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September 2018
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TAKING THE GREEN ROUTE TO CUT CARBON FOOTPRINT AND MAKE VITAL COST SAVINGS

Rising energy costs and increasing awareness of environmental issues have created a growing demand for access to funding for green initiatives. The NHS is UK’s largest public sector emitter of carbon emissions, being responsible for a million tonnes of carbon a year costing an annual £500 million. Alastair Keir, Chief Executive of Salix Finance explains how NHS Trusts can lead by example in the bid to manage their emissions and fund projects.

Numerous legislation and targets such as The Climate Change Act, the Energy Performance in Buildings directive and Carbon Reduction Commitment Energy Efficiency Scheme coming into force in April are putting NHS Trusts under considerable pressure to reduce their carbon footprint. The CRC alone will affect an estimated 180 NHS organisations with strict penalties for those that do not take bold steps to cut their emissions. The NHS Carbon reduction strategy also sets an ambition for the NHS to help drive change towards a low carbon society.

In short, there has been a shift in focus on making CO2 savings, taking it from the fringes into the heart of political and management attention. In this environment, Carbon reduction is now not something that is optional – it is a must.

But with all these tough targets how can NHS organisations translate them into reality, as targets, while essential, don’t bring about change on their own. Without proper management, the pressure to meet them can lead to short-termism and poor decision making, and without ring-fencing, budget cuts be diverted to other areas.

Although long term cost savings are easy to achieve, reducing CO2 emissions often requires targeted, carefully planned up front investment to put the right technology in place and guarantee long term benefits. Often, the simplest of measures can yield the best results such as better insulation or new heating systems, but an assessment should be undertaken to ensure that the most cost effective solution is identified, and implemented.

The government has recognised that setting targets needs to be supplemented with practical support. To assist NHS and other public sector organisations, it has made available interest free funding through Salix Finance to drive such efficiencies. In the last budget a £51.5millon loan fund was announced, building on an existing conditional grant programme that sees every pound invested many times over in energy efficiency schemes, as energy cost savings from one project are reinvested in another. Money is only allocated to projects that can meet sensible energy and cost effectiveness criteria in advance – so money is only saved, never wasted. And rigorous monitoring ensures that the focus is kept on ensuring that projects are completed in full and savings are achieved.

Frimley Park Hospital NHS Foundation Trust in Surrey has already taken advantage of the Salix funding. It focused on six key areas: reflective panels behind radiators, boiler replacement, low energy bulbs in residences and in street lighting. It has also replaced the old pumps to the boilers that heat the main building with direct drive pumps with inverters, so that the motors will only work on demand (the old technology meant that the boilers were working all the time and are therefore energy inefficient). This work is projected to achieve an overall saving to the Trust in excess of £300,000. The Trust is currently looking at replacing the fluorescent lighting tubes in corridors and non-clinical areas.

Kwan Cheng, Business and Performance Manager, at Frimley Park says: -The real advantage to the Salix funding was that the money was ring-fenced for energy efficiency initiatives. So any savings made are put back into the pot for more energy-saving projects. The support from Salix is more than just funding though; it offers a resource of expert advice when called upon. Through the regional meetings with other Salix fund holders, we have also been able to share good practice, experience and knowledge from other public sector organisations, which has proved to be invaluable.

The current economic climate means budgets are set to be tight for the foreseeable future and there are real economic benefits from cutting carbon emissions. Investment in properly implemented energy efficiency projects will reap long-term financial dividends that can’t be ignored. The £175 million total Salix Finance funding that is being allocated for energy saving projects will achieve £600 million lifetime cost savings and 3.5m tonnes of carbon savings.

Gateshead NHS Foundation Trust obtained funding from Salix Finance in March 2007 because it needed help with its drive to reduce energy consumption, carbon and costs.

Since then the Trust has increased in size and capacity with the additional building of the north east surgery centre comprising 60 beds, four operating theatres, a breast diagnostics treatment centre, and a 100 bed Jubilee building. Despite these extra facilities, the Trust has seen a 22% fall in consumption of Gas and a 7.5% fall in consumption of electricity.

With Salix funding, the Trust has been able to implement energy saving schemes that otherwise would have been difficult to get off the ground. Salix funding of £120,000 matched by an equivalent amount from the Trust itself has enabled the Trust to fund additional projects including the installation of lighting upgrades, point of use water heaters, zone controls and a steam boiler controller, which will enable total expected lifetime savings of £665,540. Over the lifetime of these technologies at least 5,607 tonnes of CO2 will be saved.

As this is a recycling fund, with the initial Salix investment being reinvested in further efficiency measures, the trust will enjoy savings over a potentially indefinite period.

For further information on how to access interest free funding for energy saving projects visit
www.salixfinance.co.uk

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