes and to involve their staff in energy efficiency initiatives. The MACC was styled as a programme aiming at the “capital priority barrier”, what policy makers at the time thought was a preference amongst senior managers for spending an organisation’s capital resources on building projects which minimized building costs rather than considering their operational performance, the so-called cost-in-use.

The scheme appears to have generated immediate and effective publicity for energy efficiency; but the direct effects of making a corporate commitment as observed from a data analysis of the measures taken by those organisations which signed up to MACC and the interviews carried out with energy managers show that the effects of signing may be short lived in terms of actual steps taken by organisations to manage energy efficiently.

In all sectors, MACC was regarded by energy managers as of little long-term importance on their organisation’s energy efficiency. While of all the measures and steps which organisations might take to improve their energy efficiency, being a signatory to MACC was least likely to be associated with any of the other steps overall, it remains the case that in a number of sectors, MACC signatories do have a statistically significantly higher level of association with other energy efficiency management measures such as policies, monitoring systems and audits. Over both the years for which impact assessment data was available, of those organisations which were taking measures and steps towards energy efficiency in terms of systems for monitoring energy and carrying out an audit, most were not MACC signatories (Statistical Appendix K, Table 9), although there was considerable variation between the two years for the sectors. Only in the Higher Education Sector and the Retail sector was being signatory to MACC likely to associate strongly with the

255 introduction of other energy efficiency management measures. When those organisations which are signatories to MACC are examined, there is no association between signing MACC and the presence of an energy manager however, except in the case of the Retail sector (Statistical Appendix E).

Energy managers interviewed differed in their views of how effective MACC had been in leading to greater commitment to energy efficiency. In a small number of organisations, signing MACC had led to a greater commitment, giving the impression, according to the energy managers in 3 organisations in the Retail sector that MACC had triggered an interest in energy efficiency and led to the provision of greater resources for organisations to pursue it.

Whether MACC is itself “causal” of changes in organisational practice or whether is merely associated with it is difficult to assess. What is apparent from comments and the clear measures of statistical association between MACC and some energy efficiency practices is that MACC may have had an impact upon senior managements in the Higher Education Sector and the Retail Sector by persuading senior staff that energy efficiency is a legitimate management goal. This demonstration achieved by government publicity may have led to increased use of Best Practice Programme material and attendance at events, leading to greater energy saving that otherwise would have occurred.

7.2.4 Intra-sectoral Actors A number of sector specific organisations provide a forum for debate and may seek to develop policy and promote the goal of energy efficiency and environmentalism. Some have emerged to deal specifically with the issues, while others are normally organized by professional groups to deal with a variety of subjects of common interest which may include energy efficiency from time to time.

Such intra-sectoral groups are particularly numerous and active in the Higher Education Sector, but exist to a lesser extent in the Hotel sector and are least active in the Retail Sector. Such organisations are sometimes associated with senior management but others involve only staff at a line management level. Examples of

256 professional networks include the Association for University Directors of Estates and the Association of University Engineers.

In the Higher Education sector, those who have established such organisations as the Environmental Association of Universities and Colleges and the institutions which stemmed from the Toyne Report perceive universities not as profit-making entities but with roles that include wider societal responsibilities. This group includes staff from a cross-section of universities and from a range of employment categories.

In addition to the quasi-regulatory organisations, a number of other kinds of group are in existence which operate to promote environmentalism in a number of forms but which do so without the explicit involvement of senior management. A large number of these can be found in the Higher Education Sector. At least four major initiatives and organisations exist to allow those concerned with energy and environmentalism to promote it and to facilitate information sharing and discussions.

Such intra-sectoral groups not only provide information but can provide a form of problem solving where the effect is more than simply to convey pre-existing information. Knowledge transfer of both the explicit and tacit kind therefore takes place, but, in addition, collective problem solving takes place with individual personal knowledge and experience playing a significant role in reaching solutions. The scale of interactions between colleagues outside the organisation in all sectors is one of the main forms of acquiring information about energy efficiency but is particularly so in the Higher Education138 and the Retail sectors, where, according to interviews and to the statistical perspectives, interaction between organisations is welcomed and creates effects in terms of technology adoption.

A comparison between the use of links with colleagues inside the organisation and outside the organisation [Statistical Appendix G] tends to confirm impression from case study interviews on the sectors. Expressing the readiness to go outside the organisation for information as a rather simplistic ratio of the proportion of external

138 For example between Edinburgh and Glasgow University in the Higher Education Sector and in the Retail Sector between Superdrug and Boots the Chemist.

257 colleagues consulted to ones consulted in ones own organisation, the Higher Education sector score is 1.33, and the Retail Sector is 1.78, while the Hotel sector is 0.87, confirming an impression of insularity amongst energy managers within that sector. Recognition of the readiness of the Higher Education sector to engage in networking is one of the reasons why the Best Practice Programme managers have established a new networking activity, run and managed by Share Fair Networks Ltd.

In the Hotel sector, a number of larger chains have become involved with Green Globe, an organisation owned by the World Travel and Tourism Council (WTTC) which awards environmental certification. The WTTC decision to develop an environmental consultancy is partly in response to the perceived pressure from a wide public to reduce the environmental burden of tourism’s activities. Green Globe certification denotes certain minimum environmental standards and secures for a specific hotel or chain the reputation of environmental responsibility. The role which Green Globe plays in disseminating information about how to achieve the goals which it sets is outlined in later sections on energy efficiency knowledge and the identification of technologies.

In addition to Green Globe are the activities of the International Hotels and Environment Initiative that also promotes environmental awareness amongst hotel operators and is funded through the Prince’s Trust. The IHEI is smaller in scope and while it promotes its activities through a newsletter, it does not have a system for the certification of hotel businesses or individual hotels. Both Green Globe and the IHEI take the form of quasi self-regulatory bodies for their sectors.

Existing actors also provide not only a synthesis of their own information but also reinforce existing forms of information from all sources, subject to confidentiality agreements. Actors play roles as sources of existing information, promoting for example Best Practice Programme information to their colleagues in the same or other organisations, and as forms of information themselves.

The Retail sector study did not identify any sector specific organisations which promote energy efficiency, either with managerial or a professional basis. Despite the relative lack of intra-sectoral bodies, energy managers in the Retail Sector are

258 comparatively well-known to each other. At the level of organisations which span different sectors, energy managers are active, for example in such networks as the Institute of Energy.

7.2.5 Sector Regulators In the case of the Higher Education Sector by contrast there are a number of legal regulatory bodies with oversight of the sector and its activities. The sector’s regulatory agency, the Higher Education Funding Council for England, is responsible for the major share of recurrent funding of the Higher Education sector, and has a responsibility to see that the grants from government are spent according to certain predefined criteria. The government also has considerable oversight of the relationship between the universities and their funding body through the National Audit Office which has conducted a number of enquiries about the sector in recent years. While none of the NAO enquiries have focused on buildings energy efficiency, one of them has focused on the construction of buildings within the sector and specifically upon the long term costs of operating university buildings. Central to the issue of long term operational cost is the issue of cost-in use. One important determinant of the long-term cost of a building is its energy efficiency.

7.2.6 Other Government Initiatives In addition to the Programme and the major initiatives launched by the government, a number of other programmes and awareness schemes have been established to promote energy efficiency and environmentalism. Some have been more closely linked to the Energy Efficiency Best Practice Programme than others. For example, the Energy Design Advisory Scheme, later re-launched as the Design Advice Scheme, was operated by the Programme managers themselves and was directed at commercial and industrial users of energy, while the Wasting Energy Costs the Earth is a far more general attempt at awareness raising operated by the government. While each of these initiatives each have their own specific targets, there is evidence that

259 impacts in terms of raising awareness of energy efficiency and environmentalism can be broader than intended.139

In the Higher Education Sector, the Going for Green initiative has had a direct influence upon two institutions, the universities of Central Lancashire and Middlesex. Awareness raising and projects carried out at the University of Central Lancashire has had some impact upon the organisation and has led management to make policies on energy efficiency which it might not have done.

7.2.7 Trans-sectoral Actors A number of highly influential professional organisations which include members from a broad range of sectors, including the three included in this study, all have the potential to influence individual awareness of energy efficiency and to justify it as a legitimate organisational activity. Two organisations in particular, the Chartered Institute of Building Services Engineers and the Institute of Energy have members within the sectors.

The Chartered Institute of Building Services Engineers has a long-standing interest in energy efficiency and environmentalism. Its technical journals contain frequent reference to the subject. During 1997, the Building Services Journal contained a series of reports by the well-known buildings services consultant, Dr Bill Bordass, on the subject of post occupancy, examining the extent to which buildings met with the specifications of designers and clients. The studies drew attention to an area of perennial concern in the field of energy efficiency in buildings: the failure of the commissioning process to ensure buildings operation matches that outlined in the design in relation to new build. While CIBSE coverage of post-occupancy was undertaken wholly independently from the Programme, it was a useful reinforcement of initiatives taken by the Programme managers on commissioning which occurred in a variety of specialist areas at different times: in relation to heating systems and controls during 1994-1995 and during 1997 and 1998 in relation to general buildings commissioning.

139 Wasting Energy Costs the Earth has had an impact within one of the hotel chains included in the case study.

260 7.2.8 Local Action In a very limited number of examples, those responsible for the management of energy using equipment were influenced by energy efficiency publicity from a number of sources and sought to improve the energy efficiency without any support or indeed knowledge of the senior management of the organisation. This kind of action has been noted as taking place in all sectors but is not very common. All sectors have examples of where energy efficiency has been “discovered” by estates staff who have turned themselves into energy managers. Two examples of this have been noted in the Hotel Sector [Thistle] and the Retail Sector [ House of Fraser]. The Hotel sector example is of an individual taking action quite independently of the senior management of the organisation – in fact in spite of it.

The Hotel sector, where hotel chief engineers work with a degree of isolation from the senior management of the organisation, appears to provide the context where engineers can exert an influence over their immediate senior manager, usually the hotel’s general manager, and can have an impact upon the level of energy efficiency. In the Hotel Sector example, the chief engineer who initiated the changes had attended a NIFES course on energy management on his own initiative, and through the course acquired a knowledge of the Programme. This example, and the one of the hotel sector is however a rare instance.

Local action can also take the form of intra-sectoral collaboration activities by energy managers and other estates staff. The Higher Education sector is particularly rich in such entities. These activities can assume a range of formal structures, some being systematic intra-sectoral initiatives aiming at inclusive membership across the sector, while others may be ad hoc groups meeting in other fora but embracing an energy efficiency agenda.

7.2.9 Principal Responsibilities of the Energy Manager In the Higher Education sector, those responsible for the management of energy within the central organisational structure are more closely focused on energy efficiency and all are concerned principally with energy efficiency and energy procurement. However, all have other responsibilities in respect of maintenance and

261 water and in one case, general environmental compliance. There are therefore no solely energy managers although the title is used. Where energy managers positions have been on the establishment, there appears to be a trend not to appoint, with three of the organisations having decided to either delay appointment or to move the responsibilities to another member of staff. Two institutions who either had energy managers or were about to appoint an energy managers have found that these staff have decided to move to what were better paid positions in the retail sector.

Throughout the 1990s, those responsible for energy management in Higher Education Institutions have added energy procurement to their responsibilities. All those who had long term and pre-electricity and gas market liberalization experience of energy management, such as the staff at Manchester and Edinburgh, stated that they found the transition of their role to include energy procurement frustrating. Their frustration at not being able to promote energy efficiency, which they saw partly as a social and environmental necessity, was made worse by the problems which affected the liberalization of the market, including frequent errors in billing, administrative arrangements and often the apparent incompetence of the new energy companies.

In the Hotel sector, those responsible for the management of energy normally have a responsibility for maintenance of hotel equipment and safety. Regardless of the location of staff who have responsibility for energy efficiency – i.e. whether at head office, regional office, or within a specific hotel, their responsibilities are split with maintenance and refurbishment or other utilities control operations such as water. In the Hotel sector responsibility for procurement of energy resides outside the largely engineering and maintenance function in which energy management is practised. Procurement is normally dealt with therefore by central services, usually an energy buyer located in the finance department. Where energy services are used, as is the case with one of the large international hotel groups, the in-house legal department handles contractual negotiations.

In the Retail sector, those responsible for the management of energy practice a discrete specialization with many having been recruited within the last two years. In addition to these members of staff who normally have the title energy manager, in

262 retail a number of other staff are also involved with the control of energy use within the central service. Energy management staff in Retail have been extensively involved in tariff analysis, an activity which has occupied senior managements of most organisations particularly in the last part of the 1990s. Local responsibilities within individual shops or stores is in the hands of maintenance staff who normally have a low level of qualification in engineering and who are more likely to receive any training in energy efficiency from their employer.

7.2.10 Metering and Accountability – Changes In all sectors, metering and measurement of energy consumption serve the goal of attributing energy costs to cost centres, as well as providing those financially responsible with the means to monitor and improve energy consumption. In the Hotels and the Retail Sectors, responsibility for energy use is clearly identifiable. In the Higher Education Sector, the attempt is underway to re-attribute energy use away from the university as a whole and to each cost centre. These attempts to promote decentralization of energy budgeting on the model of the private sector have met with opposition in universities although the scale of opposition has varied.

Amongst end-users - whether departments or faculties - which have high and rising energy use and energy costs, there is reluctance to plans drafted by university managements to measure energy consumption and attribute it locally. Resistance by end users, some of whom can be influential senior academics, has taken various forms, including the demand that electricity meters be placed in every room, a costly and impossible step. In no university interviewed did complete local budgeting of energy occur; and in those universities where budgeting did occur, it was restricted to one or two departments or involved extensive use of formulaic assessments of energy use rather direct meter readings.

Service departments can also be reluctant accept new models of cost control. Local energy budgeting by university sub-units such as faculties or departments is seen as likely to put at risk the lower energy tariffs negotiated by the estates department or other central service.

263 A central difficulty in the higher education sector, which also affects the other sectors but to a lesser degree, is the separation of three key responsibilities: the responsibility for identifying the best commercial arrangements for buying energy, so called “energy procurement”; the measurement, monitoring and control of energy consumption; and actual responsibility for energy using equipment.

In each sector, energy managers can take responsibility in all three areas: however, it is normal for responsibility to be restricted in some way. In universities, energy managers have the broadest range of responsibilities, with a role which takes in all three major functions of purchase of energy procurement, energy monitoring, and the to a lesser extent oversight of energy use with heating and air-conditioning facilities. In the Higher Education sector, energy managers wide ranging responsibilities for procurement are recent, arising from changes in the market for energy supply. In the Hotel sector, energy managers rarely have responsibility for procurement even if they are centrally located. In the Retail Sector, energy managers take responsibility for procurement activities as they are centrally based with maintenance staff or in-store technicians taking a role locally within individual shops or stores.

But real difficulties also exist. The practice of cost allocation in universities requires some form of mapping of costs of energy use to buildings, via students, academic departments or service departments. Where students are on modular courses, accounting difficulties proliferate as no student has a home department to which to attribute energy or utilities costs.

The costs of establishing administrative systems to procure energy and to introduce energy efficient measures at distributed levels are difficult to estimate. In the view of some of the energy managers in the Higher Education sector, the costs could significantly exceed any benefit of enforcing local accountability for energy use. By contrast, in the Hotel or Retail sector, the costs of energy use within a single site are nearly always the responsibility of a single business unit: even where separate metering is operated, as in the case of hotel kitchens, forcing catering units to pay for their energy separate from the rest of the hotel business is not viewed as cost- effective or sensible.

264 The statistical information about the extent of systems for monitoring energy is difficult to interpret as the term “monitoring system” has broad meanings with differences within and between sectors. As sectors are relatively static, and monitoring systems are physical objects, it is unlikely that measurements of the presence of energy monitoring systems would change much between years. However, in the case of the Higher Education Sector, the two years worth of survey data show a large difference between the two years in the proportion of organisations reporting the presence of an energy monitoring system. It is for this reason that this data is treated sceptically. However, the available statistical data identifies consistently high levels of use of monitoring systems in hotels and lower levels in Retail (see Statistical Appendices F and K – individual sector tables).

The relatively high levels of monitoring in Hotels is partly explained by the sector’s tradition of utilities cost control and measurement and partly by the size of the physical unit of the hotel which is normally connected to a metered electricity supply, i.e. one that is above 100kW. In the Hotel sector, utilities cost control is an important accounting tool with which to protect profit margins. At one of the luxury hotels chains, the Chief Engineer who had responsibility for benchmarking the UK hotels had succeeded in measuring the cost of utilities per room sold. None of the other hotels included in the study claimed to have such detailed information.140

Metered electrical supplies provide information which can be abstracted into computerized analysis packages for immediate exception reporting and for further detailed comparisons and analysis. Of those examples of Hotels interviewed, all had some form of electricity metering as all were on the above 100kW supply. Not all however were analysing their data although more than half were. In the Retail sector, larger stores are normally connected to a half-hourly metered 100kW electricity supply but smaller stores are usually not connected. Energy managers are also able to mount their own energy monitoring systems independently of the custodial metering by electricity or gas suppliers.

140 This Chief Engineer commented that one of the other major hotel chains had made far more progress in this than he had.

265 7.3 Energy Efficiency Knowledge

7.3.1 Role of the Programme In all sectors, the Programme information used by energy managers is highly regarded and for a number, regardless of their sector, the Programme information was the major source of advice when they began to take responsibility for energy efficiency. The more advanced and knowledgeable the individual is, the less likely, regardless of the sector to which they belong, they are to use the material on a day to day basis to identify the strategies which they can take to promote energy efficiency. With what suppliers and consultants said was a steady stream of new people to fill posts of energy managers, the continued provision of basic technical and awareness information about energy efficiency would be vital. However, in the sectors in which the interviews took place, staff had been either in post or a related position in energy management for comparatively long periods and consequently had developed significant amounts of expertise in energy management.

The statistical information on the use of the Programme information suggests that the information is not widely used within either the Hotel or Retail sectors (see Statistical Appendix K summary tables). Within the Higher Education Sector by contrast there is a far higher rate of use which appears relatively constant over the two years for which data is present. The statistical data which is collected by BRECSU Impact Assessment does not distinguish between the types of information requested by users of the Programme and the kinds of use to which the information requested would be put.141

In terms of using the Programme information within the Higher Education sector, higher rates of use of the information may also result from the practice of energy managers using Programme material to brief their colleagues about energy efficiency. Comments received from some Higher Education sector energy managers suggested that this was their principal use of the Programme information.

141 BRECSU does however collect information on the demand for its publications. The extent of demand can provide estimates of the extent to which the information is used.

266 In other sectors by contrast, there are often few other members of staff who take an interest in energy efficiency, unless there is a large head office facility with responsibilities for estates and buildings, and this may lead to the comparatively low levels of use of the Programme material by firms. In the Hotels Sector and the Retail Sector, the average rates of use of Programme information over the two year period is 22% and 27% respectively, whereas that for the Higher Education Sector was 71%. In both these other sectors though, there is evidence that energy managers brief their colleagues about energy efficiency measures with the Programme material.

The Programme material mainly provides a level of professional development, bringing those new to the area up to a level of awareness where they can function quickly as energy managers and energy technicians. Those who use the Programme material on energy monitoring and benchmarking begin with the Energy Consumption Guides (ECGs) and then move to make comparisons with other sectoral organisations, and within their own estate. Once energy managers are making comparisons within their own estates, they tend to rely less on the guidance provided by the Programme. In the Retail Sector as in the Hotel Sector, comparisons between institutions need to be carefully arranged. Those engaged in comparisons between different hotels or between different stores were quick to point out the risks involved with incorrect comparisons – i.e. failing to compare like with like. Use of the Energy Consumption Guides is a key first step for individual energy managers along a pathway of forms of information. The guides provide the first opportunity for benchmarking and comparison of local energy use with norms within the sector.

Whereas in the Hotel and the Retail sector where comparison between the energy use of different organisations is accepted, in the Higher Education sector, benchmarking, while perceived as a useful activity, is also seen as subject to “political” interference through the making misleading comparisons between universities. The results of such comparisons are perceived therefore in the university sector as invidious, bringing the whole process into disrepute. Interesting, the Programme has created benchmarks for the Hotel sector and the Retail sector respectively, but it has not done so for the Higher Education sector.

267 Variations in the association between having an energy manager and using the Programme information showed that in the Higher Education Sector for both years, the association between energy manager and using the Programme material was strong as measured by the phi coefficient, suggesting that the Programme material is a common form of reference for those in the sector (see Statistical Appendix K, sector comparison tables). The strength of association remains strong between the two years, attesting to the popularity of the Programme material and its reputation with energy managers in the sector. As many of those working in the Higher Education sector have been in post for a long period and are experienced in this area, the strong association suggests continued or regular use of the Programme over long periods of time, or persistence of Programme impact and reputation.

The strength of the relationship between Programme information use and the presence of an energy manager as implied by the phi coefficient for the Hotel and the Retail sector suggests that the Retail Sector, like the Higher Education Sector, has energy managers for whom the Programme is a popular form of information, while the level of use of Programme material by energy managers in the hotel sector is low.

However, there are significant other sources of information which provide more specific advice. For example, the model followed by Green Globe in the Hotel sector, provides a source of advice similar in scope to that provided by the Site Specific Advice, the successor to the Department of Energy audits and visits. These visits go further than the general advice to the point where they provide actual help with specific investments, an issue which is discussed in detail with in the next major section.

The use of information by the Higher Education Sector energy managers is higher, with a higher average level of consultation of energy sources, on average energy managers examining 7.4 forms of information within the year, as against 3.57 for the Hotel Sector and 2.97 for the Retail Sector (see Statistical Appendix G). Such a disparity is partly to be explained by the fact that the energy managers in the Higher Education Sector are usually concerned with the whole range of aspects of energy use as covered by the Programme. In the Hotel sector, individual energy

268 management staff have the opportunity to consult the Programme material but, as much senior management has given comparatively little importance to energy efficiency, the incentive to consult the material is likely to be low. Within the Hotel sector, there was more scepticism about the role of government in promoting energy efficiency.

