Energy Performance Contracting in NHSScotland

Transcription

1 Energy Performance Contracting in NHSScotland Presentation to All-Energy May 2016 Thomas Pye Energy Manager Health Facilities Scotland

2 NHSScotland Overview

3 NHSScotland Energy Use

4 NHSScotland Overview 2014/15 Energy Statistics: c GWh energy consumption c. >500,000 tco 2 e c. 100M (excluding CRC and EU ETS) c. 1% of Scotland s overall GHG emissions c. 4.6Mm 2 estate c. 1,400 buildings 202 hospitals 154,000 staff (6% of Scotland s workforce)

5 Why is Energy Efficiency Important to NHSScotland?

6 In the last 5 years, energy consumption down by 7% and CO2 emissions down by 9.3% 12-May-16 6

7 But...The Challenge 250million Salix, Green Investment Bank, Aviva, DH Loan, REIF, etc. etc.

8 Energy Performance Contracting: Principles No upfront capital cost the funding for the installation is provided by a third party funder or the contractor Contractors provide a holistic energy solution to a site (combination of energy generation and downstream measures) Contractors guarantee minimum energy savings (against an agreed baseline) Contractors operate and maintain the installed plant to agreed standards (e.g. availability)

9 Energy Performance Contracting: Principles Contractors are paid a unitary payment to cover the repayment of capital and O&M this is always less than the guaranteed savings If the savings are not met, or other performance measures are missed, financial penalties to the contractor (up to full loss of fee) Excess savings are either retained by the NHS Board or shared with the contractor Typically minimum 15 year contracts Range of available frameworks: Carbon and Energy Fund, Non-Domestic Energy Efficiency Framework, Re:Fit, Essentia, other private sector

10 The Carbon & Energy Fund (CEF) Various Energy Performance Contract models scrutinised in 2012 CEF selected as the preferred model Dedicated NHS programme with proven track record of delivery Supported by large funding tranche at competitive rates OJEU-procured framework of experienced contractors

11 The Carbon & Energy Fund (CEF) Standardised contract Underpinned by independent M&V Full end to end project management and technical support feasibility, pre-procurement, procurement, construction, commissioning, operation. No up front costs or fees all rolled into unitary payments.

12 NHS Grampian Major energy infrastructure upgrades at 3 sites: Foresterhill Campus, Royal Cornhill & Dr Gray s (Elgin) Includes new biomass boilers at Dr Gray s, upgrade of existing energy centre at Foresterhill and a district heating connection to Royal Cornhill Additional downstream energy measures at all sites Significant reduction in backlog maintenance at all sites Contract awarded to Vital Energi

13 NHS Grampian Equivalent capital investment: 18.7M ( 12.5M initial investment, 6.2M lifecycle replacement) Unitary payment: 1.392M p.a. Guaranteed savings: 1.978M p.a. Net savings: 586k p.a. (plus any excess) Net Present Value (over 25 years): M >6,000 tco2e savings p.a. (c 16% of NHS Grampian total)

14 NHS Tayside Major energy infrastructure upgrades at 3 sites: Ninewells Hospital, Perth Royal Infirmary & Stracathro Hospital Includes refurbishment of CHP energy centre at Ninewells, and full LED relamping across all sites. Additional downstream energy measures at all sites Significant reduction in backlog maintenance at all sites Contract awarded to Vital Energi

15 NHS Tayside Equivalent capital investment: M Unitary payment: 2.228M p.a. Guaranteed savings: 2.614M p.a. Net savings: 386k p.a. (plus any excess) Net Present Value (over 25 years): M >11,500 tco2e savings p.a. (c 30% of NHS Tayside total)

16 But.. A further 6 or so NHS projects were planned for CEF procurement within the next 2-3 years c 50M equivalent investment Another 150M of energy efficiency projects have been identified Overall, savings across the estate of 28% energy/ GHG emissions potential Recent changes to accountancy rules (ESA 10/ IFRS 16) Scottish Government has decided that the CEF form of contract does not comply Recent Scottish Government Non-Domestic Energy Efficiency Framework cannot be used either And for similar reasons, this rules out Re:Fit, Essentia and other schemes

17 Back to this 250million Energy Performance Contracting Salix, Green Investment Bank, Aviva, DH Loan, REIF, etc. etc.

18 Things we are doing Big push from NHS Chief Executives to save money from the energy bill Do More With Less Prioritising low/no cost measures Reviewing control settings Behaviour change campaign Forensic analysis of energy and water bills, e.g. Maximum Demand reviews, correct sizing of utility meters, etc.

19 Questions and Discussion Thomas Pye T: E: