Cynergin Consultants are pleased to announce the closure of a major energy services PFI contract between Heart of England NHS Foundation Trust and EnerG Plc. Cynergin supported EnerG Plc throughout the procurement and project development processes.

Heart of England NHS Foundation Trust is one of the first Foundation Trusts in England. It is a dynamic organisation and became the first acute Trust in Birmingham in 1992. In 1996 the Trust merged with Birmingham Heartlands and Solihull NHS (Teaching) Trust. The hospitals have has a turnover in excess of £230m; are one of the top five employers in the area with over 6,000 staff; serve a population of 0.5 million; care for 84,000 inpatients, treat over 350,000 outpatients, and approximately 140,000 accident and emergency attendees each year. The Trust has consistently achieved all key targets and been a 3 Star Status Trust for three consecutive years. This makes the Trust one of the largest, and best administered, in England.

Part of the long-term strategic plan for the Heartlands Hospital is a 5-phase upgrade of theatre and ward facilities, the first being a new A&E department, completed in 2004. However, subsequent phases to include oncology, maternity, and new wards and theatres, were dependent on the Trust embarking on phase two: a massive upgrade of the outmoded coal heating and dated air-conditioning infrastructure, sufficient to support both current and future developments. The problem was, that such an undertaking requires millions of pounds, but appears, on the surface, to deliver little in terms of clinical benefits. Conversely, without this "unglamorous" investment, all the other developments would be put on hold, indefinitely.

The Trust has therefore applied the knowledge gained from the A&E project, and have entered into a unique 15 year Energy Services Performance Contract under the Government's PFI/PPP programme.

A major boost to the affordability of the project was a grant of £403k from the Community Energy Programme, administered by the Carbon Trust. Key to accessing this grant was a pledge to substantially reduce carbon emissions both now, and for the next 15 years. This was achieved by signing a contract with ENER·G Combined Power Limited, partnered by Cynergin Consultants.

The greatest challenge was to replace coal (and all its attendant health and environmental hazards) with cleaner, but more expensive gas, while at the same time providing energy savings and lower costs. Cynergin Consultants were central to the technical design and financial modeling of a bespoke, holistic, solution combining both demand-side and supply-side energy issues, self-funding over the term of the contract.

Energy and operational savings, amounting to more than £10.5 million, are guaranteed for the full term of the contract, which includes comprehensive maintenance and all parts and labour as necessary.

Geoff Fox Facilities Manager at Heartlands said: "We were attracted to this new system as not only will it save money, but it also complies with government regulations to cut down carbon emissions in the area. By taking part in the scheme we will reduce our CO2 emissions by 3.5 thousand tonnes per year and be able to generate our own electricity in the boiler house, reducing our electricity consumption by one whole Megawatt".

There was a thorough and exacting review of all elements of this project to ensure value for money and a robust transfer of risk. The Trust entered a long-term contract that allows the money that would have otherwise have been a capital expenditure, to be applied towards both clinical priorities and future building improvements. One bonus of replacing old inefficient coal boilers is the immediate improvement in local air quality. A variety of noxious emissions will be eliminated, including sulphur dioxide, (a major cause of acid rain and respiratory complaints), nitrous oxide, methane, and the ever-present soot, smut, smell, and noise pollution associated with coal.

Peter Mapstone of Cynergin commented, "Coal is a relatively inexpensive fossil fuel. However there are additional, sometimes hidden, financial and environmental costs associated with using it. The Trust wanted to remedy this situation and found the answer was to concentrate on operational efficiency in terms of converting raw fuel into heat and electricity, and how it is delivered; and efficiency in terms of consumption, and conservation. The results were outstanding - reduced emissions and reduced costs: an exemplar project."

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