Even at present energy prices there are considerable benefits from reducing energy consumption including:

• Saving money – most university's energy bills are well over £1 million a year so a 10% reduction means significantly more money for core educational objectives
• Anticipating regulation – it is usually very expensive to retrofit equipment, yet this may be required by some forthcoming changes such as the implementation of the European Directive on the Energy Performance of Buildings
• Better credibility/image – a good record in energy efficiency is essential to achieve a ‘green' environmental reputation, which can in turn create other benefits such as improved recruitment
• Improved functionality – sometimes rethinking designs from an energy efficiency viewpoint can result in non-energy benefits becoming apparent (for example, several universities have found that using chilled water rather than air to cool equipment not only reduces energy but also means less noise and vibration)

Between 2004 and 2006 energy costs have increased dramatically, with wholesale gas prices increasing by over 70%. This is because of record oil prices driving up gas prices and concerns about European gas supplies. While there will be downward pressure on gas prices in 2007/8 with new capacity, universities cannot afford to be complacent about future energy prices. This is because:

• There is continuing volatility in the oil markets
  
• The UK has had over-capacity in electricity generation since privatisation but this is now ending
  
• Britain will be a net gas importer from 2006
  
• The Government has ambitious targets for use of renewable energy – this is environmentally beneficial but is currently more expensive to produce than existing sources
  
• Levies and taxes on carbon dioxide emissions are already in place, and will become higher in future (they have to if the Government is to meet its ambitious targets of reducing them to 20% below 1990 levels by 2010 and 60% below 1990 levels by 2050).