Hospitals lead the facilities sector with onsite power and sustainability.
With consistent 24–7 load demands for electricity, heating, and cooling, it’s hard to beat hospitals as the perfect environment for distributed energy. And with the push for sustainability, plus efficient generation such as combined heat and power (CHP) systems, the timing couldn’t be better. Just in North America, there are thousands of hospitals with opportunities to upgrade inefficient and aging energy-related systems. The issues range from neglected boilers, to lighting, insulation, HVAC, and automated environmental control systems.
Not surprisingly, these issues exist more or less due to financial constraints. But, as we’ll see, the efficiency of new technologies is so great that hospitals are installing or upgrading with no additional impact to their current utility budgets. Moreover, many county, state, and federal programs are offering financial incentives for investments in sustainable energy technologies. For an example of a new hospital that redefines efficiency and the relationship between a utility and a hospital, look to the new South Energy Center at Shands Cancer Medical Center, Gainesville, FL.
The Shands Cancer Medical Center opened on November 1, 2009, but the Solar Turbines Mercury 50, a 4.3-MW combustion turbine, has been spinning for about eight months, as the commissioning process culminated in the hospital’s official launch. Along with driving the electrical generator, the turbine connects to a heat recovery steam generator, a steam turbine centrifugal chiller, combustion turbine inlet cooling coils, and two electrical centrifugal chillers. The project is designed to run in parallel with the electric utility grid and provides efficient and reliable electrical power, chilled water, steam, and medical gases. If a natural disaster or unplanned event causes the grid to fail, the system can disconnect and run in island mode to meet 100% of the hospital’s needs.
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Photo: Burns & McDonnell
Cooling towers located on the roof of a hospital energy center |
Keeping the Lights on Through a Hurricane and Worse
Disaster recovery has become a critical factor for hospitals, says Ed Mardiat, DBIA, Principal, Aviation & Facilities Group, Burns & McDonnell. Based in Kansas City, MO, the firm provided architecture, engineering, procurement, and construction management services for the project. “After 9/11, Rita and Katrina, and the Northeast blackout, the healthcare industry has determined that these types of facilities have to be 100% up-and-running in the event of a natural disaster,” says Mardiat. “Shands recognizes this, and their performance specifications call for 96 hours of electric and thermal energy, in the event of a disaster.”
Burns & McDonnell had a persuasive argument for onsite power as the ideal solution to the disaster requirements, and its best proof was the success of a CHP-based system for Dell Children’s Hospital, in Austin, TX. Although Shands’ original plans called for the traditional approach of utility power, plus backup generators, chillers, and heat from boilers, administrators saw the advantages of CHP. But they preferred to have such a system owned and operated by an outside contractor. Could it be done in an economically feasible fashion?
Gainesville Regional Utilities (GRU) answered yes, with an offer to finance, own, and operate the South Energy Center as part of a 50-year agreement to provide electricity, steam, and chilled water, plus state-of-the-art equipment that includes: variable primary pumps, a packaged boiler—30,000 pounds per hour; black start engine generator—500 kW, and emergency engine generator—2,250 kW.
“A 50-year agreement is almost unheard of, and you just don’t see those in the industry,” says Mardiat. “Energy service agreements are often sold and transferred, but Shands wanted their provider to stay for a long period of time.”
A long relationship was ideal for GRU. The municipal utility has seen peak demand grow from 50 MW to nearly 500 MW over the last 60 years, and, although it wanted to provide Shands with electricity, programs were already in place to curtail peak demands in the Gainesville area that required using costly standby generators or buying from other power providers. To reduce those costs, GRU had already instituted a plan to cut demand by 10% by 2015. With an efficiency rating estimated at 75%, a CHP power center would allow GRU to meet its goals and provide efficient power to Shands, or export it to their grid. And the financial benefits were attractive to all parties.
State Tariff Rates Don’t Stop the Discounts
Shands reports a $30-million capital savings, accrued to the hospital from not building its own central plant. For GRU, the $45-million capital cost of the plant is a direct pass through to Shands in a monthly capital cost recovery charge. Boiler and maintenance for the plant are handled similarly. Electricity is still a regulated market in Florida, so cost per kilowatt-hour is defined by state tariff rates. However, gas is deregulated, and GRU also provides the gas at a discount. Because the utility owns the facility, it can direct power to the hospital or to the grid, depending upon market circumstances. For the future, when Shands is ready to expand, the system’s modular design will reduce construction costs.
