Missing out?

It is no secret that there are many health and hotel projects – new build or redevelopment – being planned, designed, and built at the moment. But few of these projects are considering combined heat and power (chp) technology, even though the two sectors record very high levels of energy consumption per unit floor area and large percentages of energy being used for space heating and hot water demand. These are characteristics that, together with the long occupied periods encountered within both sectors, strengthen the case for chp.

Recent studies by BRE for DEFRA highlighted that in 2000 the hotel and catering sector was responsible for 149 PJ (petajoules – 10¹⁵) of energy consumption and emitted 3·3 MtC (million tonnes of carbon). On average the sector registers an energy consumption per unit floor area of 427 kWh/m² per annum.₁ The same study shows that the health sector registered an energy consumption of 45 PJ and emitted 0·9 MtC. An average of 59 GJ/100 m³ energy consumption per unit floor area was recorded₁.

The percentages for building services energy end use within the two sub sectors are highest for heating, hot water and catering use (see figure 1). Hospitals use 71% of their energy for heating, and 11·5% for hot water (see figure 2). Hotels direct 42% of their energy to heating and 19% to hot water demand. Traditionally, thermal demands within both sectors have been met by fossil fuel fired boilers to generate space heating and domestic hot water service, while electrical demands have been met by using centrally generated grid transmitted electricity for lighting, small power loads and air conditioning.

Both sectors are recognised as being the highest energy users within the commercial and public sector. This has not necessarily led to low energy building design and the specification of energy efficient technologies as would be expected – in spite of mandatory energy targets that have been set by government for the health sector, and voluntary agreements for the hotel sector.

There are many examples of hotels in particular using grid transmitted electricity (from non-renewable sources) to meet heating demand and hot water demand via electric panel heaters and free-standing hot water calorifiers respectively. In this application electricity used for heating and hot water, is thermodynamically inefficient, environmentally damaging and usually has higher operating costs compared to other fuel options.

Meeting energy targets
NHS Estates is promoting sustainable development through new environmental strategies for its entire building portfolio. New projects will be required to encompass these ideals which directly impact on building design and mechanical and electrical building services design and specification. The challenge for all involved in these projects is to deliver the low energy design, specification and operation that will enable compliance with the mandatory targets set by government.

New and existing hospitals in particular have very specific targets originally outlined within the Climate Change programme and taken forward by the NHS environmental strategies. Overall a 15% reduction in primary energy consumption is called for or a 0·15 MtC reduction from 2000 to 2010 for the sector as a whole₂.

In April 2001 the government announced mandatory energy targets for NHS bodies in England to achieve a delivered energy target of 35-55 GJ/100m³ for all new capital and major redevelopments or refurbishments. All existing facilities should achieve a delivered energy target₃ of 55-65 GJ/100 m³.

The use of performance indicators based on primary energy rather than purchased energy more accurately reflects the environmental impact of energy use. This can be particularly useful when considering the merits of displacing mains electricity with fossil fuel, as is the case in the majority of chp schemes.₄ When looking at the delivered energy targets in a primary energy comparison the figures bode well with current best practice figures. Existing benchmarks issued by BRECSU (BRE energy conservation support unit), now BRESEC (BRE Sustainable Energy Centre) indicated that the targets are very achievable.

For example, assuming 15% of delivered energy to a hospital is electricity the targets for primary energy consumption are 45-70 GJ/100 m³ for new developments and 70-83 GJ/100 m³ for existing facilities.

These compare well with the current best practice₄ range of 67-79 GJ/100 m³ for the hospital types that appear within Action Energy publication GPG289 originally derived from Energy Consumption Guide 72, although they still provide a challenge to architects, engineers and the construction industry. They will also require good planning, building and m&e design, communication, management, co-ordination, installation, commissioning and operation for delivery.

St Mary's Hospital on the Isle of Wight, an existing hospital recently redeveloped, is recognised as a low energy design hospital by NHS Estates. Building design features included increased levels of insulation, low infiltration and double glazing. Services design incorporated chp, thermal storage, local steam generation (as opposed to centralised systems), heat recovery and low velocity mechanical ventilation. Combined with good levels of operation and maintenance recorded energy reductions were achieved.

Low energy building design can significantly reduce requirements of delivered energy. Energy efficient building services such as chp can significantly reduce equivalent primary energy consumption, reducing energy expenditure and enabling both sectors to meet energy and environmental targets and commitments.