In all sectors there was evidence that the Programme material was re-circulated by energy managers – those with principal responsibility for energy usage – to those who were close colleagues in related departments. In this, the high quality of the Programme material and its ease of access and clarity, were cited as reasons, by the energy managers themselves, for its acceptability amongst the wider group of employees working in facilities management and estates activities. None of the energy managers who had distributed the Programme material in this way knew if this had led to direct energy savings: however, the energy managers who had diffused the information were confident in its quality and its potential to inform their colleagues and thereby to broader a consensus within buildings and estates departments that energy efficiency was a legitimate organisational goal.

7.3.2 Energy Metering and Measurement The extent of metering, measurement, auditing and analysis of energy consumption to inform decisions about energy efficiency is a complex issue. Metering, measurement and auditing precedes the analysis of energy consumption data and the formulation of plans to make savings, either through changes to the practices of operation within the organisation or through changes to the technologies employed.142 All sectors see forms of measurement and auditing. Metering may take many forms, and it may involve the measurement of different types of energy source (or form) – electricity, gas, oil or even steam. Auditing, which is a term used in the Impact Assessment survey also has a broad meaning. Auditing of energy use, while giving the impression of thoroughness and accuracy, may only take place infrequently. Consequently, organisations which can use their half hourly data about

269 their energy consumption143 as do all of organisations in every sector, will know significantly more about their energy use than those organisations which discard the metered data and which only undertake a yearly or infrequent energy audit.

7.3.3 Data Collection and Metering In all sectors, half-hourly electricity metering is now common with all the organisations in all sectors interviewed undertaking some collection of the data from these meters. However, in Retail, where single sites may have sub 100 kW consumption, they are normally excluded from real time measurement. Consequently, large numbers of small retail sites have metering by self-reading, usually by members of staff such as an in-store technician, or by facilities management company employed by the electricity supplier. Measurement of electricity consumption is, in this case, a monthly activity at best, and at worst once a year, with the whole process being one with marked delays and inaccuracies. In the Higher Education Sector and the Hotel Sector, where sites are usually large, metering of the site itself is the rule. Within the Higher Education Sector, where a site may include a large number of buildings, there is a range of approaches, with older established universities installing or renting meters for all their buildings while one of the new universities interviewed had no further metering at the buildings level. Gas is measured in nearly all cases by billing either monthly or quarterly. Two of the older universities have extensive installations of their own metering equipment to supplement the half-hourly electricity metering. One organisation which is in the older sector, which is a large historic user of steam, also extensively monitored its use of steam.

Specific monitoring of high energy using equipment or facilities does take place within the Hotel Sector and the Higher Education sector, but no instances of permanent meter installations for specific uses were found within the Retail Sector. In the Hotel Sector, some of the organisations reported separate metering of the hotel kitchen. While Buildings Management Systems such as TREND were installed

142 The use of metering and analysis software is also essential to cost-effective energy procurement. In tariff analysis, a prospective purchaser will supply their consumption data to a prospective supplier, in order for the supplier to set a price. 143 Those with code 5,6 and 7 metering have access to their half hourly electricity measurement data.

270 in one of the hotels, they were not used for monitoring. In the Retail Sector, remote metering by dial-in to the local TREND system was taking place in one of the retail chains.

Where metering takes place at remote sites that are small, there are often problems of ensuring accuracy. Where meters are read daily or weekly by the organisation’s own staff, who may not be technically trained, as is the case most often in Retail, errors can occur. The trend for more complex meters has led to problems, particularly in Retail, with ensuring that meters are read correctly. Although manual meter reading takes place on smaller sites and therefore in contexts where the attribution of variations in energy use to potential causes is possible, manual metering does not take place frequently enough to achieve this in practice.

7.3.4 Analysis of Data While few of the organisations in all sectors felt that they were are able to analyse the data to the level they would like, energy managers were taking some steps in most organisations to ensure that analysis took place. In the Higher Education Sector, problems with analysis arose largely because the information generated by the metering could not be processed by suitable analysis software. Arrangements for analysis sometimes included the ad hoc, with older systems in operation set up in the early 1990s dependent on goodwill for continued operation. One energy manager with a large site had too much information coming in from the half-hourly metering, although he was able to carry out analysis. Analysis was, he claimed, difficult in that there were no suitable analysis packages for the quantity of data he was collecting. Developments in the market for software to analyse meter read data have been taking place, but have been slow144.

Other problems lay with incompatibilities between software protocols used to communicate the results from his own meters to a central monitoring system – the

144 Software programs such as EnTech’s “Ahead”, which analyses half hourly data but which also gives a wide range of exception reporting features to help energy managers to cope with the large quantities of data generated, have only begun to appear towards the end of the 1990s.

271 supervisor, a problem widely acknowledged in the buildings services industry145. This problem only appears to be significant in the Higher Education Sector. Such complex technical problems did not affect organisations in other sectors. Higher Education institutions in the pre-1992 group had a higher number of meters and were far more able to undertake meter reading and analysis. Two of the older institutions were able to monitor and analyse their electricity use by building although one had relatively new buildings and a far lower number of buildings. All organisations believed that the data was useful to them in identifying opportunities to save energy.

In Hotels, analysis was carried out at the site level. While there was a significant amount of data available, not all energy managers had access to it. Two of the hotel chains had management systems to ensure that the half-hourly consumption data was placed in the hands of energy managers or energy management staff. One of the chains had undertaken extensive analysis of the data. Three of the chains had few procedures for analysis and reporting. In Retail, sites vary in size. Those which had only begun to attempt to develop their control of energy recently were those where energy managers were having difficulty gaining access to their energy use data. Those organisations in the Retail Sector which had energy managers in post for a long period, were those organisations where benchmarking exercises were taking place frequently and where there was good knowledge of energy usage patterns.

7.3.5 Role of the Sector Regulators In two of the sectors, Higher Education and the Hotel sector, regulatory and semi- regulatory organisations play a role in advising organisations about energy efficiency. In the Higher Education Sector, the Higher Education Funding Council on behalf of the Government, has encouraged institutions to increase their energy efficiency by providing a range of services, including tutorial material. This material is based in part upon work done with the Programme. For example, the energy management matrix which was in the guide for energy managers in universities had been used in good practice guides and case studies, although the ideas themselves predate the

145 Roger Ivy, Utilities and Services Engineer at the University of Arizona and guest speaker at Share Fair described the problems of protocol incompatibility for BEMS.

272 Programme. HEFCE also provides encouragement to the institutions to recruit energy managers, although none who were interviewed have appointed as many staff as recommended in the guidance notes provided by the Council.

In the Hotel sector, the larger organisations such as Marriott and Holiday Inn Crowne Plaza, have both used information from Green Globe, an environmental and energy certification programme established by the World Travel and Tourism Council. The Green Globe certification and involvement with WTTC provide a source of information and advice which promotes and advises on energy efficiency. This information the services provided by Green Globe parallel the influence of the Programme. Furthermore, the advice promoted by these two organisations also refers organisations to the material produced under the Energy Efficiency Best Practice Programme, which increases, but only marginally, the visibility and impact of the Programme’s publications.

The Programme therefore gains from the presence and activity of other intra- sectoral bodies such the Higher Education Funding Council and Green Globe in that these organisations not only actively promote the Programme message as discussed earlier, but they also give a further channel of access to Programme publications and Programme knowledge and services. These organisations lend their credibility to the Programme message. A distinctive difference between these two initiatives is that in the case of Green Globe’s promotion of the Programme, the Programme managers had not been consulted, whereas in the case of the HEFCE involvement, Programme managers were involved in consultations about the form of the HEFCE review.

7.3.6 Other Sources of Expertise and Training In addition to the Programme and Regulatory organisations, training organisations specializing in energy efficiency, such as NIFES, offer a range of courses for energy managers and their staff. Amongst the energy managers interviewed, a small number from the Hotel Sector and the Retail Sector had attended courses run by NIFES.

273 Universities and professional bodies also offer courses in the area of energy efficiency. The Institute of Energy for example provides a range of courses for their members on various aspects of energy efficiency. It runs a distance learning service – Training in Energy Management Through Open Learning – TEMOL. In the University Sector, educational institutions provide a wide range of courses. Twelve institutions provide a total of 23 different HND, bachelors and masters courses currently which meet the Institute of Energy’s 146 qualifying criteria for membership and satisfy the Engineering Council’s requirement for Chartered Engineer status. The same institutions also offer another seven courses but these do not meet the criteria for Chartered Engineer status. The University of Cranfield has also provided a masters level course since 1972, although this does not qualify the individual for membership of the Institute of Energy. A wide variety of other organisations are also connected with the energy efficiency education, as discussed in Chapter 4 but of the other educational resources available, very few of them had been used by the energy managers interviewed in any of the sectors.

The relatively low level of energy management specific professional qualifications of the energy managers interviewed is the result of a number of factors. The field of energy management is, despite the existence of established courses, a novelty in many organisations. Furthermore, those who hold positions of energy manager are often likely to have assumed the responsibilities of energy management, having begun their careers as mechanical, electrical or building services engineers, rather than having been appointed into the post specifically as energy managers. Moreover, the broad skill base possessed by many of those in all sectors who have taken on the role of energy management has been regarded as a benefit to the organisation rather than a restriction on the development of a desirable but highly specialist technical capability147.

146 The Institute of Energy web site at http://www.instenergy.org.uk/ind_ioe.htm details the courses which match the criteria for membership of the Institute and which give the status of Chartered Engineer. 147 For example, in the Higher Education Sector, of the 121 university energy management staff registered with the Share Fair Network, only 13 have the title “Energy Manager.”

274 7.4 Identifying Technologies for Implementation

7.4.1 Information Use and Adoption – the Role of the Programme The information used by organisations to assist with identifying technologies covers a wide variety of types but can be broken down into two broad categories: awareness of generic technologies in terms of their general performance characteristics and cost effectiveness; and specific product information which includes details of the actual costs of acquiring the specific product, implementing it and ensuring its “fit” within the context or structure of the organisation, defined by its technology, technical routines, management and other cultural practices. The latter category of information is generated necessarily in context, while the former is generic and independent of the specific context of application.

The issue of what type of information is provided by the Programme and how it is used by energy managers and their organisations in the technology implementation process is addressed in this section. If the Programme were providing information which addressed the specific product choices faced by organisations on the assumption that manufacturer’s information was unreliable, it would be likely that organisations and their energy managers would use the Programme rather than the manufacturer’s information. When considering information usage, one might expect to see a negative relationship between the use of the manufacturer’s information and the use of the Programme.

A cross-tabulation between the use of each type of information should therefore show a negative association. A very general test, based upon the overall use of information types by energy management staff in each of the three sectors from the yearly impact assessment has been undertaken, the results of which are reported in Statistical Appendix J. These results suggest that the use of Programme information and the use of manufacturer’s information is not in fact negatively associated at a statistically significant degree (p=0.05). Indeed, there is a marginal statistical significance (0.050> p <0.100) to a positive relationship between them in two

275 sectors: the Higher Education Sector and the Retail Sector148. This suggests complementarity between the information sources rather than the relationship of substitutes. Furthermore, the use of manufacturer’s information rises with the number of technologies installed, as does the use of the Programme information. This impression from the statistical information confirms the observations of the individual energy managers about how they use the Programme and that of the Programme staff and the documentary sources.

Organisations in all sectors always need specific performance information about a product, in conjunction with a general awareness of energy efficiency technologies: generalized information, which reassures and provides a basis for comparison of new products with older ones, still needs to be augmented by specific product knowledge. The Programme information provides a general awareness of technologies, their potential and their general cost-effectiveness149. However, when organisations come to implement a new technique or technology, they desire more than just a general awareness of the technology and its limits. They must establish beyond a measure of doubt that the product will be cost-effective in the particular installation which they contemplate for it. Costing information is assembled, and business plans are produced and very often, testing is carried out to assess the suitability of the technology within the organisational context150. In the case of large purchases, tenders must be drawn up and the characteristics of the supplier and the manufacturer are examined to rule out the risk of a failure to perform the contract for the supply of the goods.

148 In the BRECSU Impact Assessment information, respondents are queried about their use of particular types of information generally, rather than in relation to specific types of technology installation. Assumptions therefore about the role of information in a specific installation should be tentative: overall judgements about information use may easily hide differences in information use across different types of technology and management practices. 149 The Programme’s major discernible impacts have centred on the creation of awareness and setting general standards for the presentation of information rather than delivering specific product and specific contextual help for a buying decision. This is true for all sectors. Comments from the Programme managers and those at DETR confirm that the Programme did not set out and has not been constructed as a “product testing service”[DETR comment, 1999]. 150 In addition to using information gathered from external sources on product performance, organisations also carry out their own analysis either in conjunction with consultants or with their own research and testing staff. The use of information is a key part of the process of technological acquisition.

276 The importance of information to the installation decision is underlined by the statistical information from Statistical Appendix H which reports the results of an analysis of lighting technology adoption. This shows the importance of information to the installation decision. In a cross-tabulation which compares the number of types of information used with the number of types of lighting installed in any one year151, there is a clear association between the number of types of information used and the number of lighting technologies installed. A Spearman’s rank correlation also shows a moderate and statistically significant relationship between the two, in the Higher Education Sector and the Retail Sector. In the Hotel sector, this association is not strong and not statistically significant.

7.4.2 Role of Manufacturer’s or Supplier’s Information The importance of product knowledge to decisions to install technology is underlined not only by the use made of manufacturer’s information but also by other evidence. In the Retail sector, for example, the continuing need for accurate product information has led AE Technologies to launch the Retail Energy Club which offers retailers the chance to buy into a product testing service. In the Higher Education Sector, the recently established Share Fair network, in which energy managers from around the sector share information about their energy efficiency problems, one of the most common exchanges concerns precise product and supplier information. In the Hotel sector, by contrast, where energy managers are less likely to consult with either with their colleagues inside or outside the organisation, collaborations such as Share Fair and Retail Energy Club have not emerged.

The use of manufacturer’s or supplier’s information is generally high within all sectors and while within all sectors there is a minority of interviewees who criticize the information provided by suppliers, there is a more general support for and confidence in the information provided by suppliers about their equipment and its performance. This appears to be evidenced by the fact that it is more commonly used than any other form of information. This contention is also supported by the

151 The year in which the data was collected was 1997 and the period in which the installations of up to six different types of energy efficiency equipment was installed was 1995-1996. The survey group included only existing buildings rather than new buildings which are affected significantly by actors outside the role and influence of the Programme.

277 data from the Programme Impact Assessment. If it is the case that manufacturer’s and suppliers information is discredited, it is also the case that their information is still the most widely consulted for all types of information about energy efficiency products.

In some cases, usually in retail and hotels, where volume purchases occur, close ties are formed with manufacturers and or contractors to pilot new and test existing energy efficiency equipment. In the Hotel Sector in particular, some organisations have pioneered the use of new technologies, notably Forte Hotels and Swallow Hotels. Forte operated combined heat and power technology in its hotels on a trial basis before it was proven to be cost-effective, doing so in the hope of gaining a technological lead over its competitors. Swallow were to follow quickly behind Forte in deploying CHP across their estate. The extent of collaboration between purchasers and manufacturers is strongest in the Retail sector. The nature of the collaboration is, however, unlike that undertaken with the development of CHP where a whole new technology was developed in conjunction with users from a particular sector. Rather, as will be discussed in the next section on implementation and configuration, the relationships between suppliers, manufacturers and users now takes place to support the implementation of the technology rather than its development.

In relation to rates of manufacturer’s information usage, the Higher Education Sector consults manufacturer’s information on average more than the others. The 1996 Impact Assessment suggests that 78% of the Higher Education Sector organisations used the information during the previous year. In the Hotel Sector 50% of respondents used manufacturer’s information while in the Retail Sector 46% used it. Views concerning the quality and reliability of the information provided by manufacturers and their suppliers role which manufacturer’s information plays vary; with those believing that manufacturer’s information is of sufficient quality being in a small majority over those who do not.

7.4.3 Wider Impacts: Improvements in the General Quality of Information A central assumption of the Programme has been that the general level of information available to prospective purchasers of energy efficiency equipment from

278 manufacturers, suppliers and consultants was insufficient and of poor quality in both point of fact and by reputation. While Programme initiatives have dealt directly with potential purchasers of energy efficiency equipment, some have sought to influence those delivering energy efficiency solutions as consultants and technical staff, [for example GIR 40]152. While there is strong evidence of Programme impact upon organisations, particularly through an improvement in the skills of energy managers, there is less clear evidence about the effects which the Programme has had upon the general level of information provided by manufacturers, suppliers, consultants and contractors to prospective purchasers of energy efficiency equipment.

A major issue of extended or wider Programme impact assessment is whether the performance of those who provide energy efficiency technologies, equipment and other related services, including energy services, has improved the standard and quality of information which they bring as parties to the interaction which takes place with purchasers. Investigation of these issues revealed a wide spread of views: but little awareness of the extent to which the Programme had led to an increase in the quality of information provided by suppliers and manufacturers. Such an increase in the general quality of information would indeed be one of the lasting benefits of the Programme.

Amongst suppliers, there was a view that the Programme had increased awareness and technical knowledge but the demand for information from organisations was still as great as ever. Amongst many end-users, views about the general quality of information were divided with some commenting that the quality of product information was very good and was as reliable as required, while others suggested that such information was systematically biased with inflated claims for the level of product quality and energy efficiency.

152 GIR 40 is the Heating systems and their Control General Information Report which is aimed at professional design engineers and design technicians.

279 7.4.4 Energy Services and Information During the second half of the decade, the Programme undertook various pieces of research into the growth of the energy services sector153. The Energy Services sector, which developed from Contract Energy Management, is premised on the assumption that organisations are prepared to devolve the management of their activities which involve energy use to a third party for a suitable fee. The Strategy sought to develop this sector principally through the creation of communication networks and discussion groups to solve specific problems. In the UK, the energy services sector consists of firms with expertise in three principal areas: large scale CHP plant undertaken by power generation companies involving financing and leaseback for a long period; operate and maintain style contracts for a range of plant including CHP but rarely at a large scale; and service specific contracts for such areas as energy procurement or lighting.154 In the United States, the energy services sector is more broadly drawn and includes organisations producing information on energy efficiency. One such private organisation has been the Rocky Mountain Institute which has recently sold its information services (for energy efficiency) company E- Source to Pearson, the media group. E-Source describes its main functions in the following way: “E Source is an information service company providing organisations with unbiased, independent analysis of retail energy markets, services, and technologies. E Source's clients include electric and gas utilities and other energy service providers, large corporate and institutional energy users, government agencies, energy service companies, manufacturers, consultants, research institutions, and other organisations in nearly two dozen countries world-wide.” (E-Source web site http://www.esource.com/publicdomain/profile.frame.html)

While Pearson is a UK based multinational, its E-Source company has a mostly US client base largely for historical reasons. However, E-Source does have a number of UK members although these are few in number. E-Source information is intended to meet a diverse range of information needs, including those of supplier firms themselves. However, E-Source does aim to provide information to prospective purchasers on a wide range of technical matters, including product choice. None of the organisations which were interviewed had used E-Source publications or

153 The growth of the sector was significant as a result of liberalization of the energy markets. During 1995-1996, the to total market for energy services rose by around 28%, or £72.5 million to £225 million, according to BRECSU figures [BRECSU Energy Services Strategy, 1997, page 20.] 154 BRECSU Energy Services Strategy Analysis of the sector, 1997, page 5.

280 services. However, a UK based initiative, the Retail Energy Club, which is operated by EA Technology which is itself a member of the E-Source organisation155, had begun to develop a service similar in focus to E-Source. While the Share Fair networks and the Retail Energy Club provide a means for exchanging information about products for the Higher Education Sector and the Retail sector respectively, the Hotel sector does not have any such comparable organisation.

7.4.5 Technological Change and Information Relevance Many energy managers in all sectors commented while they had used the Programme in the past to inform their decisions, they did this less as their experience increased. Furthermore, a number of energy managers also commented that the rate of change of technologies was a significant issue for them, giving rise to concerns that the assumption that energy efficiency products are relatively static may not hold. Changes in technology have been most common in the area of controls A number of energy managers commented about the pace of technical change.

7.5 Installing and Configuring Technologies and Beyond This section focuses on the operation of energy efficiency equipment by those who are managerially responsible for it and those whose actions may influence its energy efficiency performance156. Those who are managerially responsible comprise the energy managers, other facilities management employees in the organisation and also those working in technical, consulting and maintenance capacities, what might be termed third parties. Those who may exert an effect upon the performance of the equipment also include other staff not responsible for the equipment but whose actions may influence its performance. Others with a significant effect upon the equipment comprise the clients of an organisation, which in all of the case studies carried out, significantly outnumber the staff of the organisation themselves. The section examines the role which the Programme has played in affecting this area, and

155 EA Technology is a member (client) of E-Source as both of the Programme main contractors, ETSU and BRECSU. 156 Designers too play a role in creating the technologies employed in the organisation. This research however takes the organisation itself as the locus of study. The study therefore confines itself to the adoption of technology what affects it rather than considering the design process, although it is accepted that design itself is part of the process of adoption.

281 the role which is plays in underwriting the energy efficiency which stems from technological, management and cultural changes occurring within the organisation.

7.5.1 Installation and Configuration – Themes and Trends All organisations in all sectors reported a divergence between the expected energy efficiency performance and the actual delivered performance of their equipment and systems. In many cases the disparity was a major concern to them, causing significant losses of equipment efficiency, with consequences for the profitability of the investments which their organisation had made. The divergence between actual and potential performance can occur in a number of ways:

• equipment might not be fitted at all despite being part of the specification • if fitted equipment might not be appropriate or be properly installed in its own right, or in relation to other equipment with which it was expected to operate • once fitted and operational, subsequent maintenance or re-commissioning of the equipment might be foregone • Beyond the point when systems have been successfully installed and are subject to effective re-commissioning and maintenance, the energy efficiency of technologies can be significantly influenced by the actions of staff and clients. Awareness schemes are used by organisations to influence their energy efficiency when the limits of technological systems are reached.

7.5.2 Not Fitting Equipment The failure to fit equipment intended to improve energy efficiency was reported by a number of organisations in the hotel sector but not within other sectors. One hotel company regarded the issue as one of “massive” significance for energy efficiency. At Swallow Hotels, the failure to fit an occupancy control system was a major problem as it could not be retrofitted and the hotel was therefore unable to work at the planned efficiency and comfort level. Failures to fit equipment and problems with commissioning which were leading to a long periods of “snagging”, were one

282 reason why Swallow had begun to try to change the contractual arrangements. Those fitting controls and systems with responsibility for installing and commissioning equipment were being asked to be responsible for any losses arising from the failure to fit equipment properly. This had led, it was said, to poorer relations with contractors. Forte interviewees reported that CHP systems were sometimes installed but spare heat was not used to heat the hotel swimming pool, as the pool was too distant from the site of the CHP installation. Stakis reported the limited use of control systems and a failure to extent their use to all suitable applications.

