ENERGY AND CARBON REDUCTION
‘De-risking’ heating projects in the drive to Net Zero
Nick Keegan, an expert in building energy efficiency and energy performance contracting, and a director at provider of performance advice, assurance, and verification services for commercial energy-saving schemes, EEVS, considers some effective approaches to ‘de-risking’ heating projects in the drive towards Net Zero.
Scrutiny of the transition to Net Zero is growing in all parts of our society. The NHS is of course not immune to forensic analysis. A Freedom of Information request last year for data on the low carbon transition across 140 NHS Trusts revealed that 53% said that they were behind on their decarbonisation targets set out under the NHS’s overall commitment to deliver Net Zero by 2040 for direct emissions. On the plus side, this data also indicated
that most Trusts have already installed energy efficiency technologies. Ninety- three per cent have upgraded lighting or are planning to do so, with the proportion standing at 90% for building control and automation systems, and 69% for improvements to insulation. It is of course the large capital heating projects that are key to turning the low carbon dial, and, ultimately, Net Zero delivery.
Public Sector
Decarbonisation Scheme Positively, many NHS Trusts that we are working with have benefited from the government’s Public Sector Decarbonisation Scheme (PSDS), and this grant funding has driven the procurement and installation of more sustainable heating, lighting systems, and building fabric improvements. With the Non-Domestic Renewable Heat Incentive (NDRHI) no longer available, the PSDS funding has been important to make the business case stack up for a move away from gas. Phase 3 PSDS funding was announced last September, and applications opened early last October. This is a critical development, because without this it would not be financially viable to embark on a new project and move away from gas. This is because of the much higher cost of electricity relative to gas in terms of the price per kilowatt hour. Even with good heat pump coefficient of performance, the price per kilowatt hour of heat with this type of system is often still higher than gas. If we consider an acute site for one of our NHS clients, they pay around 11p/ kWh for electricity and 2p/kWh for gas,
including VAT and Climate Change Levy. With an annual heat usage of roughly 15 GWh, and current gas boiler efficiency of 80%, they would pay £37,500 more per annum in heating fuel cost by switching to heat pumps with a good coefficient of performance of 4, rising to £175,000 per annum at a coefficient of performance of 3.
Offsetting energy cost increases So, while the PSDS funding has dealt with the capital costs of the heat
pump installation, other energy-saving measures that achieve substantial cost savings – such as LED lighting, or heating distribution improvements such as de- steaming – are required as part of the package to offset energy cost increases from heat pump installations. Based on this current scenario, I suspect there will need to be further incentives beyond PSDS Phase 3 to deliver Net Zero and help more NHS Trusts move away from gas heating systems in the future.
Lighting works being delivered by Veolia, the global resource management company, on an NHS Energy Performance Contract.
April 2022 Health Estate Journal 29
©Veolia
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