Energy

Health care, as a whole, is an energy-intensive industry. In terms of Btu per square foot, for example, U.S. inpatient health care facilities are the second most energy-intensive facility type across the nation, according to the U.S. Energy Information Administration.

The high energy requirement in the health care sector makes health care facilities particularly vulnerable to increases in the cost of fossil fuels. Worldwide, primary energy consumption has risen sharply within the past few decades, increasing more than 50 percent from 1980 to 2007, with an average growth rate of 2 percent per year as reported by the Energy Information Administration.

Growth in primary energy consumption worldwide is projected to continue at an annual rate of 1.4 percent (down slightly from the 1980 to 2007 annual average of 2 percent) until 2030. Fossil fuels are expected to provide a significant portion of this energy demand well into the future. Consistent with economic principles, as crude oil becomes more difficult to source, price is expected to increase. According to a 2007 report from the World Energy Council, the peak of the world crude oil discovery was in the 1960s and has been declining ever since.

Overview

The energy-related sections of the Roadmap website are generally framed around reductions in consumption of energy derived from fossil fuels. Energy reductions can be considered a proxy for reductions in greenhouse gas (GHG) emissions, since emissions from fossil fuels are by far the largest source of emissions from hospitals, typically around 95 percent. If fossil fuel consumption is reduced, emissions are reduced. Defining the targets in this way allows the analysis to consider on-site renewable energy, energy demand reductions, utility company renewable supply sources, and even Renewable Energy Credits to help a facility realize its goals to reduce both energy and emissions. It allows maximum flexibility to users at the same time it achieves real reductions.

In light of this approach, it is useful to provide some further context specific to greenhouse gas (GHG) emissions. Some organizations may find it worthwhile to report on both energy consumption and GHG emissions, and it may soon be a requirement to do so.

Health care organizations produce GHG emissions through travel, building energy use, and procurement of goods, equipment, and materials. In general, modern health care practices in industrialized economies are highly energy intensive due to sophisticated buildings, high levels of product procurement, and transportation-related activities, which all rely heavily on the use of fossil fuels for energy. In 2007 the U.S. health care industry accounted for 8 percent (545.54 MMTCO2e) of total U.S. GHG emissions, according to the World Health Organization as reported in the Journal of the American Medical Association in November 2009.

GHG emissions from facility energy use are attributed to operations such as fuel consumption for provision of heating and electricity and anesthetic gas discharge. The type of fuel used for heating and the fuel source used to generate electricity will have a significant effect on the level of GHG emissions associated with building operations. Due to the high energy intensity of the U.S. health care sector and the fact that U.S. electricity is primarily generated through fossil fuels, GHG emissions from health care building operations are substantial.

Scope of Greenhouse Gas Emissions. GHG emissions are generally broken down into three categories, or scopes:

  • Scope 1 emissions are those that occur from sources owned or controlled by the institution and can include on-site stationary combustion of fossil fuels, mobile combustion of fossil fuels by fleet vehicles, and fugitive emissions. Fugitive emissions are those caused by intentional or unintentional releases of GHGs, which include refrigerant leakage and waste anesthetic gas discharge.
  • Scope 2 emissions include indirect emissions generated as a result of the off-site production of electricity that is consumed by an entity. These emissions occur as part of the process of producing the electricity (e.g., combustion of coal).
  • Scope 3 emissions are indirect emissions that occur as a consequence of an entity's activities but come from sources outside the control of the organization. This includes emissions such as those related to waste disposal, commuting, production/transportation of goods, and outsourced activities.

In most GHG reporting protocols, only Scope 1 and Scope 2 emissions are included in the inventory due to the difficulty of measuring Scope 3 types.

In a typical health care facility, the largest sources of Scope 1 and Scope 2 emissions are related to electricity and natural gas consumption. In most cases, this accounts for more than 95 percent of the inventory. For this reason, energy can be used as a proxy for GHG emissions within a typical health care facility. The Roadmap follows this model in providing guidance for target-setting and project implementation.

Energy Supply Terminology and Strategies

Demand vs. supply side strategies: There are two general approaches to reducing energy consumption and associated GHG emissions: demand side and supply side strategies. Demand side strategies focus on reducing a facility's demand for energy through efficiency improvements. Supply side strategies focus on reducing the amount of fossil fuel-derived energy used by the facility. This is achieved by providing renewable, non-fossil fuel-generated energy, which can be generated on-site or off-site.

