Monday, October 01, 2012

The NHS could easily save £170 million through basic energy efficiency

The Department of Health should force the NHS to save energy and money, just as the higher education sector’s capital funding is linked to meeting carbon reduction targets.

The NHS believes it spends £1.7 billion a year on energy procurement, according to the Department of Health.

Not only this, but, with all those ambulances and other traffic, it accounts for an astonishing 5% of all road traffic in England.

Moreover, the NHS in England alone spends £20 billion every year on goods and services.

Add this all up, and you can see why the organisation is not only one of the largest employers in Europe, it's one of the biggest emitters of greenhouse gases in the UK: at around 3.7 million tonnes every year.

Let's concentrate for the moment on energy use in buildings, although it forms a minority of all that energy use.

An experienced director of energy management at a prominent construction firm recently told me that he believed that using simple industry best practice, the NHS could easily cut 10% of their energy consumption, which equates to £170 million a year of taxpayers' money, with simple, quick-win energy efficiency measures.

That's a lot of money, and in these straitened times, you would think that hospitals and primary care trusts would be anxious to make these savings.

Seven weeks ago, this energy management expert met with officials in the Department of Health (DH), and asked them why these simple changes were not being implemented.

He was told by a number of hospital estates teams that any cash spend is, in general, always prioritised in hospital budgets for life-saving equipment rather than things like smart meters, more efficient boilers, or lighting and heating controls.

This is not unreasonable. So, he suggested to the official that one way round this might be for the DH to set energy-saving targets, in the same way that it does for reducing waiting lists. Energy (or carbon) saving targets have been set, with impressive results, in the university sector.

In this sector, the provision of capital funding has been explicitly linked to performance against carbon management plans.

Parallel to this, a scheme called The Revolving Green Fund, managed by the Higher Education Funding Council for England, provides recoverable grants to help higher education institutions reduce emissions. Institutions repay the funds through the savings they make.

This will contribute to a 43% reduction of carbon emissions by 2020 compared to 2005.

In answer to this suggestion, the DH official replied: “setting targets is not our direction of travel".

When it was put to him that in this case, the energy-saving would not happen, the official repeated his mantra.

I think that the comparison with the university sector is appropriate.

Institutions have to provide annual records of all their greenhouse gas emissions from every single activity, as part of their estates management record, to the Higher Education Statistics Agency.

This is an activity that all estate, facility, building and energy managers should be doing anyway. But it doesn't always happen, and mandating this activity focuses minds on where cost savings can be made.

The initiative in this sector is a combination of carrot and stick. It is merely following a strategy which is known to work: reward success, provide funding to make the change, and penalties for poor performance.

Anyone who works in the NHS or who has dealings with it, knows the phenomenal amount of waste that occurs.

We know that its prime directive is to save lives. But there is a comparison to be made with every single commercial business: its core function might be the production of widgets, but the cost of energy affects the bottom line, and wherever attention is paid to this, profits rise.

The NHS is no different.

It's not as though there isn't help there already: from the Carbon Trust (although it is not specifically targeted at the NHS but at the public sector in general), and, through using BREEAM for healthcare buildings, commissioned by the Department of Health and Welsh Health Estates, as the environmental assessment method for new healthcare buildings.

But BREEAM is not mandatory, and is often left out of PFI contracts. In fact, in respect of PFI, many problems arise from the fact that the construction company, the client and the funder have different energy objectives and there is little joined up thinking.

Moreover, the end user of a building is not always responsible for paying the bills, meaning that they do not have an incentive to save energy. Only some accounts have a dedicated energy manager.

One consultant I spoke to told of a case where, if the client turns the lights off, then they are deemed to be in breach of contract, and so lights are left on unnecessarily. Given the lifetime of PFI contracts, many unresolved problems may stick around for between 15 and 35 years.

The Department of Health provides advice on estates and facilities management but it has not been updated for three years and this particular webpage has been archived.

The Health Protection Agency produced a report this year called “Health Effects of Climate Change in the UK 2012". Looking at ozone pollution alone, one alarming statistic reads that their are already 11,900 from premature deaths per year from ozone pollution, but a further 14,000 to 15,000 could result by 2030 as a result of climate change.

There's a certain irony in the fact that the NHS and the DH are fully aware of warnings like this, and yet are unwilling to set targets to reduce this number of deaths by reducing carbon emissions from NHS activities, never mind the fact that this will also save money.

And let's not forget: saving 10% of the energy consumed by the NHS would remove the need for the construction of one nuclear power station, or three gas-fired power stations.

Joined-up thinking, anyone?

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