Failure to fit appears to be a feature of the Hotel sector where often sophisticated systems are specified but significant time pressure to complete the hotel leads to omissions. However, time pressure can be significant in the case of Retail and Higher Education sectors also. It is likely that the greater awareness of the problems may arise from the high frequency of refitting hotels in comparison with Retail stores and Higher Education facilities.

7.5.3 Configuration and Installation Issues All sectors reported significant problems in the area of configuration of equipment which affected energy efficiency. The major concern across all sectors was not simply with the commissioning of new equipment such as lighting, ventilation or insulation measures, but with the control systems which were meant to guarantee the efficient operation of the organisation’s buildings. Modern control systems lie at the heart of attempts to automate energy efficiency by embedding intelligence in the process of building operation, in terms of heating, lighting, ventilation and their complex interrelationships. When the control systems themselves fail through incorrect installation, energy efficiency becomes difficult for the organisation to achieve.

In the Higher Education Sector, problems with controls installation and commissioning were widespread. Even where a member of a university’s own staff had specialized in controls management and had even worked for the controls company before joining the university, he could not get the results he wanted from the control systems installed. The companies themselves which sold controls equipment were often unable to make it work properly. Relatively simplistic localized

283 controls systems such as thermostatic radiator valves (TRVs) were, in one university, often installed incorrectly by contractors. Misunderstandings and flaws in the design of controls system were significant and startling. A lack of what was termed “first base” engineering principles was assumed to be responsible for the failures in many of the designs. Whole building commissioning was uncommon. One energy manager argued that the problems of commissioning were understated by the industry and indeed by the Programme. A Programme publication which focused on a particular building where a range of energy efficiency control systems had been used appeared to make little mention of the considerable pitfalls involved in getting the technology to work.

In the Hotel sector, similar problems were reported with consultants and controls companies often failing to make their equipment work as required. Very poor levels of installation were reported in a number of cases. Control systems were likened in one case to highly tuned formula one cars that needed lengthy setting up before they would work effectively. One hotel company reported major problems with boiler controls which had never be used as they could not be set to work as required. Interviewees at one company observed that they paid lip-service to the idea of commissioning but that in practice, they knew that what they achieved fell well short of what was good practice. A small number of Hotel organisations had employed specialists in the area of commissioning buildings. Whole building commissioning was also uncommon in the Hotel sector.

In the Retail sector, commissioning was, according to two of the energy managers interviewed, completely unknown before they were appointed. Two separate organisations reported that outside contractors were used for controls and equipment installation and that the quality of the work they carried out was poor. Within one firm energy managers were separated functionally from those responsible for the supervision of new works and retrofits and this, it was felt, was one reason why equipment was not always installed correctly. However, in another Retail firm, which was similar in having both separate energy management and purchasing functions and experienced energy managers, supervision of contractors was thought normally to guarantee successful installations. In one organisation, downsizing was given as the reason why outside contractors were to be required for commissioning.

284 7.5.4 Re-commissioning In order to remain effective, energy efficiency equipment and control systems need maintenance. Temperature sensors require re-calibration in order to report correct information to control systems157. Without a programme of re-commissioning, significant costs can arise with building systems sometimes working against each other, sensors reporting incorrect information.

In the Higher Education Sector, the problem was acknowledged but there were few comments suggesting that re-commissioning was as significant as initial commissioning. One energy manager from the sector suggested that re- commissioning was made more difficult because of the standard of initial installations.

In the Hotel Sector, two interviewees believed that re-commissioning was constrained by the inability of local energy management staff to persuade the hotel general manager that the expense of tuning all the control equipment. Two energy managers also felt controls systems were difficult to access, raising significantly the costs of systematic re-commissioning programmes. Were controls systems to be more accessible, this might increase the likelihood that re-commissioning would take place.

In Retail, the difficulties associated with re-commissioning energy using equipment and controls lay less in the availability of financial resources than with the time and opportunities to investigate large estates. Nevertheless, in one Retail organisation, which had been so successful in terms of its energy control that it could dismiss its energy manager, all stores were visited every six months for a re-commissioning and fault finding visit by the energy manager or contractors appointed by him.

In the majority of cases in all sectors, it was the installation of control systems themselves that are the systems which are meant to guarantee the long term efficiency of equipment which give rise to the greatest concerns over performance deviation.

157 Failure to maintain sensors may lead to “sensor-drift” as the sensor becomes steadily less and less accurate in its measurements.

285 7.5.5 Beyond Commissioning The role of commissioning and configuring technologies and ensuring that there is a suitable fit within the organisational context is as important an area as choosing the right technology in first instance. In seeking to ensure that staff operate energy efficiency equipment in such a way as to maximise savings, many organisations in all sectors have used awareness schemes.

In the Higher Education Sector, the trend was for awareness schemes to become more active towards the end of the decade after a period in which senior management had shown little interest. There was a scepticism amongst some managers that savings could be achieved through awareness schemes. However, even where there was some scepticism, the publication of energy consumption data (possibly as a prelude to billing and charging) was being used as a means of encouraging a reduction in energy efficiency. Where awareness schemes were in use, there were still difficulties in identifying the benefits. The views of the employees and the clients of organisations in the sector was, however, regarded as positive towards schemes to encourage the economical use of energy, with over ten significant sectoral bodies encouraging innovation.

The Higher Education Sector had seen some significant improvements in energy efficiency when computer and library staff had enabled the energy efficiency features of their computer equipment. However, computing and library staff had shown reluctance to set their equipment to energy saving mode they believed that this might shorten the life of the monitors or might lead to network problems.

In the Hotel Sector, the trend was similar with few schemes in operation but a recognition that incentives should play a role in encouraging staff to control energy consumption. One of the luxury hotels had undertaken research on the role which its staff played in using energy and had identified an amount – the cost of utilities per room sold – of energy used by its staff.

Hotel Sector energy managers at one organisation were also wary of involving customers of the hotel in energy efficiency initiatives as adverse reactions had been experienced. Changing the towels in rooms to single occupancy, rather than

286 involving the customer in economy measures, had avoided adverse customer reactions and appeared to be the best method of cutting energy costs.

In the Retail sector, awareness schemes were viewed positively by a number of organisations. However, where high levels of staff turnover were likely and where franchises were present in stores, the returns to energy efficiency training incentives were thought to be low. Plans to run energy efficiency awareness schemes imminently were under discussion at two of the organisations. There was experience with energy saving initiatives at the other organisations. Intra-sectoral organisations which encouraged awareness of energy efficiency and environmentalism were less influential than in the Higher Education and Hotel Sectors.

7.5.6 The Role of the Programme Energy managers in the Higher Education Sector and the Retail Sector were more likely to have made use of Programme material on raising staff awareness and encouraging energy efficiency than in the Hotel Sector, despite the existence of a range of case studies and guides on awareness, including a number specifically for the Hotel sector. The Hotel sector exhibited significant diversity in the use of the Programme: those working in the area of energy efficiency for a long period had come across and used the Programme guides and case studies some time ago;158 whereas those (in the Hotel sector) who had only recently acquired responsibility were either largely unaware of the Programme’s work in this area or were sceptical of the effect which awareness schemes could have.159 Where an almost entirely new approach to management was taking place as was the case at Marriott, it was an older member of staff who had some knowledge of the Programme’s awareness scheme material. However, the awareness schemes in operation here, and also at Crowne Plaza, were established in response principally to the Green Globe certification requirements.

158 The organisations with a longer history of involvement were Holiday Inn Crowne Plaza, Forte particularly, and Swallow. 159 De Vere, Stakis, Thistle were either unaware or sceptical of effects which employee awareness schemes could have.

287 In the Retail Sector, one of the energy managers who had participated in the creation of Good Practice Case Study 182 and also in the study of staff awareness and motivation at Sears – GPCS 327, had learned significantly from the experience and had also passed on the results of his experience to colleagues in other organisations. Knowledge of how to run such schemes and where to find help to on how to carry them out passed readily between a number of energy managers within the Retail Sector who were connected by personal acquaintance or by their work experience with the current Arcadia energy manager.

7.6 General and Specific Influences upon Programme Impact

A number of general factors which have influenced the Programme’s impact have been identified through comparison between the individual sector studies. So far as the management systems context is concerned, the effect of the Programme has been strongly influenced in all sectors by the proposed imposition of the Climate Change Levy. However, during the first part of the decade of the Programme’s operation, liberalisation of the energy markets undermined the commitment of senior managements towards energy efficiency as energy prices fell quickly in real terms. The transition to energy management brought with it therefore a focus on cost reduction through tariff analysis rather than energy efficiency. The transition also resulted in an administrative chaos which undermined practical attempts at energy management. Such organisational concerns tended to undermine the influence of the Programme at its start and lasted throughout the decade until the end of the 1990s. This development appears most pronounced and disruptive of traditional energy management activities in the Higher Education Sector.

The knowledge of energy consumption and energy efficiency which is possessed by organisations has also been affected by changes in the energy markets, principally through the spread of metering systems for the measurement of energy consumption. Even in sectors where metering technologies have been difficult to introduce, for example in the Retail Sector, where the often small size of retail premises makes the costs of metering uneconomic even at very high energy prices, the overall measurement of energy consumption has improved. Knowledge of the

288 relevant techniques for improving energy efficiency has, in all sectors, come from a large range of intermediary organisations which have normally been sectorally based. Often, these organisations have promoted the Programme itself directly, but they have also given access to professional networks through which contact with the Programme has been effected.

The acquisition of technology is a complex process but one in which energy managers play a key role in all sectors. The dependence of energy managers upon Programme information when their organisations are installing energy efficiency technologies and techniques is highly dependent upon their experience and the capabilities of their organisations. The statistical data on information did not take account of the age and experience of energy managers and the capabilities of organisations and so cannot be used to make judgements on this point. However, the evidence of interviews consistently shows across all sectors that where acquisition of technologies is under consideration, dependence upon the Programme – and therefore its impact – is restricted to cases where the energy management is new and there is little organisational capability. Variations in dependency between sectors are therefore limited. Of greatest importance is the level of capabilities within the individual organisation.

Installation and configuration of equipment is an area where the Programme has a traditional emphasis through work on monitoring and targeting (M&T) and early energy management initiatives. Recently though, the installation and configuration of equipment has centred on the deployment and operation of controls systems which have been intended to automate and simplify energy management tasks including tariff management and energy accounting. Such developments stem from the liberalisation of the energy markets and the likelihood of (higher) energy taxation for business, and the effects have been visible in organisations across all the sectors. However, the Programme has not had a strong impact in this area as the problems which have affected the configuration of controls systems are themselves very difficult to address, either with information or through the delivery of capability building activities. The main problems which affect the successful implementation of controls have been threefold. Firstly, the skills of contractors in the building industry remain at too low a level to deal with the complexity of many of the controls

289 technologies to be installed. Secondly, the presence of a wide range of incompatible communications protocols makes the transmission of information difficult. Thirdly, computer systems for energy management are also incompatible and the information which is generated is often unsuitable for analysis.

7.7 Integration of Statistical Information on Programme Persistence In order to identify the extent to which the Programme was becoming more important over time, the level of association between Programme use, which is intended to represent Programme users, and a range of energy efficiency management practices, was compared over two years. This comparison is, as outlined in the methodology, a tentative method of assessing the increasing importance of the Programme in the pursuit of energy efficiency, but does not necessarily imply a causal effect of the Programme.

In all sectors, there was evidence of a statistically significant relationship between the Programme and some of the other management activities with the strongest level of associations in the Retail sector and the lowest in the Hotel sector. The purpose of this analysis was however to see if the extent of association160 increased over the period, indicating a growth in the role Programme plays amongst those pursuing energy efficient management practices. (This data is contained within Statistical Appendix K. Measures of association are compared from year to year for each of the three sectors.)

In all sectors, there were signs of an increasing association between use of the Programme and energy efficient management activities, confirming the view that the Programme not only concerns itself with technological adoption issues but also focuses heavily upon skills and management practices. The most significant growth in the level of association occurs in the Retail sector where the levels of association are already high. In the Retail sector, the level of association rises in three categories, remains constant in one, but falls in another. In the Hotel sector and the Higher Education sector, the level of association between Programme use and energy

160 The level of association is measured by the phi coefficient.

290 efficient management practices rises in two categories. In the Hotel sector, the association suggests that where the Programme is used, the prevalence of systems for monitoring energy consumption has increased. Where the Programme is used in the Higher Education sector, the presence of energy managers is likely. Also in the Higher Education sector, where the Programme is used the likelihood of an audit has also increased.

291 Chapter Eight - Conclusion

8.1 Introduction This thesis set out to address three issues which face governments that are unwilling to stiffen regulation but know that a significant change to the energy efficiency performance of business and industry is needed to address a serious environmental concern, the threat of global warming. The first of these issues was how the Programme and the concept of best practice could be constructed and delivered and how impacts were thought likely to arise; the second focused on how Programme impacts arose in practice and what were the major influences upon the Programme and its impacts; the third of these questions examined the Programme’s long term impacts. This chapter outlines the conclusions of the research in these three areas. Following these conclusions, a series of recommendations for policy are then made. Finally, consideration is given as to what further investigation may be appropriate, given the findings that have emerged from the research.

8.2 Programme Emergence – Uniting Goals Since its inception in 1989-1990, the Energy Efficiency Best Practice Programme has grown and developed to assume a role of special significance amongst government policies to promote energy efficiency. The Programme has been widely cited as one of the most successful examples of an information programme. The decision to base a programme upon the use of information and awareness to promote energy efficiency to the users and designers of buildings results from a convergence of political and organisational priorities, a convergence that has remained stable over time.

During the late 1980s, the UK Government grew committed to the belief that markets, far better than governments, knew how to decide resource allocation issues. This was a period of increasing energy supplies and falling prices. Intervention in matters of energy policy took the form of the ending the state ownership of the energy supply businesses in oil, coal, gas and electricity generation. Energy efficiency was regarded as a natural outcome of a reorganisation of energy markets on “rational

292 and competitive” lines. The wider adoption of energy efficient technologies through efficient markets would meet environmental goals and the needs of an economy increasingly open to global competitive pressures. Government intervention was to be restricted as much as possible.

The evolving model of policy action entailed an idealized technical standard – the best practice concept - and a series of reasons why the idealized standard could not be attained – the barriers. The notion of barriers was a theoretical construct of considerable plausibility for policy makers and Government. It was accepted as the key justification for action, despite a shortage of detailed studies of how such barriers actually operated in practice in the UK context.

Nevertheless, BRECSU (and ETSU) set about creating the best practice standard and identifying a whole range of barriers that prevented organisations from understanding and implementing the standard. The sectoral perspective adopted reflected the need which was already implicit in earlier approaches to energy efficiency to ground barriers in cultural and social practices based on the common experience of similar types of organisations.

The characterisation of the barriers assumed they were absolute, permanent and external to organisations. The role assumed by the Programme was twofold: to identify all of the significant barriers and to create suitable instruments with which such barriers could be surmounted. The Programme therefore aimed to ensure that the users of buildings and designers were aware of the technical and economic limits of energy efficiency technologies and management techniques. If for any reason the Programme was removed from an area, it was implied that the barriers would again threaten “rational action”, and thwart the adoption of energy efficient technologies.

8.2.1 BRECSU’s Delivery of the Programme Through its close links to the Department of the Environment and occupying a central position within of the UK buildings and construction sector of which it had

293 an almost unparalleled knowledge161, BRECSU was well placed to develop the Programme and coordinate the activity of energy and buildings consultants who came partly to depend on the Programme for work. But in addition to its management role, BRECSU also created structures to ensure that sectoral organisations were represented within sectoral panels in the process of creating and delivering the Programme162. Technical panels were also created. The resulting network of institutions comprised Ministers, government departments, agencies and consultants and manufacturers.

The Programme also acquired a broader function than assisting organisations with the identification of the suitable technologies and their respective costs and benefits. A theme of work on monitoring and targeting which had been developed before the Programme started was expanded to include a wide range of capacity building activities for energy managers, and later on, for building professionals, technical staff and tradespeople.

This new theme of work was eventually described “energy management” and soon became a major dimension of Programme activity. The training material, the courses and the events published to promote “energy management” sought to address deficiencies and weaknesses in the capabilities of organisations to identify, manage and operate energy efficiency technologies. However, the attempt to enhance the capabilities of organisations presented difficulties.

The skilling-up of staff was a form of support to business and industry rather than the more apparently “neutral” corrective to market failure. Providing support to organisations implied criticism of the model of external barriers. This view suggested that the barriers, far from being of the market and therefore external to organisations, were in fact of the organisations themselves. Consequently, the authors of strategy documents sought to avoid the word “training” as this implied government support for organisations and their staff and therefore policy based on subsidy.

161 This knowledge arose from the expertise of its staff and from connection to a wide range of consultants and researchers in buildings, construction and the environment. 162 Technical panels were also created and included representative bodies and individual manufacturers. The Lighting Technology Panel received support from the Lighting Industry Federation and the individual manufacturers.

294 8.2.2 Plausibility of Information Barriers Creating the Best Practice standard gave user organisations an awareness of the potential of energy efficiency technology based on expert testing and verification of the results of using energy efficiency equipment and management practices in a variety of contexts. Through its investment in improving the quality of information by re-directing positive externalities arising within the diffusion process, government has raised the level of energy efficiency in the economy with a consequent increase in social welfare.

Amongst energy managers, views were divided about the quality of the information provided by manufacturers and suppliers. For some, the information produced by manufacturers about their products was of poor quality; for others, manufacturer’s information was often of a very high quality, giving them a very accurate picture of how the equipment would perform in practice. Most energy managers across all sectors believed than the information provided about energy efficiency technologies and energy using equipment was no more unreliable than in other product markets.

A highly experienced former energy and environmental manager and now environmental adviser explained that users’ lack of confidence in energy efficiency and its often poor reputation had arisen not because of systemic poor information for energy efficiency technologies but from failures of manufacturers and energy management staff to specify correctly the right kind of equipment. In order to avoid the risks of under-specification of equipment, mistakes were made by sales people who were responsible for adapting technology to new organisational contexts. The failure to specify equipment correctly was also dependent upon the inexperience and often low level of qualifications of the organisational utilities managers, a feature of contemporary organisations also. The result was that energy efficiency technologies, particularly combined heat and power generation – CHP became an acronym for “combined heat and problems” - quickly acquired a reputation for high costs and poor reliability.

The central concept of Best Practice as an identifiable and relatively static technological option is a major programme assumption. Two issues contribute to make such a concept problematic in practice. Firstly, the credibility of the standard

295 depends upon the extent to which it properly represents good practice. As standards are drawn from practical examples, general poor performance within the sample may be leading to the best practice standard being set too low. Secondly, while the Programme sensibly retains new technology and future technology sections, its main emphasis upon current standards may undermine the impression of technological change and the opportunity for organisations to gain competitive advantage through improvements to their energy efficiency. Conversely, by stressing the practicability of the technological choices available to organisations, the Programme may make a significant impression. In fact, it is precisely because of differentiation of capabilities within the population of adopters that the best practice concept is problematic: for some it may be too low; for others it may represent an unattainable goal.

8.2.3 Model of Impact For the purposes of impact assessment, the Programme needed a clearly formulated impact model with which the effects of the Programme could be counted and its efficiency and effectiveness measured. In the model of impact implied by the barrier concept, information was seen as the sole instrument of policy which acted upon the (information) barrier, thereby allowing “rational action” to take place. However, a difficulty arises over whether the action of an information programme is causal or influential upon the buying or adoption decision of an organisation. The two sides of this fundamental dichotomy see information on the one hand as a necessary cause, in which case it is one of a number of possible causes all of which must be present, or on the other hand, as sufficient cause, meaning that without it alone, no action would occur.

If information is causal, Programme additionality – the net Programme effect – will comprise all energy savings resulting from the use of the Programme because without it, no action would have occurred. All energy savings are therefore by definition net Programme effects, when compared with previous ex ante Programme energy efficiency investment levels. In this model, the Programme is viewed as the sufficient condition of energy efficiency technology and technique adoption.

In practice, BRECSU realised, and as this research has demonstrated, a wide variety of other effects and influences are present which affect the decision of organisations,

296 some of which exercise a powerful influence upon the organisation. Energy prices, other sources of information and consultancy are powerful influences or causal factors. Building Regulations too – and the threat of them - are also a major effect upon the decision to install.163 In recognition of the presence of a diversity of influences, and the sheer impossibility of determining whether the Programme had been causal or influential in a particular case, the impact assessment model which was chosen conceived the impact of the Programme as an influence upon adoption. Measurement of the extent of the influence upon an organisation’s new technologies and management practices was then accomplished by using a simple formula based on the level of recognition of Programme documentation.

In programme impact studies, a traditional problem is one of pre-selection or pre- disposition whereby those who use the programme instrument and carry out a behaviour are assumed to have acted causally, i.e. in response to the stimulus of the information. What is more likely to be the case is that some of those who took the information are likely to have used the information because of a prior intention or disposition to install the equipment. In either case, the programme fulfils an important role. The position or characteristics of those who use the information having already decided to install the equipment or carry out the activities concerned, which reduce energy consumption, is analogous to the free-rider, except that in the case of the information programme, the prior commitment does not give rise to a large cost for the programme funding agency.

The use of control groups in the impact assessment of the Programme is also highly problematic: no such groups can properly be said to exist as the Programme has been a full-coverage, long term initiative. Labelling users and non-users of the Programme is a methodologically unsound basis for comparison as all organisations have been aware of the Programme and the risk of prior selection is high.

The issue of Programme impact is further complicated by the presence of organisations which promote the Programme, but do so independently of the

163 It should be noted though that the precise nature of the Regulations and the accuracy of the data held by BRECSU about the measures which are installed ensure that where savings which are mandated by regulation occur, they are subtracted from the total of energy savings to obtain a plausible Programme net effect.

