Decarbonising the NHS estate: where are we now & where are we going?

This article is written by Rupert Lugg and Emma Woodhouse.

The public sector has a critical role to play in achieving the UK's net zero ambitions. Buildings account for approximately 25% of the UK's carbon emissions and the public sector estate, for example, hospitals, council offices or schools, contributes significantly to this figure. Therefore, it is important that public sector bodies, including the NHS, consider ways in which they can decarbonise their estate.

The NHS has committed to becoming the first national health service to reach net zero and substantial effort towards this aim has already been made, including setting the ambitious target of achieving Net Zero by 2040.

For NHS trusts, achieving these targets requires navigating ageing infrastructure and complex procurement requirements whilst maintaining its frontline services. Therefore, the question is no longer whether to act, but how to achieve meaningful carbon reduction effectively before 2040.

One of the greatest challenges for the NHS is the decarbonisation of the NHS estate. Hospitals are highly energy-intensive facilities that operate 24 hours a day and require reliable heating, cooling and power for critical clinical services. Buildings and facilities account for a significant proportion of NHS emissions, and many hospitals rely on ageing gas-fired infrastructure that will need to be replaced or substantially upgraded. The transition to low-carbon heating technologies, including heat networks, heat pumps and electrification, presents both technical and financial challenges.

The solutions

Since 2020, the NHS has made significant strides in reaching this target and has already seen a 14% reduction in direct emissions. For example, tripling solar PV installations across the trust has not only reduced the NHS’s emissions, but it has already saved £22m and is expected to save £260m in energy costs.

The challenges the NHS faces to decarbonise its buildings and energy use are substantial, but the range of available solutions has never been greater.

Decarbonising heat

Heat networks

NHS trusts may be able to reduce emissions by connecting their buildings to heat networks, which distribute heat from a central energy source to multiple buildings through a network of insulated pipes. Heat networks can utilise low-carbon energy sources such as renewable electricity, energy from waste facilities, or recovered industrial waste heat. By supplying heating and hot water more efficiently at scale, heat networks can lower carbon emissions, improve energy resilience, and support the decarbonisation of large and complex healthcare estates. They are particularly effective in hospital campuses and urban settings where multiple buildings have consistent heating demands.

There have been recent changes to the implementation of Heat Network Regulations to regulate the emerging market. As part of this, Ofgem have begun to designate zones where district heat networks would offer a low-cost solution for decarbonising heat. Where these zones are identified, certain types of buildings and low carbon heat sources may be required to connect to a network within a prescribed timeframe. The most likely consumers to be required to connect are new buildings, non-domestic buildings above a certain size and energy-use threshold and buildings that are already communally heated. Considering the types of buildings and sites which make up the NHS estate, estates within designated zones may be impacted so the impact of the Regulations should be considered.

Electric heat pumps

Industrial-size heat pumps can generate heat for NHS buildings and estates. Heat pumps capture heat from the air, the ground or bodies of water. The heat is then processed within the heat pump, which uses high pressure to generate higher temperatures. The heat is transferred to the water which flows through pipes, as in a normal heating system, or into a district heat network, depending on the size of the heat pump. Heat pumps could reduce the NHS’s emissions on certain estates as they use electricity and are far more efficient than gas boilers. As renewable energy continues to grow, the use of electricity to heat, cool and power the NHS estate will help the NHS with their decarbonisation ambitions.

Improving energy efficiency

The NHS estate includes many buildings which are old and energy inefficient. An easy way to improve energy efficiency in NHS buildings is by replacing traditional lighting with LED lighting. LED lighting uses significantly less electricity than traditional lighting, the reduction in energy demand across the NHS estate would lead to significant reductions in carbon emissions.

Additionally, Building Management Systems (“BMS”) can help improve the energy efficiency of the NHS estate. A BMS is a computer system which monitors and controls lights, heating, ventilation and air conditioning within a building or connected buildings. This means that energy is only used where it is needed, for example, switching lights off in empty rooms or regulating heating and ventilation to avoid energy wastage. The NHS estate is large and utilising a BMS system could significantly improve energy efficiency compared to manual systems. A BMS also provides real-time energy monitoring which can help the NHS to detect inefficiencies and take further carbon-reduction measures.

