n 2021, the NHS with the support of the Department of Health and Social Care secured £50 million funding for the NHS Energy Efficiency Fund which will install LED lighting across 64 NHS trusts. The NHS has also secured over £800 million (US $970 million) in investment through the UK Government Public Sector Decarbonization Scheme (PSDS). The PSDS provides grants for UK public sector organizations to fund heat decarbonization and energy efficiency initiatives with the aim of reducing emissions from public sector buildings by 75% by 2037 (against 2017 baseline).

Funding for the NHS from the PSDS is being driven into more than 100 projects across more than 60 local trusts to install innovative energy technologies such as heat pumps, solar panels and LED lighting, leading to significant carbon and financial savings for the NHS. Examples of successful projects include:

• Milton Keynes University Hospital installed heat pumps and fitted over 2,500 solar panels producing enough energy to power over 200 homes for a year. This will save over £225,000 a year in energy bills.
• Hull University Teaching Hospitals used a £12.6 million grant to install 22,000 LED lights and upgrade inefficient water networks. It also installed 11,000 solar panels opposite the hospital. Through only the electricity generated via the solar panels, the Trust is expected to save on average £300,000 every month in energy costs and estimated 1,015 tonnes in greenhouse gas emissions every year.
• Bristol and Weston NHS Foundation Trust has used £17.5 million in PSDS funding to make the hospital heating system 18% more efficient, saving £800,000 over the next two years in energy costs.
• Birmingham Women’s and Children’s NHS Foundation Trust received £54.3 million in PSDS funding, part of which is being used to create heat-generating ‘bore hole’ pumps to naturally extract energy to power the hospital and significantly reduce its carbon footprint.

Improvements to estates funded through the Public Sector Decarbonization Scheme are helping NHS organizations cut carbon, improve health and save money. The separate NHS Energy Efficiency Fund to install LED lighting is expected to save the NHS £11.8 million while reducing emissions annually by 32,941 kilotonnes of greenhouse gas emissions. 

Going forward, national NHS teams will continue to promote the PSDS to local and regional colleagues, to help support the submission of effective and high-quality NHS applications. Alongside this, the NHS will continue to ensure projects are delivered by sharing best practices and driving collaboration. Financial and carbon savings will be evaluated following the completion of the PSDS funded schemes.  

There may in future be opportunities to explore alternative funding methods, including Power Purchase Agreements (PPA) and Energy Performance Contracts. Energy Performance Contracts allow for capital improvements which permit funding energy upgrades from cost reductions. PPAs ensure any electricity is directly bought and supplied from a renewable generator at a fixed rate over a long contract period. PPAs can involve renewable developers placing assets (such as solar panels) on a buyer’s site and selling the energy generated back to the buyer. This means electricity can be supplied without using National Grid infrastructure systems, avoiding the variable costs for the transmission of energy included in all energy bills.