“We have found that the Mercury 50 fits very well with a 200-bed hospital’s requirements,” says Mardiat. “The hospital draws about two megawatts, and all those chillers and other loads to support the hospital are an additional two megawatts. So this plant is already designed for the next expansion, which includes another 200 beds. Then, we’ll add a second waste heat recovery system and boiler, and there won’t be any expansion of the building needed. As you go beyond that to phase three and four, they will still be a mirror image of phase one and two. This is very consistent with what the modular design philosophy we used at Dell and consistent with the Department of Energy’s goals for CHP onsite energy systems.”
The Department of Energy (DOE) contributed funds to the Dell Children’s Hospital CHP plant and has taken a strong position on promoting CHP for hospitals, noting on its CHP Web site that, “Hospitals are excellent candidates for CHP systems, because they have high electrical and thermal energy needs that generally follow each other and have significant energy demands 24-7-365. More than 200 hospitals and health care facilities nationwide are using CHP to lower energy costs by up to 50% and decrease power outages and interruptions by up to 95%.”
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Photo: Burns & McDonnell
The two 1,500-ton electrical centrifugal chillers and the 1,200-ton steam turbine centrifugal chiller are located on the third floor. |
More than 200 is a good start, but not enough, according to Drury Crawley, technology development manager, DOE. Crawley is responsible for the DOE’s High Performance Buildings initiative, a program to achieve cost-effective net-zero energy commercial buildings by 2020, as mandated by the 2007 Energy Independence and Security Act.
In October 2009, Crawley gathered key decision makers from the hospital industry for a “Premier Energy Leadership Forum” an industry-led forum of healthcare leaders and national associations. The effort was coordinated with DOE’s EnergySmart Hospitals (one of DOE’s Commercial Building Energy Alliances) targeted at spurring major energy efficiency improvements in hospitals.
Energy Savings Contracts Mitigate Risks
According to Crawley, the industry is responding well to the DOE’s goals of short-term energy reduction. “We started with 30% reductions, and we’re now looking at up to 50%,” says Crawley. “We have found a number of solutions for getting those sorts of savings that are cost effective, and distributed energy is a technology that’s particular good for these large facilities.
“Using an energy savings contract [ESCO] is a very good opportunity for getting to savings, but often though, they may not be making changes that can get to the really deep savings,” continues Crawley. “There is some aversion to risk and technologies, and implementation and their operations.”
No risk, and no increase to utility costs, was the offer Honeywell Building Solutions made to Sunnybrook Health Sciences Centre in Toronto, Ontario, Canada. Both companies recently celebrated the completion of a photovoltaic (PV) installation at the Bayview Campus in Toronto. More than 140 solar panels mounted on a parking garage are expected to generate nearly 27,000 kWh of electricity annually.
The panels are mounted vertically on the wall of the structure, located at the main entrance of the campus, and intended to serve as a statement of the hospital’s conservation efforts. A second solar array is planned and will more than double the size of the first, making the two arrays the largest solar power generation system at a Canadian healthcare facility. The new installation is the most publicly visible part of a $28-million facility renewal program that includes a variety of energy-efficient upgrades intended to help the hospital cut energy costs and reduce its environmental impact.
Sunnybrook is financing the work using savings from the energy and operational savings improvements. Those savings, approximately $2.7 million per year over the next 15 years, are guaranteed by a Honeywell performance contract. In addition, Sunnybrook’s green initiatives make it eligible for more than $1 million in various grants and federal funding.
“Many hospitals have taken this path to more or less of a degree,” says Michael Young, Executive Vice President at Sunnybrook. “Of course it’s the right thing to do, but in these economic times people are looking very hard at ways to reduce cost and provide the same high-quality services to more patients within the restrictions of very limited growth in revenues.
“So it is becoming a necessity, whereas, perhaps 10 years ago, it was more of a philosophical issue of doing the right thing.”
Paybacks Short and Long
Young recalls being very surprised when the results of Honeywell’s energy audit offered a project exceeding the magnitude of $30 million.
