Energy Innovation. At Kaiser Permanente

Transcription

1 Energy Innovation At Kaiser Permanente October 26, 2016

2 Kaiser Permanente at a Glance Recognized as one of America s leading health care providers and not-for-profit health plans Kaiser Foundation Health Plan Permanente Medical Groups Kaiser Foundation Hospitals > 10.6 million members > $60 billion annual operating revenue 18,652 physicians 51,010 nurses 186,497 employees 8 states and the District of Columbia 38 hospitals > 630 medical offices and other facilities 1

3 Mission Alignment: Do No Harm! Kaiser Permanente s mission is to provide high-quality, affordable health care services and to improve the health of our members and the communities we serve. Kaiser Permanente is committed to creating healthy communities, and we all take pride in our focus on prevention, and that includes taking a stand to reduce our greenhouse gas emissions. - Bernard J. Tyson 2012 Chairman and CEO Bernard J. Tyson (center) participates in a panel discussion during the 2015 Paris Climate Conference. 2

4 Industry Leader in Environmental Stewardship

5 Health Effects of Climate Change Asthma Infectious Disease Allergies Weather-Related Injuries 4 Toxic Red Tides Extreme Weather Heat Stress

6 Health and Climate Change The 2015 Lancet Commission on Health and Climate Change maps out the impacts of climate change and the necessary policy responses, to ensure the highest attainable standards of health for populations worldwide. This Commission is multidisciplinary and international, with strong collaboration between academic centres in Europe and China. The central finding from the Commission is that tackling climate change could be the greatest global health opportunity of the 21st century. The Commission s report outlines the major threats both direct and indirect to global health from climate change through changing patterns of disease, water and food insecurity, vulnerable shelter and human settlements, extreme climatic events, and population migration. Although vector borne diseases will expand their reach and death tolls, the indirect effects of climate change on water, food security, and extreme climatic events are likely to have the biggest effect on global health.

7 COST = Intensity x Footprint x Unit Price Over this period, Energy Intensity has declined 2%, avoiding over $4M in annual cost Energy Intensity includes all sources of energy (natural gas, electricity) divided by square feet 6

8 GHG Emissions Across Kaiser Permanente Net GHG Emissions 810,738 metric tons, 2014, Verified Purchased energy: 66.5% Scope 1 & 2 Refrigerant emissions*: 2.7% Medical gases (N2O, CO2, SF6): 2.3% Stationary combustion: 24.8% By far the largest two emissions sources are electricity supplied by the grid and natural gas burned at our facilities totaling more than 90%. Anesthetic agents: 1.6% Fleet vehicles: 2.0% Since 2008 baseline, GHG Emissions declined 3%

9 Basics BALANCING THE KP ENERGY EQUATION Impact on Affordability Demand Manage KP Facility Energy Intensity to lower consumption Supply Green the Energy Supply Side while lowering risk and rates Carbon Carbon Reduction supports Total Health 8

10 9 Kaiser Permanente s Commitment to Renewable Energy

11 Structured Renewable Product Agreement The off-site deal reduces KP s exposure to future energy price spikes POWER TO GRID price history chart for natural gas delivered in July year term for fixed price agreement with 2% annual escalation; production begins in KP pays fixed price per unit for financial energy, resource adequacy capacity, and Renewable Energy Certificates $25M/year commitment, approximately 18% of KP s California electricity costs. Two plants: wind turbines in the Altamont Pass and a solar farm in eastern Riverside County Effectively a hedge as energy is generated in the same market in which KP procures Direct Access KP (Corporate) 20-year Fixed Price + Management Fee $ Value of Energy + Renewable Attributes RENEWABLE POWER GENERATION

12 Help is Available! KP is a co-founder of Business Renewables Center (BRC), leading major corporations by sharing best practices in the renewable energy space. 11

13 Impact of Solar (MOB) Off-peak $0.0372/kWh Mid $0.0615/kWh Peak $0.112/kWh Mid $0.0615/kWh Off-peak $0.0372/kWh Off-peak $0.0372/kWh Mid $0.0615/kWh Peak $0.112/kWh (A) Mid $0.0615/kWh Off-peak $0.0372/kWh (B) (A) (B) Net-metered back to SCE Electricity charges for each facility depend on its usage profile Solar decreases both demand and consumption portions of the bill Net metering: Utility credits you with electricity produced in excess local demand Parameter Pre - Solar Post Solar Delta Max Demand (A) kw kw 35% reduction Max Demand Time 2:45 pm 6:15 pm On-peak to mid-peak Electricity from Utility (B) 4,412 kwh 739 kwh 83% reduction 12

14 Impact of Solar (Hospital) Off-peak Mid-peak Peak Mid-peak Off-peak (A) Off-peak Mid-peak Peak Mid-peak Off-peak (A) (B) (B) Electricity charges for each facility depend on its usage profile Solar decreases both demand and consumption portions of the bill Parameter Pre - Solar Post Solar Delta Max Demand (A) 523 kw 472 kw 10% reduction Max Demand Time 2:15 pm 5:00 pm Same TOU Electricity from Utility (B) 33,746 kwh 27,335 kwh 19% reduction 13

15 Other Distributed Generation Opportunities Fuel cells and energy storage may reduce energy spend Fuel cells Convert a fuel (usually natural gas) to electricity by means of a chemical reaction rather than combustion. Have proved dependable at 7 KP locations in SCAL. Currently installing at an additional 30 to 40 locations; potential savings of $100M+ over 15-year term. No capital cost; KP pays for the power produced. Energy Storage (Batteries) Included in $4.7M California Energy Commission grant for Richmond Medical Center Store electricity when less valuable, release when more valuable. No capital or operating costs - KP locations would host batteries owned and maintained by others and share in the revenue stream. 14

16 Carbon Net Positive by 2025

17 KP Greenhouse Gas Emissions (GHG) 16 *Refrigerant emissions are associated with routine use of heating, ventilation, and air conditioning equipment in buildings. **Stationary combustion refers to emissions associated with use of natural gas by boilers and diesel fuel by standby power generators.

18 Climate Action Team Options Analysis: DESCRIPTION EXAMPLES CONSIDERATIONS ECONOMIC ANALYSIS POTENTIAL GHG IMPACT LEGITIMACY ADDITIONALITY

19 Lessons Learned Top Cover an effective renewable energy program must support the Mission Allies develop an inter-disciplinary team: facilities, sustainability, finance, accounting Consultants need to have skin in the game