297 Programme manager and the Government. Personal recommendation and endorsements of the Programme by a large number of different actors may add substantially to the influence which the Programme had. That this should happen is of course a good thing, within limits, and testament to the quality of the Programme information. Such an enhancement of the Programme impact is clearly desirable in most cases. The existing impact assessment method successfully identifies the influence of the Programme by focusing on the extent of recognition of the Programme publications and events but does not fully explore the processes by which the Programme influence is re-enforced and supported. The issue of re- enforcement of the Programme influence suggests that in some instances of technology adoption, while the Programme has been a necessary cause, the action to recommend it by, for example a colleague, has been the sufficient cause.

The delivery of the Programme therefore assumed a far broader range of activities than creating awareness of technologies and their technical potential. These wider functions represent an attempt to go beyond the narrow and technical issue of improving market functioning. But they did not encompass a flexibility about the design and shaping of technologies, and the Programme has worked with relatively static definitions of technology as constant, non-negotiable entity. In the next section, the conclusions on Programme impact are discussed and how these impacts were affected by their contexts.

8.3 Impacts in Practice Both main themes of the Programme – the information dissemination and the skills strategies - have been effective in helping organisations in the UK to save energy. At the level of general awareness, the Programme has clearly provided a highly reputable source of information about generic technologies, and the level of savings that could be expected from adoption.

8.3.1 Skills and Training For those who are more experienced, the Programme information is regarded as a form of continuing professional education; but this is one of the reasons why the Programme has been so useful as it has been easily and accessible to a range of

298 energy managers who have moved into the role of energy management without formal training. Despite the fact that energy management courses have been offered at UK universities and colleges over the last twenty years, there are comparatively few energy managers working in the UK in the sectors covered in this study who have attended such courses. Almost all energy managers interviewed within this study have assumed the responsibilities for managing energy efficiency technologies, its acquisition, configuration and subsequent maintenance whilst employed in a facilities management role. Consequently, the Programme has met a vital need to provide an introduction to the subject, sketching out the main areas of responsibility and showing energy management staff how to promote energy efficiency within the organisation to other managers, including senior managers and finance staff.

The Programme has not been alone in providing such an input to the skills training of staff; but it has provided what is regarded as some of the best quality information with which to introduce energy management and organisational energy efficiency. This is evidenced by the readiness with which energy managers pass the information on to other members of staff in their organisation, within the estates and facilities functions and also to the all important finance function. Without the broadening of the skill base undertaken within the energy management side of the Programme, the technology related side of the Programme’s activities would have been less effective.

During the lifetime of the Programme, a number of organisations in the sectors considered here have recognized the importance of making energy efficiency investments as a result of action instigated by the energy manager. However, while the Programme has supported energy managers with a range of material and activities including videos and workshops to help them make the financial case for protected energy efficiency investment, there is little evidence from interviews that these initiatives have actually made the difference.

8.3.2 Information and Technology Adoption In assessing the role of the Programme in rectifying market failure through the provision of information, the Programme’s model of impacts may, in overlooking the presence of a wide range of other influences on individual purchasers and organisations, have over-stated the role of the Programme in influencing impacts at

299 the point of purchase. Two main observations suggest this. They are firstly the presence of a wide range of other actors and sectoral bodies who promote energy efficiency and take the form of quasi-regulatory bodies, setting standards, are responsible for information, advice and, in the case of sectoral organisations, about the technologies which are available to prospective purchasers. These forms of information are numerous and derive from a rich institutional setting not fully recognized within the Programme’s impact assessment methodology.

Secondly, other evidence also suggests that the role of the Programme may not have played such a significant role in the decision to acquire a particular item of technology – the final stages of which involve identifying a suitable supplier and carrying out a detailed product assessment. This transaction level of the process of technology acquisition requires far more information than can be provided through an information and awareness programme. It involves timely and accurate assessments of suppliers, their terms of trade and the product itself. Knowing the general standards and best practices is of considerable use to organisations planning changes to their energy using equipment and methods: but knowing whether and how a particular technology measures up to the standard is also of great importance.

Observation of this transactions level of the acquisition process mainly through the case study of the Higher Education Sector and to a lesser extent through the Retail and Hotel sectors, supports the contention that energy managers seek out equipment specific advice that goes beyond the case study material and the good practice guides. Energy managers seek such information out by referring to each other – especially through the Share Fair process in the Higher Education Sector – but also through the use of internal within the organisation capabilities for testing equipment. In the Retail sector, the decision to create a Retail Energy Club and to exchange information is a reflection both of the need for such specific information and the desire of retail organisations to reduce the costs of such an expensive but necessary research activity. Developments within the Programme itself in terms of the site specific advice service have also shown a desire to address this particular issue of specificity. The extent to which the presence of an energy manager and the capabilities of the organisation associate with the decision to install also supports the view that when acquiring technology, information by itself is insufficient. In most

300 instances, further action in terms of assessing suppliers, and the particular characteristics of a product is required before the decision to place an order is made.

Even when such extensive help is present, there is strong evidence that the purchase and subsequent configuration of equipment is difficult and costly in time and effort because it involves a large number of different groups of actors. Even when contractors and sub-contractors are able to broaden their experience of installing and configuring equipment, the industry of which they are a part is so diverse and splintered that this information and expertise cannot be systematically shared and disseminated. The continual loss of information and expertise provides a justification for government action to gather and to disseminate such good practice. The Programme already achieves this, but to an extent, it may not fully gather the information externalities present. Changes to the structure of the industry itself, which led to the creation of contracting organisations able to retain this specific learning by doing knowledge, might improve the overall standard of work that is currently regarded as too low by the majority of energy managers.

In respect of sectoral differences, the sharing of information between different organisations is highest in the Higher Education Sector and lowest in the Hotel sector, as shown by the extent of staff movement between different hotel groups or staff mobility, in terms of the comments from staff, and when the data from the impact assessments is considered. Initiatives seeking to further the exchange of product specific information may be ineffective where energy managers are reluctant to share information between themselves.

The decision of the Programme managers to enhance the skills of the energy managers has provided an essential pre-condition for the success of technology specific information theme of the Programme. The Programme managers well understood the relationship of dependence of their technological information on the skills of energy managers; without initial skills enhancement, specific product related information would have had minimal impact.

301 8.3.3 Metering, Controls, Information and Impact The research has also shown the significant role of measurement and metering technology in energy efficiency brought about largely through the liberalization of the energy markets. While information about technology performance in the form of Best Practice Guides, Case Studies and Energy Consumption Guides plays an important role helping organisations identify where further investment in energy efficiency or improvement in management practice are appropriate, the information which flows from an organisation’s own monitoring and control activities is also of considerable importance in decision making. During the lifetime of the Programme, the technology available for metering electricity consumption, but also gas, has improved significantly and is now far more widely distributed. Half-hourly metering has provided insight into energy usage patterns that allow further investments in energy efficiency to be decided and planned. Monitoring, targeting and the reduction of avoidable waste are now far easier. The use of pulse or temporary, clip-on meters has also grown, providing energy managers, particularly in the Retail Sector, with the chance to analyse the energy consumption patterns of smaller buildings across an organisation’s premises.

The effects of metering have not just been increased control. Metering technology has increased awareness of what actions can be taken to reduce costs and provided a stimulus on the part of organisations in all three sectors to examine their energy consumption patterns. Metering has given such control that, in one case, senior management has felt able to dispense with the post of energy manager, retaining an energy analyst to monitor the energy consumption data from the stores. As metering and controls technology improves, monitoring, benchmarking and analysis may indeed become more automated with the consequence that energy management and estates functions may change.

8.3.4 Major Influences upon Programme Impact Generally, Programme impacts have been strongly influenced by a few powerful factors which are present in all sectors studied within the research, and which are likely to be more widely present in other sectors. These major influences are four in number and comprise the following: liberalisation of energy markets; introduction of

302 the climate change levy; the presence of cross-sectoral and sectoral organisations; and levels of skills and capabilities of organisations. Initially, energy market liberalisation has reduced the emphasis placed on energy efficiency by organisations. More recently, though, the effects of liberalisation have been to spread metering technologies, raising awareness of the costs of energy use and the potential of energy efficiency. This has acted as a spur to energy efficiency and led to greater use of the Programme. In addition, the climate change levy proposals have renewed the commitment of senior managements to the improvement of their energy efficiency performance. The Programme’s impacts have also often been mediated by a variety of cross-sectoral bodies such as professional associations and sectoral organisations. All sectors have them and many have strongly re-enforced the Programme impact. Within the Higher Education Sector and the Hotel Sector, these bodies are quite influential, although they are far more numerous within the Higher Education Sector. The identification and selection of energy efficiency equipment and methods, which the Programme has sought to influence, has been shown to be strongly dependent upon the individual experience of energy managers and their organisational capabilities and resources. The more experienced an organisation, the less is its use of the Programme at the point of technology adoption. However, the Programme has strongly influenced the development of capabilities themselves, and as such is a form of programme persistence, an issue which is discussed later in section 8.4.2.

8.4 Persistence of Programme Impacts The persistence of the Programme can be assessed under two general categories: the extension in time of the energy savings which arose as a result of the use of Programme information, what might be termed Type A effects or impacts; and broader effects which arose indirectly from the Programme, so called Type B effects or impacts. Type A impacts are the measure persistence effects of the Programme as defined earlier (by Vine, 1992). These impacts can occur immediately or they can occur after a period of time, in which case they should be regarded as simply delayed. The extent to which measure persistence is dependent upon the provision of metering and control systems is underlined in the previous section, above.

303 The provision of the information may provide a necessary cause that subsequently leads to action when other causes are present. The mathematical model introduced initially in the conceptual review demonstrates the extent to which previous Programme savings can affect a cumulative total of energy savings of the kind used in the impact assessment of the Programme. Cumulative energy savings estimates are an essential form of registering Programme effectiveness, as they show the carbon and energy saving of the set of measures attributable to the Programme as a proportion of all installed measures. But the historical dimension to the cumulative savings total calls for accurate assessments of persistence of savings.

The broader Programme effects, the Type B effects, which in combination with the Type A effects comprise the entire Programme impact, include a wide range of impacts similar in nature to ultimate impacts. A number of such B Type impacts have been identified, but have been found to be difficult to measure. These wider Programme impacts may involve changes to the environment or context in which the Programme is expected to operate. This framework or context, which is described in terms of barriers to rational action, could alter as a result of the action of the Programme. Of considerable interest to the Programme managers has been the issue of whether Programme efforts in particular areas or sectors could be downgraded without loss of impact.

This so-called “care and maintenance” regime for the Programme would be a practicable step if Programme impacts were persisting, or the actual environment in which the Programme had operated was itself changing in a way which promoted further progress towards energy efficiency, for example through the introduction of a climate change levy. The standard market failure model would suggest that removing the Programme or reducing its level of activity would once again allow information barriers to affect the energy efficiency performance of organisations. In practice though, the delivery of essential skills to energy managers and estates staff produces relatively permanent changes to the level of expertise of energy managers which is only affected by the rate of staff turnover and new recruitment of inexperienced staff. At present, with staff turnover low, a reduction in the level of Programme involvement in a sector would not have a major impact on the Programme’s influence upon energy savings behaviour. Moreover, given the extent

304 of influence of the Programme on specific technological adoption, the effect of reducing Programme activity in a sector would not significantly reduce the rate of adoption of energy efficiency technologies.

Amongst the wider and more long term impacts of the Programme, the greater awareness of energy efficiency stimulated by the Programme information has been thought to induce manufacturers to raise the performance level of their equipment. This gradual drift upwards in the standards of performance of the technology is referred to as market transformation. Growing awareness of the process has led government to attempt to gain some control over it through establishing a Programme to review the development of technologies, allowing interested parties including manufacturers to comment on the implications of increased levels of technological efficiency. However, where there is anecdotal evidence that providing information to consumers about current best practice technology leads manufacturers to create and consumers to demand even higher levels of product efficiency, demonstrating that such a link does in practice exist is difficult.

8.4.1 Did the Programme remove the Information Barrier? A second Type B effect of the Programme might been have been a general improvement in the level and quality of information provided by the suppliers, manufacturers and indeed by a new energy services information sector. When responding to probing questions on this issue, most energy managers did not believe that the standard of information of energy efficiency equipment provided by manufacturers and suppliers had improved during the period of the Programme’s operation. Had there been such a high demand for a new services sector to provide such information, evidence of growth in the sales and turnover of business operating in the energy consultancy market might have been found. However, when the turnover of businesses operating in the energy consulting area is analysed, this shows relatively steady performance rather than rapid increases.

The implication of this modest performance of the information sector may be that the information provided is already acceptable, and that the central problems facing organisations is the operationalization of energy efficiency technologies, rather than their identification in general terms.

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The growth in energy services rather than simply information on energy services has however been a significant feature of the energy market in the United Kingdom in the last ten years. However, its development is largely the result of liberalization of the markets for energy, a phenomenon the Programme has been designed to support rather than for which it is responsible.

8.4.2 Wider Skill Changes The wider skills and training strategy of the Programme must also be counted as a Type B impact164. However, while there has been a significant Programme activity directed towards raising professional and trade standards, the effects have been difficult to isolate. When commenting on the standards of work undertaken by the building industry, few energy managers and estates staff believed that the Programme had influenced trades people and consultants. The low standard of work carried out by sub-contractors was one of the principal problems facing energy efficiency, and, according to energy managers and estates staff, the standard had not improved noticeably during the lifetime of the Programme. The wider educational initiatives of the Programme had also had little impact amongst the energy managers and estates staff interviewed. None had personally benefited from such educational initiatives of the Programme as BICEPS.

8.4.3 Energy Management and the Persistence of Measures The Programme has been from the outset focused on the preservation of existing savings from technological adoption. Early energy management strategies and monitoring and targeting activities aimed to generate awareness and expertise in the area of efficient operation of the existing equipment, rather than simply through the installation of new technologies. Despite the commitment of the Programme to this area in principle, and extensive coverage of the issues within the monitoring and targeting publications, a formal emphasis upon “commissioning” and “re- commissioning” has not been noted by Programme users. Programme publications

164 This is because the skills side was not initially a formal market barrier initiative.

306 have, in respect of commissioning new buildings, often understated the difficulties involved in making new buildings work effectively.

8.4.4 Centrality and Intractability of Controls A number of Programme users observed that the Programme material had overlooked the problematic character of controls installations. The decision to include negative reports of energy efficiency technology within the Programme material is one of the most difficult and sensitive issues facing the Programme managers. On the one hand, such negative information may serve to forestall the attempt to install equipment of significant technical difficulty and high cost which is of little benefit to the organisation. Curtailing the adoption process of equipment which is technically sophisticated might prevent the development of damaging stereotypes of the “combined heat and problems” variety. But curtailing such an adoption process may prevent successful adoptions and the growth and development of a range of networks of actors to support the correct installation.

The political cost of government being seen to query a particular technology or management practice could also be high, particularly in the context of an information programme where attitudes are being affected. A delicate balance is therefore necessary which addresses problem technologies and their support networks, rather than promoting technologies without reservation. In practice, evidence of organisations making technological investments which are unwise as a result of using the Programme are difficult to find. However, in respect of buildings commissioning, more emphasis on the problems of controls may have been justified.

The technical difficulties involved in correct commissioning are significant and they appear to affect control and monitoring systems particularly. Control and monitoring systems are one of the essential foundations for efficient operation of the modern building: without their correct operation, energy efficiency is hard to achieve. In all sectors, failure to configure control systems is common either because of the activities of third parties or the organisation’s own facilities management and energy efficiency staff. Failure to install systems at all is also a problem which appears to be worst in the Hotel Sector but which is also found in the Retail Sector.

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8.5 Policy Recommendations Two recommendations for policy follow from the conclusions outlined above and both affect the way in which the Programme might be delivered in the future. Some comments are then made on the implications for the impact assessment of the Programme.

8.5.1 Greater Specific Support While the Programme is highly effective in creating awareness amongst those who choose to use it, or who come into contact with it, the awareness of technology activities promoted by the Programme have limited long-term effectiveness within the organisation. Once an energy manager is aware of what technologies are available, his use of the Programme for technology acquisition appears to decline. To an extent, this process is implied by the public goods function of the information.165 However, for a large number of organisations, more help is required with technology identification. Here “site specific advice” or short or long survey style initiatives166 will address specific issues which general information cannot.

The barriers concept – and with it the linked concepts of private and public information costs – are helpful; but the research has clearly shown within the cases examined that barriers are “not of the market” but specific and embodied in real transactions: information needs are contextual and highly dependent therefore upon capabilities. In areas of complex technologies with high levels of interdependencies between a range of technology suppliers who combine to produce what is often a “customized product” – i.e. a building -, the context specific private costs are high. In such a condition, general information may be useful, but specific information is also required and in far greater quantities than the Government has the resources to produce. The following figure illustrates the problem.

165 It is recognised in the AIDA model created by ETSU and adopted by BRECSU as description of the technology transfer process. 166 The Short and Long Surveys were features of the 1970s response to the decades’ oil crises.

308

Figure 6. Supporting the Costs of Technology Acquisition and Deployment

General Increasing Private Specific Information for Costs Information for

Acquisition Acquisition Increasing role for and Adoption and Adoption Government Information

1 2 3

The figure above shows that as the specific difficulties of technology acquisition and deployment increase, and with them the private costs that arise within the context of specific transactions, the role which government can play in providing information declines. It is the contention of this research that, while building users can benefit from generalized information, they are more likely to need specific information and be located at point 3. For users at point 2 and point 1, governmental awareness and information have greater use and the rate of return on expenditure is likely to be higher. Point 3 represents the stage at which acquisition and configuration of technology are highly dependent upon improved support networks and capabilities. Here, policy interventions should address structures and frameworks that will indirectly reduce the private costs facing adopters. Rather than treating institutional and market arrangements as perpetually fixed and immutable “barriers”, the attempt should be made to directly remove or transform them therefore, notwithstanding the implication that this might lead to the end of the programme itself.

8.5.2 Action to Further Reduce Information Costs One of the central findings of this research has been that the increased use of metering has provided organisations with the knowledge of how energy is used and

309 how its use could be controlled. The Programme should therefore consider how to promote the use of metering which will help organisations to improve both the performance of existing technologies and techniques and also their ability to identify new opportunities to make savings. The extent of correlation and associations observed between monitoring systems, the presence of energy managers and energy efficiency installations suggests that monitoring (and metering) are key activities. Publication of the benefits of metering and the savings which arise from it would also be likely to lead to the wider availability of metering technologies, thereby reducing the costs of knowing how energy is used.

8.5.3 Implications for Impact Assessment The continual broadening of the range and type of Programme activities has serious implications for the measurement of net impact. Decisions to install already take place in highly complex environments. Programme effects, particularly in relation to the building up of skill levels, have been shown to have significant persistence effects, leading individual energy managers and organisations to take action long after their contact with the Programme material. The greater the scope of activities taking place, and the larger the number of actors influencing the use of energy in organisations, the harder become the tasks of assessing net impact and the related issue of Programme cost-effectiveness. Despite the difficulties involved, it is still important that assessments are carried out of what energy is saved by the introduction of new measures and techniques under the Programme and generally through other means.

8.6 Further Research Work Given the findings outlined earlier in this chapter, further research work would appear to be justified in the following two areas which concern firstly, the attribution of savings to the Programme and secondly, the understanding of the Programme impact.

Firstly, the process of attributing installations of equipment and technology to Programme influence could involve the construction of a number of predictive

310 models of adoption based on an assessment of the information sources consulted by organisations. Such a model building exercise would require specific measures to be recorded: this is done currently by the impact assessment process. In addition, a record of the exact forms of information used for the measures would be required. Such models could then be used in comparison with the current interview based methods of assessing the influence of the Programme.

Secondly, it is recommended that further cohort style studies of Programme use should be undertaken to examine the role played by the Programme over time within the organisation. Current methods of impact assessment take a yearly cross-section of the Programme in each sector and identify overall rates of use of the Programme without a close examination of the transformations of organisational capabilities. Such information gives a perspective on the sector as a whole but does not uncover the function which the Programme material takes.

Such studies, which would be simple to carry out, would require some standardisation of the impact assessment procedure between years and the identification of individual organisations from year to year. They would also involve minimal extra costs. These cohort studies would follow individual organisations over a period of years and would more clearly identify the importance of the Programme to a particular organisation. This would also provide evidence of how much reliance there is upon the Programme itself. Given that a major and lasting effect of the Programme has been its capability building within organisations – in other words an emphasis on how and not just what technologies are available -, it is recommended that a longer term study is begun which follows the development of capabilities within organisations and not simply counts the technologies which they install. Such a study may provide further evidence and insight into the significant contribution that the Programme has already made to energy efficiency in the United Kingdom.

311 Conceptual Analysis Appendix A - Persistence Modelling

Introduction This appendix includes two elementary models for calculating the effect on cumulative totals of savings of declines in the performance of energy saving measures. The measures could include either physical equipment – artefacts – or management and operational practices, or indeed a combination of the two. The models make a number of simple assumptions. The purpose of the models is not to show how persistence occurs, but what effect declining persistence may have on cumulative savings totals for a programme. The reason that persistence is important to energy policy makers is that the effects of the introduction of previous measures are normally expected to continue contributing energy (and cost) savings. In the naïve case, these savings are assumed to continue ad infinitum.

The first model assumes that the same amount of measures are installed each year, i.e. the rate of introduction of measures is constant. In the second case, the model is adapted to take account of the case, which more accurately matches that found in real-life policy, of an increasing level of measures installed over time. This would occur for two main reasons. Firstly programmes grow in terms of the introduction of measures as they are built up by their managers. Secondly, as potential users of programmes become more aware of them, the rate of use, and hence the introduction of new measures, are likely to increase.

Model Assumptions The model makes the following assumptions about the programme. 1) Measure life is infinite. 2) Programme duration is ten years. 3) Savings decline each year through losses due to replacement and measure persistence losses. 4) Savings would have occurred later without the programme at a rate defined by the rate of market transformation. The attempt to measure the rate of market transformation in the absence of the programme is the attempt to solve the counter- factual question. No answer is therefore experimentally verifiable.

