New Procurement Mindset Emerges as an Inner-city Neighbourhood Gets Energy Efficiency Makeover

A UK council housing estate with a high density of fuel poverty has benefited from an energy makeover which bundles technology, aesthetics and a novel approach to public procurement.

Nottingham's Sneinton district looked like many others throughout the UK: houses designed and built in the 1960s, still looking much the same today as when they were built, albeit older and shabbier. The residents struggled with hefty fuel bills due to badly insulated façades and roofs. Over the last fifty years, loose fittings would be patched up and roofing panels replaced – piecemeal improvements, but never a comprehensive makeover. More needed to be done than provide external wall insulation if the city council was to aim for near-zero emissions standards for this ageing housing stock.

Pioneering Pilot Scheme

The landlord, Nottingham City Homes (NCH), therefore decided to launch a pilot scheme to see how houses could be retrofitted to meet 2050 zero-carbon standards in a way that would be affordable for NCH and tenants alike. These standards are part of the UK's Climate Change Act aimed at reducing carbon emissions by 80% by the year 2050 compared to 1990 levels.

The scheme's aim was to drastically improve the homes' energy performance as well as enhancing the look and feel of the neighbourhood. This pilot scheme was undertaken as part of an EU-funded project – REMOURBAN – which has been trialling interventions in the housing and transport sectors on a European level.

Today, the retrofitting has been completed and tenants are now feeling the benefits. They now have a flat-rate cost for energy. The homes not only look smarter, they are smarter.

The pilot scheme revamped ten homes in Sneinton. The retrofitting involved a comprehensive makeover with new outside walls and windows, a solar roof and a smart heating system. The technology installed allows tenants to use energy in the most cost-effective way and draws on on-site energy sources. The interventions featured enhanced external lighting, skylights and wider windows to improve overall comfort and foster a greater sense of community. It took just two weeks to complete the upgrades, thus causing minimal inconvenience to tenants.

The scheme draws on the recent Energiesprong model which brings existing housing stock up to 2050 energy standards. Originally from the Netherlands, it was the first time this model has been used in the UK. Now it is set to be rolled out in other districts in Nottingham and in other towns such as Derby.

Procurement Game Changer

The model uses an innovative, whole-life approach to finance; the cost of the works is designed to be equal to the expected savings in maintenance and energy over a 30-year period. It is outcome-based, offering guarantees for both landlord and tenant. And for the Sneinton pilot, this meant a shift in mindset by all those involved.

Generally, when a local council issues a tender, it is seeking the lowest upfront cost. According to Emily Braham, Head of Sustainable Energy at Nottingham City Homes, this can reward lower quality and puts the contractor against the client – council – right from the start. Specifications are set from the start and bidders try to match them by competing on cost. With the Sneinton retrofit scheme, things were turned on their head; both council and contractor found themselves embarking on a steep learning curve where contractual specifications came at the end of the iterative dialogue process rather than at the beginning.

This was indeed unusual in that NCC had to tender for an outcome-based retrofit that was yet to be designed. Furthermore, they didn't exactly know what they were asking for; they only really knew the outcome which was the 2050 energy standards. The big unknown was: What performance could actually be achieved and achieved cost effectively? As Emily Braham explains: "It was painstaking work putting together a tender when we didn't have a benchmark to guide us. And at the beginning, we wondered how we would actually be able to evaluate the incoming bids. We and the bidders all found ourselves in unchartered waters."

Benefits

Despite a radically new approach, the procurement process – known as a dialogue process – offers a number of advantages for the long term. Pre-selected bidders enter a dialogue with the client before specifications are drawn up. Unlike the traditional process, this new approach focuses first on the outcome required and only then on the solutions.

This gives a lot more scope to contractors who have greater possibility to come up with fuller and better adapted solutions. More innovation emerges and upfront thinking and discussion takes place as bidders aren't shackled to a set of specifications imposed by the client.

In Sneinton, the whole process became a partnered approach and both parties had to embrace a new way of working together. Nottingham Council and contractor aimed for two groups of outcome: aesthetics and energy efficiency to 2050 standards. Tenants didn't sit on the sidelines as the process included extensive consultation, bringing them and the wider local community in at key stages so that their aspirations could be taken into account.

Replication

The REMOURBAN project offered Nottingham City Council and NCH the chance to test the technology and the model for future roll-out in other areas. Besides Nottingham, the international consortium includes the cities of Valladolid (Spain) and Tepebasi (Turkey). Known as "Lighthouse Cities", they are delivering and sharing a raft of smart city solutions with a view to replicating them in other "Follower Cities" across Europe.

"The EU-funded REMOURBAN project was critical as it enabled this model to be tested in the UK, and Nottingham City Homes have taken a really innovation approach but they wouldn't have been able to do this without vital funds for demonstrations projects," says Emily Braham.

Building on the achievement in Sneinton, Nottingham City Council have now successfully secured over £5 million from the European Regional Development Fund to extend the Energiesprong pilot to over 150 NCH properties. Other towns and cities in the UK are set to replicate the Sneinton experience.

By Mark Thompson

Further information on www.remourban.eu