FUNDING AND NET ZERO
Above: Solar panels, as seen above over a car park roof at Eastbourne District General Hospital, can offer a renewable alternative. The hospital installed 2,250 solar panels as part of a project to reduce carbon emissions. Right: CHP is being considered as a ‘bridge’ technology.
Technology pathways
n CHP: Yesterday’s hero, tomorrow’s dilemma For a decade, Combined Heat and Power (CHP) was the go-to technology. With generous spark spreads and carbon accounting that favoured on-site generation, CHP delivered substantial revenue savings and rapid paybacks. Many Trusts regret not having installed more capacity during this ‘golden window’. Today, with electricity grid carbon factors falling, new gas-fired CHP generally increases emissions. Yet, context matters. In regions with access to low-carbon hydrogen that meets the government’s Low Carbon Hydrogen Standard, CHP could make a comeback. If hydrogen can be supplied at the same price as natural gas, hospitals could retain the economic benefits without the carbon penalty. For multi-site Trusts with one hospital near a hydrogen cluster, CHP revenues from that site could even be recycled to support decarbonisation at less advantaged sites.
n Hybrid models Another approach is to accept CHP as a transitional technology. A trust might install CHP now, benefiting from significant revenue generation. If structured correctly, this revenue can be ring-fenced and recycled into heat pump deployment and supporting infrastructure, effectively using CHP as a ‘bridge’ technology. While politically uncomfortable for some, it could create affordable, fundable projects over a 15-year horizon – provided policy allows Trusts to retain and reinvest the benefit.
n Heat pumps with storage and smart tariffs If CHP is unpalatable, the next frontier lies in pairing heat pumps with batteries and thermal storage. This model relies on time-of-use tariffs: charging batteries with cheap off- peak electricity and deploying that energy at peak times when prices spike. Although battery technology is proven, we have yet to see a full-scale NHS deployment combining batteries with 100% electrified heat. There are pilots, but no scaled schemes. With the right tariff structures and supplier partnerships, this approach could materially shift the economics.
November 2025 Health Estate Journal 73
n District heating District heating offers promise, particularly where local authorities or developers are investing in large-scale low-carbon networks. But the case depends heavily on the carbon factor of the heat supplied – both today and projected to 2040. Resilience and redundancy are critical: a hospital cannot compromise patient safety by relying on a single external source. Where conditions are right, however, district heating can provide a viable long-term path.
n Deep geothermal Deep geothermal is re-emerging as a serious option. Projects drilling 2 km or more into the subsurface, using open-loop systems, can deliver large volumes of low- carbon heat with a 50-year asset life. The Carbon and Energy Fund has been at the forefront of bringing these projects to NHS sites, with the British Geological Survey mapping favourable locations. The challenge lies in upfront risk. Until the well is drilled,
heat yield cannot be guaranteed, leaving Trusts exposed to £600–700k of early risk. Yet once proven, these schemes are net-present-value positive over long horizons. If a
Aerial shot of a geothermal drilling site in Germany which is generating geothermal energy.
Innovative Energie fur Pullach
Carbon and Energy Fund
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