312 5) No losses through comfort are assumed. 6) No programme spillover is assumed. 7) No impacts from other programmes on EEBPp users are assumed. 8) Impacts are calculated in the following ways: a) cumulative savings for the last period – the savings from all measures operating in the last period are measured. Those measures installed in the last period are assumed to be working at full effectiveness. Cumulative savings are those savings which are arising in any one year. The EEBPp impact assessment calculates the programme savings in such a way. b) cumulative total savings - cumulative total savings are all savings achieved by all measures for the whole of the programme life. Other energy efficiency programmes calculate the savings in this way.

9) Savings decline at constant rates rather than by fixed values.

10) Savings introduced in each year are assumed to be the same, regardless of the year. In the case of the EEBPp, the savings introduced in later years are greater than in the early years of the programme’s influence. The effect of larger savings in later years minimises the decline in the persistence of energy savings.

The equation for cumulative savings Cum_S at time t is given by the sum of the savings of previous periods t subject to discounting by the overall persistence rate p. This comprises the reversion rate r, and the market transformation rate k, and replacement rate v, and measure persistence rate m. The overall decay in savings – the decline in persistence p - for a period is therefore the measures installed for that period multiplied by a function consisting of the persistence rate for the measures m, times the reversion rate v, times the replacement rate r, times the market transformation rate k. The overall programme persistence is p.

In the following equation, p stands for all

313 Equation 1. Simple Decline in Savings

A(pt −1) Cum_S= (p−1)

Equation One is a based upon the mathematical formula for the summation of a series. The series of energy savings from successive years is a series of declining values which are assumed to fall at a constant rate.

314

Table 23. Savings’ Decay Case One – Model One

Variables: Results: Period Years 10.00 Cumulative Savings Final Period no losses 1000.00 Persistence of Measure % 99.00 Cumulative Savings Final Period with losses 876.40 Market Transformation % 1.00 Cumulative Total Savings no losses for whole period 5500.00 Reversion/Replacement % 1.00 Cumulative Total Savings with losses 5037.87 Savings Per Year Installed 100.00 Shortfall of Savings Final Period % 12.36% Shortfall in Total Savings for Whole Period % 8.40%

Table 24. Savings’ Decay Case Two – Model One

Variables: Results: Period Years 10.00 Cumulative Savings Final Period no losses 1000.00 Persistence of Measure % 95.00 Cumulative Savings Final Period with losses 550.65 Market Transformation % 5.00 Cumulative Total Savings no losses for whole period 5500.00 Reversion/Replacement % 5.00 Cumulative Total Savings with losses 3701.23 Savings Per Year Installed 100.00 Shortfall of Savings Final Period % 44.94% Shortfall in Total Savings for Whole Period % 32.70%

Table 25. Savings’ Decay Case Three – Model One

Variables: Results: Period Years 10.00 Cumulative Savings Final Period no losses 1000.00 Persistence of Measure % 90.00 Cumulative Savings Final Period with losses 353.36 Market Transformation % 10.00 Cumulative Total Savings no losses for whole period 5500.00 Reversion/Replacement % 10.00 Cumulative Total Savings with losses 2739.48 Savings Per Year Installed 100.00 Shortfall of Savings Final Period % 64.66% Shortfall in Total Savings for Whole Period % 50.19%

315 Discussion of the Model

Three cases of savings decline have been considered. For simplification, in each case, the rates of measure persistence, replacement or reversion and market transformation have been the same. In Case One these rates were all 1%, in Case Two, they were 5%; and in Case Three, they were 10%.

For each case, shortfalls in savings were calculated for the total cumulative programme expected savings and for the cumulative expected final year savings. In each case, the shortfall of final year cumulative savings exceeded the shortfall of total cumulative savings for the programme, when expressed as a percentage. This suggests that any impact assessment methodology assuming losses and estimating final or yearly cumulative savings totals would give a larger percentage shortfall than a methodology that counted total cumulative programme savings.

Small rates of decline in savings from the installed techniques mount up over a long period. Even in the case of a one per cent decline in savings due to measure losses, reversion/replacement and market transformation results in a loss after ten periods in programme yearly cumulative impact of 12%. Total cumulative programme losses over the period would be 8% below what would occur in the absence of any form of decay.

The following graph demonstrates the effect of varying persistence rates on a programme lasting ten years. The savings from the nominal installation of energy efficiency technologies and techniques is counted as 100 units each year.

316 Figure 7. Persistence Ratio and Cumulative Savings

Persistence Ratio and Cumulative Savings

1200.00

1000.00

800.00 Declining Cum_S

600.00

400.00 Cumulative Savings

200.00

0.00

0.99 0.95 0.91 0.87 0.83 0.79 0.75 0.71 0.67 0.63 0.59 0.55 Persistence Rate Per Year

A Second Version of the Model

A mathematical function of how cumulative savings depends additionally upon an increase in the yearly amount of savings installed is given by the following and more complex expression in which the new term i represents the rate by which the annual savings amount is increased. The purpose of this derivation is to demonstrate that an abstract model can be used to show the effect of savings decay where there is an increase in the amount of savings introduced each year, rather than a constant increase in the savings level. Programmes which increase their scale of operation as they grow older are common. Pilot projects are likely in the early stages of new programmes. As expertise increases, so does the scale of the programme initiative.

317

Equation 2. Savings Decay with Change in Programme Impact

 1   (p × )t  −1  +  + 1 i t−1  1 i   Cum _ S(t) = A( )   1   1    ( p × ) −1    1+ i  

The above expression when applied in three cases which are similar to the first model results in the following values for decay:

Table 26. Savings’ Decay Case One – Model Two

Variables: Results: Period Years 10.00 Cumulative Savings Final Period no losses 2595.87 Persistence of Measure % 99.00 Cumulative Savings Final Period with losses 2373.54 Market Transformation % 1.00 Cumulative Total Savings no losses for 10575.21 whole period Reversion/Replacement % 1.00 Cumulative Total Savings with losses 9859.22 Savings Per Year Installed 100.00 Shortfall of Savings Final Period % 8.56% Increment of savings % 20.00 Shortfall in Total Savings for Whole 6.77% Period %

Table 27. Savings’ Decay Case Two – Model Two

Variables: Results: Period Years 10.00 Cumulative Savings Final Period no losses 2595.87 Persistence of Measure % 95.00 Cumulative Savings Final Period with losses 1744.50 Market Transformation % 5.00 Cumulative Total Savings no losses for 10575.21 whole period Reversion/Replacement % 5.00 Cumulative Total Savings with losses 7713.77 Savings Per Year Installed 100.00 Shortfall of Savings Final Period % 32.80% Increment of savings % 20.00 Shortfall in Total Savings for Whole 27.06% Period %

318

Table 28. Savings’ Decay Case Three – Model Two

Variables: Results: Period Years 10.00 Cumulative Savings Final Period no losses 2595.87 Persistence of Measure % 90.00 Cumulative Savings Final Period with losses 1305.59 Market Transformation % 10.00 Cumulative Total Savings no losses for 10575.21 whole period Reversion/Replacement % 10.00 Cumulative Total Savings with losses 6066.75 Savings Per Year Installed 100.00 Shortfall of Savings Final Period % 49.70% Increment of savings % 20.00 Shortfall in Total Savings for Whole 42.63% Period %

With comparable assumptions between the first and second models in respect of persistence, market transformation and reversion/replacement effects, but with the introduction of a new assumption of a yearly increase in the rate at which new measures are installed of 20%, the shortfalls in savings both for the final period are significantly different. In the case of the first model with the third set of assumptions about persistence and reversion, the shortfall is 64% of savings for the final period. For the second model and the same set of assumptions about persistence and reversion and replacement, but with the additional assumption of a savings increment, the shortfall of savings is less at 50%. This is entirely to be expected as the loading of the programme savings takes place towards the end of the programme life: consequently fewer of the actual savings are prone to decay.

Concluding Note It should be noted that the overall models with all variables included calculate the net programme effect. However, as the figure for net programme effect discounts some of the savings as a result of market transformation, net programme effects do not include all the savings actually occurring from the measures themselves.

319 Statistical Appendix A – Data and Analysis Methods

Introduction This appendix is in two sections. The first section outlines how BRECSU gathers information about sectors and the use to which this information is put. The second section explains the purpose of the statistical tests which have been carried out throughout the statistical analyses, and which data have been used in those analyses.

BRECSU’s Impact Assessment Data The Impact Assessment Section of BRECSU undertakes a now yearly impact assessment of all of the 13 building sectors in which the programme is operating. This impact assessment aims to determine the role of EEBPp publications in the installation of energy efficiency measures in both existing and new buildings. The survey aims to assess the influence of the programme upon savings and also to assess what actual savings may have been achieved by the programme and without the programme.

Within each sector, existing and new buildings are surveyed separately. The BRECSU impact assessment contains two different operations: assessing the measures installed, from which an estimate of energy saved is made; and assessing the influence of the programme upon the measures installed. The output from the first is then modified by the influence factor to obtain an overall figure for both programme-influenced savings and those that are autonomous. In addition to these forms of information, further questions in the questionnaire obtain information about other actions by organisations that may affect their energy efficiency.

Assessing the Measures and Energy Saved Respondents are asked in a questionnaire to state the kinds of measures which they have installed, and the floor area to which these measures apply. This part of the questionnaire aims to ascertain the number and scale of the measures which organisations have installed during the year. These responses can be used to estimate

320 a global total of measures installed – autonomous savings plus those attributable to the programme.

BRECSU subsequently apply their model of non-domestic energy consumption of buildings (N-DEEM) to work from a figure of floor area to the amounts of fuel saved. A further set of operations uses a variety of models to estimate the carbon, energy and cost savings.

Assessing the Role of the Programme Respondents, who are normally energy or facilities managers, are also asked to state the forms of information and advice which they have used in making energy efficiency investments. Respondents are also shown copies of the programme material and, depending upon the strength of the respondents recognition of the programme material, the extent of the programme’s influence upon all their installed measures is estimated. Such a procedure does not measure variations of programme influence on different installed measures. All measures are assumed therefore to be equally influenced by the programme.

Synthesis The savings from measures for each organisation are summed and the total then multiplied by the influence factor to give an estimate of the programme’s role in generating energy savings within that organisation. Organisation totals are summed by sector and totalled. Sector totals are summed to give a measure of overall programme impact within the year. Totals for existing and new buildings are created for each sector and sub-sector. Since 1996, the programme’s influence as a proportion of the total measures installed has been calculated and published within the reports sent by BRECSU to DETR. Before that date, the gross figure for all savings measured was not calculated or published.

Other Data The questionnaire also collects responses about actions undertaken by the organisation in addition to an estimate of the measures installed and the

321 programme’s influence upon those installing them. Information is collected about whether the organisation is a signatory to MACC, whether there is an energy manager in post, an energy policy, and whether an energy audit has taken place within the last 12 months. The Impact Assessment also collates responses about the forms of information and advice which organisations have seen in the last year, including contacts with colleagues in other organisations and other government initiatives such as the Energy Design Advice Scheme (EDAS).

The Data for the Research Impact Assessment data is used for the analysis performed here is from two years, 1994-1995 and 1995-1996. The data from 1994-1995 became available in 1996 and the 1995-1996 data became available in 1997. For each year, sector data was used for existing buildings only. For the two years in question from which the data is analysed, a paper questionnaire was used to obtain responses about a range of behaviours and actions of the target organisations within each sector.

322

The Aim of the Statistical Tests The aim of the statistical tests used in the research was to use pre-existing data collected by BRECSU in the course of its impact assessment of the EEBPp and, through further analysis, to provide insight on questions of programme operation and organisational characteristics within a sector. The analysis assessed whether certain patterns of energy efficiency behaviours, in the form of associations between variables, were present within and across sectors, and whether such patterns were statistically significant. The analysis also sought to determine how strongly the variables were associated. The strengths of associations and the possible relationships between different behaviours and actions are not disclosed by simple sector totals: only statistical tests of association by sector group will identify the relationships.

The data used for the tests comprises data gathered by BRECSU in the course of two of its yearly impact assessments. Three SPSS files of data for existing buildings users were collected on the Further and Higher Education Sector, the Hotel Sector and the Retail Sector.

Initial treatment of the data was to create subsets of the data relevant to the sub- sectors in which organisations had been interviewed. In the case of the Further and Higher Education sector, the Further Education Institutions were filtered from the sample. The Hotel sector was used without modification as it was not divided into sub-sectors and the interview programme had included organisations from across the whole sector. The Retail sector was divided into five sub-sectors from which two sectors were removed leaving three sectors which matched those in which the interviews had been carried out. Those sub-sectors which were covered were department stores, non-food retailers and retail services. The data was also summarised to obtain totals for the number of cases for each variable within each sector.

323 The Statistical Tests Used

Measuring Association The existence of an association between a pair of nominal or categorical variables can be assessed by using a number of statistical techniques based on cross-tabulation or cross-referencing. Such tests involve examining the distribution of one set of variables in terms of the other in the form of a matrix and comparing the actual number of cases with the expected number assuming no association between the variables. Tests of association and the strength of association assume that the cases are selected from random samples. The conclusions reached in testing for association are then held to be valid for the sample but they cannot be assumed to be valid for the entire population.

In the case of a comparison between whether organisations have energy managers and whether they also have monitoring systems for example, each of the four possible types of response are tabulated in the form of a two by two matrix. The totals of each row and each column are also calculated. The sum of the row and column totals is, of course, the total number of cases in the cross-tabulation. Marginal totals which sum the row and column totals are created and can be used to generate expected values when computation is done by hand. Otherwise a statistical programme, such as SPSS, automates the calculation of marginal totals, percentages and expected frequencies and performs the statistical tests.

The four possible types of response in this example cross-tabulation are:

• neither energy manager nor monitoring system are present within the case • an energy manager is present but there is no monitoring system within the case • there is no energy manager but a monitoring system is present within the case • both an energy manager and a monitoring system are present within the case

The observed frequencies can then be compared with those which would occur under the assumption of no association. The expected frequency is calculated by multiplying the column marginal by the row marginal and dividing the result by the total number of cases. For each cell of the matrix, the following operation is carried

324 out: each expected frequency is subtracted from the observed frequency and squared, and this number is then divided by the expected frequency. The sum of these operations for the four cells of the matrix is the X2 statistic for the association.

This statistic is then assessed against a probability distribution which takes into account the number of cells whose totals determine the contents of the other cells.167 The point on the probability distribution which corresponds to the X2 statistic and the degrees of freedom is termed the critical region and provides a measure of the probability of the observed frequencies.

The X2 statistic provides one method of assessing the likelihood of an association. Other methods can be used when the number of cases falls below 30 and or when the expected row totals fall below 5. Under these conditions, applying the X2 test results in too low a value for the critical region or p-value168 and corrective methods are required.

Two principal methods are available to achieve more accurate probabilities, the X2 statistic corrected for continuity and the Fisher’s Exact Test. The correction for continuity involves simple modification of the observed totals and results in a lower value for X2 and consequently a smaller p-value. Fisher’s Exact Test, which employs an exact method of measuring the probability with a probability function based on discrete rather than continuous values as X2 does, also results in a lower p-value. This value has been used in the data analysis to determine the likelihood of association whenever the limiting conditions on the effectiveness of X2 apply.

The Association Between Variables The research sought to examine the associations or correspondences between all paired combinations of the following six variables in the study of organisational characteristics.

167 In a two by two matrix, one cell determines the extent to which the other cell totals may vary. In a three by three matrix for example, four possible cell totals will determine the other five. The number of cells which determine the totals of the others is the number of degrees of freedom (d.f.) which is then used to define a probability distribution. 168 If a classical hypothesis testing procedure is being followed, the effect of using X2 under such conditions will an increased risk that the null-hypothesis may wrongly be rejected , a type 1 error.

325

• whether there was an employee carrying out the role of energy manager • whether there was a formal energy policy in the organisation • whether a yearly energy audit had taken place • whether the programme material had been seen in the previous year • whether an energy monitoring system was being used • whether the organisation was signatory to (MACC)

Five of the dichotomous variables were taken directly from the BRECSU data. The fourth variable – whether the programme material had been seen in the previous year – was constructed from the responses of organisations to a number of questions in the Impact Assessment Survey in the following way. If an organisation had used any of the information produced by the EEBPp, by BRECSU, or by the EEO or Regional Energy Officers or attended workshops run by under the auspices of the EEBPp, it was assumed that they had used the programme during the year. If an organisation had not used any of the above forms of information or attended a workshop or seminar, it was assumed that they had not used the programme during the year. Such a wider definition of use of the programme aimed to capture the effect of a wide range of possible forms and sources of information provided.

In each survey there were six variables. The number of possible combinations of a number of variables is given by: C =n!/r!.(n-r)! , where n is the number of objects, and r is the number of objects in combination. In this case there were 15 possible sets of pairs of combinations for each sector. Each variable was dichotomous and was reported in the form of a “yes” or “no” in the impact assessment data. Missing values were excluded from the tests. In some instances, the number of missing values is an interesting issue itself which will be discussed later.

Testing for the independence of one nominal variable from another nominal variable gives some limited insight into possible effects of one variable upon another. However, such correspondences or associations provide no proof of causation since there is no time element. Associations are instead best seen as indicative of relationships between what should be regarded as independent variables that can be explored experimentally in detailed case study interviews. The research aim was to

326 use the measures of the likelihood of association and the strengths of possible associations to inform a discussion of each sector.

There are however a number of significant limitations on the use of the BRECSU data and therefore only very strong associations at the 95% level are treated as indicative of correspondence. The limitations of the BRECSU data arise from the fact that dichotomous variables may themselves hide significant amounts of information. For example, if an energy manager is said to be in post in any particular period, this does not necessarily indicate whether they are functional or for how long they have been functional. Such limitations arise firstly from the type of information which is being collated. Further difficulties could arise from the fact that the sample upon which the tests have been run are not independent.

Measuring the Strength of Association While it is possible to measure the strength of the association between variables directly from the data of a cross-tabulation, such a step would be invalid as there is would be no evidence until a X2 test or other suitable test was performed that an association exists between the variables. Once it has been established however that an association between variables is likely, the strength of the association can be assessed using a range of procedures which involve further manipulation of the cross-tabulated information to produce single values to indicate strength of association. The strength of association can also be assessed by examining the conditional distributions, having made an assumption of which variable is dependent and which is independent.

Although the X2 statistic may give the impression of the strength of the association between variables, the magnitude of the X2 statistic is dependent upon the number of cases in the sample, usually referred to as N, (Blalock page 292, 1972). Therefore measures which take into account sample size are normally used in the measurement of the strength of the association between variables.

The most commonly used measures of the strength of association of nominal variables are Φ or Φ2, Yule’s Q,, Cramer’s V and the Pearson Contingency Coefficient. These tests provide a measure of the strength of the association with a

327 maximum value of ±1 with 0 indicating no association. The algebraic sign is affected by the magnitude of the products of the diagonals. The calculation of Φ is achieved by dividing the X2 statistic by the number of cases and taking the square root. Φ2 is also often used as a measure of the strength of association. Yule’s Q is also used in certain circumstances and involves manipulating the number of cases in the cross- tabulation in the following manner.

In the following example cross tabulation of energy audit employed and presence of monitoring system, cells are identified by letter to show how Yule’s Q is calculated

Audit Audit No Yes Monitoring A) 20 B) 24 System No Monitoring C) 0 D) 12 System Yes

Q=(ad-bc)/(ad+bc) = (20)(12) – (24)(0) / (20)(12) + (24)(0) = 1.0

In the above example, Φ and V are both 0.389 as, in the case of two by two tables which are used here, Φ and V are identical.169 The Pearson contingency co-efficient can also be calculated and is equal to √(X2/(X2+N)), in this case 0.362.

Because Yule’s Q attains a value of 1 whenever the value of one the cells is 0, the statistic indicates a perfect relationship between variables when only a partial one exists. For that reason, Φ or V have been used to measure the strength of association because they produce a spread of values within narrower bounds than Q, providing easier comparison between different associations within the same table and between tables.

169 Cramer’s V is defined as √(X2/N Min (r-1,c-1) where N is the number of cases and Min (r-1,c-1) is either r-1 or c-1, whichever is the smaller of the two possible terms. In a two by two table, r and c are identical and hence either r -1 or c – 1 is equal to 1, giving the formula the same form as that for Φ.

328 Independent and Dependent Variables – The use of Asymmetric Tests

Asymmetric tests of association such as the Goodman and Kruskal tau and Lambda can also be used but require one of the variables to be defined as independent. In this statistical analysis, variables have not been considered to be independent or dependent but to be independent variables between which there may be some association and each of which may be potential predictors of the other. For that reason, asymmetric tests have not been made on the data.

Comparing Variable Totals and Associations - An Example The following example demonstrates that cross-tabulation allows more valuable inferences to be drawn from data than can be made when only data totals are considered. In the hypothetical example below, two sectors are compared, A and B in respect of the distribution of energy auditing and whether an energy manager is present. In sector A there are 200 cases, in B, 170 cases. The data cross-tabulates as follows:

Group A Energy Audit Manager N Y Total N 10 40 50 Y 40 110 150 Total 50 150 200

Group B Energy Audit Manager N Y Total N 40 30 70 Y 10 90 100 Total 50 100 170

329 In group A, the proportion of energy managers within the group is 75%. The proportion of audits within the group is also 75%. In group B the proportion of energy managers is lower at 59%. The proportion of audits is also 59%.

In group A the association measured in terms of Φ between energy manager and audit is 0.152. In group B the association is far stronger measuring 0.551. The corresponding values for Yule’s Q are 0.185 and 0.920.

In this example, it can be seen that in group B, there is a far stronger association present between energy manager and whether an energy audit has taken place than in group A. This strength of association may provide support for the view that energy managers are more likely to be carrying out energy audits, that energy audits are seen to be a more important part of the energy manager’s responsibilities. Where there is a continued strength of association from year to year, this may suggest persistence of a particular energy efficiency practice.

Missing Values In the hotels sector data, the number of responses to the question of whether the organisation was a signatory to the Making a Corporate Commitment Campaign was very low in comparison with the other sectors.

