Kaiser Permanente, in what it's calling the largest renewable energy buy to date for a healthcare organization, plans to purchase enough wind and solar power to supply half of the electricity it uses at its more than 500 buildings in California.
The not-for-profit healthcare giant last week announced that it has signed two 20-year power production contracts that together are expected to cost about $35 million a year. Kaiser expects to do no worse than break even over the course of the agreements compared with what it would have spent with other power sources, depending upon shifts in electricity pricing.
“There could be periods of time where we don't (see a return), but the majority of those 20 years we expect to be black,” Chief Energy Officer Ramé Hemstreet said.
A solar energy plant in Blythe, Calif., that will supply 110 megawatts of energy and 43 megawatts of wind power is being purchased from turbines at the planned Golden Hills wind farm in Alameda County, both owned by Juno Beach, Fla.-based NextEra Energy Resources. The plants are expected to be partially under construction for the next two years; Kaiser expects to start using the energy in 2016.
Kaiser also agreed to purchase as much as 70 megawatts of onsite solar power from NRG Energy, which will install rooftop and ground-mounted solar arrays at as many as 170 Kaiser facilities between 2015 and 2017. NRG, which has dual headquarters in Houston and Princeton, N.J., will build and own the systems, distributing the power to Kaiser at a fixed cost for 20 years.
The healthcare giant has 35 hospitals and 450 medical office buildings in California, in addition to various warehouse and administrative buildings. Several Kaiser facilities already use onsite solar power, including locations in Colorado, Hawaii and Oregon.
Kaiser is a “de-facto leader” in healthcare renewable energy usage, particularly because of its size, said Cecilia DeLoach Lynn, director of facility engagement and metrics for Practice Greenhealth, a membership organization of more than 1,300 healthcare organizations committed to environmental sustainability.
“Kaiser has always been on the frontlines of the environmental stewardship movement,” DeLoach Lynn said. “They've long understood this connection with population health and have been very proactive around climate change's potential to really negatively affect human health.”
Kaiser uses nearly 1.5 billion kilowatts of power a year company-wide and emits 806,000 metric tons of greenhouse gasses, it said, much of which comes from energy consumed at its hospitals and other buildings. Kaiser expects a 23% decrease in emissions by 2017 as a result of these energy purchases. It had previously set a goal to reduce emissions 30% by 2020.
Though the state of California is known to be progressive in terms of energy policy, Kaiser isn't responding to any mandate or regulation, Hemstreet said. California offers tax credits for the implementation of wind and solar systems, but Kaiser is tax-exempt.
Kaiser is among a steadily growing group of health systems that are looking to lessen their environmental impact, and in some cases, save money as a result.
Gundersen Health System, La Crosse, Wis., announced in October that it would freeze all future investments in fossil fuels, making it the first U.S. healthcare organization to publicly change fossil-fuel related securities in its portfolio. Its Gundersen Lutheran Medical Center, its sole acute-care hospital, is energy independent, running entirely on self-produced renewable energy.
A recent survey of 40 of Practice Greenhealth member facilities showed that they get an average of about 4.2% of their energy from renewable sources. The plan for Kaiser—which is a member of Practice Greenhealth—goes beyond previous industry initiatives.
“I think Kaiser is a groundbreaker,” DeLoach Lynn said. “It's going to make other health systems ask, well, why are they doing that?”
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