As debate over our National Health Service continues to be the subject of numerous debates across the country, a beacon of hope for may be found in the Carbon Energy Fund (CEF) and the Carbon Energy Fund Scotland (CEFS), an initiative set up by the National Services Scotland and NHS.
Established in 2011, the CEF was created specifically to fund, facilitate and project manage complex energy infrastructure upgrades across the UK and Northern Ireland. In Scotland, the fund takes the form of the Carbon and Energy Fund Scotland (CEFS), a partnership agreement between the NHS, NSS, the NHS’s Shared Buisness Services and National Procurement bodies, designed to ensure that the CEFS works in the best interests of the NHS and NSS.
To date the CEF has been involved in more than forty projects UK wide and continues to be available to health boards looking to upgrade their energy infrastructure.
The core principle behind the service offered by the CEFS is that the upgrades provided under the scheme self-fund the cost of those improvements. Like Salix this means that the funding provided is repaid throughout the life of the contract (generally 15 to 25 year contracts) but, unlike Salix, the Health Boards costs are repaid through guaranteed savings underwritten by the contractor using a standard form contract.
CEFS further services include the provision of skilled advisers to help Health Boards with their projects for the entire life of their project, the use of a standard form contract, access to a framework procurement model, assisting with sources of funding, assisting with overseeing the installation of the project and certifying practical completion as well as further legal and financial reporting support. CEFS costs, admin fees, are recovered from the guaranteed savings from the project and the Health Board will only have to pay for any part of the project once it has been handed over for operations.
Once a member of the CEFS, Health Boards can consider entering into an OJEU based mini-competition for project which CEFS estimates would require one to three months of preparatory work prior to proceeding with a mini-competition during which time feasibility and data collection is carried out.
The CEFS presents a good opportunity for Health Boards in Scotland to continue to meet and exceed their HEAT (Health, Efficiency, Access, Treatment) targets for a reduction in energy-based carbon dioxide emissions and a reduction in energy consumption (which according to data last updated on 04/12/15 stated that, as a whole, NHS Scotland was 4% over target for both carbon emission and energy usage reduction for the 2014/2015 period).
To date, the CEFS has been involved in the procurement and installation of health related energy projects in Perth, Brechin, Aberdeen & Elgin in addition to the latest project in Dundee, a new £15.4 million “Dundee Energy Centre”, which will provide Ninewells Hospital with 90% of the power and 100% of the heat it requires. Expected to be complete by December 2016, the new centre is expected to cut energy usage in NHS Tayside by 10%; a welcome Christmas present for the Health Board.
Another route which Health Boards may wish to consider is to adopt the support and framework of the Low Carbon Infrastructure Transition Programme (LCITP), a scheme working in parallel with Scottish Enterprise, Highlands & Island Enterprise, Scottish Futures Trust and sector specialists which is targeted at supporting the acceleration of projects to develop investment grade business cases in order to secure public and private capital finance. LCITP, as the name suggests, has less focus on traditional methods of low-carbon projects and specifically excludes certain types of energy or projects such as marine/offshore wind energy, established technologies or sustainable transport. Further details can be found on the Scottish Government website.
If you would like any further information on any of the schemes mentioned above or would like general procurement advice please contact Lynsey Brown or James McDonald.