“I was expecting a $10-million project with a five-year payback, and with the various options we could’ve done that,” says Young. “But the opportunity to do something for our staff, and residents, and to do something to improve our sustainability, with 10- to 15-year paybacks was still manageable.”
As part of the facility renewal program, Honeywell will: replace chillers and cooling towers with more energy-efficient models that use environmentally friendly refrigerants; install high-efficiency lighting systems and control strategies that provide better illumination from less energy; and upgrade and optimize ventilation, heating, and cooling equipment, plus building automation systems to improve energy management.
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Photo: Burns & McDonnell
The heart of the CHP system—a state-of-the-art high-efficiency, low-emissions combustion turbine generation |
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Photo: Honeywell Building Controls
Honeywell Building Solutions and Sunnybrook Health Sciences Centre recently celebrated the completion of a photovoltaic installation at the Bayview Campus in Toronto. |
“At the end of the day, on the $28-million project, we had somewhere in the range of $10 million that fell into the first category of things that we should be doing, because they make good business sense from an economic payback basis,” says Young. “There was another $7-million worth of initiatives that were building infrastructure issues that had to be dealt with anyway, and it was most cost-effective to roll them into this project. We spent another $7 million, roughly, on initiatives that had impact in terms of improving the work environment and living environment for the staff and residents.”
Environmental Stewardship Worth the Wait
The solar arrays cost approximately $1.5 million, and didn’t necessarily make economic sense because the payback on paper was about 18 years, and that long of a wait for a return on investment made it less than attractive from a financial viewpoint. However, the analysis didn’t account for rising energy costs, and the $1.5 million didn’t have a major impact on the overall payback period for the entire project.
“If we didn’t do it, the project would have had a 10.2-year payback, and when we did do it, the project had an overall payback of 10.5 years,” notes Young. “So, it didn’t really hurt the payback, and it was the right thing to do regarding sustainability and environmental stewardship for Sunnybrook.”
Companies like Honeywell are seeing a growing concern for the environment and corporate responsibility as key movers in the healthcare industry, according to Luis Rodrigues, Vice President of Energy Solutions for Honeywell Building Solutions.
“Ten years ago, these types of programs were not about environmental issues,” says Rodrigues. “Clients were just in it to get the quickest bang for the buck. Then, five or six years ago, we started seeing a trend where the customer said they didn’t mind getting into an agreement with a longer return on investment, because it was a good way to fund repairs.
“When you’re looking at a large main air-conditioning chiller, it’s so capital-intensive that you can never get a payback, but they’re going to have to be replaced anyway, so these programs enabled efforts to address these maintenance efforts,” he adds.
Now the latest trend is environmental responsibility, and, over the last two or three years, Rodrigues has seen it accelerate by leaps and bounds. He notes that all of Honeywell’s approaches include some element of environmental responsibility or sustainability. The company has done hospital projects with solar walls and a wind turbine. There’s also a growing interest in geothermal.
The second half of the business opportunity driving the market is issue of deferred maintenance. “Whether it’s in the United States or Canada, public institutions are all suffering from deferred maintenance of work that needs to be done, yet it is continually cut from the budget,” says Rodrigues. “Buildings are getting older, and systems need upgrade replacements.”
The Sunnybrook facility is more than 30 years old. Yet, Honeywell was able to offer technology and a plan that solved the hospital’s deferred maintenance issues, and, with the solar array, they boosted their sustainability program.
Sunnybrook’s solar wall is on the vertical face of a building and very visible to the public. The hospital put up a sign to educate the public and the staff of 10,000 employees.
“It’s part of a huge culture change,” explains Young. “Not only to the staff, but to the public. We rely very much on donations, and a lot of donors have talked about what we’re doing and congratulating us on these initiatives, because these donors are conscious of the importance of going green and sustainability. They are happier to donate to an organization that is seeking these initiatives.”
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Photo: Burns & McDonnell
Switchgear for the essential power feeds to the hospital. |
With the success of the project, and the fact that Honeywell surpassed their savings estimates while completing their work ahead of schedule, Young is sold on the ESCO concept, and sees more opportunities. For example, Sunnybrook has looked at the potential benefits of a CHP plant, but couldn’t make the business casework, due mostly to concerns about the volatility of the natural gas market.
