United Kingdom

Effective energy financing solutions 

Buildings have a key role to play in energy and climate policies. Globally, they account for 30 to 40 percent of total final energy demand and over 30 percent of all energy-related CO2 emissions. China, Europe, India and the United States, together, represented more than 60 percent of global final building energy use in 2005. China and India especially are growing rapidly.  

Most building energy performance improvements are modest – usually between 10 and 20 per cent for specific energy efficiency interventions. Until recently, those improvements have been considered sufficient.


It is now widely accepted that the building sector needs to limit annual global CO2 emissions to 25 percent below business-as-usual projections by 2020 and 50 percent below by 2030.


Transformational policies for both new and existing buildings will be needed at a scale we’ve not seen before. This will require widespread adoption of technologies for new buildings and deeper energy efficient retrofitting for existing buildings. Most importantly – this will need financing.


(Source: Buildings for our Future – The Deep Path for Closing the Emissions Gap in the Building Sector PDF 4.58MB)


The need for financing


A huge challenge companies face is how to fund investment in new technologies for energy efficiency alongside competing priorities for capital from the core business. Schemes often fall short of the internal payback criteria.


As a result, initiatives are often delayed, affecting how businesses deliver sustainable imperatives. This applies to energy and waste targets, where organisations face the dilemma of core business versus sustainability.


Businesses must now use internal funding for traditional and innovative investments. For example, services are created which are designed to guarantee less energy consumption or minimum power, steam or heat usage through power purchase agreements for generating waste energy.


We aim to help organisations achieve their commercial and environmental objectives.


Clients use our services to:


  • Identify how to remove energy financing obstacles
  • Introduce energy and carbon reduction measures quickly
  • Structure grants, incentives and accounting treatment to create service-based solutions
  • Find the right service partner to guarantee the savings and power generation they need to meet targets


Case Study: Energy efficiency in the healthcare system

A growing number of healthcare facilities are exploring innovative ways to develop their long-term cost structure through aligning hospitals with the environment. For example, retrofitting helps hospitals significantly reduce their carbon footprint.


At a major UK hospital, implementing a Combined Heat and Power (CHP) plant and three new boilers – plus other small adjustments – created annual energy savings of £1.8 million. The project provided a return on the investment after just seven years and allowed the site to increase its energy security and meet sustainability targets.


A South American energy holding company developed an initiative in 2002 to reduce the energy costs and carbon footprint of more than 100 hospitals. This included simple energy-saving measures such as energy-efficient lighting and modern circuitry which reduced energy use by 25 percent.


Other health care facilities want to realign non-clinical costs by improving overall efficiency and enhancing sustainability.


(Source: Care in a changing world: Challenges and opportunities for sustainable healthcare)


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Karen Wordsworth


KPMG in the UK

020 7650 5404