Cynergin Consultants are delighted to announce the award of an Energy Services contract between the Natural History Museum and Vital Energi Utilities Ltd. The contract will deliver cash release to the Museum in excess of £200,000 per year at current utility prices and reduce net annual carbon dioxide emissions by 2000 tonnes.

Cynergin were appointed to develop the project and manage the procurement in December 2004. The first step was to undertake a comprehensive option appraisal that reviewed the museum's technical, financial and procurement needs.This revealed that the Museum's existing heating system was over capacity and requiring considerable investment. The Museum also required additional cooling capacity to serve the Darwin Centre Phase Two building that was being constructed. Most importantly, the Museum operates in an environment where capital is scarce and subject to many competing demands.

The preferred option was therefore an externally financed energy services contract in which a private sector contractor would be responsible for the design, delivery, operation and maintenance of the project for a period determined to be 15 years.

It was considered that the most appropriate procurement route was to apply the PFI/PPP route that we have utilised for 15 NHS and Local Authority projects.

Cynergin prepared the detailed tender documentation and a draft contract resulting in the confirmation of Vital Energi as preferred bidder in December 2005. Key to the process was the engagement of the Victoria & Albert Museum as an active stakeholder in the project. The contract was closed in July 2006. Vital Energi will install a new 1.8 mW combined heat & power unit, replace burners and provide comprehensive maintenance for the existing boiler plant which will become integral to the new installation as well as install an absorption chiller to provide the chilled water to the facilities.

The project also requires the conversion of nine plantrooms at the Natural History Museum and fourteen plantrooms at the Victoria & Albert Museum to allow them to operate on low temperature hot water.

Vital Energi have guaranteed that the project will deliver energy savings more than sufficient to cover the annual costs of the project for the full 15 years of the contract and backed this commitment with a guarantee to make up the difference in the event of an annual shortfall.

A major advantage to the Museum is that the capital is off-balance sheet to the Museum because of the very significant transfer of operating risk to the private partner.

Neil Greenwood, Director of Finance at the Natural History Museum stated: "We appointed Cynergin to review an existing procurement in late 2004 which had stagnated. They clarified our technical and financial requirements and endorsed the PFI route as the best way to obtain the energy services that we required. This was new and complex territory for the Museum, and Cynergin excelled in providing high quality and clear advice, and efficiently and effectively managing the process through to a successful contract award."

Director of Cynergin, Nick Ray, said "We are proud to have played a major role in this innovative project. It will bring substantial financial and environmental benefits to the Museums and will also allow them to devote their own capital to mission-critical issues."