big ten sustainability conference november 14-15, 2010 funding strategies: energy savings projects...
TRANSCRIPT
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Big Ten Sustainability ConferenceNovember 14-15, 2010
Funding Strategies:Energy Savings Projects and
Seed Grants Funding Strategies
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Energy Savings Projects
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Energy Savings Projects and Seed Grants Funding Strategies
Energy Savings Projects Program Components
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• Commissioningo Continuous Commissioning (CCX)o Rapid Commissioning (RCX)
• Guaranteed Energy Savings Projects (GESP’s)
• Energy Savings Projects (ESP’s)
• Energy Conservation Measures (ECM’s)o Seed Grants
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Energy Savings Projects and Seed Grants Funding Strategies
Annual Budgets
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• Guaranteed Energy Savings Projects (GESPs) and Energy Savings Projects (ESPs ) – 10 yr payback
• $5,000,000 to $10,000,000
• Applies to all University facilities
• Energy Conservation Measures (ECMs) – 5 yr payback
o Commissioning = $580,000
o Stand alone = $500,000
o Incorporated in Projects = $500,000
o Applies only to E & G facilities
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Energy Savings Projects and Seed Grants Funding Strategies
PENN STATE’sTraditional Guaranteed Energy Savings Project (GESP)
Contracting Process
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Energy Savings Projects and Seed Grants Funding Strategies
UNIVERSITYIMPROVEMENTS
ANNUAL UTILITY BUDGET
UTILITY PAYMENTUTILITY
COMPANYREVENUE
EN
ER
GY
SA
VIN
GS
$ spent should not increase as a result of a GESP
Measurable or Guaranteed Results
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Energy Savings Projects and Seed Grants Funding Strategies
Organized Process
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The Guaranteed Energy Savings Act (GESA) is provided for under Chapter 37 of Act 57 (1998),and as amended by Act 77 (2003).
In the Commonwealth of Pennsylvania, energy performance contracting was standardizedthrough the procurement code………………
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Energy Savings Projects and Seed Grants Funding Strategies
Traditional Guaranteed Energy Savings Program Process
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Month 1 2 3 4 5 6 7 8 9 10 11 ?
Site
Selection
Letter of Interest
ESCO Proposals
Investment Grade Audit
Funding/ Contracts
Construction
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Energy Savings Projects and Seed Grants Funding Strategies
Penn State’s Process
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1. Select Project Sites
2. Issue Request for Letters of Interest
3. Select up to 3 ESCOs from LOIs and Issue RFP
4. Evaluation and Selection of ESCO
5. Execute Energy Audit Contract
6. Audit conducted by ESCO approved by Penn State
7. Negotiate and execute GUARANTEED ENERGY SAVINGS CONTRACT
8. Determine financing method and secures monies
9. Construction Period begins
10. Project accepted and approved
11. Guaranteed period commences
12. Ongoing project monitoring
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Energy Savings Projects and Seed Grants Funding Strategies
GESP Process
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1) Select Project Sites• A campus or group of buildings• Similar customers• Similar needs• Target projects of $2,000,000 to $4,000,000• Establish the selection committee
Example:
Penn State Altoona 2007 FY utility cost = $1,400,000
20% Expected Savings = $280,000 over 10 years = $2,800,000Selection Committee:
• Director Housing & Food Service• Director Business Operations• Assistant DBO• Foreman Operation and Maintenance• Heat & Vent Technician• Project Manager• Mechanical Engineer
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Energy Savings Projects and Seed Grants Funding Strategies
GESP Process
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2) Issue request for letters of interest (LOI)• List of 18 qualified ESCOs from the DGS site• ESCO reference projects• Team member qualifications• ESCO financial information
3) Select 3 ESCOs and issue the RFP• The RFP establishes the foundation of the GESP• Requirements, terms, and conditions• Expectations and selection process• Schedules for meetings, proposals and presentations
4) Evaluation and selection of ESCO• From 3 proposals select 1 ESCO to complete an IGA• Written proposal evaluation• Interview Evaluation• DGS forms available
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Energy Savings Projects and Seed Grants Funding Strategies
GESP Process
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5) Execute the Investment Grade Audit Agreement (IGA)• The next step in the contractual process• Builds on the RFP• The IGA agreement is absorbed into the GESA
6) Audit conducted by ESCO• Partnership between the ESCO and the owner• Commonly takes 3 to 6 months• Measure from the proposal are refined• Cost and savings can not vary by 10%• The IGA report becomes the basis of the GESA
7) Negotiate and Execute Guaranteed Energy Savings Contract
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Energy Savings Projects and Seed Grants Funding Strategies
GESP Process
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8) Determine the financing method• Penn State uses internal financing• ESCO offer a wide range of options
9) Construction Period begins
10) Project accepted and approved
11) Guaranteed period commences
12) Ongoing project monitoring
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Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
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Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1
PSU Fees $5,000 $12,000
Upfront Capital (MM) $575,000
Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
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Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
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Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1
PSU Fees $5,000 $12,000
Upfront Capital (MM) $575,000
Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
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Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
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Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1
PSU Fees $5,000 $12,000
Upfront Capital (MM) $575,000
Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
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Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
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Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1
PSU Fees $5,000 $12,000
Upfront Capital (MM) $575,000
Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
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Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
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Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1
PSU Fees $5,000 $12,000
Upfront Capital (MM) $575,000
Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
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Energy Savings Projects and Seed Grants Funding Strategies
Energy Saving Program Process w/ In-House Labor
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Month 1 2 3 4 5 6 7 8 9 10 11 ?
Site
Selection
Engineering Study and
Design
Funding/ Contracts
Construction
Simplified process for working with in-house forces
• Based on stipulated savings as determined by Penn State energy engineers
• Reduced cost due to elimination of ESCO profits
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Energy Savings Projects and Seed Grants Funding Strategies
Sample ESP Projects
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Energy Savings Projects and Seed Grants Funding Strategies
Sample ECMs
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Energy Savings Projects with maximum 5 year simple paybacks
Continuous Process• Occupancy Sensors – HVAC – Many Buildings• Lighting – Many Buildings• Thermostatic Valves – Many Buildings
Batch Process – • Lab air flow adjustments – Wartik & Hosler• Valve replacement – Leonhard• Valve Replacement – South Henderson• Heat recovery ACF 1&2 – Research East• Heat Recovery – Althouse• 100% OA – Rec Hall rm 151 and HVF 05• RTU replacement – Research West
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Sustainability Seed Grant Program:“Crowd Sourcing” New Ideas
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Sustainability Seed Grant Program:“Crowd Sourcing” New Ideas
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Energy Savings Projects and Seed Grants Funding Strategies
Goal : To foster basic and applied research, practice, education, and outreach as it relates to sustainability
• Penn State Institutes of Energy and the Environment partnership with Outreach, OPP & several colleges
• $350,000 funding available • Grants awarded May 2010• Grants need to be by June 30, 2012
Sustainability Seed Grant Program
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Energy Savings Projects and Seed Grants Funding Strategies
Sustainability Seed Grant Program
75 proposals
13 awardees
Amount People
$15,000 1
$40,000 2
$75,000 3+
EncouragingCollaboration
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Energy Savings Projects and Seed Grants Funding Strategies
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Energy Savings Projects and Seed Grants Funding Strategies
Results
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BT
U/G
SF
24% reduction
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Energy Savings Projects and Seed Grants Funding Strategies
What’s next. . .?
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Energy Savings Projects and Seed Grants Funding Strategies
EndowmentConventional Investments
EN
ER
GY
SA
VIN
GS
What’s next. . .?
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Thank you. Comments? Questions?