The Hotel and Catering International Management Association (HCIMA) is the professional body for the industry, and it has signed an agreement with the UK government to reduce carbon emissions by 15% below 1999 levels by 2010. The aim of HCIMA is to recruit 7500 member establishments to reach this goal, which could save the hotel industry £31 million in annual energy costs₅. By meeting and bettering minimum standards set by the Building Regulations, reducing levels of air infiltration, prioritising low energy design and specifying energy efficient equipment these targets are certainly realistic. One of the key energy efficient technologies essential in meeting these targets is chp.

Technology overview
There are clear economic and environmental benefits by specifying chp. The technology can also contribute socially by allowing the financial savings gained to be reinvested back into other areas of a business or organisation, for example through increased employment or further energy efficiency improvements.

A typical chp packaged unit (within plantrooms) usually consists of:

• A prime mover, usually in the form of an engine.
  
• A generator for the production of electricity.
  
• Heat recovery and cooling facility usually in the form of a heat exchanger for heating and hot water provision.
  
• Combustion and ventilation systems for removal of products of combustion and general cooling.
  
• Control system and enclosure around the equipment for acoustic requirements.

The simultaneous generation of heat and power in a single process means the technology has the facility to be a highly fuel flexible and energy efficient technology.

Realising the benefits of the application of chp within buildings depend on five fundamental inter-related parameters:

• Building diurnal heating and electricity demands – ie daily demand profiles.
  
• Fuel tariff costs for gas, oil and electricity.
  
• Capacity and heat to power ratio of the equipment.
  
• Potential running hours of the equipment during the year.
  
• Level of operation, monitoring and maintenance.

The energy efficiency of chp compared with conventional systems is derived from the ability of a chp scheme to make use of the liberated heat often wasted during the generation of electricity within conventional power generating plant.

Total efficiencies of approximately 80% are common for successful schemes, (compared to conventional method efficiencies of approximately 50% for modern gas-fired power stations). Thermal energy efficiency results in lower consumption of primary energy₆.

Integration of chp with building services design can often depend on the requirements of the facilities and its occupants. Heat can be utilised for the provision of heating demand during winter months and hot water demand all year. Within some applications that require air conditioning, heat can be applied to absorption chilling equipment that can generate chilled water to supply fan convectors and/or ductwork for the supply of cool, fresh air during summer months. Further applications available within particular sectors are, for example, laundry facilities and catering facilities which have a significant demand for hotels and hospitals.

Combined heat and power generates electricity often without matching local demand, therefore there is the facility for exporting excess electricity to the national grid. This does of course depend on utility negotiation and agreement.

A requirement for constant electrical supplies for occupant comfort and safety is not uncommon and subsequently the installation of additional uninterrupted power supplies (ups) equipment can be expensive. Often chp can utilise the advantage of being its own independent electricity generator by being designed to run in parallel with conventional electricity supplies and therefore provide some standby facility should there be a mains power failure, providing security of supply. This can be used to offset capital investment in chp and improve financial viability.

One of the important financial benefits of introducing chp to the built environment is the opportunity for claiming the Enhanced Capital Allowance (ECA) providing the equipment qualifies as 'good quality' with the combined heat and power quality assurance programme. Although hospitals (as non-taxpayers) cannot take the benefit of ECAs, this particular tax benefit is applicable to PPP/PFI companies.

Challenges for chp
There are still some barriers to greater use of chp. The New Electricity Trading Arrangements (NETA) in England and Wales is cited as a main reason for reduced electricity export revenue. A sustained increase in gas energy prices has also put pressure on the viability of new chp installations. However, it must be recognised this has affected the industrial sector more than specific sectors within the built environment.

This is because the built environment, and particularly the health and hospital sector, is more concerned with generating electricity for its own use, rather than export back to the grid. But there are many examples of consistently successful chp installations, supplying heat and electricity to their individual buildings and exporting electricity despite the market conditions.

Current levels of knowledge and technical expertise can be perceived as a barrier to chp technology. From consulting engineers to technical staff installing chp, there is a lack of experience of design, implementation and operation. This is not a fit and forget technology and therefore requires relatively high levels of operational maintenance after installation for many years.

Initial capital costs of chp can often deter financial decision makers who often only consider quick payback periods, ie three to five years, for investment (see figure 3). When considering capital investment in chp and its alternatives, an assessment of the whole life costs for all options over the life of the installation, typically 15 years, is a more reliable and realistic technique. A number of management and finance options are available, and these require consideration during feasibility studies. The specification of chp can depend on factors the client views more important, cost, operating efficiency or environmental impact.

These financial options include capital purchase. In this case all capital cost is payable by the client and the client accepts the risk associated. If capital is available and the client has established estates management, it is a very good option as benefits are realised from day one. However the client may still be required to negotiate a maintenance contract with the supplier/manufacturer.

