Landmark hospital energy deal

06 May 2011

The Royal Free Hampstead NHS Trust in North London, which treats 700,000 patients a year, has signed a 15-year contract with MITIE.

As part of the agreement, MITIE has developed a new energy centre within the hospital which will supply all of the Trust’s energy independently of the national grid, including heating and hot water. This will reduce the hospital’s external energy dependence and increase its efficiency - cutting emissions and saving money.
At the heart of the energy centre is a high efficiency gas turbine that will provide the hospital’s electrical and heat supply. It is the same type of technology found in modern jet fighter engines.
The centre will save the Royal Free 16 percent in carbon emissions in its first year – approximately 4,500 tonnes of CO2 which is the equivalent emissions of over 2,000 family cars per year (based on a Ford Focus driving 10,000 miles a year).
As well as the reduction in CO2 emissions the energy centre will save £13.7m for the hospital over the term of the contract. The annual saving of £850,000 on fuel bills equates to about 20 per cent of the Royal Free’s utility bills alone. In addition, MITIE is helping the Trust with other energy-saving initiatives and projects which will cut the overall CO2 emissions by a total of 25 percent.
The project involves the replacement of three boilers – a huge undertaking as the boilers each weigh 20 tonnes and are similar in size to a large van (measuring four by six metres).
The development of the energy centre has been funded by MITIE and its partners, which will maintain it for the length of the agreement in return for an annual fee from the hospital. This means that the hospital capital budget is preserved and it can focus resources on its core mission of providing world-class clinical services. MITIE will also work with the NHS Trust to help it meet its NHS carbon reduction targets, including cutting CO2 emissions by 15% on 1995 levels by 2020.
As part of the contract MITIE has guaranteed to deliver financial efficiency savings and, if these exceed the capital outlay, share the surplus funds with the Trust.
Ruby McGregor Smith, MITIE’s chief executive said: “This landmark agreement provides Royal Free Hampstead NHS Trust with first-class energy facilities, reduced carbon emissions and substantial ongoing cost savings. At a time when public services are faced with increasing budgetary pressures, this kind of mutually beneficial model enables hospitals to simultaneously free up resources for patient care and meet increasingly strict environmental regulations.”
Martyn Jeffery, estates director at the Royal Free Hampstead NHS Trust said: “This performance-based contract solved the dilemma we faced as an NHS Trust, in allocating resources to sustainability actions while maintaining our clinical funding. It will enable us to meet our targets and gain certainty of supply without any adverse impact on patients, staff or other stakeholders.”
As part of this arrangement surplus heat will be captured and recycled to supply 1500 local council houses in Camden. More details on this CLICK HERE and HERE