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News - November 2018
Prescribing an energy cure for the NHS
The NHS is under constant pressure to cut costs and improve efficiency.
And, according to Tony Orton, head of healthcare business development at Centrica Business Solutions, updating energy systems could help the NHS to meet its cost-saving targets.
“A growing population, increasing life expectancy, and government targets to save almost £22billion by 2020 are just three of the challenges placing enormous financial stress on the NHS,” he told hdm.
“Currently, the NHS spends more than £6.5billion a year maintaining and running its estate and facilities, and energy makes up around £500m of this bill. There’s clearly an opportunity here to make savings.”
According to the Operational Productivity and Performance Report from Lord Carter of Coles; energy is one of the main areas where cost reductions could be made within the sector, with estimated savings in the region of £125m a year through simple energy efficiency measures.
“Our own research suggests that the size of the prize could be even bigger if NHS adopted new distributed energy solutions such as battery storage,” said Orton.
“We found that if only 50% of trusts updated their energy systems, it could save £130m each year - enough to support the recruitment of around 4,000 new nurses.
“If all trusts used new energy technology, the savings could reach £260m, more than double Lord Carter’s estimate.”
Add in the private sector, which accounts for 17% of healthcare expenditure, and the savings are greater still.
“One thing is clear,” said Orton, “power is not just an inescapable overhead anymore. It can drive business growth by unlocking cost savings and improving operational efficiencies.”
And the NHS can take advantage of the latest technology to not only achieve these cost savings, but access new revenue streams, too.
Combined heat and power (CHP) is one of the most-popular distributed energy solutions.
Powered by an engine, CHP units convert a single fuel into power and heat simultaneously onsite.
They typically use low-priced and widely-available natural gases as fuel and are linked to a generator to produce electricity.
Heat is recovered from the engine’s exhaust, jacket and water, and oil cooling circuit at the same time, providing an instant and cost-efficient heat supply that can be used, for example, to warm a hospital’s water supply.
“Once installed, CHPs can lower energy bills by up to 40% and cut carbon emissions by up to 30%,” said Orton.
“And they have a typical lifespan of up to 15 years.”
The typically-large and complex estates that make up hospital trusts make it difficult to know what is going on, energy-wise, across sites as there might be hundreds, or even thousands, of individual devices using power at any one time.
To help gain a better overview, Orton advises hospitals to connect smart sensors to their equipment to monitor what is using energy and how much, right down to a singular device, at any one time.
“Displayed on a dashboard, these sensors provide insight into energy use, allowing healthcare providers to make intelligent decisions on energy use - and even begin to map out a pro-active energy strategy,” he added.
“Smart sensors can also indicate whether equipment is performing inefficiently or if it is about to break.
“Equipment failure can be particularly dangerous for the healthcare industry, potentially endangering life, so having the energy sensor equipment in place helps to reduce this risk.”
Battery storage is particularly useful for those exploring renewable energy where supply is dependent on intermittent sources such as sunlight or wind.
The stored energy can also be tapped into when an intermittent supply causes disruption.
This can be crucial for the healthcare industry, where a 24-hour service relies on a constant supply of energy.
“Recent research we conducted found that 46% of healthcare organisations have suffered an interruption to energy supply due to external factors over the last 12 months,” said Orton.
“Having systems in place to prevent any failures from taking place can help to reduce this risk and ensure the smooth running of hospital operations.
“Moreover, any unused power stored in a battery can be sold back to the National Grid and can generate revenue for healthcare sites.”
He added: “There’s a clear business case for the NHS to update its energy systems.
“Improving energy efficiency and reducing costs while maintaining a robust and reliable energy infrastructure will be essential if the NHS is to free up funding for frontline services and improving patient outcomes.”
To offer further advice to estates and facilities professionals, Centrica has published a report entitled Powering the Future of Healthcare, which is available for download on its website.