Results from Statistical Tests used in the Research

The Data Eight sets of tables of data are presented. In the first six tables, the data for each sector and for each year are arranged in a matrix. Two years’ worth of data for each of the three sectors provides six tables of data. Each cell of the matrix contains the results of the tests on the association between the variables that form the pair of variables that intersect within the box. In each of the fifteen boxes of each matrix, the following information is given:

330 The number of cases within the test. This may be the number of cases within the sample. However, because of missing values, this number is sometimes lower than the number within the whole sample. The Pearson Χ2 measure. The probability of the result calculated using the p-value for that measurement of Χ2. The probability of the result calculated using the p-value for Continuity Correction. The calculation of the probability of the result using Fisher’s Exact Test. Φ (V) = The values of Φ and Cramer’s V which provide one measure of the strength of the association between variables (and which are identical in a two by two matrix). Position = The rank order of the association strength within the 15 cross-tabulations for the sector and for that year for those pairs of variables those associations are statistically significant at a 0.05 level.

The Appendices

The Statistical Appendices B to J which follow contain the results of a number of statistical tests of association. Statistical Appendix K which then follows contains the ten sets of tables of summary data. In the first six tables of this appendix, the data for each sector and for each year are presented within separate matrices. Two years worth of data for each of the three sectors provides six tables of data. Each cell of the matrix contains the results of the test on the association between the variables that form the pair of variables that intersect within the box. Four summary tables are then presented.

331 Statistical Appendix B – Senior Management and Programme Use

Description This appendix contains the results of tests of association which assess the relationship within each sector between participation in the other government support scheme - Making a Corporate Commitment – and use of the EEBPp.

Higher Education Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Programme Awareness 55 72.4% 21 27.6% 76 100.0% * Signatory to MACC

Programme Awareness * Signatory to MACC Crosstabulation

Count Signatory to MACC 0 1 Total Programme 0 5 1 6 Awareness 1 29 20 49 Total 34 21 55

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 1.321b 1 .250 Continuity Correctiona .496 1 .481 Likelihood Ratio 1.472 1 .225 Fisher's Exact Test .390 .248 Linear-by-Linear 1.297 1 .255 Association N of Valid Cases 55 a. Computed only for a 2x2 table b. 2 cells (50.0%) have expected count less than 5. The minimum expected count is 2.29.

332 Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .000 .000 .c .c Nominal Programme Awareness c c .000 .000 . . Dependent Signatory to MACC c c .000 .000 . . Dependent Goodman and Programme Awareness d .024 .034 .255 Kruskal tau Dependent Signatory to MACC d .024 .033 .255 Dependent Uncertainty Coefficient Symmetric .027 .040 .654 .225e Programme Awareness e .039 .058 .654 .225 Dependent Signatory to MACC e .020 .031 .654 .225 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .155 .250 Nominal Cramer's V .155 .250 Contingency Coefficient .153 .250 N of Valid Cases 55 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

Hotel Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Programme Information 58 90.6% 6 9.4% 64 100.0% * Signatories to MACC

333 Programme Information * Signatories to MACC Crosstabulation

Count Signatories to MACC .00 1.00 Total Programme Not used 45 1 46 Information Used 8 4 12 Total 53 5 58

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 11.730b 1 .001 Continuity Correctiona 8.108 1 .004 Likelihood Ratio 9.154 1 .002 Fisher's Exact Test .005 .005 Linear-by-Linear 11.528 1 .001 Association N of Valid Cases 58 a. Computed only for a 2x2 table b. 2 cells (50.0%) have expected count less than 5. The minimum expected count is 1.03.

Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .176 .107 1.363 .173 Nominal Programme Information .250 .161 1.363 .173 Dependent Signatories to MACC c c .000 .000 . . Dependent Goodman and Programme Information d .202 .119 .001 Kruskal tau Dependent Signatories to MACC d .202 .133 .001 Dependent Uncertainty Coefficient Symmetric .196 .123 1.458 .002e Programme Information e .155 .104 1.458 .002 Dependent Signatories to MACC e .269 .156 1.458 .002 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

334 Symmetric Measures

Approx. Value Sig. Nominal by Phi .450 .001 Nominal Cramer's V .450 .001 Contingency Coefficient .410 .001 N of Valid Cases 58 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

Retail Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Programme Information 101 100.0% 0 .0% 101 100.0% * Signatory to MACC

Programme Information * Signatory to MACC Crosstabulation

Count Signatory to MACC .00 1.00 Total Programme Not used 83 1 84 Information Used 8 9 17 Total 91 10 101

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 42.446b 1 .000 Continuity Correctiona 36.843 1 .000 Likelihood Ratio 30.868 1 .000 Fisher's Exact Test .000 .000 Linear-by-Linear 42.026 1 .000 Association N of Valid Cases 101 a. Computed only for a 2x2 table b. 1 cells (25.0%) have expected count less than 5. The minimum expected count is 1.68.

335 Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .333 .210 1.354 .176 Nominal Programme Information .471 .135 2.614 .009 Dependent Signatory to MACC .100 .391 .243 .808 Dependent Goodman and Programme Information c .420 .116 .000 Kruskal tau Dependent Signatory to MACC c .420 .132 .000 Dependent Uncertainty Coefficient Symmetric .394 .120 2.750 .000d Programme Information d .337 .115 2.750 .000 Dependent Signatory to MACC d .473 .128 2.750 .000 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on chi-square approximation d. Likelihood ratio chi-square probability.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .648 .000 Nominal Cramer's V .648 .000 Contingency Coefficient .544 .000 N of Valid Cases 101 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

336 Statistical Appendix C – Energy Managers and Programme Awareness

Description This appendix contains the results of tests of association which assess the relationship within each sector between use of the Programme and whether an energy manager is present.

Higher Education Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * 76 100.0% 0 .0% 76 100.0% Programme Awareness

Energy Manager * Programme Awareness Crosstabulation

Count Programme Awareness 0 1 Total Energy Manager no 10 7 17 yes 9 50 59 Total 19 57 76

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 13.361b 1 .000 Continuity Correctiona 11.139 1 .001 Likelihood Ratio 12.043 1 .001 Fisher's Exact Test .001 .001 Linear-by-Linear 13.185 1 .000 Association N of Valid Cases 76 a. Computed only for a 2x2 table b. 1 cells (25.0%) have expected count less than 5. The minimum expected count is 4.25.

337 Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .111 .199 .536 .592 Nominal Energy Manager .059 .249 .229 .818 Dependent Programme Awareness .158 .199 .730 .465 Dependent Goodman and Energy Manager c .176 .101 .000 Kruskal tau Dependent Programme Awareness c .176 .100 .000 Dependent Uncertainty Coefficient Symmetric .145 .082 1.717 .001d Energy Manager d .149 .084 1.717 .001 Dependent Programme Awareness d .141 .081 1.717 .001 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on chi-square approximation d. Likelihood ratio chi-square probability.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .419 .000 Nominal Cramer's V .419 .000 Contingency Coefficient .387 .000 N of Valid Cases 76 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

Hotel Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * 61 95.3% 3 4.7% 64 100.0% Programme Information

Energy Manager * Programme Information Crosstabulation

Count Programme Information Not used Used Total Energy Manager no 19 5 24 yes 26 11 37 Total 45 16 61

338 Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square .595b 1 .440 Continuity Correctiona .224 1 .636 Likelihood Ratio .607 1 .436 Fisher's Exact Test .557 .321 Linear-by-Linear .586 1 .444 Association N of Valid Cases 61 a. Computed only for a 2x2 table b. 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.30.

Directional Measures

Asymp. Approx. Value Std. Errora Approx. Tb Sig. Nominal by Lambda Symmetric .000 .000 .c .c Nominal Energy Manager c c .000 .000 . . Dependent Programme Information c c .000 .000 . . Dependent Goodman and Energy Manager d .010 .024 .444 Kruskal tau Dependent Programme Information d .010 .024 .444 Dependent Uncertainty Coefficient Symmetric .008 .020 .395 .436e Energy Manager e .007 .019 .395 .436 Dependent Programme Information e .009 .022 .395 .436 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .099 .440 Nominal Cramer's V .099 .440 Contingency Coefficient .098 .440 N of Valid Cases 61 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

339 Retail Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * 100 99.0% 1 1.0% 101 100.0% Programme Information

Energy Manager * Programme Information Crosstabulation

Count Programme Information Not used Used Total Energy Manager no 49 1 50 yes 34 16 50 Total 83 17 100

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 15.946b 1 .000 Continuity Correctiona 13.891 1 .000 Likelihood Ratio 18.686 1 .000 Fisher's Exact Test .000 .000 Linear-by-Linear 15.787 1 .000 Association N of Valid Cases 100 a. Computed only for a 2x2 table b. 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.50.

Directional Measures

Asymp. Approx. Value Std. Errora Approx. Tb Sig. Nominal by Lambda Symmetric .224 .042 3.906 .000 Nominal Energy Manager .300 .069 3.906 .000 Dependent Programme Information c c .000 .000 . . Dependent Goodman and Energy Manager d .159 .047 .000 Kruskal tau Dependent Programme Information d .159 .054 .000 Dependent Uncertainty Coefficient Symmetric .163 .059 2.610 .000e Energy Manager e .135 .052 2.610 .000 Dependent Programme Information e .205 .070 2.610 .000 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

340 Symmetric Measures

Approx. Value Sig. Nominal by Phi .399 .000 Nominal Cramer's V .399 .000 Contingency Coefficient .371 .000 N of Valid Cases 100 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

341 Statistical Appendix D – Energy Managers and Information Use

Description The following sets of tables are based on the BRECSU Impact Assessment of 1995- 1996. They show the extent of the association between the presence of an energy manager and the number of types of information used. A second set of tables shows the average number of types of information used by organisations, grouped into two sets: those with and those without an energy manager.

Higher Education Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Using All Types of Information * 75 98.7% 1 1.3% 76 100.0% Energy Manager

Using All Types of Information * Energy Manager Crosstabulation

Count Energy Manager no yes Total Using All .00 2 2 Types of 1.00 2 1 3 Information 2.00 1 2 3 3.00 3 3 6 4.00 1 3 4 5.00 2 5 7 6.00 2 5 7 7.00 3 6 9 8.00 6 6 9.00 3 3 10.00 1 6 7 11.00 1 5 6 12.00 5 5 13.00 1 1 14.00 4 4 15.00 1 1 17.00 1 1 Total 16 59 75

342 Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 14.633a 16 .552 Likelihood Ratio 17.939 16 .327 Linear-by-Linear 7.252 1 .007 Association N of Valid Cases 75 a. 30 cells (88.2%) have expected count less than 5. The minimum expected count is .21.

Hotel Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Using All Types of Information * 61 95.3% 3 4.7% 64 100.0% Energy Manager

Using All Types of Information * Energy Manager Crosstabulation

Count Energy Manager no yes Total Using All .00 2 5 7 Types of 1.00 3 1 4 Information 2.00 4 7 11 3.00 4 4 8 4.00 6 8 14 5.00 2 3 5 6.00 1 5 6 7.00 1 2 3 8.00 1 1 9.00 1 1 11.00 1 1 Total 24 37 61

343 Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 7.144a 10 .712 Likelihood Ratio 8.309 10 .599 Linear-by-Linear .443 1 .506 Association N of Valid Cases 61 a. 19 cells (86.4%) have expected count less than 5. The minimum expected count is .39.

Retail Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent All Types of Information 100 99.0% 1 1.0% 101 100.0% * Energy Manager

All Types of Information * Energy Manager Crosstabulation

Count Energy Manager no yes Total All Types of .00 15 8 23 Information 1.00 10 4 14 2.00 8 5 13 3.00 7 5 12 4.00 6 7 13 5.00 1 9 10 6.00 1 3 4 7.00 1 3 4 8.00 1 1 2 9.00 3 3 13.00 1 1 14.00 1 1 Total 50 50 100

344 Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 19.204a 11 .058 Likelihood Ratio 22.317 11 .022 Linear-by-Linear 13.767 1 .000 Association N of Valid Cases 100 a. 12 cells (50.0%) have expected count less than 5. The minimum expected count is .50.

345

Information Use – Means for Energy Manager and Non-Energy Manager Organisations

Higher Education Sector

Case Processing Summary

Using All Types of Information * Cases Energy Manager Included N 75 Percent 98.7% Excluded N 1 Percent 1.3% Total N 76 Percent 100.0%

Case Summaries

Using All Types of Information Energy Manager no yes Total N 16 59 75 Mean 5.0625 8.0339 7.4000 Std. Error .7330 .5111 .4520 of Mean Minimum 1.00 .00 .00 Maximum 11.00 17.00 17.00 Std. 2.9319 3.9259 3.9146 Deviation Variance 8.596 15.413 15.324

346 Hotel Sector

Case Processing Summary

Using All Types of Information * Cases Energy Manager Included N 61 Percent 95.3% Excluded N 3 Percent 4.7% Total N 64 Percent 100.0%

Case Summaries

Using All Types of Information Energy Manager no yes Total N 24 37 61 Mean 3.2917 3.7027 3.5410 Std. Error .4402 .4098 .3017 of Mean Minimum .00 .00 .00 Maximum 9.00 11.00 11.00 Std. 2.1565 2.4929 2.3564 Deviation Variance 4.650 6.215 5.552

Retail Sector

Case Processing Summary

All Types of Information Cases * Energy Manager Included N 100 Percent 99.0% Excluded N 1 Percent 1.0% Total N 101 Percent 100.0%

347 Case Summaries

All Types of Information Energy Manager no yes Total N 50 50 100 Mean 1.9400 4.0600 3.0000 Std. Error .2761 .4557 .2857 of Mean Minimum .00 .00 .00 Maximum 8.00 14.00 14.00 Std. 1.9526 3.2224 2.8569 Deviation Variance 3.813 10.384 8.162

348 Statistical Appendix E – Senior Managers’ Commitment and Energy Managers

Description This appendix contains the results of tests of association which assess the relationship between the presence of an energy manager and whether the organisation has signed MACC.

Higher Education Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * 55 72.4% 21 27.6% 76 100.0% Signatory to MACC

Energy Manager * Signatory to MACC Crosstabulation

Count Signatory to MACC 0 1 Total Energy Manager no 5 1 6 yes 29 20 49 Total 34 21 55

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 1.321b 1 .250 Continuity Correctiona .496 1 .481 Likelihood Ratio 1.472 1 .225 Fisher's Exact Test .390 .248 Linear-by-Linear 1.297 1 .255 Association N of Valid Cases 55 a. Computed only for a 2x2 table b. 2 cells (50.0%) have expected count less than 5. The minimum expected count is 2.29.

349 Symmetric Measures

Approx. Value Sig. Nominal by Phi .155 .250 Nominal Cramer's V .155 .250 Contingency Coefficient .153 .250 N of Valid Cases 55 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

Hotel Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * 55 85.9% 9 14.1% 64 100.0% Signatories to MACC

Energy Manager * Signatories to MACC Crosstabulation

Count Signatories to MACC .00 1.00 Total Energy Manager no 22 22 yes 28 5 33 Total 50 5 55

350 Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 3.667b 1 .056 Continuity Correctiona 2.063 1 .151 Likelihood Ratio 5.438 1 .020 Fisher's Exact Test .076 .068 Linear-by-Linear 3.600 1 .058 Association N of Valid Cases 55 a. Computed only for a 2x2 table b. 2 cells (50.0%) have expected count less than 5. The minimum expected count is 2.00.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .258 .056 Nominal Cramer's V .258 .056 Contingency Coefficient .250 .056 N of Valid Cases 55 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

Retail Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * 100 99.0% 1 1.0% 101 100.0% Signatory to MACC

Energy Manager * Signatory to MACC Crosstabulation

Count Signatory to MACC .00 1.00 Total Energy Manager no 49 1 50 yes 41 9 50 Total 90 10 100

351 Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 7.111b 1 .008 Continuity Correctiona 5.444 1 .020 Likelihood Ratio 8.073 1 .004 Fisher's Exact Test .016 .008 Linear-by-Linear 7.040 1 .008 Association N of Valid Cases 100 a. Computed only for a 2x2 table b. 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.00.

Directional Measures

Asymp. Approx. Value Std. Errora Approx. Tb Sig. Nominal by Lambda Symmetric .133 .044 2.615 .009 Nominal Energy Manager .160 .058 2.615 .009 Dependent Signatory to MACC c c .000 .000 . . Dependent Goodman and Energy Manager d .071 .035 .008 Kruskal tau Dependent Signatory to MACC d .071 .039 .008 Dependent Uncertainty Coefficient Symmetric .079 .047 1.615 .004e Energy Manager e .058 .036 1.615 .004 Dependent Signatory to MACC e .124 .070 1.615 .004 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .267 .008 Nominal Cramer's V .267 .008 Contingency Coefficient .258 .008 N of Valid Cases 100 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

352 Statistical Appendix F – Energy Managers, Audits and Monitoring Systems

Description This appendix contains the results of statistical tests on the association between the presence of an energy manager and the presence of an energy audit in the past year and the presence of an energy monitoring system. Each of the three sectors are tested. The strength of the association is intended to that knowledge of how energy is used, which is dependent upon the use of monitoring and energy auditing activities, is dependent upon the presence of an energy manager.

Higher Education Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * Energy 72 100.0% 0 .0% 72 100.0% Efficiency Knowledge

Energy Manager * Energy Efficiency Knowledge Crosstabulation

Count Energy Efficiency Knowledge .00 1.00 2.00 Total Energy Manager no 7 7 1 15 yes 9 29 19 57 Total 16 36 20 72

Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 8.177a 2 .017 Likelihood Ratio 8.352 2 .015 Linear-by-Linear 7.803 1 .005 Association N of Valid Cases 72 a. 2 cells (33.3%) have expected count less than 5. The minimum expected count is 3.33.

353 Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .000 .073 .000 1.000 Nominal Energy Manager c c .000 .000 . . Dependent Energy Efficiency .000 .104 .000 1.000 Knowledge Dependent Goodman and Energy Manager d .114 .075 .018 Kruskal tau Dependent Energy Efficiency d .045 .029 .042 Knowledge Dependent Uncertainty Coefficient Symmetric .075 .048 1.538 .015e Energy Manager e .113 .071 1.538 .015 Dependent Energy Efficiency e .056 .036 1.538 .015 Knowledge Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .337 .017 Nominal Cramer's V .337 .017 Contingency Coefficient .319 .017 N of Valid Cases 72 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

Hotel Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * Energy 56 87.5% 8 12.5% 64 100.0% Efficiency Knowledge

Energy Manager * Energy Efficiency Knowledge Crosstabulation

Count Energy Efficiency Knowledge .00 1.00 2.00 Total Energy Manager no 14 8 1 23 yes 6 16 11 33 Total 20 24 12 56

354 Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 12.823a 2 .002 Likelihood Ratio 13.966 2 .001 Linear-by-Linear 12.410 1 .000 Association N of Valid Cases 56 a. 1 cells (16.7%) have expected count less than 5. The minimum expected count is 4.93.

Directional Measures

Asymp. Approx. Value Std. Errora Approx. Tb Sig. Nominal by Lambda Symmetric .255 .134 1.717 .086 Nominal Energy Manager .348 .157 1.842 .065 Dependent Energy Efficiency .188 .132 1.298 .194 Knowledge Dependent Goodman and Energy Manager c .229 .101 .002 Kruskal tau Dependent Energy Efficiency c .107 .055 .003 Knowledge Dependent Uncertainty Coefficient Symmetric .143 .068 2.093 .001d Energy Manager d .184 .088 2.093 .001 Dependent Energy Efficiency d .118 .055 2.093 .001 Knowledge Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on chi-square approximation d. Likelihood ratio chi-square probability.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .479 .002 Nominal Cramer's V .479 .002 Contingency Coefficient .432 .002 N of Valid Cases 56 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

Retail Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Energy Manager * Energy 96 95.0% 5 5.0% 101 100.0% Efficiency Knowledge

355 Energy Manager * Energy Efficiency Knowledge Crosstabulation

Count Energy Efficiency Knowledge .00 1.00 2.00 Total Energy Manager no 42 4 1 47 yes 14 23 12 49 Total 56 27 13 96

Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 36.652a 2 .000 Likelihood Ratio 40.358 2 .000 Linear-by-Linear 31.681 1 .000 Association N of Valid Cases 96 a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.36.

Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .425 .105 3.581 .000 Nominal Energy Manager .596 .101 4.048 .000 Dependent Energy Efficiency .225 .134 1.497 .134 Knowledge Dependent Goodman and Energy Manager c .382 .093 .000 Kruskal tau Dependent Energy Efficiency c .252 .064 .000 Knowledge Dependent Uncertainty Coefficient Symmetric .257 .069 3.689 .000d Energy Manager d .303 .082 3.689 .000 Dependent Energy Efficiency d .223 .060 3.689 .000 Knowledge Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on chi-square approximation d. Likelihood ratio chi-square probability.

Symmetric Measures

Approx. Value Sig. Nominal by Phi .618 .000 Nominal Cramer's V .618 .000 Contingency Coefficient .526 .000 N of Valid Cases 96 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis.

356 Statistical Appendix G – Types and Frequency of Information Used

Description This appendix contains sets of tables on the types and frequencies of information used as observed by the BRECSU Impact Assessment of 1995-1996. The appendix also contains information on the average number of types of information used within each sector.

Types and Frequencies of Information Used The following three tables show the proportion of use of different forms and sources of information. It is clearly the case that forms of information and sources of information overlap. Colleagues for example are able to provide their own information and to pass on other sources of information. In this sense then, a source of information – a colleague – is also acting to promote a particular source of information. Forms and sources of information are not always easily separable entities as they can be combined.

While the frequency of use of a particular type of information might be thought to be a strong predictor of technological adoption, this is not necessarily the case. What is more clearly a predictor of technological adoption is not the rate of use – its popularity - but the extent to which use is actually correlated with adoption. While this appendix demonstrates the general relative popularity of different forms and sources of information, other appendices contain the statistical analyses of the associations and predictions of technological adoption in relation to the most statistically significant forms of information and advice.

