Low carbon, low cost

Last year’s McKinsey Report revealed that the NHS may be forced to slash its workforce by over 130,000 if it is to achieve planned savings of £20 billion by 2014. The release of the report underlines the extent of spending constraints in the sector and the need to make existing funds go further. Although the idea of making cost savings through energy efficiency is being explored by many in the NHS, the potential financial savings on offer by reducing carbon emissions are not yet being fully realised by some Trusts. If cost cutting targets set out by the government are to be met without substantial workforce cuts, it is vital that healthcare boards place energy efficiency near the top of their agenda. This will help to reduce costs in a way that doesn’t affect frontline services.

Simple measures
The good news is that implementing a few straightforward, practical measures can help reduce the amount of energy consumed by Trusts and in doing so release funding for use elsewhere. For example, costs can be significantly reduced by setting appropriate temperatures, and ensuring heating equipment and controls are operated and managed correctly. In fact, it is possible to save up to 30 per cent on heating costs through the implementation of simple ‘low cost, or no cost’ energy saving measures. Other more far reaching investments, such as boiler upgrades and building refurbishments tackling heat loss can save considerably more than this. Lighting is also important as it can account for over 20 per cent of the total energy use in a typical hospital. An effective lighting system can both reduce costs and improve the quality of lighting for staff and patients.
    
Reducing energy consumption will also help NHS Trusts meet the legally binding UK carbon reduction target of a 34 per cent cut over 1990 levels by 2020. Already, new strategies and legislation are targeting carbon emissions in the NHS. The NHS Sustainable Development Unit has developed a carbon reduction strategy to help Trusts reduce their carbon emissions. Using guidance from the strategy, the NHS has set itself a target of achieving a 10 per cent reduction on its 2007 carbon footprint by 2015. Whilst this may seem like a daunting prospect to many NHS Trusts, by taking action to reduce their carbon emissions now, healthcare organisations can not only benefit from energy efficiency cost savings but also get ahead of the game in terms of the government’s Carbon Reduction Commitment (CRC).
    
The CRC is a mandatory scheme that targets carbon dioxide emissions from large public and private sector organisations, which use more than 6,000MWh of electricity per year. The CRC has significant financial and reputational implications for organisations so it is vital they understand how it will impact them and how they can profit from early action to reduce the cost of compliance and minimise risk. Until 2013, organisations that are part of the scheme must buy carbon allowances to cover their emissions at a cost of £12/tCO2, after this the price will float, and trading will begin in earnest. This money will be paid back to businesses in October of each year, but how much is dependent on how highly they are ranked in the CRC league table. In 2011 the league table is determined solely on the basis of whether the organisation has taken ‘early action’ in advance of the CRC. With healthcare organisations set to make a significant financial loss or gain dependent on their performance in the scheme, carbon reduction will be high on the agenda of every healthcare board across the UK.

Help at hand
The Carbon Trust’s NHS Carbon Management programme is designed specifically for the NHS – providing support for staff to produce a board approved carbon management strategy, with a roadmap to achieving real cost and carbon savings. What’s more, the Carbon Trust’s advice includes analysis tools, training and workshops, and expert one-on-one support, all free of charge. Past participants have identified average annual cost savings of over £490,000 per Trust per year, with carbon savings of 4,400 tonnes per Trust annually. Since May 2008, the Carbon Trust has helped 82 NHS trusts, like Wrightington, Wigan & Leigh, produce effective carbon management plans.
    
Wrightington, Wigan & Leigh employs around 4,200 staff, serving patients across Wigan and Leigh. In 2004/05, the Trust spent approximately £1 million on energy, emitting more than 17,000 tonnes of carbon dioxide. By 2007/08, this figure had risen to more than £1.5 million and it was anticipated that it would double to £3.2 million by 2008/09. Eager to slow the snowballing energy costs, the Trust joined the Carbon Trust’s NHS Carbon Management programme.
    
By working with the Carbon Trust, Wrightington. Wigan and Leigh has mitigated the effects of rising energy prices and limited the increase in its energy costs, as well as cutting carbon emissions. The Trust is already saving over £500,000 per year on its energy bill, and has cut carbon dioxide emissions by over 6,000 tonnes per year. Through one project alone – the replacement of a coal fired boiler house with a modern low-pressure hot water system – the Trust has been able to cost effectively save 3,000 tonnes of carbon per year.

Commitment from the top
To implement long term carbon reduction there is a need for board level and senior management support. Achieving energy and carbon savings in hospitals requires strong leadership, ideally from the chief executive. By demonstrating a commitment to the organisation’s energy policy at the top, staff lower down the chain will be empowered to take action on energy saving initiatives. To be accepted onto the scheme, NHS Trusts need to show this top level commitment, and to nominate a team committed to driving the programme forward. All members of the team need to work across organisational boundaries to promote and implement carbon reduction projects.
    
Epsom & St. Helier NHS Trust in Surrey was also able to improve its energy efficiency through the use of Carbon Trust surveys. These free walk-round surveys provide on-site assistance to help NHS Trusts to identify energy saving opportunities.
    
The Trust employs more than 4,000 people across four sites: St. Helier Hospital, a 600 bed general hospital; Epsom General Hospital, with 400 beds; and Sutton and Nelson Hospitals, both outpatient and day surgery units. Due to its substantial utilities bills totalling £1.5m per year, the Trust became aware of the need to become more energy efficient as a means to drive down costs.
    
A Carbon Trust survey was undertaken on each of the Trust’s four sites and made the following recommendations:

• Replacing current boilers with condensing boilers
• Upgrading the lighting (lamps and fittings)
• Introducing additional heating zone controls 
• Encouraging ‘ownership’ of the hospitals’ building management systems
• Carrying out general good housekeeping measures
• Raising staff awareness

The Carbon Trust predicted that, by following these recommendations, Epsom & St Helier Hospitals could save over £65,000 a year. A CHP (Combined Heat & Power) scoping study was also proposed in the report. Early indications are that CHP could reduce energy bills by £150,000 a year and cut carbon emissions by 300 tonnes, giving total potential savings of £215,000 per year alongside the other survey recommendations.
    
Considering the potential immediate and long term cost savings that can be made by taking carbon reduction seriously, the case for a more energy efficient NHS becomes clear. Not only will these savings have an impact on tough cost cutting targets, but they will also pave the way towards a greener health service.

For more information
NHS Trusts can find more information about the Carbon Trust by calling 0800 085 2005 or visiting www.carbontrust.co.uk/nhs