Case Study: Dunedin Energy Centre
Southern District Health Board
Centralised steam and hot water energy network
Southern District Health Board saved over $3 million in anticipated capital expenditure and mitigated a range of future business risks following its decision to outsource its energy supply and sell its energy assets to Energy for Industry Ltd.
As a result, budget that was previously earmarked for energy utilities capital expenditure now goes towards much-needed hospital equipment, and the hospital can concentrate its resources and efforts on its core business. The partnership with Energy for Industry and the acquisition of energy plant by EFI enabled the SDHB to resolve a variety of anticipated operational and financial risks associated with aging energy assets and utilities.
Energy for Industry purchased the central city located Dunedin Energy Centre from the then Otago District Health Board under a Build, Own, Operate, Transfer (BOOT) partnership. The outsourcing and management arrangement provides the hospital with a long-term risk management option and valuable expenditure reduction strategy and resolved a variety of anticipated operational and financial risks associated with the aging plant.
The energy centre comprises four coal-fired steam boilers with a total capacity of 30MWth and a steam reticulation system. As part of the agreement, Energy for Industry took over the commercial supply contracts of other customers connected to the heat supply network, supplying steam and hot water to Cadbury Confectionery Ltd, Alsco, University of Otago and a number of smaller business customers.
Following acquisition of the energy centre a comprehensive upgrade programme was undertaken by EFI to extend the life of the plant and to bring it up to modern best practice standards. This included the installation of a baghouse which materially reduced particulate emissions and dust by 93%, enhancing environmental air quality in the Dunedin’s CBD.
EFI’s long-term commitment to continual energy efficiency improvements and life cycle asset management EFI invests extensively capital improvements to benefit customers and included pipeline upgrades and boiler house control systems. A fuel switching initiative has also been undertaken to bring reduced heat supply costs compared to coal blend options used previously.
These efficiencies and other and ongoing initiatives enable EFI to lower the risk to its customers from future steam supply price rises due to access to long-term fuel supply and enhance the capability of EFI to co-fire with wood fuel in the future to reduce the impact on customers of an emissions trading scheme.
Dunedin Energy Centre customers also benefit from the EFI’s accreditation to the CEMARS® emissions measurement and reduction scheme, where EFI measures and manages year on year emission intensity targets.
