Barriers to Energy Efficiency Projects and the Uptake of Green Revolving Funds in Canadian Universities, a paper by John Maiorano and supervised by Dr. Beth Savan at the Centre for Environment – University of Toronto and published by Sustainable Prosperity, July 2012 – Region: Canada
Worldwide, 30-40% of all primary energy is used in buildings. In addition, Universities are 60% more energy intensive than commercial office and more than twice as energy intensive as manufacturing premises. Improving energy efficiency is regarded as a fast and cost-effective solution to reducing greenhouse gas emissions and equally, promoting cost savings, environmental protection better public health and economic sustainability.
Furthermore, there is strong evidence suggesting that Canadian universities are committed to sustainability and energy efficiency though barriers to implementing energy efficiency projects continue to exist, as summarized in the table below.
| Access to Capital | · Lack of Capital
· Other priorities for Capital Investment · Strict Adherence to Capital Budgets |
| Bounded Rationality | · Energy manager lacks influence
· Lack of technical skills · Low priority given to energy management · Low priority given to environmental performance · Technology inappropriate at this site |
| Hidden Costs | · Cost of disruptions/hassle/inconvenience
· Cost of identifying opportunities, analyzing cost effectiveness and tendering · Cost of staff replacement, retirement, retraining · Lack of time/other priorities · Poor technology performance |
| Imperfect Information | · Difficulty/cost of obtaining information on the energy consumption of purchased equipment
· Lack of information/poor quality information on energy efficiency opportunities · Lack of staff awareness |
| Risk | · Business/market uncertainty
· Technical risk |
| Split Incentives | · Conflicts of interest within the organization
· Departments not accountable for energy costs · Energy objectives not integrated into operating, maintenance or purchasing procedures |
Overwhelmingly, the Canadian universities that were interviewed for this paper pointed to ‘Access to Capital’ as the largest barrier to implementing energy efficiency projects, though respondents also strongly agreed that revolving funds are (1) an effective method to address capital funding constraints and (2) may be an effective method to implement energy conservation projects. Still, only four out of the 83 universities in Canada were known to implement revolving funds as a tool to address limitations in accessing capital at the time of this study.
It is worthy of mention that revolving funds used specifically to fund energy efficiency projects have shown to: outperform market returns, reduce energy consumption, resource use, waste generation, and pollution levels in campuses, among other benefits. Furthermore, revolving funds can address funding constraints, as the structure of the fund acts such that one-time fund can perpetually fund more projects.
To improve energy efficiency in Canadian universities over the long term, the paper provided the following recommendations:
- Develop formal commitments to energy efficiency through the creation and adoption of a formal energy policy; and
- Establish multi-party committees to develop and implement the policy and to source the necessary funding to create and implement revolving funds to provide environmental, social and financial benefits.