Over 50% of the costs on electricity invoices are for things like the transport and distribution of electricity across the country. These costs are known as non-commodity costs.
Distribution charges vary depending on the time of day and red, amber and green zone charges are applied. Peak time (red zone) is generally between 4pm and 7pm and carries the most expensive charges - about 3 times more than the green zone.
By using the Crown Commercial Service (CCS) agreement for half-hourly electricity, customers receive a breakdown on when they are using electricity to help them see if they can move any of their energy usage to cheaper times of the day.
It is estimated that the NHS spent over £14 million on red zone usage in 2015/16. The potential saving of moving just 10% of this usage out of the red zone is £1.2 million a year, rising to over £3 million based on a 25% shift.
NHS Property Service Limited (NHS PS) has been working in partnership with CCS for several years and uses all the energy agreements. As part of the half-hourly electricity agreement, the supplier - EDF - has been working with them to review potential savings areas, including shifting red zone usage.
Kim Ormsby, the National Head of Corporate Social Responsibility and Sustainability, and the sustainability team at NHS PS are helping educate staff on how and when to move energy usage outside of the red zone to help reduce costs.
Working with CCS and EDF, they have launched webinars and training seminars to help colleagues understand the savings potential and the part that they can play in achieving these savings.
Based on best practice ideas from the Ministry of Defence, the team also introduced a message at the bottom of their email communications to remind colleagues of the benefits of reducing usage at peak times.
The team is aiming to save £80,000 by reducing their electricity usage at peak times.
Additionally, Kim and the team are continuing to review all the current savings initiatives available through CCS and are confident that they will be able to make even more great savings.
“These initiatives will further enhance the drive to improve efficiencies within NHS Property Services and ensure we are able to pass cost savings back into the NHS to improve patient care.”
Dennis Markey, Chief Operating Officer
The CCS energy team is committed to powering the public sector - helping our customers across central government, the NHS and the wider public sector save millions of pound each year. Our combined buying power and commercial innovation helps you get best value in buying gas, electricity and liquid fuels. We can also help you save even more by reducing your consumption and future proofing your buildings.
If you are not yet using a CCS energy agreement we would encourage you to get in touch to discuss the options available to you by emailing EHNEnergy@crowncommercial.gov.uk or calling 0345 410 2222.