Finance for UK Hospitals for Energy Efficiency

THE UK Green Investment Bank (GIB) announced yesterday a £1.1m to finance the £3.1m energy efficiency project with Cheltenham General Hospital, managed by Gloucestershire Hospitals NHS Foundation Trust.

This has mobilised an additional £1.1m of private sector investment, from the Aviva Investors REaLM Infrastructure Fund. The project will also receive a £900,000 grant from the UK Department of Health.

The investment is being made by the Aviva Investors REaLM Energy Centres Fund, in which GIB is the cornerstone investor. GIB has committed £50m to the fund, to make investments in small scale energy efficiency projects.

The 'spend to save' model means that the repayments will be paid for from the cost savings generated by reducing electricity consumption. The project will save the Trust money from day one.

As well as reducing the Trust's energy costs by 40%, the project will reduce the Trust's greenhouse gas emissions by 30%.

As one of the most energy intensive organisations in the UK - spending more than £750 million on energy costs each year - the NHS (National Health Service) is actively exploring ways to reduce energy use and save money. In response, GIB has created the Health Sector Energy Efficiency Financing Programme to help Trusts and Health Boards finance energy efficiency measures. GIB estimates that energy efficiency measures could cut the current energy bill by up to 20%, £150 million each year.

GIB has today published a report 'A healthy saving: energy efficiency and the NHS' which sets out the scale of the opportunity and the help GIB can offer.

Investment in energy efficiency could provide the NHS with more reliable and resilient systems that would significantly reduce costs and operating risks. It is estimated that the capital investment requirement in the NHS estate could be up to £1.5 billion.

The NHS has already adopted a target to cut its greenhouse gas emissions by 10% by 2015. By introducing energy efficiency measures such as combined heat and power systems, LED lighting, heating, ventilation and control systems and biomass boilers, GHG emissions could be quickly cut by 25%.

GIB and its partners are running a series of seminars on NHS Energy Efficiency across the UK, the events began in Birmingham, and future events are planned.

Shaun Kingsbury, chief executive, UK Green Investment Bank, said: "As we would expect, the NHS is one of the most energy intensive organisations in the UK. We want to help it reduce its energy costs by providing a package of support to finance energy efficiency measures. These investments require no upfront outlay by the NHS and the costs are more than covered by lower bills, saving money overall.

"Investing in energy efficiency isn't just about cost savings and environmental benefits. Projects - like the four we've already supported - can help the NHS upgrade its facilities while improving the reliability and resilience of its systems."

Picture of Cheltenham General Hospital by David Hawgood [CC-BY-SA-2.0], via Wikimedia Commons

Friday 4th April 2014

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