How to Overcome Barriers to Transformative Energy Management in Health Care

Tip #23

By Jennifer Black, Craig Walter and Ian Larson

Health care—which must reliably operate 24 hours a day, 365 days a year—has unique operational needs. Energy is a critical, high-use resource that accounts for more than 2% of operating costs. This makes sustainable energy management especially important in this field to reduce costs, improve reliability of facilities, enhance care and meet the greater good of patients and employees.

During a recent ASHE Lunch & Learn focused on energy management strategies, the audience was polled to find out, “Where is your organization with its energy management program?” The responses ranged from, “we haven’t started (24%)” to “we’re leveraging data to build a business case (24%).” While another 24% have a well-integrated program that they are looking to expand even further.

Whether your organization is just starting in the tactical phase of data collection and planning, or already moving toward a more transformative strategy of monetizing on-campus energy systems, we examine practical solutions to overcome three main barriers to transformative energy management.

Barrier: Lack of data or ability to analyze

ENGIE Impact’s energy management experts have found that 52% of health care facilities implement five or more energy efficiency projects per year, and the foundation of this work is cost and consumption data. This can be collected from utility bills, interval meters or on-site energy management systems (EMS). Once you’ve gathered this data, use it! Apply digital energy management tools like advanced analytics or site level data capture to create baselines and reveal anomalies or outliers. Then prioritize the locations and projects that have the greatest potential for reduced energy consumption and costs.

One of the biggest challenges of this work is finding the right mix of time, skill and technology for data collection and analysis. Many organizations are resource constrained in these areas, but benefit from partnerships like those ENGIE Impact has with our clients. From data collection, to analyzation, to prioritization and strategy recommendation, having a holistic partner that is able to solely focus on your resource optimization can elevate your operations to a new level of excellence.

Barrier: Lack of centralized planning and stakeholder buy-in

Implementing change in a complex field like health care must be planned and championed from the executive level. It also requires engagement and action from leaders throughout the organization: facilities, engineering, finance, health and safety, and your supply chain partners to ensure every team is aligned with long-term energy management and sustainability goals. However, it’s a challenge to bring stakeholders together, especially as departments become very lean and long-term capital planning becomes more complex—often taking a back seat to the priority of patient care.

To overcome this challenge, it’s important to present a business case that resonates with decision makers. Facilities and energy managers/engineers can take the lead on development, including expected outcomes, savings, ROI, carbon reductions and a project plan to achieve a few “quick wins” early on. For instance, tackle low-hanging fruit such as energy efficient lighting, considering changes in energy costs, maintenance costs and system interdependencies (e.g., more efficient, cooler lighting could decrease cooling loads and improve both employee and patient visual and physical comfort). Often digital tools, like those utilized by ENGIE Impact, can help to both identify opportunities as well as track performance against KPIs.

Barrier: Overcoming financing risks

Historically, project financing comes with risk. But in health care, doing nothing also brings operational risks. Aging and outdated equipment increases maintenance and energy costs and reduces positive patient outcomes. But by financing capital projects across a portfolio, companies enable more rapid deployment of energy-saving equipment. By committing to an immediate project roll out, organizations can leverage economies of scale and purchasing power, and once more efficient equipment is in place, maintenance, energy costs and overall risks decrease over time.

To overcome the challenge of financing risks, partners like Redaptive are helping organizations transfer risk by taking on project development costs and guaranteeing savings. Two financing types are emerging for energy management: Energy as a Service (Eaas) and Commercial Property Assessed Clean Energy (cPace). Both offer off-book financing and no upfront costs. EAAS typically works better for good credit companies while cPACE can support moderate to low-rated credit companies. Also, work with local utilities to find out if there are commercial rebates based on kWh, therms and water saved.

Energy is just one area in which the health care field can accelerate their sustainability efforts and benefit from the long-term savings. As resources become more regulated – and more expensive – establishing a strategy now will set you up for sustainability success.

To learn more about steps you can take to move toward a more transformative energy management strategy, download ENGIE Impact’s latest report, The Sustainable Resource Maturity Scale: From Tactical to Transformative.