Helping the NHS save energy and costs

The latest ERIC report from October 2016 reported that the total annual energy usage from all energy sources across the NHS Estate amounted to 11.9 billion kWh, an increase of 3.5% from 2014/15. In this article we demonstrate how further reductions in cost and energy consumption can be made to help the NHS reach its next carbon reduction target.

But what if you could reduce this further and possibly exceed targets?

Making savings on energy expenditure is always high on the agenda within finance and energy departments and the NHS is no exception. But where do you start and what do you need to do to ensure energy is reduced and costs are kept to a minimum?

Procurement

Energy is still one of the NHS’s significant expenses and the starting point is to consider your energy procurement and most importantly your energy procurement strategy, whilst at the same time ensuring that the supply is sourced from a compliant route such as an established framework. A review of your energy procurement should initially start with a complete review of the type of supply contract you are utilising. This could be a fully delivered fixed price contract with no visibility of the commodity element nor third party non-commodity costs, as they are all fixed within your unit rate, or a bespoke flexible risk managed solution, which is completely transparent and enables you to optimise the commodity element while scrutinising third party non-commodity costs. Non-commodity costs are made up of obligatory charges and levies from third parties. In 2015/16 this charge accounted for around 50% of a customer bill.

The contract type selected will often be determined by an organisation’s appetite for risk and/or the requirement for budget certainty and these discussions should always include input from all key stakeholders within your organisation. Bespoke flexible risk managed portfolios have become more common in the market place and are underpinned by a robust risk management strategy. With rising third party non-commodity costs you can also achieve further savings through the transparency of these costs and elements such as Triad avoidance or Distribution Use of Systems (DUoS) optimisation.

Once a contract type and strategy have been completely defined then all supply information is verified and tendered to the appropriate suppliers in the market place with all offers being analysed and the best supply contract selected. Following this it is imperative to be able to monitor the future energy markets to look for the most opportune time in the market to purchase all or some of your energy requirements.

Invoice Validation - Only paying for what you use

Suppliers’ contracts and invoices can be very complex and difficult to understand and as a result it is inevitable that some billing errors will be missed if not validated correctly. With flexible and energy only contracts becoming a more popular way of buying energy, additional validation is required to balance reconciliation statements from suppliers and check the growing number of third party charges.

It is estimated that between 3% and 5% of utility expenditure can be saved by fully validating all elements of the suppliers’ invoices. Further savings can be achieved by reducing time spent by internal staff dealing with utility issues. This type of saving can often outweigh the cost of an energy bureau service, which should equate to less than 0.5% of the total utility expenditure.

Accounts Payable - Faster solutions, accurate results
Changing to electronic billing and using a system that can import and validate these invoice files provides a much more efficient way of processing utility invoices. Once validated, invoices can be included on a consolidated accounts payable file that can be imported into most accounting software. This process further reduces the time internal staff spend processing invoices and also ensures that duplicate or incorrect payments are eliminated.

Monthly Executive Reports – Having the right data at your fingertips

The Estates Return Information Collection (ERIC) is the main central data collection for hospital estates and facilities services from the NHS. ERIC is a resource of valuable data that enables the analysis of Estates & Facilities information from NHS Trusts and PCTs in England.

Completing your statutory reports accurately can be rather stressful and time consuming especially if your data is limited or incomplete. Limited or incomplete data is a common issue experienced when completing ERIC reports, however having this data provided to you on a report, such as our monthly executive report (MER), can help ensure statutory reports are easier to complete.

The report is a comprehensive provision that contains the following sections:

  • Database Statistics – showing how many sites, accounts and meters are being monitored
  • Monitoring Point Analysis – showing the breakdown of meters across the estate
  • Invoice Statistics – showing the number and value of invoices processed in the period
  • Billing Query Information – showing the bill validation savings to date, and outstanding queries
  • Management Report – showing overall consumption, CO₂ and costs for the last three years
  • Electricity/Gas/Water Performance Analyses – showing the top 10 poorest performing properties by cost, consumption, energy PI, average p/kWh and year on year increase

Section 7 (energy) and section 8 (water) of your statutory report, can be completed using our MER which provides all the information you need about your electricity, gas and water consumption all in one place. Having all of this data at your fingertips will ensure that your statutory reports are easier to complete.

The data provided within the MER is both accurate and easy to use.

Profile Alerts - Highlighting wastage

Identifying where energy is being wasted is essential, because if you can’t see it you can’t save it. Profile alerts are an intuitive way to combat energy waste and other exceptional consumption. Profile alerts are successful in identifying energy waste directly and in suggesting behaviourial changes that can be implemented to reduce wastage. Profile alerts work for both small and large multi-sites that use HH or AMR electricity meters and data loggers, providing great cost and time saving opportunities.

Setting consumption targets and undertaking proactive monitoring, is a great way to ensure that you are only using what is needed. STC provide half-hourly and AMR profile data management for electricity, gas and water meters and loggers. We use sophisticated software modelling to build a picture of a site’s consumption profile, which is then automatically monitored for exceptions. Any deviations will trigger an email alert, and can be viewed on a map-based site exception dashboard. Reporting can quickly highlight which sites are over target, enabling swift corrective action.

Demand Response - Avoiding peak times

With the introduction of the capacity market, reducing energy usage during peak times is crucial. For example, radiation departments in hospitals could reschedule appointments outside of the DUoS (Distribution Use of System) red band times. Our analysis of the profile data can assist with identifying periods of consumption that could be reduced during peak times. Peak times are typically 4pm – 7pm Mon – Fri, however peak times can vary by region.

DUoS charges during the red band period can be significantly more expensive than other periods. These charges are likely to rise as demand increases. By shifting the electrical load away from that period can help reduce costs, without the significant capital outlay.

What can you do?

Analyse the 30 minute profile data usage to see what load is being used during the DUoS red band periods. 

Determine what load could be moved to other times and recommend actions to reduce consumption during this peak period. The results can then be monitored to see the impact of the actions taken.

Calculate the cost of energy used during the red band times.

Undertake a site survey, to identify key plant that could be time-controlled to reduce red band consumption.

Sub Metering

Sub metering enables you to monitor energy usage for tenants, individual departments, pieces of equipment or other loads individually to account for their actual energy usage. With sub metering, a clear and accurate picture of how and when energy is being consumed inside a facility is available.

This ensures that all metered areas can see what they are using and any tenanted areas are charged accurately and only pay for what they use.

Having this data available online would enable the NHS to view their consumption and engage in energy efficiency monitoring and behavioural changes, making the building a more sustainable property.

Benefits of sub metering include:

  • Accurate energy monitoring, real-time energy consumption
  • Granular in-depth review of facility energy data
  • Better informed to make decisions that can help optimise energy performance
  • Ability to record actual energy usage (no estimates)
  • Comparison of usage across similar facilities over time
  • Ability to identify and eliminate wasted energy
  • Early access to maintenance issues for repair before critical equipment fails

Compliance

Although the CRC scheme is nearing its demise in 2019, annual returns and audits will still be required. Savings can be made here by ensuring that estimated invoices are kept to a minimum by using Profile / AMR data or self-read meter readings. This will save an uplift of 10% on estimated data when purchasing allowances.

If you would like to find out more about how STC Energy can help you save time, money and energy, get in touch today!

For solutions and services that work use STC Energy (part of the Inspired Energy group).

Tel: 
020 84662900

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