CRC and the healthcare sector

The UK has made a commitment to reduce greenhouse gas emissions by at least 80 per cent from 1990 levels by 2050. This is a tough target will require significant changes in the way businesses and the public sector operate.
    
The CRC Energy Efficiency Scheme is a new energy saving and carbon reduction scheme designed by the government to help reach this target. It could reduce carbon dioxide (CO2) emissions by up to 11.6 million tonnes per year by 2020 – the equivalent to taking roughly four million cars off the road.
    
The scheme is also expected to save organisations money through reduced energy bills – benefiting the economy by more than £1billion a year by 2020, making it a valuable business opportunity. The CRC scheme will impact all large healthcare providers, both public and private. Most hospitals, including NHS trusts, will need to adhere to CRC, along with other organisations such as larger groups of nursing homes.
    
From 1 April, large private and public sector organisations that had a half hourly meter during 2008 must register under the scheme. Around 20,000 organisations need to register for the scheme with the Environment Agency before 30 September 2010. Of these, about 5,000 will qualify as full participants in the scheme (see below).
    
Healthcare was one of the key sectors that were affected by the CRC Energy Efficiency Scheme when it started in April. The UK healthcare sector spends about £450 million annually on energy bills.
    
While only large organisations will be caught by the CRC, both large and small healthcare organisations could save significant amounts of money through simple energy saving measures and put the savings into frontline services. For example, the average doctor’s surgery could save up to 20 per cent on its bills by taking simple steps such as turning down lighting and improving heating efficiency.

Who qualifies for the scheme?
The threshold to qualify for the scheme is determined by 2008 electricity consumption: if your organisation had a half-hourly electricity meter and consumed at least 6,000 mega-watt-hours of electricity through all of its meters during 2008 (equivalent to an electricity bill of around £500,000), then you will need to participate in the scheme by monitoring energy consumption and purchasing allowances.
    
However, if your organisation has a half-hourly meter and you consumed less than this amount of electricity you will be an Information Declarer. This means that all you will need to do is identify your half-hourly meters and you will not have to purchase allowances.
    
Whilst the Environment Agency’s aim is not to prosecute organisations, we do have the power to impose serious penalties for eligible organisations that do not register with CRC by the end of the registration period.

Understanding CRC
It’s important to understand how CRC will affect your organisation. You will need to decide who will be responsible for the ongoing data collection and CRC reporting. In most organisations, the day-to-day CRC management basis would be dealt with by an energy or facilities manager.
    
You will also need to make sure all the preparation has been made so that the right data is collected. Under CRC, you will need to report all of your emissions in the first year. After that, you will need to monitor your fuel and energy use as well as reporting your CRC emissions to the Environment Agency at the end of each compliance year.
    
Participants successful in reducing energy consumption will not only save money on energy bills. They will also receive financial and reputational incentives. These savings should be well in excess of the costs of participating in the scheme.

Reducing energy use
There are many steps organisations can take to cut energy use. Simple actions such as turning off lights and unnecessary equipment are important, but there are also more significant changes that can be made to cut energy use on a larger scale.
    
It’s important to look at where most of your organisation’s energy is used. For example, heating and hot water can account for up to 60 per cent of your organisation’s total energy costs, while lighting can account for around 25 per cent of electricity use. However, steps can be made to make heating and lighting more energy efficient. It can be simple things such as ensuring that buildings are not overheated or heated when not in use, as well as bigger investments such as installing more efficient boilers.
    
You can also explore energy efficiency technologies such as voltage optimisation, which moderates electricity use. Other measures to improve energy efficiency include adequate insulation, motion sensored lighting and de-stratification fans, which circulate the air in rooms with tall ceilings to prevent the warm air at ceiling level going to waste. While some improvements may require significant upfront costs, in the long term these costs will be outweighed by substantial reductions in energy bills.

Leading by example
A number of healthcare providers are already leading the way in reducing carbon emissions and improving environmental performance. With many healthcare providers across the UK, especially NHS trusts, occupying large and old leaky buildings, improving energy efficiency is reaping significant financial rewards and improving patient comfort.
    
Guy’s and St Thomas’ NHS Foundation Trust is one such example. Guy’s and St Thomas’ is one of the first trusts in London to produce its own electricity and heat to power the hospitals – saving the equivalent carbon dioxide of around 17,000 passengers flying to New York and enough energy to power Newcastle for a week.
    
The Trust uses two gas engines to drive alternators that produce enough electricity to meet a half its electricity requirements. The waste heat generated by this process, in the form of steam and hot water, is collected and used for the Trust’s heating, including space heating and hot water around the hospital. Because the units are located within the hospital grounds it is also very efficient as virtually no electricity is lost during transmission.
    
Overall the units will reduce CO2 emissions produced by the Trust by almost 11,300 tonnes per year. It will also save the Trust more than £1.5 million in energy costs annually – one of the largest savings from a combined heat and power for an NHS Trust.

How the Scheme works
The CRC Energy Efficiency Scheme will be phased in over three years. Once fully operational, CRC Participants (not Information Declarers) will be required to monitor their emissions and purchase allowances for each tonne of CO2 they emit at the beginning of each reporting year.
    
