Feb 16, 2019 Last Updated 2:53 PM, Feb 5, 2019

NHS can spend less on energy and more on people

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Back in 2010, a Government greenhouse gas emissions survey of the public estate found the worst offenders included many of the country’s hospitals, writes Jan Ponsford, Director at Virtus Consult.


Things have improved in recent years, with healthcare estates and the trusts that manage them, recognising that reducing energy consumption not only cuts emissions but reduces the amount spent on fuel.

Reducing energy consumption is often conflated with reducing carbon emissions. Organisations can become focused on large renewables projects and their ability to reduce the reliance on traditional fossil fuels, rather than a drive to cut their energy consumption.

It is easy to grasp the concept of a single big idea, like a large photovoltaic array or a waste-to-energy project, but it is much harder for facilities managers to ‘sell’ senior management teams the concept of many small changes adding up to big savings over time.

It’s time for more management teams to understand the many small changes facilities managers can make, rather than one big headline change.

Comprehensive evaluation is key

The evaluation of an organisation’s estate needs to be detailed, consider every aspect of the energy efficiency equation and call on every source of information from half-hourly electricity bills to waste management policies. To establish a baseline, any evaluation also has to consider the facility’s energy spend and carbon emissions from mechanical and electrical activities, buildings, infrastructure, land, waste, transport and workforce.

A good evaluation will typically focus on three distinct areas:

• Power usage – metering and sub-metering, often by department, where there can be a huge disparity in usage. It is important to monitor and benchmark performance, comparing the in-use performance of a building to its historical energy use or the energy use characteristics of similar healthcare facilities.

• Initiatives – this is less strategic and more tactical, looking at heat recovery, use of renewables, if relevant, including energy from waste, lighting systems, electrical equipment, voltage optimisation and improvements to the fabric of the building and surrounding environs.

• Operational – the energy use awareness of the staff, the lifecycle maintenance, waste reduction strategies, procurement services, transport and, ultimately, the culture of the organisation – is there a desire to cut consumption and is everyone on board?

Once it has been established who in the organisation has the day-to-day responsibility for energy consumption, purchasing and wastage, along with operational activities, the assessment can look in detail at the policies in place and the baseline information needed to make recommendations.

Baseline information and knowledge transfer

As expected, the information needed starts with the buildings, their age, construction and condition, their occupancy profile and the plans to redevelop, if appropriate.

A thorough inspection of the building fabric and its thermal properties, along with roofs, windows, doors, flooring etc., forms an important step of the final evaluation. If no asset register is available for the mechanical and electrical systems, a thorough review of heating, ventilation, cooling and lighting systems is essential.

The temperature and humidity set points (and whether they change throughout the year), in different locations across the estate, will be critical to the overall consumption picture and will help highlight potential changes.

Future funding or grant opportunities

Typically, the real stumbling block for NHS energy managers and facilities managers is not what changes need to be made, but how the energy efficiency and carbon reduction improvements will be funded.

There are a number of funding options, but it has to be recognised that a ‘one solution fits all’ approach is rarely applicable, given that no two trusts are ever the same and no opportunity should be overlooked.

Funding options are assessed on a project-specific basis, considering building type, usage, location, trust requirements and preferences. The energy-saving measures being considered will also impact the potential funding solutions.

The options usually fall into a number of categories, with the simplest perhaps the trust capital funding the improvements. Borrowing directly from the Green Investment Bank or Salix, which offers interest- and fee-free loans, are popular choices, with energy cost savings used to pay the loan.

Salix requires NHS programmes to pay back within five years and less than £120 per tonne of CO2 over the lifetime of the project. Salix funding covers over 100 energy-efficient technologies including boilers, combined heat and power, LED and lighting upgrades as well as heat recovery.

Financing the improvements is possible through third parties, which could include ‘off-balance sheet’ options like an Energy Services Company (ESCo) agreement, a Short Term Operating Reserve (STOR) arrangement, a Special Purchase Vehicles or Programme Partnership Arrangements.

It is all about building the business case for the whole project, considering:

  • Procurement and application process with indicative timescales
  • Compliant initiatives
  • Levels of funding
  • Risks
  • Interest levels
  • Payback periods
  • Any restrictions on using different types of financing together
  • Potential contractual or legal issues
  • Any significant dates, such as when a particular fund closes.

Experience dictates that the best funding solution is the one that presents the least risk for all stakeholders, whilst providing the best value. It also has to meet the trust’s needs and satisfy legal and statutory requirements.

Implementation follows evaluation

Starting with the evaluation and the baseline information, the process of the implementation of the various simple changes will typically take six to nine months. Once the business case has been made for a raft of small changes, a tender process will follow to select the contractors experienced in delivering similar projects and guaranteeing the predicted savings and payback period.

Ideally, the project will be managed by the consultants that initially undertook the evaluation, as they will understand the organisation’s objectives, economic drivers, operational structure, existing knowledge and experience – all beneficial to the successful delivery of the project.

Energy efficiency projects within the healthcare sector rarely have an endpoint as a lot of monitoring and verification is required to ensure targets are hit. Perhaps the most important aspect is a continual improvement as new technologies emerge, or become more affordable, in the fight to cut energy consumption.

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