Government’s €250 million investment in energy efficiency programmes has leveraged €250m additional spend Rabbitte tells CIF Conference

Today the CIF hosts a Public Procurement in Ireland conference. This represents a very positive initiative undertaken by the CIF to provide knowledge and support to the construction industry with regard to best practice when operating under Public Procurement legislation.

Under EU legislation, Ireland must achieve very ambitious energy efficiency targets to reduce our energy consumption by 20%, by 2020. It is estimated that one million of our buildings will need to be retrofitted, across the domestic, public and private sector, by then. Smarter Public Procurement will play a crucial role with regard to fulfilling our energy efficiency goals.

Public Bodies are major consumers of goods and services and are estimated to spend in the region of €14 billion annually through their procurement budgets. This equates to almost 12% of Ireland’s Gross Domestic Product. The public capital programme comprises some €17 billion for 2012 to 2016 and marks a significant expenditure commitment in the current economic climate.

The Construction Procurement Reform Initiative which was launched in 2007 is tasked with delivering greater cost certainty at tender stage; better value for money and more efficient project delivery and comprises a standard suite of documents for use by all contracting authorities in tendering for public works contracts.

“Green” Public Procurement can be a real driver for innovation, providing many industries, including the construction industry, with incentives to get involved in developing products and delivering quality services.

Minister Pat Rabbitte speaking at the conference said: “It has never been more important for Government to strive to become more energy efficient. The Government’s Action Plan on Green Public Procurement – “Green Tenders” – that was published in 2012 provides a framework for procurement in an energy efficient and sustainable way. Under the framework, the Government has identified key priority areas including construction, energy, food and ICT, where there is significant opportunity to innovate”.

The minister went on to day that: “Furthermore, the plan acknowledges that “Energy Efficient Procurement is Good Procurement” and among its key objectives are to improve energy efficiency and reduce energy consumption and costs. This can be achieved through the procurement of products of superior energy efficient performance, sustainable energy services and energy efficient capital projects. The knock-on effect is that through winning tenders in Ireland we can become a portal to global export markets.

It should be of particular note to the construction industry that improving energy efficiency and renewable energy uptake in our building stock are key elements to support us in meeting our energy efficiency targets by 2020. It is imperative that we pick up the pace, scale and depth of investment in upgrading existing buildings to support Ireland in reaching those energy efficiency goals. This will require a cross-government collaborative approach in particular between my Department, the Department of Education and the Department of Jobs, Enterprise and Innovation.

In order for the construction industry to step up to the mark and become fully involved, it will require the correct skills needed to achieve the 2020 energy savings targets. What we need to do is provide professional, fully accredited, targeted training courses to construction workers who wish to answer this call.

‘Building up Skills Ireland’ has been established as part of an EU-wide initiative to specifically provide energy training for builders. The project has done an in-depth analysis of the skills gap, in order to best target energy training for builders across the retrofit area. On foot of this analysis, it is anticipated that employment and skills demand in renewable technologies and the buildings sectors are set to increase. Analysis also reveals the employment potential in the renewable energy generation and energy management sectors.

With this in mind, training has been targeted to deliver new energy skills and competences specifically to the construction industry. The aim is to have the highest standards and calibre of installers and building energy rating assessors available to the retrofit industry. I urge CIF to fully support this initiative.

The Government has invested €250 million in Exchequer funding in energy efficiency programmes in the domestic and non-domestic sectors over the past few years, leveraging additional spend in the economy of more than €250 million. The Programme for Government commits to a move away from Exchequer-funded grants and the introduction of sustainable financing initiatives.

I want to mention one of the most exciting initiatives in the energy efficiency sector for many years. The Government has committed to roll out a Better Energy Financing (BEF) scheme for domestic buildings after 2013. The BEF model proposes that the current suite of Exchequer funded grants for energy efficiency measures, excluding the low-income housing retrofit programme, will be replaced by a new financing scheme open to households and commercial operators.

My Department has put in place a project team to design a suitable model under the direction of a Project Board representing key state and industry stakeholders. Project resources have been drawn from industry experts and elsewhere in the public sector. I would strongly urge CIF to get on board and fully support this important scheme that will impact greatly on the retrofit industry into the future.

I am happy to say that I launched the Energy Efficiency Fund, combined with a call for exemplar projects, last month. The Fund will provide finance to energy efficiency initiatives in the public and private sectors. The aim is to attract matching funding from the private sector, such that the overall amount available for investment is greater than €70 million.

The Fund will be supported by the creation of a National Energy Performance Contracting Policy Framework, which will standardise energy performance contracting in Ireland. The Framework will provide a robust process for establishing investment-ready projects. Work on the Framework is well advanced and I expect the guidance material will be published shortly.

I am pleased that my colleague Minister Brian Hayes, who has responsibility for the OPW, recently brought the Construction Contracts Bill 2010 through the second stage in the Dáil. The Bill is of great significance to all present here. Through increased protection under statutory mechanisms, it seeks to alleviate the issue of non-payment to construction sector contractors and sub-contractors who have completed work to the required standard on construction projects.

The construction industry has been in decline since 2007. However, the latest Quarterly National Household Survey from the CSO reveals direct construction employment rose in the third and final quarters of 2012. This is the first time this has been achieved since construction reached its peak level in 2007. The Construction Contracts Bill when finalised will be another positive step for the industry and is in line with the Programme for Government commitment to “introduce new legislation to protect all small building subcontractors that have been denied payments from bigger companies”.