The scheme is revenue neutral overall meaning all revenue raised from selling allowances is re-distributed back to Participants according to their position in the annual Performance League Table. As a consequence, reducing carbon emissions means Participants will save money on their energy bill, will purchase fewer allowances and receive greater financial reward through revenue recycling.
    
Participants that perform well will also be placed higher in the Performance League Table, which will be published annually by the Environment Agency. In an age of eco-conscious public, being higher up the league table will have the added benefit of enhancing the organisation’s reputation.

Take action now
If you believe your organisation is likely to fall under the CRC Energy Efficiency Scheme, the first step you need to take is to identify your highest parent organisation, as that’s the body responsible for registering for CRC on behalf of the entire organisation. Before registering, determine if your organisation qualifies for CRC as a Participant or Information Declarer. This will require taking account of all half hourly meters in your organisation and their total electricity consumption for the calendar year 2008.
    
Once you know if you are a Participant or Information Declarer, you will need the following information to register for the scheme: your registration address, the names of senior officers and contact details along with the half-hourly meters your organisation has and those meters’ electricity consumption. Making sure this information is easily available and getting all the data in order beforehand will make registration simpler and quicker.

Public and private sectors
When it comes to reducing our emissions, we are all in this together. Many public bodies are setting the right example for the corporate sector in cutting emissions. However, it is possible that poor public sector performers will take out less than they put in, while good corporate performers will get a financial bonus. But it also works the other way round. If a public sector organisation performs well, it could get an extra financial boost.

Our own research shows that the public sector has the potential to cut its energy use by a fifth at no overall cost, so there is no reason why this sector should not do well out of the CRC. Organisations like hospitals and local authorities that get smarter with their energy can divert money wasted on energy bills into front line services.
    
Organisations housed in old buildings stand to benefit as much, if not more, from the CRC Energy Efficiency Scheme than those in newer buildings. This is because there are many small and cost effective steps that these organisations can take to improve the energy efficiency of older buildings and reduce carbon emissions. These simple steps will save money on energy bills. These savings are expected to be well in excess of the costs of participating in the scheme, freeing up capital to be used elsewhere in the organisation.
    
We all – including the public sector – have a part to play in cutting dangerous greenhouse gas emissions. The government can’t have one rule for businesses and another for its own operations.

Time to take charge
The CRC Energy Efficiency Scheme gives financial and reputation incentives to businesses and public sector organisations to reduce their CO2 emission. However, the real opportunity lies in the financial savings to be made by improving energy efficiency.
    
Organisations have the choice between viewing CRC as a benefit or a cost. CRC can be a cost on poor energy management or a financial incentive for low carbon leadership. The Environment Agency hopes other organisations will follow our lead and embrace their role in helping to fight climate change.

Process heating and drying
About 40 per cent of the energy used in UK industry goes on process heating and drying. Cutting the energy costs of process heating is often a great way for a company to save money.
    
Up to 10 per cent of this energy could be saved using straightforward techniques.

• Heat recovery: Re-using heat from a process makes financial sense
• Insulation: Insulate all steam pipework well as all hot-water and hot-oil systems. Effective insulation can cut energy costs by up to 5 per cent. 
• Boilers: A well-maintained boiler is far cheaper to run. So, closely monitor your boiler’s combustion efficiency and schedule regular maintenance work.

Heating and hot water
Heating and hot water can account for 60 per cent of your total energy costs. And because it’s possible to reduce your heating costs by up to a third, the potential savings are substantial.

• Install boiler sequencing controls: If you have a number of boilers on your site, a boiler sequence control that fires the minimum number of boilers at the same time will save energy
• Replace inefficient boilers: Higher efficiency boilers gain better energy savings
• Install de-stratification fans: In commercial or industrial buildings with warm air heaters and high ceilings, de-stratification fans can reduce energy use by 20 per cent by blowing warm air down to ground level where it’s needed.

Lighting
On average, 25 per cent of an organisation’s electricity costs come from lighting. Yet you can cut these costs by up to a third while reducing your carbon footprint and improving the working environment for your staff. Switch lights off in empty rooms. You could cut your lighting costs by as much as 15 per cent just by making sure you turn off lights in areas that aren’t being used.

• Use energy efficient lamps: If you have fluorescent tube lighting, changing from T12 tubes to T8s will bring energy savings of 10 per cent. Upgrading lamps and fittings to T5 will bring even greater savings and will retain a high light output. This short video explains how to replace T12 tubes
• Install occupancy sensors: Why light empty spaces? Occupancy sensors, which switch off lights when a space isn’t being used, can reduce lighting costs by 30 per cent
• Install daylight sensors: Lighting a space artificially when daylight is already doing the job is a waste of energy. Light sensors (photocells) can switch off or dim artificial lighting when there is sufficient daylight.

For more information
For more information about the CRC Energy Efficiency Scheme and to download the CRC Registration Guidance visit www.environment-agency.gov.uk/crc

For assistance or queries about the scheme contact the CRC dedicated helpdesk at crchelp@environment-agency.gov.uk

You can make an action plan for reducing your organisation’s energy use on the Carbon Trust website: www.carbontrust.co.uk