Cynergin Consultants are delighted to report that the Energy Services contract between the Natural History Museum and Vital Energi Utilities Ltd achieved practical completion in December according to programme.

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 II 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 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 have now installed a new 1.8 mW combined heat & power unit, replaced burners and are providing comprehensive maintenance for the existing boiler plant which has become integral to the new installation as well as installed new absorption chillers to provide the chilled water to the facilities.

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.

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.”

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