“But if it’s the right thing to do with the strong business case, why not go beyond Sunnybrook needs?” says Young. “We have the University of York and three other hospitals around. Why not build a CHP plant that could meet the needs of these other institutions as a consortium to enhance the benefits and reduce the risks?”
It’s a good question, and in the future, Rodrigues expects to hear more inquiries about CHP from hospitals, because Canadian utilities have a mandate to ensure that fuels such as natural gas or electricity are consumed in an environmentally responsible manner.
The Veterans Administration Catches Up
A similar approach is taking place just south of the Canadian and US border as the US Veterans Administration (VA) gears up for a frontal assault on reducing energy, increasing sustainability, and figuring out how to spend millions of dollars allocated to it by the Economic Reinvestment and Recovery Act. The VA system has thousands of buildings and more than 150 hospitals.
The average age of all VA facilities exceeds 50 years, and—according to Cynthia Cordova, team leader for the VA Green Management Program Office of Asset Enterprise Management—sustainability is a driving force for VA hospitals.
“I’m proud to say it’s one of the top priorities here at the VA, and with the new executive order and this administration, the issue has become a very high-profile goal,” says Cordova. “We actually put out requests for proposals on this and awarded contracts. We’re currently doing feasibility studies at 38 sites for combined heat and power projects using renewable fuels.”
The benefits of CHP are key in the VA goal to become energy-efficient, and it will still be considered with a non-refueled renewable fuel source such as natural gas.
The VA has the funds to pursue these projects, with about $31 million to implement projects that come out of feasibility studies. Two projects funded with conventional dollars are the Togus VA Medical Center, Maine, and the White River Junction Medical Center, Vermont. Feasibility studies are completed, and, when environmental assessments are finished, construction will begin on CHP systems fueled in both cases with biomass.
Solar Shines at 20 VA Sites
In 2008, the VA put in solar arrays at medical centers in Dallas, TX, and Loma Linda, CA. “We awarded contracts to install solar PV projects at 18 additional sites, and those include a couple of national cemeteries, so it’s not just our hospitals,” notes Cordova. “Under the Recovery Act, we’ll be doing feasibility studies at 31 additional sites.”
Cordova’s department is also working on the concept of energy-saving contracts in four regions, using energy savings performance contracts and also, in some areas, using utility energy services contracts. Under utility energy services contracts, the utility handles the installation, but it’s not a given that they would own and operate it.
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Photo: Burns & McDonnell
Combustion turbine exhaust diverter valve, Heat Recovery Steam Generation, and the standby boiler are located on the second floor. |
The St. Cloud Medical Center in Minnesota is slated for a 600-kW turbine installation and a geothermal ground source heat pump. “We have a mandate that 7.5% of our electricity is both to come from renewable sources by 2013, and our internal goal is to double that,” says Cordova. “Like other federal agencies, we were mandated to meet the goal of 30% efficiency or reduce usage by 3% annually, and this is based upon the square footage of the location. I have to say, for hospitals, that is a real challenge.”
Mandates for Disaster Operations
Another challenge for the VA is a mandate to keep medical facilities operating for a minimum of four days, in the event of a grid outage from sources such as natural disasters or terrorist attacks. Some VA facilities in gulf coast states, such as New Orleans, have opted to extend the time to seven days.
According to Kurt Knight, chief, Facilities Quality Service Office of Construction and Facilities Management at the VA, after 9/11, the VA took a more serious look at physical security and protection for its facilities and worked with the National Institute of Building Sciences to develop a physical security evaluation process to determine its needs for multi-hazard scenarios. “We have a variety of different risks including earthquakes, terrorists, floods, hurricanes, and others,” says Knight. “We evaluated about 150 medical centers which we have deemed mission-critical—about 150 of them—and developed a report on the vulnerabilities and mitigations necessary to address some of these risks associated with those events.”
Knight says CHP is a viable solution for maintaining operations during a disaster, as long as it is economically feasible for a particular location.