Equipment supplier finance can also be considered. Should capital not be available, the client can enter into a contract to finance the installation of the equipment with the risk passed onto the supplier. The supplier can regain the investment through maintenance or fixed electricity tariff supply contracts. This arrangement also requires agreement of performance specifications before contract commences. It must be noted the client never owns the equipment.

Energy services agreements or contract energy management are similar to equipment supplier finance. Energy management contracts mean the system is completely contracted out and paid for over an agreed course of time by purchasing energy back at an agreed rate. Particularly suitable for PPP/PFI projects. For many applications of chp energy supply is not their core business and this may be the preferred option.

The importance of completing a full feasibility study is recognised. This usually follows three steps: initial outline and viability study; option appraisal; full feasibility study.

The initial outline and viability study may include the collection and collation of heating and electricity demand data for the proposed building or site over a number of years. This can often determine the market for heating, cooling and power. Such information can usually be obtained from historical data, although should the project be new build, energy modelling techniques may be required to determine the data. Information may then be used to complete load profile analysis to calculate base heat and electrical loads, influencing the capacity of chp equipment.

An option appraisal may include a survey of installed building services, particularly if the site consists of existing building(s). Taking into account the age, condition and configuration of the building services currently operational, recommendations can be made regarding the applicability of chp and how the equipment may utilise the useful heat and electricity it may produce in comparison with other options.

It would be expected that the full feasibility study would consist of a detailed technical and financial appraisal including the outline, viability and option appraisal. A financial appraisal would consider the marginal capital cost of the chp equipment over and above any avoided costs of a boiler or standby generation plant. The financial appraisal should use whole life costing methodology, considering revenue and operating/maintenance costs in comparison with other alternatives for the generation of heating hot water and electricity using net present value or internal rate of return techniques. Often this methodology will yield a result favourable for the specification of chp. The feasibility study should then consider possible financing options for the purchase of the chp equipment.

The majority of hospitals and hotels with chp have their own dedicated plantroom supplying one site or building. But the facility of energy linking to other buildings is now a common approach. The number of customers that are supplied with heating/cooling and/or electricity from an energy centre some distance from the site as part of a community energy scheme is increasing every year in the UK. Usually operated by an established energy services company, it is anticipated that these schemes are to become more popular with advent of the community energy programme. Development and capital grant schemes managed by the Energy Saving Trust and Carbon Trust that offer support for the installation of new, and the refurbishment of existing community heating schemes for the public sector.

The future for chp
The hotel and catering sector had a measured energy consumption of 149 PJ in 2000. Efficiency scenarios estimate this amount to decrease to 134 PJ by 2020. Hospitals are expected to reduce from 48 PJ in 2000 to 38 PJ in 2020₁.

A number of large hotel companies are embracing environmental management with detailed energy strategies that are predominantly concentrating on low energy design alongside the commitment of installing chp within their hotels. Some hotels are also following the installation of chp measuring their carbon dioxide reduction and offsetting remaining amounts by planting trees to contribute towards a carbon neutral development or building. Hotels have 308 chp schemes installed₇. Although there are 2153 hospitals in the devolved administrations only 228 have chp₇. 180 of these are in NHS Trusts₈. The potential in both sectors is great, particularly in the health sector. And is yet to be realised.

  

For the purpose of this article the health sector refers to all health care sites including NHS hospitals, and private hospitals.

Action Energy (the government programme formerly known as the Energy Efficiency Best practice programme) is planning to issue a chp building sector supplement covering chp in the hotel industry in early 2003.

The second version of chp Sizer, chp Sizer V2 providing a viability calculation tool for the application of chp to hospitals, hotels, leisure centres and university residences is planned to be available from Action Energy January 2003.

Further information
Action Energy: www.actionenergy.org.uk; Enhanced Capital Allowances: www.eca.gov.uk; the community energy programme: www.est.co.uk/communityenergy

Key benefits from installing chp

• Overall reduction of electrical energy costs – for an individual site or building (usually 50% of energy costs in hospitals are for electricity)₁₁.
  
• Reduced CO₂ emissions.
  
• Facility of uninterruptible power supply providing security of supply.
  
• Facility of interlinking with air conditioning ie utilising absorption chilling equipment.
  
• Eligibility for claiming Enhanced Capital Allowances.
  
• Exemption from the Climate Change Levy for installed good quality chp.
  
• Potential to export generated heat, cooling or electricity to other buildings.
  
• Clear financial benefits – the whole life costing methodology.