Committee Reports > List of Committees > Dáil > 1996 > Committee of Public Accounts > Report No. 01 - Value for money examinations

APPENDIX 3

Dear Ms O’Rourke

I enclose for your information a copy of a circular which issued recently to health agencies in regard to the Report of the Comptroller and Auditor General on Energy Management in the Health Service.

Yours sincerely

Eamon Corcoran

Finance Unit

Chief Executive Officer, each Health Board

Chief Executive Officer/Chief Executive/Secretary Manager, each Voluntary/Joint Board Hospital

Administrator/Chief Executive, each Direct Funded Home

Dear CEO/Chief Executive/Secretary Manager/Administrator

I am writing to you in connection with the recently published report on “Energy Management in the Health Service”.*

The report, which was laid before both Houses of the Oireachtas in August 1995, was prepared by the Comptroller and Auditor General (C&AG) using new powers given to him in the Comptroller and Auditor General (Amendment) Act, 1993.

The aim of this particular study was to examine whether health boards procured energy products economically and converted them efficiently into energy output. Data were also assembled in respect of Voluntary/Joint Board Hospitals and Direct Funded Homes for comparison purposes.

I am pleased to note that, in general, the report was favourable and indicated a strong commitment on the part of health agency management and technical staff to using energy economically and efficiently. I made these points during the recent examination of the report by the Dáil Public Accounts Committee and I am grateful for the detailed briefing material supplied by Health Boards in this connection.

The main findings of the report can be summarised as follows:

●considerable variation in the efficiency and effectiveness with which energy was used;

●a need to adopt best practice in this area;

●the need for better co-ordination between line and financial management and the technical services function in regard to energy usage.

The report provides a valuable basis for agencies to assess their own energy performance by establishing targets and assessing their achievements at regular intervals. In responding to the report, it is essential that, where this has not already been done, health agencies should develop clear documented policies and procedures in the following areas:-

1energy saving;

2energy procurement;

3electricity costs;

4control and building management.

A suggested checklist by which energy performance may be improved is set out in the Appendix to this letter.

With regard to procurement, the report emphasises that savings can be realised through central procurement. Two initiatives have already been taken in this area - the natural gas contract with Bord Gáis Éireann and the Health Boards Value for Money Group’s fuel contract but this issue will have to be re-examined to see what further savings can be obtained.

With regard to low cost initiatives with short pay-back periods, agencies will need to consider their individual responses under this heading. The report makes clear that it should be possible to progress such initiatives from current allocations. However, in a limited number of instances there may be a need to look at more intensive capital outlays or at investment over a longer period than one year and such initiatives should be discussed with the Hospital Planning Office of this Department.

As the report raises many issues for consideration by health agencies and also by the Department, the Department is organising a workshop on the report which will take place early in 1996.

Yours sincerely

Jerry O’Dwyer

Secretary

Appendix

ENERGY PERFORMANCE CHECKLIST

1. Energy Saving.

-Establish energy policies and procedures.

-Set conservation targets.

-Agree the basis for accountability and performance measurement between line and financial management and the technical services function.

-Consider, where appropriate, the introduction of Contract Energy Management (CEM).

-Implement good housekeeping energy practices e.g.

●Switch off electrical equipment when it is not in use.

●Increase automatic switching.

●Introduce metering in areas of particularly high electricity consumption.

-Establish local energy committees.

-Ensure adequacy of data collection.

-Make arrangements for periodic review and external energy audit.

2. Energy Procurement

-Expand the use of central procurement for fuel oils.

-Use heavier fuel oils, where possible.

-Use natural gas in substitution for gas oil.

-Substitute gas for electricity to power kitchen equipment where this would not compromise the availability of a back-up capacity.

-Minimise the use of electricity, where possible.

Appendix

3. Electricity Costs

-Ensure that institutions have opted for the correct ESB tariff.

-Use the free advisory service provided by the ESB on energy efficiency through which it advises consumers on the most appropriate tariff structure.

-Minimise loads at peak periods either by peak-lopping or by re-scheduling work.

-Monitor the purchase and installation of new electrical equipment above a certain size.

-Accurately monitor total consumption and consumption of key units within hospitals and homes.

-Consider Combined Heat and Power (CHP) technology for all medium and large hospital sites in the natural gas area.

-Introduce longlife bulbs and fittings.

4. Control and Building Management

-Introduce Building Management Systems (BMS) to monitor and control energy use at one or more locations by means of a link to a centralised computer control.

-Where a BMS is already installed, incorporate a progressive and phased up-grade to a full monitoring and reporting BMS in all medium term energy management plans.

-Review the upgrading of controls to a more effective level during the life of most mechanical plant.

-Establish zone control systems to achieve energy conservation.

-Examine boiler plant in respect of:

● Suitability of boiler control/time control including consideration of optimum stop/start settings.

● Boiler efficiency at high and low firing rates.

● Elimination of wasted output in multiple boiler installation

● Establishment of the economic viability of operational but semi-obsolete plant.

* “Energy Management in the Health Service” (Pn 1628), published by the Stationery Office and available from the Government Publications Sales Office, Sun Alliance House, Molesworth Street, Dublin 2 (Price £5).