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Taking the scalpel to energy waste in healthcare

Buried in the pre-Christmas rush last year was a media statement from the Clean Energy Finance Corporation that it was investing $100 million in the new Dexus Healthcare Wholesale Property Fund (HWPF) in order to kick start new standards in clean energy for healthcare.

The fund would target emissions reductions of 45 per cent in both new and existing buildings, and new buildings would target high Green Star outcomes, the CEFC said.

Over the long term the fund would target a “portfolio of net zero carbon outcomes, including low-emission transport options, such as electric vehicles, ride sharing and integration with local transport infrastructure”.

It’s a move that brings the sensitive healthcare sector into the competitive sustainability fold of the broader property sector.

Australian Ethical Investments would also participate in the fund, the statement said, and surprisingly, it added: “HWPF will own Australia’s first portfolio of hospital and healthcare assets to have an environmentally sustainable development focus.”

Surprising, that is, because it’s the first.

The story failed to get media traction (in other words, it came in as we shut down for the summer break). But it’s important and worth picking up.

Environmentally it’s a story that matters because of the huge consumption and waste of energy we know goes on in hospitals.

Politically it matters because wasting energy and funding that could be better spent on extra beds and critical staff is not a good look, especially at a time of cash-strapped government coffers and an ageing, medically needy population.

In a briefing, Paul Wall, head of group sustainability and energy at Dexus, which recently announced it would target net zero emissions for its portfolio by 2030, underscored that there were vast opportunities for energy savings in healthcare.

The sector is “pretty much untapped”, Wall said.

“It’s a good opportunity for a pretty big sector.

“The CEFC is an equity investor and sees enormous opportunity in healthcare for energy efficiency so it invested in our fund because they see that our expertise in offices and industrial can be overlaid into that sector and can provide some benchmarking.”

The fund and energy-slicing program would operate as much over retrofits as new builds, he said. A key driver was for the CEFC to get “credible information and then showing what can be done”.

It would be “a discovery process”.

Time for NABERS healthcare

Wall hopes the focus will lead to a NABERS energy tool for healthcare, and momentum for this was growing, he said.

“NABERS has a lot of rigour and it is accepted and credible.”

In commercial property owners would see the benefits because, as they were striving for higher NABERS ratings, they would see improvements in the way their buildings operated and in amenities.

The same would apply to hospitals and other healthcare assets.

UK saves $3.5 billion

Meanwhile Australian doctors and medical professionals attending the Royal Australia College of Physicians in Sydney last week heard from UK doctor and sustainable healthcare expert David Pencheon about the massive cost and emissions savings his industry had been able to achieve.

“Greenhouse gas emissions had been cut by 11 per cent between 2007 and 2017, even as the demand for health services rose by 18 per cent,” Fairfax Media reported.

The National Health Service in England is responsible for three per cent of total greenhouse gas emissions and Australia’s health sector contribution is a whopping seven per cent of the national footprint.

Politically more persuasive will be that the sustainability savings in England equated to $3.5 billion from 2007 to 2017.

Australia lagging

Which brings us to Australia’s dismal track record in this area, in particular the axing by the former Victorian Baillieu government of the Greener Government Buildings Program, which had particularly targeted energy savings in hospitals.

The program was painstakingly pieced together by a passionate team that worked through the systemic hurdles needed to make long-term energy savings a priority in sectors fixed on other outcomes such as, understandably – and hopefully – saving lives and improving health outcomes. The savings were estimated at more than $2 billion over two decades.

Yet, the Baillieu government decided to axe the program in what can only be described as a fit of anti-climate sentiment at the time. And the Andrews government, dragging its feet (inexplicably), finally reinstated a version of the GGB but then failed to follow through with any action until late last year, with an election looming for 24 November this year, when it announced there would be $26 million to fund energy efficiency and renewables for hospitals.

In an understatement, CEFC property sector lead Chris Wade said in the Dexus fund announcement: “The healthcare sector is ideally suited to benefit from clean energy investments, and yet interest in improving energy efficiency in this area is long overdue.

“Healthcare facilities typically use far more energy than standard office buildings because they operate for extended hours, have high hot water consumption, and extensive airconditioning and specialist medical equipment requirements.

“With this investment in the healthcare sector, we are looking to demonstrate the extensive benefits of clean energy right across the economy.”

The fund already has $370 million in seed assets, including Adelaide’s 12-storey 343-bed Calvary Hospital, the GP Plus Health Care centre in Elizabeth, north of Adelaide, with another $445 million in pipeline opportunities, including the North Shore Health Hub in St Leonards in Sydney, and a new medical research facility in Adelaide.

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