Site vs. source energy: It is also important to understand the difference between site- and source-measured energy. Site energy refers to energy consumption measured at the site level by utility meters. Source energy, on the other hand, refers to energy generated at the source (i.e., the utility) that is ultimately consumed at the facility. For electricity, source energy can be on average three times greater than site energy due to losses through transmission and distribution.

Power mix and the renewable portfolio standard: The power mix refers to the combined makeup of fuel sources used by the utility in electricity generation and can include coal, natural gas, nuclear, wind, solar, geothermal, biomass, and hydroelectric plants. “Renewable” sources typically include solar, wind, geothermal, biomass, and small-scale hydroelectric plants. Most states have established a policy, called a renewable portfolio standard (RPS), that requires utility providers to generate a certain portion of their electricity from renewable sources. The power mix is significant to an organization concerned about GHGs, as it directly relates to the emissions caused as a result of electricity consumption by facilities. The U.S. Department of Energy has a good state map list of renewable portfolio standards. To find out more information about your state's standards, link to the DOE website.

Health and Environmental Considerations. In addition to the climate change impacts of fossil fuel combustion and its associated emission of greenhouse gases, the U.S. Environmental Protection Agency estimates the U.S. health care sector’s high level of electricity consumption (73 trillion kWh) contributes to more than $600 million per year in health care cost due to increased asthma and other respiratory illnesses. This result is due to the fact that a high proportion of this electricity is produced through combustion of fossil fuels.

To better understand the health impacts of energy use, Practice Greenhealth’s free Healthcare Energy Impact Calculator (EIC) estimates premature deaths, chronic bronchitis, asthma attacks, emergency room visits, and more by kilowatt hour per year. The EIC displays the projected number of incidents, estimates of medical treatment costs, external societal costs, and likely emissions permit costs for the green house gas carbon dioxide.

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Compliance Considerations

Some state and local governments have energy reduction mandates (e.g., New York City). Some jurisdictions require energy reporting using EPA’s Portfolio Manager or another acceptable measure. Some have climate action plans that set energy reduction goals. The U.S. Department of Energy has a comprehensive list of state-by-state requirements and resources. Be aware of (1) current mandates, (2) impending legislation, and (3) voluntary programs that might help you gain recognition and also prepare your organization for upcoming legislation.

Various organizations develop model building codes for adoption by local authorities having jurisdiction. Among these are the International Code Council with itsInternational Green Construction Code (IGCC) and ASHRAE with its Standard 189.1:Design of High-Performance Green Buildings, Except Low-Rise Residential Buildings.

Increasingly, jurisdictions are requiring Leadership in Energy and Environmental Design (LEED)® certification. Many others require other approaches to achieving a higher level of environmental performance. California has recently enacted the first statewide green building code, and Massachusetts requires compliance with LEED or the Green Guide for Healthcare to obtain a determination of need. This trend is only gaining momentum.

Some jurisdictions are also instituting their own carbon taxes. In 2006 Boulder, Col., was the first city to institute a carbon tax. The Air Quality District in the San Francisco Bay area imposed a similar tax under its Clean Air Act powers. To date, such taxes have remained rare because of the political and economic climate, but they are increasingly being eyed by cash-strapped governments as sources of revenue. Other proposals include lowering payroll taxes equal to the increased revenue from carbon, so as to keep them revenue-neutral.

In terms of GHG emissions reporting and regulation, it is not yet clear what the thresholds will be, but it is likely that many facilities and entities will be subject to some form of regulation and reporting in the near future. To understand your risk profile based on existing, pending, and projected regulation, you will need to assess the current emissions of your facility or organization. The best way to do this is through a greenhouse gas inventory and voluntary participation in The Climate Registry. By going through this process now before reporting is mandatory, your organization can get a better idea of its risks, become comfortable with the process, streamline emissions data management procedures, and be prepared for what is likely to come—whatever the magic number for minimum thresholds may be.

For more information on the current state of climate change law, click here.

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Opportunities and Benefits

Given the health care sector's high energy consumption and GHG emissions, it will become increasingly imperative that organizations make energy performance improvements wherever possible. Beyond saving energy and reducing emissions, organizations can generate substantial financial savings. Additionally, there are multiple co-benefits and opportunities that may be realized from conscious energy management and planning.

Disaster Preparedness. Securing a reliable source of energy is vital to a health care facility at all times. During a disaster, however, renewable energy sources (solar, wind, photovoltaic, and so on) can help mitigate interruptions in energy sources. Developing multiple reliable sources of energy is a critical aspect of continuing operations in the event of an environmental or biological catastrophe.