357 Higher Education Sector

Manufacturer's Coun 17 59 76 no yes Total % 22.4% 77.6% 100.0 Newspaper Coun 31 45 76 % 40.8% 59.2% 100.0 BRECS Coun 33 43 76 % 43.4% 56.6% 100.0 CIBS Coun 45 31 76 % 59.2% 40.8% 100.0 EEBP Coun 52 24 76 % 68.4% 31.6% 100.0 EEO/ Coun 30 46 76 % 39.5% 60.5% 100.0 BSRI Coun 38 38 76 % 50.0% 50.0% 100.0 EDA Coun 65 11 76 % 85.5% 14.5% 100.0 Consultant Coun 25 51 76 % 32.9% 67.1% 100.0 % BR Coun 50 26 76 E % 65.8% 34.2% 100.0 Electricity Coun 54 21 75 % 72.0% 28.0% 100.0 Gas Coun 61 15 76 % 80.3% 19.7% 100.0 ETS Coun 57 19 76 % 75.0% 25.0% 100.0 EEBPp Coun 53 23 76 % 69.7% 30.3% 100.0 CADDE Coun 35 41 76 % 46.1% 53.9% 100.0 Do Coun 70 6 76 % 92.1% 7.9% 100.0 Colleagues in Coun 50 26 76 organisatio % 65.8% 34.2% 100.0 Colleagues in Coun 42 34 76 organisation % 55.3% 44.7% 100.0

358 Hotel Sector

no yes Total Manufacturer's info Count 32 32 64 % 50.0% 50.0% 100.0% Newspaper articles Count 37 27 64 % 57.8% 42.2% 100.0% BRECSU Count 58 6 64 % 90.6% 9.4% 100.0% CIBSE Count 61 3 64 % 95.3% 4.7% 100.0% EEBPp Count 56 8 64 % 87.5% 12.5% 100.0% EEO/ REEO Count 56 8 64 % 87.5% 12.5% 100.0% BSRIA Count 63 1 64 % 98.4% 1.6% 100.0% EDAS Count 63 1 64 % 98.4% 1.6% 100.0% Consultants Count 32 32 64 % 50.0% 50.0% 100.0% BRE Count 63 1 64 % 98.4% 1.6% 100.0% Electricity suppliers Count 40 24 64 % 62.5% 37.5% 100.0% Gas suppliers Count 43 21 64 % 67.2% 32.8% 100.0% ETSU Count 62 2 64 % 96.9% 3.1% 100.0% EEBPp publications Count 58 6 64 % 90.6% 9.4% 100.0% CADDET Count 64 64 % 100.0% 100.0% DoE Count 54 10 64 % 84.4% 15.6% 100.0% Colleagues in your Count 39 25 64 organisation % 60.9% 39.1% 100.0% Colleagues in other Count 42 22 64 organisations % 65.6% 34.4% 100.0%

359 Retail Sector

no yes Manufacturer's info Count 54 47 % 53.5% 46.5% Newspaper articles Count 60 41 % 59.4% 40.6% BRECSU Count 87 14 % 86.1% 13.9% CIBSE Count 92 9 % 91.1% 8.9% EEBPp Count 93 8 % 92.1% 7.9% EEO/ REEO Count 94 7 % 93.1% 6.9% BSRIA Count 94 7 % 93.1% 6.9% EDAS Count 100 1 % 99.0% 1.0% Consultants Count 57 44 % 56.4% 43.6% BRE Count 92 9 % 91.1% 8.9% Electricity suppliers Count 65 36 % 64.4% 35.6% Gas suppliers Count 80 21 % 79.2% 20.8% ETSU Count 98 3 % 97.0% 3.0% EEBPp publications Count 95 6 % 94.1% 5.9% CADDET Count 101 % 100.0% DoE Count 93 8 % 92.1% 7.9% Colleagues in your Count 87 14 organisation % 86.1% 13.9% Colleagues in other Count 76 25 organisations % 75.2% 24.8%

360 Average Number of Types of Information Used

Higher Education Sector

Case Processing Summary

Cases Included Excluded Total N Percent N Percent N Percent Using All Types 75 98.7% 1 1.3% 76 100.0% of Information

Case Summaries

Using All Types of Information Std. Error Std. N Mean of Mean Minimum Maximum Deviation Variance 75 7.4000 .4520 .00 17.00 3.9146 15.324

Hotel Sector

Case Processing Summary

Cases Included Excluded Total N Percent N Percent N Percent Using All Types 64 100.0% 0 .0% 64 100.0% of Information

Case Summaries

Using All Types of Information Std. Error Std. N Mean of Mean Minimum Maximum Deviation Variance 64 3.5781 .2961 .00 11.00 2.3691 5.613

361 Retail Sector

Case Processing Summary

Cases Included Excluded Total N Percent N Percent N Percent All Types of Information 101 100.0% 0 .0% 101 100.0%

Case Summaries

All Types of Information Std. Error Std. N Mean of Mean Minimum Maximum Deviation Variance 101 2.9703 .2844 .00 14.00 2.8582 8.169

362 Statistical Appendix H – Lighting Measures Installed and Forms of Information Consulted

Description This appendix contains three main sections. For each sector, the number of types of measure is cross-tabulated against the number of types of information used to show the extent of the association of information use with technology adoption. Measures of association (chi-square) and correlation (Spearman’s R – ordinal correlation) provide the appropriate measures of association and correlation respectively for ordinal data of this kind.

Higher Education Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Using All Types of Information * Lighting 68 89.5% 8 10.5% 76 100.0% Total Measures Installed

Using All Types of Information * Lighting Total Measures Installed Crosstabulation

Count Lighting Total Measures Installed .00 1.00 2.00 3.00 4.00 5.00 6.00 Total Using All .00 1 1 2 Types of 1.00 1 1 Information 2.00 2 1 3 3.00 1 2 2 1 6 4.00 1 1 1 3 5.00 1 1 4 6 6.00 3 1 1 1 6 7.00 2 1 3 1 2 9 8.00 1 1 2 2 6 9.00 1 1 1 3 10.00 1 1 1 1 1 1 6 11.00 3 1 1 5 12.00 1 1 2 1 5 13.00 1 1 14.00 1 3 4 15.00 1 1 17.00 1 1 Total 12 10 11 15 11 5 4 68

363

Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 118.823a 96 .057 Likelihood Ratio 100.985 96 .344 Linear-by-Linear 10.685 1 .001 Association N of Valid Cases 68 a. 119 cells (100.0%) have expected count less than 5. The minimum expected count is .06.

Symmetric Measures

Asymp. Approx. Value Std. Errora Approx. Tb Sig. Nominal by Nominal Contingency Coefficient .798 .057 Interval by Interval Pearson's R .399 .107 3.539 .001c Ordinal by Ordinal Spearman Correlation .397 .106 3.509 .001c N of Valid Cases 68 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on normal approximation.

Hotel Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Using All Types of Information * 63 98.4% 1 1.6% 64 100.0% Number of Types of Lighting Installed

364 Using All Types of Information * Number of Types of Lighting Installed Crosstabulation

Count Number of Types of Lighting Installed .00 1.00 2.00 3.00 4.00 5.00 Total Using All .00 3 1 1 1 6 Types of 1.00 1 3 1 5 Information 2.00 5 3 2 1 11 3.00 4 4 8 4.00 5 5 1 1 2 14 5.00 1 3 1 1 6 6.00 3 1 2 6 7.00 1 1 2 4 8.00 1 1 9.00 1 1 11.00 1 1 Total 23 18 14 3 4 1 63

Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 68.349a 50 .043 Likelihood Ratio 45.079 50 .671 Linear-by-Linear 1.530 1 .216 Association N of Valid Cases 63 a. 65 cells (98.5%) have expected count less than 5. The minimum expected count is .02.

365 Symmetric Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Nominal Contingency Coefficient .721 .043 Interval by Interval Pearson's R .157 .142 1.242 .219c Ordinal by Ordinal Spearman Correlation .147 .125 1.158 .252c N of Valid Cases 63 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on normal approximation.

Retail Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent All Types of Information * Light Count - Number 101 100.0% 0 .0% 101 100.0% of Measures

All Types of Information * Light Count - Number of Measures Crosstabulation

Count Light Count - Number of Measures .00 1.00 2.00 3.00 4.00 6.00 7.00 Total All Types of .00 20 2 1 1 24 Information 1.00 9 3 2 14 2.00 9 3 1 13 3.00 5 3 1 1 2 12 4.00 8 2 3 13 5.00 3 1 5 1 10 6.00 1 1 2 4 7.00 1 2 1 4 8.00 1 1 2 9.00 1 2 3 13.00 1 1 14.00 1 1 Total 58 16 13 5 6 1 2 101

366 Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 186.485a 66 .000 Likelihood Ratio 85.167 66 .056 Linear-by-Linear 19.631 1 .000 Association N of Valid Cases 101 a. 78 cells (92.9%) have expected count less than 5. The minimum expected count is .01.

Symmetric Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Nominal Contingency Coefficient .805 .000 Interval by Interval Pearson's R .443 .131 4.918 .000c Ordinal by Ordinal Spearman Correlation .422 .090 4.628 .000c N of Valid Cases 101 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on normal approximation.

367 Statistical Appendix I – Use of Programme Information and the Number of Lighting Measures Installed

Description The following tables are created from the Impact Assessment Data from the yearly BRECSU survey of Programme use and energy efficiency technology installation. They show the extent of the relationship between the number of lighting measures used within each sector and the use of the Programme material. Each crosstabulation shows the number of types of lighting installed and whether or not the organisation installing was a user of the Programme material.

Higher Education Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Lighting Total Measures Installed * Programme 69 90.8% 7 9.2% 76 100.0% Awareness

Lighting Total Measures Installed * Programme Awareness Crosstabulation

Count Programme Awareness 0 1 Total Lighting .00 4 8 12 Total 1.00 5 5 10 Measures Installed 2.00 4 7 11 3.00 2 13 15 4.00 1 10 11 5.00 1 5 6 6.00 4 4 Total 17 52 69

368 Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 8.745a 6 .188 Likelihood Ratio 9.599 6 .143 Linear-by-Linear 5.637 1 .018 Association N of Valid Cases 69 a. 9 cells (64.3%) have expected count less than 5. The minimum expected count is .99.

Hotel Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Number of Types of Lighting Installed * 63 98.4% 1 1.6% 64 100.0% Programme Information

Number of Types of Lighting Installed * Programme Information Crosstabulation

Count Programme Information Not used Used Total Number of .00 21 2 23 Types of 1.00 11 7 18 Lighting Installed 2.00 12 2 14 3.00 1 2 3 4.00 1 3 4 5.00 1 1 Total 47 16 63

Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 14.259a 5 .014 Likelihood Ratio 13.950 5 .016 Linear-by-Linear 4.969 1 .026 Association N of Valid Cases 63 a. 8 cells (66.7%) have expected count less than 5. The minimum expected count is .25.

369

Retail Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Light Count - Number of Measures * Programme 101 100.0% 0 .0% 101 100.0% Information

Light Count - Number of Measures * Programme Information Crosstabulation

Count Programme Information Not used Used Total Light Count .00 54 4 58 - Number of 1.00 14 2 16 Measures 2.00 9 4 13 3.00 5 5 4.00 1 5 6 6.00 1 1 7.00 1 1 2 Total 84 17 101

Chi-Square Tests

Asymp. Sig. Value df (2-sided) Pearson Chi-Square 32.588a 6 .000 Likelihood Ratio 26.153 6 .000 Linear-by-Linear 19.757 1 .000 Association N of Valid Cases 101 a. 10 cells (71.4%) have expected count less than 5. The minimum expected count is .17.

370 Statistical Appendix J – Use of Programme Information and Manufacturer’s Information

Description The following tables are cross-tabulations for each of the three sectors studied of the relationship of Programme Information and Manufacturer’s Information use in the period 1995-1996. The cross-tabulation and cross-classification undertaken here seeks to identify the extent to which the use of these kinds of information is related generally and between the three sectors.

Assuming the rationale for the Programme that manufacturer’s information is perceived to be of poor quality and that the provision of information to prospective purchasers is one way of rectifying the general standard of information on energy efficiency technologies, it would be likely that those organisations which did not use manufacturer’s information would be more likely to use Programme information. This relationship would be identifiable through a chi-square test of association and in particular where phi – a coefficient of association – took a negative value. If however no relationship was present, the value of phi would be low. If the two forms of information were actually complementary – and that the use of one increased with the use of another – the value of the chi-square statistic would be high as would the value of phi, which would have a positive value.

371 Higher Education

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Manufacturer's info * 76 100.0% 0 .0% 76 100.0% Programme Awareness

Manufacturer's info * Programme Awareness Crosstabulation

Programme Awareness 0 1 Total Manufacturer's no Count 7 10 17 info Expected Count 4.3 12.8 17.0 % within 41.2% 58.8% 100.0% Manufacturer's info % within Programme 36.8% 17.5% 22.4% Awareness % of Total 9.2% 13.2% 22.4% yes Count 12 47 59 Expected Count 14.8 44.3 59.0 % within 20.3% 79.7% 100.0% Manufacturer's info % within Programme 63.2% 82.5% 77.6% Awareness % of Total 15.8% 61.8% 77.6% Total Count 19 57 76 Expected Count 19.0 57.0 76.0 % within 25.0% 75.0% 100.0% Manufacturer's info % within Programme 100.0% 100.0% 100.0% Awareness % of Total 25.0% 75.0% 100.0%

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 3.056b 1 .080 Continuity Correctiona 2.046 1 .153 Likelihood Ratio 2.842 1 .092 Fisher's Exact Test .112 .079 Linear-by-Linear 3.016 1 .082 Association N of Valid Cases 76 a. Computed only for a 2x2 table b. 1 cells (25.0%) have expected count less than 5. The minimum expected count is 4.25.

372 Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .000 .000 .c .c Nominal Manufacturer's info c c .000 .000 . . Dependent Programme Awareness c c .000 .000 . . Dependent Goodman and Manufacturer's info d .040 .050 .082 Kruskal tau Dependent Programme Awareness d .040 .050 .082 Dependent Uncertainty Coefficient Symmetric .034 .041 .822 .092e Manufacturer's info e .035 .043 .822 .092 Dependent Programme Awareness e .033 .040 .822 .092 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

Symmetric Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Phi .201 .080 Nominal Cramer's V .201 .080 Contingency Coefficient .197 .080 Interval by Interval Pearson's R .201 .125 1.761 .082c Ordinal by Ordinal Spearman Correlation .201 .125 1.761 .082c N of Valid Cases 76 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on normal approximation.

Hotel Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Manufacturer's info * 64 100.0% 0 .0% 64 100.0% Programme Information

373 Manufacturer's info * Programme Information Crosstabulation

Programme Information Not used Used Total Manufacturer's no Count 26 6 32 info Expected Count 24.0 8.0 32.0 % within 81.3% 18.8% 100.0% Manufacturer's info % within Programme 54.2% 37.5% 50.0% Information % of Total 40.6% 9.4% 50.0% yes Count 22 10 32 Expected Count 24.0 8.0 32.0 % within 68.8% 31.3% 100.0% Manufacturer's info % within Programme 45.8% 62.5% 50.0% Information % of Total 34.4% 15.6% 50.0% Total Count 48 16 64 Expected Count 48.0 16.0 64.0 % within 75.0% 25.0% 100.0% Manufacturer's info % within Programme 100.0% 100.0% 100.0% Information % of Total 75.0% 25.0% 100.0%

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 1.333b 1 .248 Continuity Correctiona .750 1 .386 Likelihood Ratio 1.344 1 .246 Fisher's Exact Test .387 .194 Linear-by-Linear 1.313 1 .252 Association N of Valid Cases 64 a. Computed only for a 2x2 table b. 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.00.

374 Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .083 .078 1.008 .313 Nominal Manufacturer's info .125 .117 1.008 .313 Dependent Programme Information c c .000 .000 . . Dependent Goodman and Manufacturer's info d .021 .035 .252 Kruskal tau Dependent Programme Information d .021 .035 .252 Dependent Uncertainty Coefficient Symmetric .017 .029 .585 .246e Manufacturer's info e .015 .026 .585 .246 Dependent Programme Information e .019 .032 .585 .246 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

Symmetric Measures

Asymp. Approx. Value Std. Errora Approx. Tb Sig. Nominal by Phi .144 .248 Nominal Cramer's V .144 .248 Contingency Coefficient .143 .248 Interval by Interval Pearson's R .144 .122 1.149 .255c Ordinal by Ordinal Spearman Correlation .144 .122 1.149 .255c N of Valid Cases 64 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on normal approximation.

Retail Sector

Case Processing Summary

Cases Valid Missing Total N Percent N Percent N Percent Manufacturer's info * 101 100.0% 0 .0% 101 100.0% Programme Information

375 Manufacturer's info * Programme Information Crosstabulation

Programme Information Not used Used Total Manufacturer's no Count 48 6 54 info Expected Count 44.9 9.1 54.0 % within 88.9% 11.1% 100.0% Manufacturer's info % within Programme 57.1% 35.3% 53.5% Information % of Total 47.5% 5.9% 53.5% yes Count 36 11 47 Expected Count 39.1 7.9 47.0 % within 76.6% 23.4% 100.0% Manufacturer's info % within Programme 42.9% 64.7% 46.5% Information % of Total 35.6% 10.9% 46.5% Total Count 84 17 101 Expected Count 84.0 17.0 101.0 % within 83.2% 16.8% 100.0% Manufacturer's info % within Programme 100.0% 100.0% 100.0% Information % of Total 83.2% 16.8% 100.0%

Chi-Square Tests

Asymp. Sig. Exact Sig. Exact Sig. Value df (2-sided) (2-sided) (1-sided) Pearson Chi-Square 2.713b 1 .100 Continuity Correctiona 1.906 1 .167 Likelihood Ratio 2.727 1 .099 Fisher's Exact Test .116 .084 Linear-by-Linear 2.686 1 .101 Association N of Valid Cases 101 a. Computed only for a 2x2 table b. 0 cells (.0%) have expected count less than 5. The minimum expected count is 7.91.

376 Directional Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Lambda Symmetric .078 .061 1.222 .222 Nominal Manufacturer's info .106 .083 1.222 .222 Dependent Programme Information c c .000 .000 . . Dependent Goodman and Manufacturer's info d .027 .031 .101 Kruskal tau Dependent Programme Information d .027 .032 .101 Dependent Uncertainty Coefficient Symmetric .024 .028 .835 .099e Manufacturer's info e .020 .023 .835 .099 Dependent Programme Information e .030 .035 .835 .099 Dependent a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Cannot be computed because the asymptotic standard error equals zero. d. Based on chi-square approximation e. Likelihood ratio chi-square probability.

Symmetric Measures

Asymp. Approx. a b Value Std. Error Approx. T Sig. Nominal by Phi .164 .100 Nominal Cramer's V .164 .100 Contingency Coefficient .162 .100 Interval by Interval Pearson's R .164 .097 1.653 .101c Ordinal by Ordinal Spearman Correlation .164 .097 1.653 .101c N of Valid Cases 101 a. Not assuming the null hypothesis. b. Using the asymptotic standard error assuming the null hypothesis. c. Based on normal approximation.

377 Statistical Appendix K – Crosstabulation Summary Tables

Description This statistical appendix contains two forms of table. The first are cross tabulation tables in which the association between energy efficiency behaviours of organisations in each of the three sectors are calculated. The cross tabulations are calculated for two years and are intended to be comparable. The second type of tables are summary tables which aggregate the values from the cross tabulations and show the percentage of organisations in each sector with particular characteristics.

The Tables

Cross Tabulation Tables

1994-1995 – Existing Buildings Table 1. Higher Education Sector Table 2. Hotel Sector Table 3. Retail Sector

1995-1996 – Existing Buildings Table 4. Higher Education Sector Table 5. Hotel Sector Table 6. Retail Sector

378

Summary Tables

The summary tables shown here abstract the measurements of association from the first set of tables to show the relatedness of certain different forms of energy efficiency behaviour between organisations. While Table 9. shows the presence of different activities within a sector for both periods, Tables 7. and 8. show the behaviours which are most strongly associated with the other energy efficiency behaviours. These key behaviours have been found to be the presence of an energy monitoring system and the conduct of an energy audit during the previous year.

All the tables are displayed on a landscape form.

