Decarbonising the NHS estate: Strategic Energy Partnerships

This article is written by Rupert Lugg and Emma Woodhouse.

The NHS has committed to the ambitious target of achieving Net Zero by 2040 and has already made positive steps towards this goal. However, the NHS estate is still a large source of carbon emissions and provides an opportunity to make further meaningful carbon reductions to NHS buildings and estate sites.

One of the biggest challenges is that a large proportion of the infrastructure of the NHS estate is energy inefficient and many buildings are still reliant on older technologies which require replacing or upgrading. Assessing a site and the appropriate measures needed to upgrade the estate can be challenging, which is why Strategic Energy Partnerships could help the NHS to achieve its decarbonisation goals in an organised and timely manner.

What is a Strategic Energy Partnership?

A Strategic Energy Partnership (“SEP”) is a long-term operational partnership between a public body and a private organisation, such as an energy company. The aim of the partnership is to deliver large-scale decarbonisation and energy efficient infrastructure. A SEP enables the NHS to join with a private organisation, specialising in energy, to help the NHS organise, plan and fund large-scale projects, build the infrastructure and improve the technology.

These are typically long term partnerships arrangements allowing the parties to work together to understand the energy assets, the NHS’s requirements and to agree on the scope, design and procurement route of the relevant energy projects.

What are the benefits?

There are a broad range of benefits that an SEP would provide the NHS with.

Sector expertise

One of the main benefits to an SEP is that the NHS can choose a private organisation that has specialisms in designing and delivering energy projects. Having experts involved from the outset can assist the NHS to identify key areas and strategies to decarbonise in the early stages of the project. This can help make the organisation and execution of the projects far more efficient.

Large-scale projects

As stated, the aim of an SEP is to deliver large-scale infrastructure projects. This is a real benefit to the NHS estate which often has large-scale buildings or sites. Rather than focusing on a single building or a single method to decarbonise, an SEP looks at the bigger picture and can involve lots of different technologies across different areas of one site. For example, the project may involve EV Charging Points being installed in the car park in addition to retrofitting solar panels to the roof. The benefit for the NHS is that an SEP can create a cohesive, single project drawing the smaller plans together.

Financial savings

One of the ways an SEP can save the NHS financially is through the large-scale project approach. By bringing together different small-scale projects, this is likely to reduce costs for the services and suppliers involved with the NHS. The cost of services is reduced as the NHS will require the same services less frequently, as aspects of the project can be tied together. Additionally, the cost of supplies may be reduced through purchasing in bulk, rather than for each individual small-scale project.

Funding

Some SEPs can inject monies into a project through innovative privately funded models streamed through the energy company. This is a great benefit for the NHS, a body which must be careful about public spending, as it reduces the upfront cost of these projects. The ability of SEPs to provide fully funded project solutions is a core benefit of the model and could be critical for certain bodies struggling to transition from carbon reduction planning to energy project delivery.

Our experience

At Bevan Brittan, we are one of the leading national legal advisers on SEPs and we recognise the increasing importance of SEPs for energy work and decarbonisation. Alongside our knowledge and experience in commercial and construction side of energy, we also have expertise in the governance and regulatory landscape that the NHS must navigate, including the Procurement Act, NHS-specific capital requirements and emerging Heat Networks Market Framework.

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