Economic Savings. Being proactive with energy management can generate opportunities for savings. Reducing energy consumption results in a dollar savings on utility bills. For example, an organization that has installed on-site renewable energy (and has retained ownership of that energy) could sell its Renewable Energy Credits to a utility that needs to meet Renewable Portfolio Standards (RPS). Another savings example is installation of light fixtures that use LED or CFL bulbs, which can save both energy and maintenance costs.

Energy to Care Program. Energy costs are increasingly volatile, but there are steps health care facilities can take to manage them. The first step to reducing your health care facilities’ energy costs is participating in ASHE’s Energy to Care program, which is a complementary program to the Sustainability Roadmap. The Energy to Care program allows users to access detailed energy data using a robust data visualization dashboard at no cost; compare data with similar or nearby facilities by participating in regional challenges; and if they are an ASHE member, apply for awards.

This program builds on past successes in energy benchmarking using EPA Energy Star and shares fundamental concepts, real data, proven strategies, financial tools, and local success stories. Energy to Care can provide expert knowledge on where to dig to uncover the energy savings inherent in your building design and operations—savings of 10 percent or more.

Two such hospitals were able to achieve savings through the Energy to Care program (formerly called the Energy Efficiency Commitment [E2C] program). St. Francis Hospital and Health Services in Marysville, Missouri, cut its gas bill by 50 percent and its electricity bill by 17 percent from 2002 to 2005, leading to a total avoided cost of $808,000. Shriners Hospital for Children in Houston produced a savings of 24 percent in a single year. When Shriners first benchmarked its building in 2002 using Energy Star's Portfolio Manager (PM), the facility received a below average rating of 42. Four years later, after implementing an energy management plan, Shriners had reached a PM rating of 94, reducing total utility costs by 40 percent.

Visit energytocare.com to for more information on participating in Energy to Care.

Rebates, Grants, and Incentives. Particularly since the introduction of the federal stimulus package, multiple grant, rebate, and incentive programs are available across the nation. Investigate city, regional, state, and national rebate and incentive programs to help finance energy performance improvement upgrades, renewable energy projects, or high-performance design for new buildings. Look also to the utilities, which are motivated (and in some cases required) to reduce demand on energy infrastructure. To learn about opportunities in your state, click your state on the index map on the DOE website.

As one example, the Energy Trust of Oregon, which is funded by a public purpose charge paid through the state utilities, provides incentives for lighting upgrades in existing buildings; lighting incentives for new buildings; incentives for HVAC upgrades in existing buildings, and the use of high efficiency HVAC equipment in new buildings. These particular incentives can offset up to 50 percent of the project cost.

LEED or Other Certification. The LEED program, along with most other voluntary green building certification programs, offer several points related to energy efficiency. See U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) rating system website to learn more about LEED, or see the Consumer Guide for a side-by-side comparison of available green building certification programs and rating systems. These types of certification programs provide a standardized framework for evaluating and reporting on energy strategies; they provide excellent PR opportunities, and can form the basis for other awards programs.

Environmental Health and Safety Improvements. The U.S. EPA reports that reducing GHG emissions should minimize the negative impacts of climate change on human health: "[M]any energy efficiency and renewable energy programs that reduce GHGs also reduce criteria pollutants and therefore have direct and more immediate health benefits in addition to lessening climate change. Clean energy programs, by reducing fossil fuel use, typically reduce emissions of nitrogen oxides (NOx), sulfur dioxide, mercury and other toxic metals, diesel, and black carbon. Reducing these primary pollutants also reduces 'secondary' pollutants (ozone (O3) and fine particulate matter (PM2.5)) that form in the air. O3 and PM2.5 are of particular concern because they are most prevalent and are linked with a variety of respiratory and cardiovascular illnesses and death."

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Using the Roadmap for Energy Management

The Roadmap is designed to help facilities design a customized short- and/or long-term energy management strategy to achieve their energy usage reduction goals. If now is not the right time to develop a full plan or strategy, the Roadmap will also help you launch easy-to-implement projects today.

The Roadmap identifies opportunities for improving energy performance and explains the strategies involved to achieve those reductions. It allows you to customize your plan based on your facility’s current progress on sustainability and how aggressively your organization wants to pursue energy goals.

Click on the sections below to take the next steps:

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