Hospitals shift from fossil fuel to renewable energy sources

About 26% of the electricity Partners HealthCare buys this year for the facilities it owns will come from renewable sources. Its leaders wanted to reduce pollution from traditional fossil-fuel energy sources and the illness burden that pollution causes, as well as to play a role in reducing greenhouse gas emissions that contribute to climate change.

“Our responsibility as a healthcare provider is not just about taking care of people when they are ill,” said John Messervy, Partners' corporate director of design and construction. “It's really looking at the health and wellness of the community as a whole, and how we contribute to that.”

Boston-based Partners' energy-purchasing strategy is significant because the big hospital system uses as much power as the city of Cambridge, Mass., which has 105,000 residents. It's one of a growing number of health systems that are moving away from power produced from fossil-fuel sources to green energy that comes from renewable, non-polluting, non-carbon sources such as wind, solar and small hydroelectric projects that have a low environmental impact.

In some cases, renewable energy costs less than energy produced from conventional sources. Typically, the power produced from renewable sources does not flow directly to the health system's facilities. Instead, the system's contract for renewable energy supports the production of green energy that is added to the overall energy supply, reducing the need for so-called brown energy.

While the use of renewable energy is still uncommon in the healthcare sector, forward-thinking provider organizations are blazing a trail, said Cecilia DeLoach Lynn, director of facility engagement and metrics at Practice Greenhealth, a Reston, Va.-based not-for-profit that helps healthcare organizations adopt environmentally friendly practices. Indeed, some healthcare organizations, including Providence Newberg (Ore.) Medical Center and Gundersen Health System in LaCrosse, Wis., use renewable power to meet 100% of their needs.

There are no estimates of the number of healthcare organizations using renewable energy, Lynn said. But she expects more systems to explore renewable energy as healthcare leaders focus on population health and recognize that the use of fossil fuels contributes to health problems.

Practice Greenhealth uses its Healthcare Energy Impact Calculator to demonstrate the connection between energy sources and health. According to the calculator, a typical 200-bed hospital that uses coal-powered energy is responsible for $107,000 a year in direct healthcare costs associated with asthma attacks, chronic bronchitis and other health problems.

At Partners HealthCare, the connection between energy purchasing and environmental sustainability became clear to its leaders in 2008, when the system took an unexpected $20 million hit to its budget because of escalating fuel costs. That prompted Partners to develop a five-year energy master plan that went into effect in 2010. Its goal was to reduce energy consumption 25% by 2015 in the 10 million square feet of facilities it owns.

Developing the energy master plan gave Messervy and his colleagues an opportunity to think about how Partners' energy purchases reflected the values of the organization. Renewable energy sources became a priority. “The reason (an organization) heads in this direction is … because you believe that you have a responsibility as a healthcare provider to be setting a standard and to model what healthy living looks like,” Messervy said.

Partners has incrementally increased the proportion of energy coming from renewable sources over the past few years, and it is saving money in making the shift. Instead of buying energy from the local energy company, it contracts directly with TransCanada, a wholesale provider; its power purchase agreement stipulates the amount of energy that will come from renewable sources. “Our unit cost of power is still significantly lower than the retail cost for (conventional) power,” Messervy said. “So there is a savings over conventional power purchases even though we are increasing our mix of renewables.”

But savings are not guaranteed in switching from brown to green energy, Lynn said. That's because the price of energy from conventional sources varies widely based on geographic location. Thus, alternative energy sources that might be economically attractive in the high-priced Northeast might compare unfavorably to traditional energy sources in other parts of the country.

Another leader in healthcare's green energy movement is George Washington University Hospital in Washington. By the end of 2015, GWUH expects to obtain more than a third of its electricity from solar-energy sources, thanks to a long-term agreement signed this year.

