More than £375 million in cost savings can be made each year if the public sector upgrades its infrastructure to more green technology, a Centrica Business Solutions report has found.
The ‘Powering Britain’s Public Sector’ report published today (16 September) found the savings equate to more than £5.6 billion over a typical 15-year energy contract.
According to the report the UK’s public sector employs over five million people which is equal to one in six UK workers. Current spending within the sector is around a third of the UK’s GDP and it accounts for around 3 per cent of the country’s emissions.
Healthcare, universities and defence represent approximately 55 per cent of public sector energy use. The report found that if half the organisations in these areas updated their energy infrastructure, they would reduce emissions by 8 per cent, saving 660,000 tonnes of carbon annually.
The carbon reduction savings could be doubled with the injection of around 20 per cent green gas into the fuel mix, the report added.
All sectors must contribute to the UK’s target of attaining net zero emissions by 2050, following the introduction of legislation earlier this year.
Energy is estimated to cost the public sector £3.4 billion and as a result, the company is calling on the government to:
- Set a public sector emissions reduction target for 2030 in legislation
- Create energy specific capital spending allowances
- Extend funding to the Modern Energy Partners project to enable installation of energy technology at over 1,000 high energy demand sites in the public sector by 2030
- Ensure a stable and long-term regulatory environment and commit to leading on the delivery of flexibility markets by 2023
Iain Conn, Centrica group chief executive, said: “Government bodies have two very clear challenges, to operate more cost effectively and more sustainably. New energy technologies, adopted aggressively, have the potential to unlock both.
“Over the last four years, Centrica has been building the capabilities in energy services and solutions to satisfy the changing needs of our customers, and to enable their transition to a lower carbon future. This report sets out how we can help our customers in these critical sectors of the UK economy.”
Richard Hookway, chief executive of Centrica Business, said: “The government has announced £1.8 billion of extra capital funding for the NHS. Investing a fraction of this in distributed energy technology would not only improve the resilience of trusts but would create long term savings that could be redirected towards new nurses, new infrastructure and protecting vital front-line services.
“What’s needed now is for government and public sector leaders to work together on making this opportunity a reality.
“Centrica has committed to helping the public sector deliver £300m in energy efficiency savings by 2030 as part of our responsible business ambitions, so we are ready to support.”