The NHS is under constant pressure to cut costs and improve efficiency. Here, Tony Orton, head of healthcare business development at Centrica Business Solutions, discusses how updating energy systems could help the NHS meet its cost-saving targets
A growing population, increasing life expectancy, and Government targets to save almost £22billion by 2020 – these are just three of the challenges placing enormous financial stress on the NHS.
Currently, the health service spends more than £6.5billion per year maintaining and running its estate and facilities, and energy makes up around £500m of this bill.
Power is not just an inescapable overhead anymore. It can drive business growth by unlocking cost savings and improving operational efficiencies
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, estimating 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.
We found that if only 50% of NHS England updated its outdated energy systems, it could save £130m each year – enough to support the recruitment of around 4,000 new nurses.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: 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 to access new revenue streams, too.
Combined heat and power (CHP) technology is one of the most-popular distributed energy solutions.
Powered by an engine, CHP units convert a single fuel into power and heat simultaneously on-site. <.p>
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.
We found that if only 50% of NHS England updated its outdated energy systems, it could save £130m each year – enough to support the recruitment of around 4,000 new nurses
Once installed, CHPs can lower energy bills by up to 40% and cut carbon emissions by up to 30%. They have a typical lifespan of up to 15 years.
Hospitals’ typically large and complex estates 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, hospitals can connect smart sensors to their equipment that will 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.
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.
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
The stored energy can also be tapped into when an intermittent supply causes disruption. This can be crucial for the healthcare industry, whose 24-hour service relies on a constant supply of energy.
Recent research we conducted found that nearly half (46%) of healthcare organisations have suffered an interruption to energy supply due to external factors over the last 12 months. 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 generate revenue for healthcare sites.
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.