Heat Pump Technology Raises Chiller Performance to New Heights
Economics played a critical roll in the choice of technology for a new central plant at the Phoenix Children’s Hospital, in Arizona. The hospital broke ground this year on a $588-million expansion plan, and new facilities, including: a new 11-story patient tower, an 18-unit Ronald McDonald House, and a Level One Pediatric Trauma Center, plus a new central plant to handle the increase in hot and chilled water loads. Originally, the plant was designed with a conventional boiler and chiller, but that changed when Johnson Controls, Milwaukee, WI, showed planners how they could achieve significant operating savings by using heat pump technology.
The heat pump chiller cogenerates heating and cooling from just one source of electric power and reduces loads on the boilers, and that saves significant amounts of natural gas. For example (based on manufacturer’s specifications and estimates), the conventional design would have burned natural gas at a rate of 126,360 MMBTU per year. The alternative design reduces natural gas consumption by 70% to 37,430 MMBTU per year. Yes, electricity usage goes up, but it’s a marginal increase from 41.79 million kWh to 46.46 million kWh per year (10%).
“From the hospital’s perspective, we wanted to go with green building guidelines for healthcare as our baseline, and that’s how we started with the design,” explains Dave Cottle, executive director of planning, design, and construction for Phoenix Children’s Hospital.
The hospital added a professional consulting engineering firm, ccrd partners, Greenwood Village, CO, to execute their design, but when Johnson Controls introduced their heat pump solution, the operation became a dual prime contractor relationship.
“We never had to ask ourselves how we would accomplish this,” says Cottle. “The team that we have made a seamless switch from a standard central plant design to the building design we have today.”
The switch may have been seamless, but that doesn’t mean it was effortless, notes Rick Rome, president and CEO of ccrd Partners.
“One of the first things we did to ensure success was come up with a responsibility matrix,” recalls Rome. “We continued to fine-tune that, and it was needed, because one of the biggest obstacles you encounter when you change design and have two prime contractors working on the same scenario is communication. It could’ve gone south if we didn’t sit down and roll up our sleeves to create that matrix which became our Bible.”
The original design specified four, 1,600-ton conventional electric chillers (total capacity 6,400 tons) and natural gas boilers rated at 60,000 MBTU per hour. The revised design specified nine, 3-MMBTU-per-hour high-efficiency condensing boilers with variable-flow primary pumping, three 1,900-ton chillers with variable-frequency drives, and one 800-ton water-to-water heat pump chiller. For standby electric power, two 2-MW diesel generator sets were proposed.
“It’s not the typical heat pump you see for air-conditioning,” says David Boone, account executive, Johnson Controls. “The principle is that we are recycling the BTUs that we pull out of the hospital’s indoor air stream and feed them back into the heating and hot water side where they can be reused for domestic hot water or heating.”
Basically, the heat pump takes the BTUs out of the chilled-water side that cools the hospital and the water and returns them back to the central plant. A dual-compression mechanical process compresses gas to a high pressure in the condenser side of the chiller, and that increases the temperature from the water on the condenser side to 155°F, for use in the heating hot-water side of the system. On the chilled-water side, the system puts out 42°F chilled water.
“So we are getting two products out of the process, 42°F chilled water, and 155°F heating hot water,” says Boone.
An additional benefit from such a system, in an area like Arizona or other arid environments, is that taking the heat out of the water and transferring it into the hot water reduces the amount of heat that would otherwise enter the atmosphere through cooling towers.
“It comes back into our building for other usages and that means less use of the cooling tower, which also evaporates water and requires that you constantly make up water,” says Cottle. “In essence, we’re saving about five-and-a-half-million gallons of water a year. That’s a big deal in areas like Phoenix and Las Vegas [NV], where the cost of water is substantial and natural resources are scarce.”
The system also saves an additional 600,000 gallons on discharge to the sanitation and sewer system, because the cooling towers don’t have to be cleaned and blown down as often.
As we’ve seen from savings incurred at Phoenix and the previous examples, hospitals are leading the way in the facilities sector. Ultimately, with the benefits from onsite energy systems, such as CHP and solar, and new technologies, such as heat pump chillers and building automation systems, these often-neglected institutions are now reaping vast economic and performance gains.
Combined with the benefits of sustainability and reliability, plus ESCO financing, the growth-distributed energy in healthcare looks very attractive for the industry.