In a climate of stretched budgets, NHS Trusts are working harder than ever to reduce costs. And as they face their tenth successive year of energy price rises, energy is becoming an increasingly significant expenditure for many Trusts - but could it also offer an opportunity to save?
In fact, it’s estimated that public sector energy costs could increase by up to 45% by 2020, compared to 2016 levels, But by reviewing their energy strategy in three key areas, Inenco believes that Trusts of all sizes could successfully mitigate increases and reduce their energy costs and consumption.
Inenco’s three key steps to energy savings:
• Better buying
Wholesale costs make up around 40% of Trusts’ energy bills, so optimising energy buying strategy can make a significant impact on the bottom lines. On average, NHS Trusts could save 15%* by switching from a one-year fixed contract to a longer ‘capped’ strategy, reducing costs without impacting budget certainty.
• Catching invoice errors early
At least one in five public sector energy bills contain errors, so it’s vital that Trusts validate their bills to identify erroneous charges, avoid overpaying and secure refunds. While many will conduct audits, they often only do so every two to three years. Identifying and recovering errors within financial year is crucial to avoid overpaying.
• Clever consumption
The most sustainable way to cut costs is by reducing overall consumption. Acting on opportunities with short payback periods and focusing on behavioural change can deliver results with little capex required. Some elements of an energy bill are influenced by when Trusts use energy, so finding ways to shift some consumption outside of peak demand periods can also make a real difference.
For more information on the steps NHS Trusts can take to reduce their energy costs and consumption, click here to download Inenco’s ‘Reducing energy cost and carbon in the NHS’ report.
* Inenco analysis using 2018 ERIC data for NHS Trusts
