Southwark has recently launched the Green Buildings Fund, which uses Section 106 carbon offset payments from developers to fund retrofit and low carbon technologies in council buildings.
As of August 2022, developers in Southwark have contributed more than £5 million to the fund, and works are already underway to use this fund to decarbonise our buildings.
Research commissioned by the council found that buildings in Southwark are responsible for 75 per cent of carbon emissions. We also know that there is a significant funding gap in our ability to reduce emissions from our buildings at the required rate. We recognised that payments made by developers could be used to decarbonise buildings in Southwark, but it was vital to ensure that there was a clear methodology behind how this funding is being spent, that demonstrated tangible carbon reductions. Before we could begin spending this money, another challenge was to develop a robust methodology that allow a clear cost per tonne of carbon ratio to be calculated.
We use a process which allows projects to be assessed according to the cost per tonne of carbon that they will save over a 30-year period. This is done using energy assessments that show the current carbon efficiency of a building and carbon savings projections based on proposed energy saving or renewable energy measures proposed by the project. After extensive engagement with colleagues ranging from housing to asset management and corporate facilities, we were able to start understanding where in our existing pipeline of capital works could present an opportunity to spend money from our Green Buildings Fund.
So far, the Green Buildings Fund has been used to fund the planned refurbishment of 18 council homes on the Tustin Estate in Southwark. Because the project was able to show carbon savings at a relatively low cost, over an assumed lifetime of 30 years, plus co-benefits of improved insulation and lower energy bills for residents, our planning committee agreed to release £700,000 to fund the works. This included cavity wall insulation, triple glazing, air source heat pump systems and solar panels. It is estimated that the project will save 344 tonnes of carbon per year, at a cost of under £70 per tonne. This has shown that a rigorous carbon measuring methodology can be applied to energy efficiency improvements in buildings, while also delivering strong outcomes for residents.
How is the approach being sustained?
The Climate Change Team at Southwark are actively seeking new projects within the council’s portfolio to fund. The council has pledged to spend £2 million from the Green Buildings Fund by 2024, and this includes launching the fund to the public, so that local organisations can also decarbonise their buildings. Southwark will also be using an Early Review of its local plan to review the amount of money that developers pay for offsetting, which is currently set at £95 per tonne.
It can be challenging to gather the information that is needed to show the cost per tonne of carbon that will be saved by a given project, however, this can allow you to get a clear picture of where the biggest carbon savings can be made.