British Gas Trading Ltd – Guy’s & St Thomas’ NHS Foundation TrustLondon

Provision of commercial support to British Gas Trading Ltd to deliver an Energy Performance Contract at Guy’s & St Thomas’ NHS Foundation Trust.

Under an NEC Target Cost contract, British Gas was contracted to design and deliver energy saving measures to Guy’s and St Thomas’ Hospitals, which were guaranteed to produce energy savings of £1.2 million per year, guaranteed and underwritten for a 10-year period.

The design and management elements of the contract, worth £2.5 million, were fixed costs but the construction direct costs of £6.6 million were reimbursable, with a clause under which the contractor benefitted if the savings were delivered at a lower actual cost.

The contract lasted from December 2015 to January 2019 and savings of £1.3 million per year were achieved with the contractor managing to achieve a significant underspend of the reimbursable costs.

The energy savings were achieved through a variety of measures including:

  • LED lighting retrofits
  • Motor replacements with invertor driven controls
  • High efficiency filters on AHUs
  • Replacement of faulty valves
  • Timer controls added to air conditioning units
  • Optimising BMS controls and time of day scheduling
  • Replacing boiler burners
  • Installing flue economisers and oxygen trim on boilers
  • Insulation repair/replacement and installation of valve muffs
  • Installation of over 150 meters to monitor usage and assist the Hospital Trust with billing tenants
  • A significant amount of backlog maintenance identified by the Trust

Ridge provided commercial support in the following areas:

  • Preparation of NEC main contract
  • Procurement of all Subcontract Packages
  • Agreement of Compensation Events with the client and with subcontractors
  • Preparing Applications for Payment for British Gas and certifying payments to subcontractors
  • Agreement of all Final Accounts including negotiating contractor share and resolving disputes
  • Negotiating termination fee to cancel ongoing saving monitoring over 10-year ‘service’ period
  • £10.2million

    Contract value

  • £8.3million

    Final account value

  • £1.08million/year

    Contract target savings (guaranteed)

  • £1.27million/year

    Contract actual savings