Steven Heape explores how the explosive growth in AI and data centre demand could hand the NHS the revenue generator it has lacked since CHP fell out of favour, and sets out what a genuinely investable model for combined heat and compute might look like.
Since 2020, the NHS has benefited from around £1.5bn of Public Sector Decarbonisation Scheme (PSDS) funding, delivered via Salix, to install heat decarbonisation technology across the estate. That funding has been transformational. It has proven that heat pumps, geothermal pilots and large-scale retrofits can work at NHS scale, and it has built a supply chain capable of delivering them. The NHS has a target to reach Net Zero for building emissions by 2040, ten years ahead of the government's own 2050 target for the country as a whole.
But PSDS funding has now been withdrawn, and the fundamental question it leaves behind has not gone away: how does the NHS continue this journey without capital support or revenue funding to soften the cost?
The government and NHS strategy both lean heavily on the fact that the electricity grid is decarbonising at a national, centralised level. That is genuinely good news: it means we do not need to solve electricity decarbonisation site by site. But it also means heat is now the hard part. We need to move away from natural gas towards electricity-based or renewable heat solutions, and heat pumps have been seen as the principal route to do this.
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