Welsh universities could save at least £500,000 a year just by switching off lights in unoccupied rooms and adopting other energy saving measures.
A report from the National Audit Office says that the sum represents about 4 per cent of the Welsh higher education sector's total expenditure and could increase dramatically in the near future unless better energy-efficient practices are adopted.
"Rising energy costs and increasing demand mean that, unless improvements in energy and water efficiency are delivered, expenditure is likely to increase significantly over the next five to ten years," says Sir John Bourne, the Auditor General for Wales.
The report found that the 12 higher education institutions in the Welsh sector spent more than £11 million on energy and water last year - consuming 355 million kilowatt hours of energy, which resulted in 87,000 tonnes of carbon dioxide emissions.
A consultant hired by the NAO said that although some energy savings required investment, much could be achieved by simple "good housekeeping", such as shutting windows in heated rooms, setting thermostats at a lower level and switching off lights and computers.
The report found that nine of the 12 institutions had developed or were planning a specific energy and water management policy, and of these, "most lacked any obvious reference to an operational plan with clear and measurable targets".
The NAO says that the Higher Education Funding Council for Wales should set a deadline for institutions to appoint dedicated energy and water managers and set aside specific funds to invest in energy and water saving measures amounting to about 10 per cent of energy and water expenditure.