By Jane Garcia

Knox City Council in Victoria aims to employ a revolving energy fund as part of a strategy to reduce its greenhouse gas emissions by 30 per cent by 2010. To achieve this vision, the council must reduce emissions from its buildings, fleet, streetlights and waste disposal by a little more than 4000 tonnes each year.

“The premise of the revolving energy fund is that all savings in energy costs (gas or electricity) from the implementation of energy reduction works is reinvested in future years for further works to minimise energy consumption,” Knox mayor Jim Penna said in a statement.
“Establishing a revolving energy fund gives Council an opportunity to accelerate energy minimisation projects across Council’s buildings and achieve significant financial savings.”

Hornsby Shire Council in NSW successfully used a revolving energy fund and energy performance contracting to deliver greenhouse gas abatement.

Initially, the council had used funds in a revolving energy fund to kick start energy initiatives, including a cogeneration project at its library (see Generating interest in energy savings).

In 2002, Hornsby decided to go along the path of an Energy Performance Contract (EPC) that guarantees energy savings. An EPC allows organisations to implement equipment or replace or upgrade facilities to more energy efficient options. The monetary savings these measures will produce over the life of the contract are guaranteed by the contractor.

Hornsby was the first Australian council to implement an EPC across a suite of buildings. It also included elements of water conservation in its contract, which ended up covering 250 sites, including parks and buildings.

 “We’re getting cost savings of $136,000 per annum (both energy and water savings), greenhouse savings of 307 tonnes of carbon dioxide per annum, water savings of 27957 kL per annum and energy savings of 4,572,555 megajoules per annum,” Environmental Health and Protection team manager, Adam Davis,  told www.governmentnews.com.au
“We primarily implemented this to get our energy and water bills down but at the same time cutting down our greenhouse gas emissions because we had a target of 20 per cent abatement by 2010.
“This project went a long way in achieving that target. As of last year, we achieved 23 per cent reduction – five years ahead of schedule – so we’ve re-set our target to 30 per cent reduction.”

He says the council has tracked the success of the project by setting up a system to measure and verify energy and water savings, and reflect them in its budget each financial year.

His advice for organisations looking to effectively implement revolving energy funds and/or energy performance contracting is, “For energy performance contracts, I recommend they implement it across all their major sites rather than just picking an isolated building because then you can capitalise on the savings.
“It also has other benefits. Say for example for solar installations, they have a 20 to 30 year payback but if you couple that with a few other projects for improving your lighting or water conservation works then we got the payback down to around the seven year period.
“With the revolving energy fund, the recommendation there would be to make sure if you’re if you’re paying for expenditure out of an account then make sure the savings come back into the same responsibility area within council so you can track the money being revolved through the fund and measurement verification processes are in place to make sure you actually achieve the savings.”