Administrative Staff College of India, Hyderabad

Retrofitting Mahindra Towers:How an Innovative ESCO model Lowers

Energy Bills with no Upfront Cost

Rajkiran V BilolikarAssociate Professor

Energy AreaAdministrative Staff College of India

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Energy Efficiency in Buildings – Role of ESCO

“It was the first time that we could get buy-in from people in the company to show that energy efficiency pays. For us, the ESCO

was an enabler to validate our claim and show that energy efficiency is a good business case. We changed the mindset at the company through this retrofit and we would recommend it

[the ESCO model] to other companies.”

- Ms Beroz Gazdar, Sr Vice President – Group Sustainability, Mahindra & Mahindra

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Mahindra Towers ESCO Model - Key Findings

Key Findings Mahindra Towers worked with an ESCO to

implement energy efficiency measures, resulting in a payback period of less than half a year, without making any upfront payments

The building reduced its power consumption by 14 percent in the first 12 months of the retrofit.

Key energy conservation measures included lighting and cooling systems

ESCO model enabled the company to make payments over time through the energy savings.

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ESCO Agreement

BUILDING BASICS

Location Worli, Mumbai, India

Climate Zone Hot and Humid

Building Area 18430 sq m (198,277 sq ft)

Occupancy 1380

Number of wings 2

Number of Floors 6 (A Wing) & 7 (B wing)

Building Use Commercial

Constructed 1985

Retrofit Started March 2009

Retrofit Completed July 2009

Building Owner Mahindra & Mahindra

Retrofit Financing Provided by ESCO

ESCO ENCON energy management services Pvt Limited

Pre-retrofit Annual Energy Consumption 3,836,910 kWh/Year

• 36 Months (Mar 2009 – Feb 2012)

• Duration of the Contract and Billing

Period

• Savings were calculated monthly on the basis of a pre-determined baseline• Savings

• Monthly savings were shared 50/50 between Mahindra and ENCON throughout the duration

• Sharing of savings

• Upfront retrofitting costs were borne entirely by ENCON – No initial capital expenditure by Mahindra

• Upfront Costs

• It was mutually determined which allowed any variations in normal electrical load or operating conditions to be accounted for in final measurement of savings

• Measurement and

Verification

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Role of ESCO

• Investment Grade Energy Audit

• Technical Report and Proposed

ECMs

• Implementation • Training and Monitoring

• Investment and associated risk

• Payment to suppliers /

contractors by Mahindra and

deduction of 50% from savings

profit of ENCON

• ENCON was entitled to receive a professional fee at the rate of 50% of the savings in a particular month

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Establishing the Baseline and Energy Audit

• Lighting

• Lights were normally operated for 250 hrs per month with a connected load of 250 kW

• Were ceiling mounted luminaries with two 36 W FTL• The utility areas – one 36 W FTL• 150 W – Security lights• FTLs accounted for 78% of total lighting• CFLs accounted for 10% of the load

• HVAC

• 22 air handling units (AHUs)• AHUs consume an average of 30,500 kWh• Motors were loaded below 50%• Electrical rooms with AHUs were poorly insulated• Two screw chillers with a capacity of 350 tons using 75000

kWh per month• Cooling tower used 60 cubic meters of water a day and a 15

HP motor using 29060 kWh

• Electrical System

• Energy audit revealed that the building did not require a retrofit in electrical system

• Lighting

• Replaced with T-5 high efficiency tube rods with high frequency, low harmonic electronic ballasts

• Over 500 lamps were changed resulting in savings of 5,551 kWh per month

• HVAC

• The Air conditioning system was optimized while maintaining pre-retrofit air-temperatures

• The AHU motors were replaced with appropriately sized high efficiency motors, reducing wasted energy and capacity

• The chiller system’s pump’s capacity was reduced to 15 cubic meters per hour with 7.5 HP motor

• Electrical System

• By working with ESCO, Mahindra was able to modify their electrical system with no additional cost

After RetrofitBefore Retrofit

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Cost and Savings

Yearly Consumption kWh

Average Monthly Saving kWh

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Energy Efficient Retrofit: Motivations

• Saving Cost and Energy

• No upfront investment needed from Mahindra

• Simplicity and transparency of the ESCO Model

• Mahindra & Mahin

dra • Client’s Reputation

• Fair work agreement

• Flexible work agreement

• ENCON - ESCO

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Overcoming Four Common Barriers to ESCOs

Barrier Solution

Lack of knowledge and awareness of the ESCO model.

Case studies and pilot projects demonstrate savings through ESCOs.

Lack of trust in ESCO model. BEE accreditation to increase trust.

Lack of financial strength and incentives.

Financial opportunities to support and incentivize ESCOs.

Calculation of savings disputes. Strong M&V protocols can eliminate the need for disputes in calculation of savings

Administrative Staff College of India, Hyderabad

Thank You

Rajkiran V. Bilolikar,Associate Professor, Energy Area,

Administrative Staff College of India, Bella Vista, Raj Bhavan Road, Hyderabad – 500082

www.asci.org.in

T: +91 40 6653 4390 F: +91 40 6653 4356 M: +91 9704087888rajkiran@asci.org.in