Energy Efficiency in the Health Sector

Audited Entities

• Department of Health (DH)
• Environment Protection Authority
• Department of Treasury and Finance

Audit Objective

• The objective of the audit was to assess whether the Department of Health and health services have been effective in improving energy efficiency in health services. To address this objective, the audit examined:
  • how the Department of Health and health services planned to improve energy efficiency
  • whether the Department of Health and health services are implementing energy efficiency initiatives and meeting energy efficiency targets.

Audit Scope

• The audit examined the role of the Department of Health in planning for energy efficiency across the health sector. It also examined the planning and actions taken to improve energy efficiency at three selected metropolitan health services: Austin Health, Eastern Health and St. Vincent’s.
• The audit also examined the activities of the Department of Treasury and Finance in administering the Greener Government Buildings (GGB) program, and the Environment Protection Authority in overseeing the Environment and Resource Efficiency Plans (EREP) program.

Audit Criteria

• Not available

Main Audit Findings

• The Department of Health’s (DH) approach to statewide planning for energy efficiency is inadequate. It does not have a documented policy or plan and lacks a strategic focus and a coordinated approach. It also does not align with health services’ local planning.
• While there have been improvements in energy efficiency across the health system over the past seven years, the lack of an adequate planning approach has potentially limited the gains that could have been made. Specifically, DH's planning approach limits its ability to demonstrate whether it is appropriately allocating resources to areas of greatest need or highest risk, and whether it is sufficiently prepared for emerging challenges.
• DH believes that individual health services should be responsible for their own energy efficiency planning. However, this approach is not conducive to optimising and driving outcomes at a system level. Despite this stance, DH undertakes a range of ad hoc centralised activities. These activities include estimating cost pressures on health services to inform future planning activities and investigating the feasibility of expanding cogeneration energy supply to selected metropolitan and regional hospitals. These activities confuse whether planning for energy efficiency is a statewide or health service level activity.

Audit Recommendations

• The Department of Health, in consultation with health services, should improve the measures it uses to assess health service energy efficiency performance.
• The Department of Health should adopt a more focused and strategic approach to planning for energy efficiency in the health sector to:
  • support consistent planning at a health service level
  • align with statewide goals for health services.
• The Department of Health, after consulting the Department of Treasury and Finance and approved energy service companies, should assess the risks associated with:
  • the Department of Health’s modified approach to delivering energy performance contracts in health services
  • the industry’s capacity to deliver energy performance contracts in line with the Department of Health’s planned rollout under the Greener Government Buildings program.
• The Department of Treasury and Finance should strengthen its governance arrangements for the Greener Government Buildings program to:
  • influence departments’ participation by clarifying roles and responsibilities and its required involvement in delivering and scheduling energy performance contracts
  • clarify departments’ performance reporting obligations                             

• PreviousReview of the Efficiency Delivery Programme
• NextIrrigation Efficiency Programs