Table 7. Sum of Association Strength – all tables and all sectors Table 8. Order Association Strength by Summing Φ Table 9. Summary of Distributions of Variables by Sector Table 10. Weighting for Scores within Sectors

379 Table 1. Higher Education Sector 1994-1995

Energy Manager Employed Formal Energy Policy Audit of Energy Use During Programme Material Used System for Monitoring Energy Year Present Formal Energy Cases = 71 Policy Pearson Χ2 = 1.724 p-value = 0.189 Continuity Correction = 0.288 Fisher’s Exact Test = 0.219 Φ (V) = 0.156 Position = Audit of Cases = 65 Cases = 65 Energy Use Pearson Χ2 = 2.412 Pearson Χ2 = 2.958 During Year p-value = 0.120 p-value = 0.085 Continuity Correction = 0.205 Continuity Correction = 0.149 Fisher’s Exact Test = 0.159 Fisher’s Exact Test = 0.103 Φ (V) = 0.193 Φ (V) = 0.213 Position = Position = Programme Cases = 72 Cases = 71 Cases = 65 Material Used Pearson Χ2 = 4.267 Pearson Χ2 = 0.373 Pearson Χ2 = 0.680 p-value = 0.039 p-value = 0.541 p-value = 0.410 Continuity Correction = 0.071 Continuity Correction = 0.722 Continuity Correction = 0.592 Fisher’s Exact Test = 0.069 Fisher’s Exact Test = 0.614 Fisher’s Exact Test = 0.566 Φ (V) = 0.243 Φ (V) = 0.073 Φ (V) = 0.102 Position = 4 Position = Position = System for Cases = 70 Cases = 69 Cases = 63 Cases = 70 Monitoring Pearson Χ2 = 2.572 Pearson Χ2 = 5.324 Pearson Χ2 = 9.662 Pearson Χ2 = 0.042 Energy Present p-value = 0.109 p-value = 0.021 p-value = 0.002 p-value = 0.837 Continuity Correction = 0.176 Continuity Correction = 0.040 Continuity Correction = 0.005 Continuity Correction = 1.000 Fisher’s Exact Test = 0.136 Fisher’s Exact Test = 0.025 Fisher’s Exact Test = 0.002 Fisher’s Exact Test = 1.000 Φ (V) = 0.192 Φ (V) = 0.278 Φ (V) = 0.392 Φ (V) = 0.025 Position = Position = 3 Position = 2 Position = Signatory to Cases = 66 Cases = 65 Cases = 60 Cases = 66 Cases = 64 Making a Pearson Χ2 = 2.246 Pearson Χ2 = 2.737 Pearson Χ2 = 12.163 Pearson Χ2 = 3.494 Pearson Χ2 = 1.583 Corporate p-value = 0.134 p-value = 0.098 p-value = 0.000 p-value = 0.062 p-value = 0.208 Commitment Continuity Correction = 0.233 Continuity Correction = 0.175 Continuity Correction = 0.002 Continuity Correction = 0.119 Continuity Correction = 0.338 Fisher’s Exact Test = 0.222 Fisher’s Exact Test = 0.137 Fisher’s Exact Test = 0.001 Fisher’s Exact Test = 0.071 Fisher’s Exact Test = 0.245 Φ (V) = 0.184 Φ (V) = 0.205 Φ (V) = 0.450 Φ (V) = 0.230 Φ (V) = 0.157 Position = Position = Position = 1 Position = Position =

380 Table 2. Hotel Sector 1994-1995

Energy Manager Employed Formal Energy Policy Audit of Energy Use During Year Programme Material Used System for Monitoring Energy Present Formal Energy Cases = 54 Policy Pearson Χ2 = 12.658 p-value = 0.000 Continuity Correction = 0.001 Fisher’s Exact Test = 0.001 Φ (V) = 0.484 Position = 4 Audit of Energy Cases = 47 Cases = 45 Use During Year Pearson Χ2 = 5.810 Pearson Χ2 = 10.417 p-value = 0.016 p-value = 0.001 Continuity Correction = 0.037 Continuity Correction = 0.004 Fisher’s Exact Test = 0.024 Fisher’s Exact Test = 0.003 Φ (V) = 0.352 Φ (V) = 0.481 Position = 7 Position = 5 Programme Cases = 56 Cases = 52 Cases = 47 Material Used Pearson Χ2 = 1.591 Pearson Χ2 = 1.248 Pearson Χ2 = 4.611 p-value = 0.207 p-value = 0.264 p-value = 0.032 Continuity Correction = 0.368 Continuity Correction = 0.445 Continuity Correction = 0.078 Fisher’s Exact Test = 0.290 Fisher’s Exact Test = 0.307 Fisher’s Exact Test = 0.054 Φ (V) = 0.169 Φ (V) = 0.155 Φ (V) = 0.313 Position = Position = Position = System for Cases = 55 Cases = 53 Cases = 45 Cases = 54 Monitoring Energy Pearson Χ2 = 25.509 Pearson Χ2 = 17.362 Pearson Χ2 = 12.414 Pearson Χ2 = 3.007 Present p-value = 0.000 p-value = 0.000 p-value = 0.000 p-value = 0.083 Continuity Correction = 0.000 Continuity Correction = 0.000 Continuity Correction = 0.001 Continuity Correction = 0.173 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.138 Φ (V) = 0.681 Φ (V) = 0.572 Φ (V) = 0.525 Φ (V) = 0.236 Position = 1 Position = 2 Position = 3 Position = Signatory to Cases = 46 Cases = 44 Cases = 40 Cases = 46 Cases = 44 Making a Corporate Pearson Χ2 = 0.104 Pearson Χ2 = 3.062 Pearson Χ2 = 4.372 Pearson Χ2 = 7.527 Pearson Χ2 = 1.197 Commitment p-value = 0.747 p-value = 0.082 p-value = 0.037 p-value = 0.006 p-value = 0.274 Continuity Correction = 1.000 Continuity Correction = 0.316 Continuity Correction = 0.188 Continuity Correction = 0.062 Continuity Correction = 0.732 Fisher’s Exact Test = 1.000 Fisher’s Exact Test = 0.162 Fisher’s Exact Test = 0.100 Fisher’s Exact Test = 0.043 Fisher’s Exact Test = 0.562 Φ (V) = 0.047 Φ (V) = 0.262 Φ (V) = 0.331 Φ (V) = 0.405 Φ (V) = 0.165 Position = Position = Position = Position = 6 Position =

381 Table 3. Retail Sector 1994-1995

Energy Manager Employed Formal Energy Policy Audit of Energy Use During Programme Material Used System for Monitoring Energy Year Present Formal Energy Policy Cases = 56 Pearson Χ2 = 6.734 p-value = 0.009 Continuity Correction = 0.021 Fisher’s Exact Test = 0.012 Φ (V) = 0.347 Position = 6 Audit of Energy Use Cases = 54 Cases = 54 During Year Pearson Χ2 = 4.125 Pearson Χ2 = 5.854 p-value = 0.042 p-value = 0.016 Continuity Correction = 0.094 Continuity Correction = 0.038 Fisher’s Exact Test = 0.074 Fisher’s Exact Test = 0.036 Φ (V) = 0.276 Φ (V) = 0.329 Position = Position = 7 Programme Material Used Cases = 57 Cases = 56 Cases = 54 Pearson Χ2 = 5.362 Pearson Χ2 = 0.595 Pearson Χ2 = 10.712 p-value = 0.021 p-value = 0.440 p-value = 0.001 Continuity Correction = 0.042 Continuity Correction = 0.623 Continuity Correction = 0.003 Fisher’s Exact Test = 0.026 Fisher’s Exact Test = 0.576 Fisher’s Exact Test = 0.002 Φ (V) = 0.307 Φ (V) = 0.103 Φ (V) = 0.445 Position = 10 Position = Position = 3 System for Monitoring Cases = 56 Cases = 56 Cases = 54 Cases = 56 Energy Present Pearson Χ2 = 5.901 Pearson Χ2 = 13.531 Pearson Χ2 = 16.024 Pearson Χ2 = 13.352 p-value = 0.015 p-value = 0.000 p-value = 0.000 p-value = 0.000 Continuity Correction = 0.031 Continuity Correction = 0.000 Continuity Correction = 0.000 Continuity Correction = 0.001 Fisher’s Exact Test = 0.026 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.000 Φ (V) = 0.325 Φ (V) = 0.492 Φ (V) = 0.545 Φ (V) = 0.391 Position = 8 Position = 2 Position = 1 Position = 4 Signatory to Making a Cases = 51 Cases = 50 Cases = 48 Cases = 51 Cases = 50 Corporate Commitment Pearson Χ2 = 1.025 Pearson Χ2 = 4.861 Pearson Χ2 = 6.154 Pearson Χ2 = 2.587 Pearson Χ2 = 3.714 p-value = 0.311 p-value = 0.027 p-value = 0.013 p-value = 0.108 p-value = 0.054 Continuity Correction = 0.534 Continuity Correction = 0.070 Continuity Correction = 0.047 Continuity Correction = 0.226 Continuity Correction = 0.124 Fisher’s Exact Test = 0.445 Fisher’s Exact Test = 0.047 Fisher’s Exact Test = 0.031 Fisher’s Exact Test = 0.131 Fisher’s Exact Test = 0.116 Φ (V) = 0.142 Φ (V) = 0.312 Φ (V) = 0.358 Φ (V) = 0.225 Φ (V) = 0.273 Position = Position = 9 Position = 5 Position = Position =

382 Table 4. Higher Education Sector 1995-1996

Energy Manager Employed Formal Energy Policy Audit of Energy Use During Programme Material Used System for Monitoring Energy Year Present Formal Energy Cases = 74 Policy Pearson Χ2 = 0.735 p-value = 0.386 Continuity Correction = 0.322 Fisher’s Exact Test = 0.561 Φ (V) = 0.101 Position = Audit of Energy Cases = 74 Cases = 72 Use During Year Pearson Χ2 = 2.202 Pearson Χ2 = 6.429 p-value = 0.138 p-value = 0.011 Continuity Correction = 0.235 Continuity Correction = 0.022 Fisher’s Exact Test = 0.237 Fisher’s Exact Test = 0.021 Φ (V) = 0.172 Φ (V) = 0.299 Position = Position = 4 Programme Cases = 76 Cases = 74 Cases = 74 Material Used Pearson Χ2 = 13.361 Pearson Χ2 = 0.184 Pearson Χ2 = 4.934 p-value = 0.000 p-value = 0.668 p-value = 0.026 Continuity Correction = 0.001 Continuity Correction = 0.787 Continuity Correction = 0.041 Fisher’s Exact Test = 0.001 Fisher’s Exact Test = 0.787 Fisher’s Exact Test = 0.041 Φ (V) = 0.419 Φ (V) = 0.05 Φ (V) = 0.258 Position = 1 Position = Position = 5 System for Cases = 74 Cases = 73 Cases = 72 Cases = 74 Monitoring Pearson Χ2 = 10.371 Pearson Χ2 = 3.202 Pearson Χ2 = 2.215 Pearson Χ2 = 3.658 Energy Present p-value = 0.001 p-value = 0.074 p-value = 0.137 p-value = 0.056 Continuity Correction = 0.004 Continuity Correction = 0.128 Continuity Correction = 0.227 Continuity Correction = 0.108 Fisher’s Exact Test = 0.003 Fisher’s Exact Test = 0.107 Fisher’s Exact Test = 0.170 Fisher’s Exact Test = 0.071 Φ (V) = 0.374 Φ (V) = 0.209 Φ (V) = 0.175 Φ (V) = 0.222 Position = 2 Position = Position = Position = Signatory to Cases = 55 Cases = 54 Cases = 55 Cases = 55 Cases = 54 Making a Pearson Χ2 = 1.321 Pearson Χ2 = 5.735 Pearson Χ2 = 0.822 Pearson Χ2 = 1.132 Pearson Χ2 = 0.251 Corporate p-value = 0.250 p-value = 0.017 p-value = 0.365 p-value = 0.250 p-value = 0.617 Commitment Continuity Correction = 0.481 Continuity Correction = 0.034 Continuity Correction = 0.533 Continuity Correction = 0.225 Continuity Correction = 0.878 Fisher’s Exact Test = 0.390 Fisher’s Exact Test = 0.025 Fisher’s Exact Test = 0.407 Fisher’s Exact Test = 0.390 Fisher’s Exact Test = 0.733 Φ (V) = 0.155 Φ (V) = 0.326 Φ (V) = 0.122 Φ (V) = 0.155 Φ (V) = 0.068 Position = Position = 3 Position = Position = Position =

383 Table 5. Hotel Sector 1995-1996

Energy Manager Employed Formal Energy Policy Audit of Energy Use During Programme Material Used System for Monitoring Energy Year Present Formal Energy Policy Cases = 59 Pearson Χ2 = 3.156 p-value = 0.076 Continuity Correction = 0.0134 Fisher’s Exact Test = 0.098 Φ (V) = 0.231 Position = Audit of Energy Use Cases = 58 Cases = 56 During Year Pearson Χ2 = 4.668 Pearson Χ2 = 4.918 p-value = 0.031 p-value = 0.027 Continuity Correction = 0.066 Continuity Correction = 0.059 Fisher’s Exact Test = 0.053 Fisher’s Exact Test = 0.046 Φ (V) = 0.284 Φ (V) = 0.296 Position = 8 Position = 7 Programme Material Used Cases = 61 Cases = 59 Cases = 59 Pearson Χ2 = 0.595 Pearson Χ2 = 1.988 Pearson Χ2 = 2.000 p-value = 0.440 p-value = 0.159 p-value = 0.157 Continuity Correction = 0.636 Continuity Correction = 0.270 Continuity Correction = 0.296 Fisher’s Exact Test = 0.557 Fisher’s Exact Test = 0.233 Fisher’s Exact Test = 0.266 Φ (V) = 0.099 Φ (V) = 0.184 Φ (V) = 0.184 Position = Position = Position = System for Monitoring Cases = 59 Cases = 58 Cases = 56 Cases = 60 Energy Present Pearson Χ2 = 10.505 Pearson Χ2 = 5.129 Pearson Χ2 = 8.485 Pearson Χ2 = 7.927 p-value = 0.001 p-value = 0.024 p-value = 0.004 p-value = 0.005 Continuity Correction = 0.003 Continuity Correction = 0.048 Continuity Correction = 0.01 Continuity Correction = 0.012 Fisher’s Exact Test = 0.002 Fisher’s Exact Test = 0.040 Fisher’s Exact Test = 0.005 Fisher’s Exact Test = 0.005 Φ (V) = 0.442 Φ (V) = 0.297 Φ (V) = 0.389 Φ (V) = 0.363 Position = 2 Position = 6 Position = 4 Position = 5 Signatory to Making a Cases = 55 Cases = 53 Cases = 54 Cases = 58 Cases = 54 Corporate Commitment Pearson Χ2 = 3.667 Pearson Χ2 = 9.109 Pearson Χ2 = 1.009 Pearson Χ2 = 11.130 Pearson Χ2 = 2.991 p-value = 0.056 p-value = 0.003 p-value = 0.315 p-value = 0.001 p-value = 0.084 Continuity Correction = 0.151 Continuity Correction = 0.011 Continuity Correction = 0.661 Continuity Correction = 0.004 Continuity Correction = 0.216 Fisher’s Exact Test = 0.076 Fisher’s Exact Test = 0.005 Fisher’s Exact Test = 0.306 Fisher’s Exact Test = 0.005 Fisher’s Exact Test = 0.149 Φ (V) = 0.258 Φ (V) = 0.415 Φ (V) = 0.137 Φ (V) = 0.450 Φ (V) = 0.235 Position = Position = 3 Position = Position = 1 Position =

384 Table 6. Retail Sector 1995-1996

Energy Manager Employed Formal Energy Policy Audit of Energy Use During Year Programme Material Used System for Monitoring Energy Present Formal Energy Cases = 98 Policy Pearson Χ2 = 23.956 p-value = 0.000 Continuity Correction = 0.000 Fisher’s Exact Test = 0.000 Φ (V) = 0.494 Position = 3 Audit of Cases = 98 Cases = 96 Energy Use Pearson Χ2 = 11.440 Pearson Χ2 = 20.273 During Year p-value = 0.001 p-value = 0.000 Continuity Correction = 0.002 Continuity Correction = 0.000 Fisher’s Exact Test = 0.001 Fisher’s Exact Test = 0.000 Φ (V) = 0.342 Φ (V) = 0.460 Position = 11 Position = 5 Programme Cases = 100 Cases = 98 Cases = 98 Material Used Pearson Χ2 = 15.946 Pearson Χ2 = 14.313 Pearson Χ2 = 18.041 p-value = 0.000 p-value = 0.000 p-value = 0.000 Continuity Correction = 0.000 Continuity Correction = 0.001 Continuity Correction = 0.000 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.001 Fisher’s Exact Test = 0.000 Φ (V) = 0.399 Φ (V) = 0.382 Φ (V) = 0.429 Position = 8 Position = 9 Position = 7 System for Cases = 98 Cases = 96 Cases = 96 Cases = 98 Monitoring Pearson Χ2 = 35.818 Pearson Χ2 = 22.102 Pearson Χ2 = 18.538 Pearson Χ2 = 8.140 Energy Present p-value = 0.000 p-value = 0.000 p-value = 0.000 p-value = 0.004 Continuity Correction = 0.000 Continuity Correction = 0.000 Continuity Correction = 0.000 Continuity Correction = 0.005 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.006 Φ (V) = 0.605 Φ (V) = 0.480 Φ (V) = 0.439 Φ (V) = 0.288 Position = 2 Position = 4 Position = 6 Position = 12 Signatory to Cases = 100 Cases = 98 Cases = 90 Cases = 101 Cases = 98 Making a Pearson Χ2 = 7.111 Pearson Χ2 = 13.474 Pearson Χ2 = 6.014 Pearson Χ2 = 42.446 Pearson Χ2 = 4.240 Corporate p-value = 0.008 p-value = 0.000 p-value = 0.014 p-value = 0.000 p-value = 0.039 Commitment Continuity Correction = 0.020 Continuity Correction = 0.001 Continuity Correction = 0.048 Continuity Correction = 0.000 Continuity Correction = 0.086 Fisher’s Exact Test = 0.016 Fisher’s Exact Test = 0.001 Fisher’s Exact Test = 0.034 Fisher’s Exact Test = 0.000 Fisher’s Exact Test = 0.084 Φ (V) = 0.267 Φ (V) = 0.370 Φ (V) = 0.248 Φ (V) = 0.648 Φ (V) = 0.208 Position = 13 Position = 10 Position = 14 Position = 1 Position = 15

385 Table 7. Sum of Association Strength – all tables and all sectors

Energy Manager Employed Formal Energy Policy Audit of Energy Use During Year Programme Material Used System for Monitoring Energy Present Formal Energy .484+ Policy .347+ .494

= 1.325 Audit of .342+ .481+ Energy Use .284+ .299+ During Year .352 .296+ .460

= 0.978 = 1.536 Programme .243+ .382 .313+ Material Used .307+ .572 .445+ .419+ .258+ .399 .429

= 1.368 =.954 = 1.445 System for .605+ .480+ .439+ .288+ Monitoring .442+ .297+ .389+ .363+ Energy Present .374+ .492+ .545+ .391 .325+ .572+ .525+ .681 .278 .392

= 2.427 = 2.119 = 2.290 = 1.042 Signatory to No values .312 + .450+ .405+ No values Making a .326+ .358 .230 Corporate .833 Commitment = 0.267 = 1.471 = .808 = .635 = 0

386 Table 8. Order Association Strength by Summing Φ

The following table takes the values from the previous table, Table 7 of the strengths of the associations between variables and calculates those variables which have the strongest associations with each of the five other variables. The total give at the foot of each column is the sum of the values of Φ for each association in which the variable takes part.

Energy Manager Formal Energy Audit of Energy Use Programme System for Monitoring Signatory to Making a Employed Policy During Year Material Used Energy Present Corporate Commitment 1.325 1.325 0.978 1.368 2.427 0.267 0.978 1.536 1.536 0.382 1.639 1.053 1.368 0.382 1.132 1.132 2.77 1.426 2.427 1.639 2.77 1.042 1.042 1.503 0.267 1.053 1.426 1.503 0.208 0.208

6.365 5.935 7.842 5.427 8.086 4.457

Total value of all phi values = 38.112

387

Table 9. Summary of Distributions of Variables by Sector

Higher Education Hotel Sector Retail Sector Higher Education Hotel Sector Retail Sector Sector 94-95 94-95 Sector 95-96 95-96 94-95 95-96 No Yes % Yes No Yes % Yes No Yes % Yes No Yes % Yes No Yes % Yes No Yes % Yes Energy 26 45 63 21 33 64 21 35 62 15 59 79 23 36 61 48 50 51 Manager Employed Formal 42 29 40 30 24 44 33 23 41 42 32 43 38 21 36 75 23 29 Energy Policy Audit of 46 19 29 36 15 29 43 11 20 20 54 73 45 13 22 80 14 15 Energy Use During Year Programme 24 48 67 46 10 18 36 21 37 18 56 75 45 16 26 83 17 17 Material Used System for 28 42 60 18 37 67 31 25 45 50 24 32 21 38 64 59 39 40 Monitoring Energy Present Signatory to 51 15 23 44 2 4 43 8 16 33 21 39 53 5 9 91 10 10 Making A Corporate Commitment

388 Table 10. Weighting for Scores Within Sectors Measured by Phi

He 94-95 Ho 94-95 Re 94-95 He 95-96 Ho 95-96 Re 95-96 Totals Energy Manager .243 1.517 .979 .793 .726 2.107 6.365 Employed Formal Energy .278 1.537 1.151 .625 1.008 2.186 6.785 Policy Audit of Energy .842 1.358 1.348 .557 .969 1.918 6.992 Use During Year Programme Material .243 .405 1.143 .677 .813 2.146 5.427 Used System for .67 1.778 1.753 .374 1.491 2.020 8.086 Monitoring Energy Present Signatory to Making .45 .405 .670 .326 .865 1.741 4.457 A Corporate Commitment Total 2.726 7 7.044 3.352 5.872 12.118 38.112

Total Weightings of all values of phi = 38.112

389

Questionnaire Appendix A – Interview Framework for Sectoral and Non-Sectoral Interviews

Description This appendix includes the framework for questions asked during the Second and Third Stages of the research which focuses on the impacts of the Programme within the organisationand the persistence of those impacts. This framework is used both for sector members and for non-sector organisations which affected the energy saving performance of the organisation. These non-sector organisations include consultants, technology suppliers, and providers of rival and complementary programmes. The questions put to sector organisations – universities, hotel chains and retail chains – are listed first. Questions for non- sector organisations are placed second. Framework questions focussing on the persistence of impacts are underlined.

Where the amount of time for interview was not significantly constrained, sector organisations were asked to comment on the sector as a whole, in addition to their own specific organisational practices.

Energy Management Structure For sector organisations Does your organisation pursue the goal of energy efficiency? How does it do this in terms of its management systems? What has affected your organisation’s management systems which has either improved or worsened its capability to pursue energy efficiency? What role has the EEBPp played in this? What have been the other influences? Have the changes made as a result of the EEBPp endured – been permanent? If they have not been permanent, why was this?

391 For non-sector organisations How have you affected the management structure of organisations to improve their energy efficiency? Have the changes made as a result of the EEBPp endured – been permanent? If they have not been permanent, why was this?

Energy Knowledge and Understanding For sector organisations What knowledge and understanding do you have about how your organisation uses energy? On what does this knowledge and understanding depend? What role has the EEBPp played in this? What have been the other influences? Have the changes made as a result of the EEBPp endured – been permanent? If they have not been permanent, why was this?

For non-sector organisations How has your organisation contributed to the development of energy knowledge and understanding in organisations? What role has the EEBPp played in this process? Have the changes made as a result of the EEBPp endured – been permanent? If they have not been permanent, why was this?

Identifying Technologies and Techniques For sector organisations What helps you identify suitable energy efficiency technologies and energy efficiency techniques for your organisation? What role is played by the EEBPp in this – by other Programmes, by manufacturers – suppliers etc. ?

392 Have the changes made as a result of the EEBPp endured – been permanent? If they have not been permanent, why was this?

For non-sector organisations How have you helped organisations identify energy efficiency technologies and techniques? What role has the EEBPp played in this process? Have the changes made as a result of the EEBPp endured – been permanent? If they have not been permanent, why was this?

Installing and Configuring Technologies For sector organisations What helps you install and configure energy efficiency technologies and techniques? What role is played by the EEBPp – by other Programmes, by manufacturers – suppliers etc. ? Have the changes made as a result of the EEBPp endured – been permanent? If they have not been permanent, why was this?

For non-sector organisations How have you helped organisations install and configure (set up) energy efficiency technologies and techniques? What role has the EEBPp played in this process? Have the changes made as a result of the EEBPp endured – been permanent? If they have not been permanent, why was this?

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