Why energy should be a key part of every healthcare leader’s strategy | Viewpoint

Healthcare facilities play a major role in their communities, frequently operating around-the-clock to provide essential care. This constant operation consumes a massive amount of energy, often making "energy” the second-largest line item in an organization’s budget.

For healthcare leaders, a proactive energy strategy is no longer just about sustainability, it's about becoming a more informed and efficient energy customer. By integrating intelligent energy management into your core operations, you can reduce costs, improve the care environment and strengthen your facility's ability to serve its community, no matter the circumstances.

The role of risk: Identifying opportunities in energy spend

Weather, power outages, rising energy demand, and more all create volatility in the market. While organizations can’t control the market, they can take more control of their costs by having an energy strategy designed to meet their business’ unique needs.

Healthcare facilities must remain operational during extreme weather events, grid outages, and other emergencies. A resilient energy strategy is fundamental to ensuring continuity of care, which means they must go beyond traditional backup generators.

Experienced energy supply experts can help healthcare facilities understand and articulate your organization’s needs and goals, articulate the options available to you and from there help you determine the right paths that meet your needs and align with the company’s risk appetite.

Diversify your source of energy

Incorporating renewable energy sources can reduce reliance on volatile traditional energy sources while also ensuring reliability.

Modern solutions like on-site solar generation paired with battery storage create a microgrid that can power critical operations independently from the main power grid.

When looking at the effect renewable energy can have on energy bills, there are several things worth considering.

The benefits of on-site generation

On-site power generation can cover a sizable portion of an organization’s energy needs. On-site generation, when paired with battery storage, may also mean greater reliability. When you own your generation resources, in addition to being connected to the grid, you may have a lower chance of experiencing an outage.

Generating renewable energy on-site can also protect a business from potential price fluctuations. On-site solar is the only energy source that allows customers to “lock in” their energy costs for up to 30 years; all other sources have varying costs that can typically be secured for up to five years.

Determining if solar is right for your facility

Before making an investment in on-site power generation, there are several factors to consider.

On-site solar will only cover part of your energy costs — while it can offset the kilowatt-hour charges, it won’t eliminate your monthly utility demand charges . However, solar often does help reduce seasonal coincidental peak demand, which sets your capacity and transmission peak load contribution (often referred to as PLC) for the following year. As these costs have increased exponentially over the past year, a PLC reduction is extremely beneficial.

Here are some things to think about before going solar:

• Do you own your building?
• What are your energy goals?
• Is your site suitable for solar? (E.g., Does your facility have a large, flat roof? Is there another space available on the property, like a field or large parking lot?)

If your facility is considering on-site generation, it can be helpful to invest time in an analysis of the ROI. Importantly, when working with a third-party solar partner, it’s important to understand and analyze the assumptions behind the forecasted savings.

Slashing costs with energy efficiency

Hospitals are among the most energy-intensive commercial buildings in the country. This high consumption presents a significant opportunity for savings. Implementing energy efficiency measures such as upgrading HVAC systems, installing LED lighting and improving building insulation can yield immediate and substantial cost reductions.

These savings can be redirected to critical areas like patient care, medical equipment upgrades or staff development. One report from the U.S. Department of Energy found that a comprehensive energy retrofit might reduce a facility's energy consumption by 30 percent or more. This frees up capital that would otherwise be spent on utilities, allowing greater financial flexibility to invest in delivering outstanding healthcare.

Reducing usage through a demand response situation

Commercial energy customers who are able to temporarily reduce consumption have a unique opportunity to save on energy spend. In short, when power demand is high, grid operators incentivize businesses that can temporarily reduce their load.

For reducing their usage, businesses that participate in this type of program are paid in return for their efforts. Keep in mind that these programs vary by ISO and market.

Charting your path to a smarter energy future

Transitioning to a strategic approach to energy management is a journey, not a destination. It begins with a commitment from leadership to view energy as more than just a line item on a budget.

Steps to get started

1. Conduct a comprehensive energy audit: Partner with an expert to assess the current energy performance of your buildings. An audit will identify key areas for improvement and provide a baseline for measuring progress.
2. Develop a phased implementation plan: You don’t have to do everything at once. Start with low-cost, high-impact projects, such as lighting retrofits or HVAC recalibration. Use the savings from these initial projects to fund more significant upgrades over time.
3. Use your energy data: Implement a system for real-time energy monitoring. This technology is the foundation of a data-driven strategy, providing the insights needed to continuously optimize performance.
4. Engage your team: Your facilities team holds invaluable knowledge about your buildings. Involve them in the process and empower them with the tools and data they need to manage energy effectively.

While energy has long been viewed as a fixed cost of doing business, it’s time to think of it as a strategic asset that can unlock significant financial savings.

By rethinking your approach to energy, you can build a stronger, more efficient and more resilient organization. This strategic shift helps to not only improve your bottom line but also enhance your ability to deliver the highest quality of care to your patients and community.

Patrick Smith is vice president of business development with IGS Energy.