LONDON, UK - (HealthTech Wire / Opinion by Karl Campbell) - From wards and theatres that remain lit all night to ageing heating systems, many healthcare organisations are wasting six-figure sums on poorly managed energy each year. Ambitious government carbon-abatement programmes could highlight the opportunity to introduce intelligent controls to help curb wasteful practices. This would deliver real savings for the NHS that could be ploughed back into patient care. The first step, though, is to scope the problem and this demands energy performance management software.
With the current financial pressures on the NHS, acute hospitals, clinics and other healthcare organisations could be forgiven for allowing energy and carbon management targets to slip down their strategic agenda. Although environmental sustainability and energy efficiency targets are real and vital, they pale in significance next to the fundamental need to continue delivering acceptable patient care with the depleted resources left at their disposal.
Yet, with UK energy efficiency funding to the tune of £26 billion available to them, healthcare organisations are doing themselves and their patients a great disservice by downgrading carbon reduction programmes in their clampdown on apparently ‘non-essential’ investment. This is especially true now that specialist energy monitoring and management software exists to help them pinpoint and address wasteful practices.
Hospitals with 10-year-old legacy lighting and heating/air conditioning systems are likely to be losing vast sums of money through inflated energy bills. Estimates suggest that a large hospital with an ageing infrastructure could expect to achieve up to 40% savings on energy costs by being more aware of its consumption rates, implementing some simple energy-saving measures, and changing related behaviour. That’s a staggering amount of money that could be ploughed into vital front-line services.
Better still, initiatives of this nature are typically self-funding — a payback period of 24-36 months is about average, though this can be much shorter if current inefficiencies are substantial.
Environmental targets
Ultimately, healthcare organisations can’t afford not to make positive changes to their energy consumption — not only because of the potential savings that are possible, but also because of the implications of non-compliance with strict public sector targets on carbon reduction and energy efficiency improvement.
As with large businesses and other substantial organisations, the NHS is subject to mandatory carbon reduction targets of 10% by 2015 and 80% by 2050, to ensure that the UK meets its commitment to the EU and to broader global targets.
Public sector organisations are under particular pressure to conform to these requirements, and to lead the way with best practices — if they are not seen to take environmental sustainability initiatives seriously, there will be less incentive for private businesses to take the necessary measures. For organisations with a remit to look after patients’ health and wellbeing, failing to look after the environment in which they are being cared for should go against the grain, in any case.
The potential for transformative change is huge. With an annual energy bill of over £600m, total carbon emissions from the NHS represent 3% of UK CO2 emissions [1].
Indeed, the Environment Agency has recommended that, if the NHS wants to lead the public sector in addressing the challenge of climate change, its ambitions should set “ambitious and unambiguous targets that will lead towards the NHS’s own target of 60% reduction in carbon emissions by 2030.” [2]
Not only should NHS trusts in England aim to achieve the government’s target to reduce carbon emissions by 30% by 2015 (rather than 2020), according to the Environment Agency, “there should be a presumption of no net increase in CO2 emissions, and active commitment to reducing emissions”.
The biggest culprits — lighting and heating
The larger and more sprawling an organisation’s estate, the greater the savings that are possible. The good news is that the biggest savings can often come from the simplest changes — for example to lighting and heating/ventilation systems. Surprisingly, these two sources together account for 90% or more of any building’s energy consumption. Upgrading such facilities to smarter, more efficient systems could save a hospital anything between 15 and 40% in energy costs and carbon impact.
The first step in any energy efficiency and environmental sustainability initiative must be to scope the problem, and identify and prioritise target areas for improvement. One of the main reasons many healthcare organisations haven’t made more progress with energy efficiency programmes, aside from perceived budget restrictions and overstretched staff resources, is that they have not known where or how to start. A further factor has been that the responsibility for implementing positive change has fallen between multiple departments — for example facilities management and teams looking after corporate social responsibility.
To make real progress, hospitals need to assign a champion for energy efficiency and carbon reduction who can then take proactive steps to begin measuring current energy consumption and carbon footprint. By creating a benchmark — for example the number of watts consumed per square metre of the hospital’s premises — the organisation can start to assess how good or bad this is in comparison with other healthcare institutions or large enterprises, giving it a goal to aim for.
As the truism goes, only when something is measured can it be managed effectively, so hospitals need a clearer line of sight of its energy consumption and carbon footprint — with a detailed breakdown of where this is peaking, and where there may be particular wastage. Most premises managers would be horrified to learn how much it is costing them each year to keep lights on all night, or leave equipment such as compressors on when they are not in use.
Although financial managers ought to be concerned about poor energy efficiency, consumption of utilities is traditionally viewed and treated as a predictable and necessary expense, which is budgeted for without question. Faced with more information and the potential for six-figure savings — money that could be spent on improving front-line patient services — they are likely to shift from this view.
Close monitoring of energy consumption and carbon output offers hospitals an enormous opportunity to release funds they badly need. This requires that healthcare organisations have access to data revealing where energy — and money — is leaking from the system. Yet capturing such data manually, across diverse premises and energy sources and utilities would be time and labour-intensive, even if hospitals could spare the staff time.
Compliance reporting
Failing to undertake this fact-finding exercise is not an option. For compliance purposes, energy consumption and carbon efficiency reporting must meet strict criteria, to enable formal, accurate auditing and real and fair comparisons.
Indeed, many NHS trusts and NHS special health authorities are already obliged to report their carbon emissions as part of the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) [3]. This requires qualifying organisations to buy carbon allowances covering the CO2 emissions they generate from fixed energy sources, including fuels for heating. Organisations that fail to report carbon emissions accurately face reputation-related risks in addition to the negative financial impact.
There is no question that CRC reporting is a complex reporting regime. Large organisations targeted by the CRC scheme are required to capture energy and carbon emissions data from internal and external sources such as utilities, suppliers and metering agencies.
To comply with these requirements, and to reduce the administrative burden of the associated data gathering and reporting, trusts are turning to specially-developed energy efficiency and carbon management software tools which automate consumption monitoring, freeing up management time to come up with action plans to address the issues highlighted by the elicited findings.
The positive impact of the CRC reporting requirements is that they are enforcing a discipline that has been lacking until now for most healthcare institutions, shining a light on where Trusts could make real improvements and deliver significant savings from improved energy and fuel management.
Given the pressure on NHS trust boards and senior healthcare managers to raise the financial and environmental performance of hospitals and healthcare services, this new discipline should be positively embraced for the cost-saving opportunities it introduces.
[View table: "Accelerated energy efficiency"]
With the right leadership and the right tools in place, the gains from energy efficiency and carbon abatement programmes will be multiplied, and national environmental goals achieved sooner than otherwise.
References
[1] Carbon Trust advice for NHS trusts
[2] Environment Agency NHS carbon reduction strategy
[3] The CRC Energy Efficiency Scheme and the NHS. What you need to know and do.
###
Source: CarbonSystems
Karl Campbell is Managing Director Europe at CarbonSystems.
HealthTech Wire's Opinion informs about and analyzes important events and industry developments.
© so2say communications. All rights reserved.
