New Defra demand response rules could cost NHS £27 million annually


The Department for Environment, Food and Rural Affairs (Defra) is set to heap further pressure on NHS finances by preventing Trusts from participating in energy demand response programmes as it implements the EU Medium Combustion Plant Directive.

New analysis shows NHS finances will lose out more than £27 million per year from 2019 once these proposed regulations come into effect – this could fund more than three million prescriptions or around 5,000 hip replacements.

Currently, NHS Trusts participate in energy demand response programmes using backup generators, which they require to maintain services in an emergency. The money they receive from these programmes enable their generators to run at no cost, ensuring a continuous energy supply at all times. Without an effective backup electricity source, hospitals could lose crucial power to life support machinery or operating theaters during a power outage.

However, under new Defra proposals, NHS Trusts will be unable to provide these services without spending taxpayers’ money on prohibitively expensive emissions abatement equipment, says a release by KiWi Power.

According to the company, this is an “unnecessary and unwelcome intervention” at a time when public finances are squeezed and when the NHS needs to be focusing on its core business of providing crucial medical care.

On a practical level, the demand response services provided by NHS Trusts ensure critical grid resilience and help to keep the lights on at times of system stress. Defra’s proposed approach will increase the emissions needed to provide these services, as NHS Trusts will continue to use their generators to ensure resilience.

As backup generators would be excluded from providing ‘balancing services’, additional emissions will arise from the power stations that would be needed to make up the resulting shortfall. This will result in an estimated increase of more than 5,400 tonnes CO2 emissions over the course of an average year compared to the status quo.

Jonathan Ainley, head of public affairs and UK programme manager at KiWi Power said: “The last thing the country needs is for the government to place additional strain on the NHS budget. The proposed policy will create a funding shortfall, requiring NHS Trusts to divert much-needed money away from front-line services towards generator maintenance, which is surely an outcome to be avoided.

“I urge Defra to think again about shutting the NHS out of a means of generating additional income from their existing assets by providing critical services to the National Grid.”