Generating electricity

Solar PV

Not only can the NHS reduce its emissions through switching to electric heat pumps, but the increased use of renewable energy more broadly within NHS buildings will reduce the carbon emissions of buildings. The NHS has already tripled its solar PV installations since 2020. However, continuing to fit rooftop and carport solar installations will help to meet the NHS’s goal of decarbonisation, reduce operating costs and reliance on grid capacity. Switching to solar PV systems would also reduce the NHS estate’s dependence on the external grid, reducing the strains on the grid. For the construction of new NHS buildings, including solar PV rather than connecting to the grid would have the additional benefit that this can help prevent waiting in the queue to be connected to the grid.

Electric vehicle charge points

Another challenge is the decarbonisation of public sector vehicle fleets. Ambulances, maintenance vehicles, transport services and wider operational fleets remain heavily reliant on traditional fuels. Approximately 14% of the NHS’s total emissions is caused by road travel in England relating to patients, visitors, staff and suppliers to the NHS. A significant proportion of this figure is as a result of transporting patients and using NHS vehicles, such as ambulances. At present, the NHS has not seen emissions relating to their fleet fall since 2020. Increasing the number of electric vehicles within the NHS’s fleet and increasing the number of electric vehicle charging points within NHS car parks would help reduce the emissions from both the NHS fleet as well as patients, visitors and staff parking on the NHS estate.

The role of Strategic Energy Partnerships

A Strategic Energy Partnership (SEP) is a partnership between a public sector body and a private energy or utility company to deliver large-scale decarbonisation infrastructure. Considering the size of the NHS estate sites, entering into an SEP would help the NHS reach their decarbonisation goals through specialist expertise, investment and technological solutions for a large project.

Funding the transition

There are various grants and schemes which the NHS could apply for to fund decarbonisation projects.

The Public Sector Decarbonisation Scheme (PSDS) is a government grant scheme, managed by Salix Finance on behalf of DESNZ, that provides capital funding to public sector organisations in England to install heat decarbonisation and energy efficiency measures in their buildings. Phase 4 of the scheme has committed £1.17 billion for the financial years of 2025/26 to 2027/28, with 207 public sector organisations awarded grants for 245 heat decarbonisation and energy efficiency projects. Eligible measures include heat pumps, building fabric improvements, LED lighting and connections to heat networks.

The government has also announced that £100 million has been awarded through Great British Energy to install rooftop solar panels at nearly 200 NHS sites, with the first installations already under way.

Individual trusts can also explore power purchase agreements, energy performance contracts, and private sector partnerships to finance sustainability projects while generating long-term cost savings. Trusts and public bodies that have not yet explored these funding streams and should consider doing so as a matter of priority.

Our experience

We have supported Leeds Teaching Hospitals NHS Trust on its heat supply agreement which will connect St James's University Hospital to the Leeds PIPES district heat network. The heat agreement will provide hot water to 17 buildings at St James’s University Hospital. In order to implement the heat scheme and decarbonisation programme, the Trust has been awarded £22 million by the Public Sector Decarbonisation Scheme.

Where are we going?

The NHS has made real progress in its drive to achieve its net zero targets, having already reduced emissions through initiatives such as cleaner anaesthetic gases, improved waste management, and investment in renewable energy and energy efficiency projects. However, further progress will require significant investment, particularly in estate decarbonisation, low-carbon heating, fleet electrification, and supply chain emissions reduction.

Decarbonising the NHS estate is a complex, multi-disciplinary undertaking, but it is also an opportunity to reduce energy costs, improve building performance, and demonstrate public sector leadership on climate action.

At Bevan Brittan, we are proud to be at the forefront of this work, having built one of the UK's leading legal practices in public sector energy and infrastructure, advising on well over 100 district energy schemes in recent years and supporting NHS trusts, local authorities, and other public bodies across the full range of decarbonisation projects. We would therefore welcome the opportunity to discuss how we can support your organisation's net zero journey.

For the latest developments affecting NHS organisations, follow our NHS Health & Care showcase page.

For legal updates on the transition to net zero, follow our dedicated Energy & Resource Management page.