Delivering Heating Solutions for Social Housing AVC ALTERNATIVE ENERGY Saving energy Cutting Utility Costs Reducing

1. Delivering Heating Solutions for Social Housing AVC ALTERNATIVE ENERGY Saving energyCutting Utility CostsReducing Carbon Emissions

2. About AVC • A leading service company in Energy, Recycling, Digital and Media • Over 20 years experience in delivering energy savings projects • National presence of offices with local engineering workforce • AVC Alternative Energy seek to help our customers save energy, cut costs and reduce carbon emissions by; • Providing detailed energy audits • Identifying and delivering proven solutions • Use conventional and renewable technologies • Providing finance solutions (through partners) • Full Service monitoring operations and maintenance

3. Key Drivers 1) Fuel prices continue to rise Over the last five years figures show that there has been a total… • 31% rise in coal costs • 30% increase in gas prices • 31% increase in oil costs These increases look set to continue Woodchips Wood pellets Natural gas LPG Oil Coal Electricity 2) Need to reduce carbon emissions • As part of ‘The Kyoto Agreement’. The UK has a target to reduce Carbon emissions to 80% of 1990 levels by 2050. Source data: Biomass Energy Centre & World Energy Council

4. AVC Alternative Energy Provides a variety of services including • Energy Efficiency • Energy Service • Energy Generation The focus today is on; • Biomass Heating • Air Source Heat Pumps

5. Biomass – The Technology • Biomass Boilers are effective direct replacement for oil/electricity/LPG/ coal boilers for heating and hot water • Used in Europe for over 30 years with more than 8.5m domestic, commercial and public sector systems installed, it is a proven reliable technology • Biomass Boilers use wood pellets and wood chip from renewable sources to lower fuels prices, reduce running costs and deliver carbon savings

6. Biomass boilers can be sized to your requirements and made to integrate into their environment

7. Biomass – Why Consider Switching? • Lower running costs of 20% to 40% per annum when switching from oil, electricity, coal or LPG • 100% funding available and delivers guaranteed savings from year 1 (ESCO structure) • Qualifies for Government RHI payments • Capital investment typically repaid within 5-7 years • Reduce in Carbon Emissions • On-line remote monitoring, comprehensive maintenance service and fuel security • Seamless Service Delivered

8. Biomass – Ideal Applications For Social Housing • District Heating Systems, Offices, Warehouses, Community Centres as RHI is only applicable for commercial installations until Green Deal • Off gas • “Wet” heating system • Space for wood chip store • Access to deliver wood chip • Secure site

9. Biomass – Issues and Pitfalls Performance – is effected by the following factors • Configuration & Maintenance of the Biomass System • Wood chip quality; type, moisture content, calorific value and size Fuel security • What price is paid for the fuel • How frequently is the price reset and what mechanism is used? • Ability to supply the wood chip for 20+ years Other • RHI Structure • Monitoring; performance, fuel levels, billing Trade off between managing these risks or having them managed

10. Biomass – Managing Risks Spoke Spoke Benefits • Local Business • Guaranteed Fuel Supply • Consistent quality • Reduced transport costs & emissions • Ability to provide a long term fixed price heat contract indexed to RPI • Guaranteed savings Spoke Spoke Spoke Spoke AVC BIOMASS HUB Spoke Spoke Spoke Spoke Spoke Spoke

11. Biomass – Managing Risks ESCO Contracts

12. Air Source Heat Pumps Benefit of Air Source Heat are well understood: • Reduce cost of heating by 30% to 50% • Reduce carbon emissions by 40% to 65% • Relatively easy to install and maintain Until recently types of funding for ASHP has been limited. • In partnership with a major bank, AVC has developed a operating leasing model for ASHP.

13. Portability Hot water cylinder slide out base ASHP on skid

14. Portability Hot water cylinder slide out base ASHP on skid Radiators optional

15. Product Install Wall Mount Kit Floor Mount Kit Either option will be installed with quick release fittings

16. Risk and mitigation • Banks view is the Operating lease is unlikely to be challenged as an ASHP is an external device therefore more portable than internally wall mounted previously approved Boiler leasing scheme. • Need for replacement met with minimal capital outlay • Lease repayments can be recovered through energy saved • System under performing • Fully accredited audit, survey and install process • Continuous monitoring via Energy Eye • Manufacture warranties

17. Solution options • Leasing will support a high % of the install cost • Project linked to CESP and CERT • Offer operating lease linked appliance • On introduction of Green Deal HA could become Green Deal provider to payback primary lease via energy savings • RV and secondary lease to be taken by Appliance manufacturer, linked with term maintenance agreement with AVC for primary lease • Monitoring via energy eye protects investment

18. Questions

19. In 2011 the Government launched the Renewable Heat Incentive Policy (RHI) to encourage organisations to decrease reliance on fossil fuels, reduce carbon emissions and encourage innovation, jobs and growth in energy technologies. Payments are made for each kWh of renewable heat which is produced. It is paid for a period of 20 years. The table below shows biomass tariff rates in Great Britain Renewable Heat Incentive (RHI)Available for Industry, Commercial & Public Sector in Great Britain Updated 01 Apr 2012