Health-care facility managers eager to gain energy and financial savings are finding that today’s technologies offer added benefits. Upfront costs of new systems present significant barriers; clinical needs’ funding often takes precedence over operational advances. However, two health-care facilities found new partnerships that leveraged their existing systems to accomplish their goals.
The driving force for system improvements at the University of Maryland Upper Chesapeake Medical Center (UCMC) in Bel Air was the desire for more available power during emergencies. As required by federal law, the hospital has a diesel backup generator for life support but it posed multiple limitations.
“You run out of diesel after a few days, and during severe floods roads become blocked with no way to truck more diesel in,” explains Don Allik, facilities director at UCMC. In addition, extremely high ventilation standards for hospitals require enormous energy to condition outdoor air. “The generator can only handle about 40 percent of health-care-specific loads,” Allik says. “If an emergency occurs in mid-summer when our typical outdoor air temperature is 95 F, the building interior would be so hot we’d have to evacuate our patients.”
UCMC’s campus was supplied with natural gas and utility-grid electricity. Allik knew a natural gas cogeneration system would allow the hospital to operate off-grid if electrical disruptions occurred. Cogeneration systems (or combined heat and power systems) capture waste heat for reuse within the system to greatly increase efficiency. The $8.5 million price tag for this type of system, however, kept it out of reach. That’s when Clark Construction Group, Bethesda, Md., stepped in.
“We helped the institution assess the optimal solution based on footprint, cost of power, incentives, constraints and opportunities in the marketplace, and lifecycle,” recalls Claudia Meer, managing director Energy & Structured Finance at Clark Construction Group. “We devised a tri-generation system for UCMC where steam, hot water and chilled water output are the byproducts reused in the system.”
The customized solution included new equipment, including a 2-megawatt reciprocating natural gas engine; 350-ton absorption chiller; two radiators; an HRSG (heat-recovery steam generator); and a cooling tower that Clark tied into UCMC’s existing steam, electrical, cooling and water distribution systems.
To obtain the major infrastructure improvement without having to use its own funding, UCMC entered into a Power Purchase Agreement (PPA) with Clark Construction Group. Clark owns the cogeneration system, which is funded with a mix of project finance debt tax credit and sponsor equity. UCMC has a 20-year contract to buy the system’s electricity directly from Clark Construction Group at a per kilowatt-hour rate based upon an assumed level of consumption. UCMC receives the waste heat for free. Because they are a for-profit entity, Clark Construction Group could take advantage of federal tax credits not available to the non-profit health-care organization. The project also received $1.5 million in funding from local utility BC&E as part of the EmPower Maryland CHP incentive awards program.
Because it captures waste heat, the system is nearly 80 percent efficient and it alone supplies more than 45 percent of the 44-acre campus’s energy needs, which includes the hospital, administration, medical office, garages and a new Cancer Center. UCMC purchases the natural gas that supplies the system and utility-grid electricity needed for the campus.
The PPA structure created significant power savings for the hospital. During the life of the contract, UCMC expects to gain $9 million in savings thanks to the low price of gas, the contractual price of electricity and the waste heat utilization.