Source: The Energyst
Energy managers must build better business cases if they are to succeed in getting energy efficiency projects signed off by their boards, according to the Green Investment Bank. Meanwhile, firms that cherry pick only short term payback solutions risk pricing themselves out of more substantial savings.
A recent survey by The Energyst found that finance was one of the biggest barriers to energy efficiency. Readers also suggested that board directors had other priorities than energy.
But Miles Alexander, director of energy efficiency at the Green Investment Bank, disagrees that projects are failing for lack of finance. He believes they fail because the business case for energy efficiency is not being presented sufficiently strongly. He also thinks board-level apathy is not the issue.
“Finance isn’t a barrier because there is plenty of capital out there, both within companies and externally,” says Alexander.
“Often people say they can’t get financing. But actually they can’t get financing because they haven’t necessarily put forward the right business case. For example, one that can compete internally against a plant manager in China who is putting in a request to central office for £10m to build out a new plant. Unless those projects are packaged up into – not just megawatt hours or tonnes of carbon dioxide saved – but in financial terms to a CFO, then that project is going to lose out to the plant. People are going to say, ‘that plant is core business’.”