The hospital partnered with George Washington University and American University to launch the Capital Partners Solar Project. Duke Energy Renewables will provide the institutions with solar photovoltaic power produced in North Carolina. The power generated from 243,000 solar panels at three sites in North Carolina will be transmitted through a North Carolina electrical grid into the regional grid that serves the D.C. area. When fully operational, the three institutions will receive 123 million kilowatt hours a year from the project, which the partners say is the largest non-utility solar PV power purchase east of the Mississippi River.

“Our role is to contribute to the health of our community in many ways, and reducing our carbon footprint is one of them,” said Barry Wolfman, CEO and managing director of GWUH. “It will be the equivalent of taking some 12,500 cars off the road.”

Under the deal, GWUH and its partners will pay a fixed price for the solar energy at a lower total price than they are currently paying for energy. “The renewable energy industry has changed, and it is becoming more economical,” Wolfman said.

While Wolfman hopes that solar power from the Capital Partners project will provide half of the hospital's electricity, he wants to maintain a diversified range of energy sources. “The technology today is different than it was yesterday, and it will be different tomorrow than it is today,” he said. “We decided not to be all brown power and not all green power because we want to be diversified in our approach to energy management.”

In the Philadelphia area, six organizations—Main Line Health (MLH), Thomas Jefferson University Hospitals and Thomas Jefferson University, Aria Health, Magee Rehabilitation, Christiana Care Health System and the Albert Einstein Healthcare Network—are in the fourth year of a 10-year purchasing agreement with one of Pennsylvania's largest wind-power projects. Their purchase of about 200 million kilowatt hours a year accounts for 70% of the energy produced by the 102 MW Locust Ridge II wind facility.

On average, the wind-purchase agreement accounts for about one-third of the annual electricity consumption for MLH, a four-hospital system serving the western suburbs of Philadelphia, said Lewis Cohen, the system's energy consulting partner. The percentage varies widely over the course of the year because the Northeast is windier in the winter than in the summer.

From a financial standpoint, it is too soon to tell how the 10-year fixed-price agreement will work out for Main Line and its purchasing partners. When the contract was negotiated, the cost of wind energy was less than the market rate for energy from conventional sources. But energy prices fell during the Great Recession, and wind energy is more expensive now than energy from fossil fuels. Over the remaining six years of the contract, however, the price of energy from conventional sources is expected to fluctuate, so the fixed-price wind-energy agreement offers a hedge against rising prices.

The potential cost savings from the wind-power agreement was only one reason MLH entered the deal. “MLH believes in the long-term advantages of moving toward renewable non-polluting sources of energy and its consistency with MLH's goal of improving overall public health and wellness,” Cohen said.

In addition to their purchase of actual renewable energy, Main Line and its partners also buy renewable energy certificates, or credits (RECs), from the Locust Ridge II project. The RECs are tradeable, and can be bought and sold to help companies voluntarily meet renewable energy targets. Main Line, for example, uses the RECs to qualify for Leadership in Energy and Environmental Design (LEED) certification from the U.S. Green Building Council.

At least two healthcare organizations are going even further, getting all their energy from renewable sources. In Oregon, Providence Newberg, a hospital in the Providence Health & Services system, buys all its electricity through Portland General Electric's Clean Wind program, which generates energy from wind farms in the Northwest.

Taking a different approach, Gundersen, a not-for-profit integrated-delivery system, generates 100% of its energy needs through a variety of renewable sources. It co-owns two wind turbine projects. It also pipes landfill gas to an engine that powers a large outpatient campus. Its biomass boiler heats water to create steam energy. And a dairy digester system turns manure into electricity.

While the Providence Newberg and Gundersen examples are inspirational, they are not easily replicable, said Practice Greenhealth's Lynn. For example, since the supply and price of renewable energy can vary by location, what works for one health system might not work for another. Further, because the healthcare industry has little experience with renewable energy, few staff members know how to identify potential sources and negotiate agreements.

“Many facility managers don't yet understand how to access renewable energy sources or build these relationships,” Lynn said. “They may not be discussing it unless the issue is being driven by a board that is focused on sustainability.”