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CHPs a smart solution to combat increasing blackout risks facing healthcare facilities

By Alan M. Seltzer and John F. Povilaitis / Special to Healthcare Facilities Today
August 30, 2019

Blackouts, weather-related issues, and other power outages are a serious – and growing – risk to hospitals and other healthcare providers around the country. Yet, many healthcare facilities still aren’t properly prepared for what is increasingly becoming a more recurrent threat to their ability to safely serve patients.

Just last month, a five-hour blackout in parts of New York City forced area hospitals into disaster mode to ensure their facilities retained functionality despite the lack of power. During Hurricane Michael last fall, numerous hospitals in Florida dealt with intermittent power outages and were forced to rely on much smaller backup generators to keep their facilities running. And for many university research facilities, the prospect of losing power means potentially thousands of frozen tissue samples can be put in immediate jeopardy.

Even in non-disaster scenarios, concerns about power supply reliability are growing. Recently, a heat wave that hit large swaths of Texas sent electricity prices through the roof and required the state's grid operator to call for strict energy conservation for the first time since 2014. While hospitals are often the last ones affected by calls for energy conservation, tighter electricity reserve margins are becoming an unfortunate reality in today’s energy climate.

This is all to say that hospitals can no longer afford to depend solely on the electric grid and outdated or unreliable backup generators to source their energy needs. When the welfare of patients and the stability of many medications, food, and other resources is at stake, there needs to be a better solution.

Increasingly, hospitals, research facilities, and other critical care facilities are installing Combined Heat and Power (CHP) systems on-site. This technology allows them to generate their own safe, reliable, and cost-effective on-site electric power without needing to rely just on the electric grid and costly backup generators. And often times, a third-party operator will cover the initial development and construction costs of the facility, so hospitals can avoid fronting these considerable costs.

CHPs: Reducing hospitals’ energy risk with improved reliability and long-term savings

While some in the healthcare industry may be unfamiliar with CHPs or how they work, this technology has actually been around for quite a while. Also known as cogeneration, CHP technology has been used as far back as the late 1800s. At the time, Thomas Edison’s Pearl Street Station was fired by coal, but the affordability and reliability of natural gas today, especially in the Southern and Northeastern U.S., is driving a CHP renaissance.

CHP systems allow businesses of all types to generate their own on-site electric power instead of primarily buying electricity through a utility. Simultaneously, excess heat energy from electricity production is captured and reused to provide the facility with all its heating and cooling needs.

Traditionally, CHPs have been used primarily in the industrial sector, but the need for cost reduction, energy reliability and quality, greater efficiency, and lower carbon emissions has made them more attractive than ever for a variety of hospitals and other healthcare facilities, both big and small. Already, healthcare facilities are some of the biggest energy users in the country, with the average hospital spending more than $675,000 on energy costs each year. This energy cost is almost 10 times as much as other similar building types.

CHP systems have the power to save hospitals hundreds of thousands in energy costs each year and can deliver up to an 80 percent annual reduction in greenhouse gas emissions, particularly when used in combination with renewable energy resources, such as solar photovoltaic arrays and battery storage systems.

But the benefits don’t stop there. Most CHP systems are fueled by supplies of underground natural gas pipelines, while most energy grid supply comes from aboveground electric transmission wiring. In times of severe weather, underground energy supplies are safer and more protected from damaging winds, rain, or worse. Because of this, CHPs provide protection from short-term grid outages, lengthy grid outages, voltage fluctuations and frequency fluctuations.

Additionally, any electricity produced by the CHP not used on-site can often be sold back to the local electric utility, making the system more cost-effective. While most CHP systems today use natural gas, they can use a variety of fuels and energy types, including renewables, to power them.

When is the right time for hospitals to upgrade to a CHP System?

Aside from preventing blackouts and power outages, building a CHP system makes sense for a variety of reasons. Moving to a CHP system is a big decision for any business. But with hospitals’ specific energy needs and risks, timing surrounding energy supply decisions becomes even more critical.

Here are just a few examples of when it may make sense for hospitals to think seriously about a CHP system installation.

• When considering facility upgrades: For any hospital or healthcare facility that may be thinking about upgrading, expanding or replacing older or outdated boilers, generators, or heating / cooling facilities in the next three to five years, the reliability and cost-savings a CHP provides make them a smart way to modernize a facility’s internal infrastructure.

• When energy cost stability is needed: CHPs provide a more predictable long-term energy cost with protection from electricity market price fluctuations compared to purchases from local utilities or the competitive market. CHP operations can also be reduced during the times when the power market is cheaper.

• When environmental impacts need to be reduced: With multiple states, including California, Colorado, Nevada, New Mexico, New York, and Washington creating aggressive climate plans in the hopes of reducing their overall emissions, CHP systems, and especially CHP systems that use both natural gas and renewable energy, are a more environmentally friendly solution when compared to pulling energy from the grid, which often includes less environmentally friendly sources.

CHPs have emerged as an energy-efficient and cost-effective solution for hospitals and healthcare facilities to protect themselves and their patients from potentially devastating power outages. CHP systems are also quickly growing in popularity because of their accessibility for smaller facilities, their long-term affordability and flexibility. They can be deployed quickly and more cost-effectively compared to larger scale electric generators. However, because these systems require some customization and engineering to be installed properly in a specific facility, there is complexity involved that requires a smart approach to their implementation.

From construction and regulatory approval, to energy servicing, net metering and finance agreements, installation compliance and navigating utility CHP requirements and options, there is a lot to think about before, during, and after a facility deploys its first CHP system. But for hospitals that need a more reliable and cost-effective energy strategy in the event of blackouts, power outages, and damaging weather, CHPs have proven to be a worthwhile investment both in the short and long term.

Alan M. Seltzer and John F. Povilaitis are Shareholders. Energy, for Buchanan Ingersoll & Rooney.

 

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