international green awards brisbane, australia 13 th august 2012 sustainability: the dollars and...

International Green Awards

Brisbane, Australia 13th August 2012

Sustainability: the dollars and sense

Professor Martin A. Blake DBA MBA BSc.Blake Advisory Pte Ltd., Singapore

Strategic Advisor – Moss, Australia

Strategic Advisor – Carbon Systems, Australia

© 2011 – 2012 Blake Advisory Pte. Ltd.

• Personal Context

• Existing Built Environment

• Marginal Abatement Cost Curves (MACC) and IRR Curves

• Case Study 1: Royal Mail Group

• Case Study 2: National Oil Company, Persian Gulf

• New Buildings• Integrated Design Process

• Case Study: United World College of South-East Asia

• The Blue Economy

• A Case Study Example


• I am not a full time academic - but I have developed theory• I have delivered big projects and employed consultants• I have delivered internationally recognized energy projects• I have significant Board level experience with fiduciary

duties• I speak the language of business in a sustainability context• I love disrupting the status quo when it doesn’t work!

Personal Introduction

New Paradigm Assumptions

• “Positive Deviancy” necessary to challenge herd mentality• “C” words unnecessary! However, metrics are unequivocal• Sustainability projects can exceed core business IRR• Transactional vs. Transformational Paradigm


People Profit Planet

Triple bottom line


The Business Case

• Environmental impact • Capital cost• Consultancy fees• Oversized servicing systems• Risk• Operating costs• Maintenance costs• Reliance on fossil fuels

REDUCE


The Business Case

• Systems integration• Investor value• Customer interest• Property value• Profit margins• Resilience against future energy and water prices and volatility

INCREASE


• De-bunking myths – there are significant paybacks!

• You cannot create business cases without disaggregated data

• Energy needs to be performance managed, not reported

• KPI’s and devolvement of P&L Accountability key

• Too many choices, technologies, manufacturers, derivatives, and therefore risks creates information overload and organisational paralysis!

• Ranking projects methodically brings clarity

• The use of Marginal Abatement Cost Curves and IRR Curves

Existing Buildings – Retrofit and Refurbishment


Macro Level MACC (following Kyoto)


Cost effectiveness

Width = amount of energy

conserved

Below axis = positive Net

Present Value

Above axis = negative Net

Present Value

Net Present Value per

unit of energysaved

energy saving

✗✓


Qualitative Data:

Pumps, Boiler,

HVAC, etc

Quantitative Data:

Electricity, gas, fuel, LPG, etc

Cost benefit analysis

of relevant intervention

Marginal Abatemen

t Cost Curve

The Simple Arithmetic Behind the MACC


Marginal Abatement Cost Curves andCumulative IRR Curves• Provides absolute clarity with a highly compelling business

case

• Creates project rankings based on NPV

• Unequivocal disclosure of ROI, IRR, PBP etc…

• Therefore, creates sophisticated tool to get Board approval

• Can be the basis of public disclosure on sustainability

• Discloses fiduciary duty to deploy

• Risks to deployment can be entered into corporate risk register

• Mitigates multiple risks and creates opportunities with a single strategy © 2011 – 2012 Blake Advisory Pte.

Ltd.

DATA

DATA

DATA


Automated Data CaptureCapture copies of electronic data files from smart meters, supplier reports, electronic invoices and your internal IT systems for automated upload to a secure database

Manual Data CaptureQuickly and accurately enter data manually via customised web forms or preconfigured spreadsheet templates

Data Services HubsFiles in various electronic formats can be emailed to the services hubs for secure data extraction, verification and integrity testing

Global databaseThe secure SQL server manages your data and a database of global data formats, metrics and carbon emission factors for all major reporting regions around the world

Carbon Systems – Technology Overview

Case Study 1:

Royal Mail Group

Real empirical case study75 National and International Awards

Most successful Energy Reduction Programme in Europesaving £30 million in fuel and energy costs per annum


Royal Mail Group context Single largest employer in the UK - c.176,000

employees

Handle 75 million items every working day

113,000 collection points

28 million delivery addresses

33,000 vehicles travelling 1.8 million miles a day

135 million litres of diesel annually

12,000 retail outlets.


39%

12%

20%

19%

7%2%1%

Scope 1 Businessroad

Scope 1 Natural gasand oil

Scope 2 Gridelectricity

Scope 3 Commutingto work

Scope 3 Business air& rail

Scope 3 Personalroad

Scope 3 Personal air& rail & Authorisedcars on delivery

Royal Mail – Gross Energy Footprint (Circa 2004)


1. Avoid and Reduce fuel and energy consumption

2. Replace existing fuels with zero/low C equivalents and finally…

3. Offset and sequestrate residual emissions through sustainable projects.

Priority

The Philosophy of Energy Conservation


RMG Energy Reduction Programme

Communications + Employee Engagement (project 1)

Buildings Current (Project 6B)

Policy, Risk + Regulation (Project 7)

Fuel and Transport - Light

(Project 5A)

Fuel and Transport - Heavy

(Project 5B)

Buildings New (Project 6A)

(REDUCE)

Offsetting/Sequestration (Project 9)(OFFSET)

Supply Chain (Project 4)

Commercial Opportunities

(Project 3)

Innovations (Project 2)

MACC CreationKPI’s, Data +Reporting

(Project 8)

(AVOID)

Report to Board quarterly: 1, 5A, 5B, 6A, 6B, 8Report on rotation:

2, 3, 4, 7, 9

(REPLACE)


Europe’s First Enterprise Marginal Abatement Cost Curve


Not just for Buildings!!Apply the Same methodology to Transport

and Logistics


Fleet – 60% of the RML footprint


Electric 7.5t Diesel/electric hybrid

Double deck trailer

H 2 - ICE conversions

H2 Fuel Cell Petrol micro-vans


Car Derived Small Panel Medium Panel Large Panel Sml People Carrier

Nos. 15,197 4,538 1,277 1,558 1,253Miles p.a. 14,000 17,000 16,500 21,500 13,000Lifecycle yrs: 3 4 4 4 3

Crew/Post Bus Heavy Small Heavy Medium Heavy Large Trailers

Nos. 3,257 2,191 345 1,351 2,448Miles p.a. 10,500 48,000 54,000 83,000 Lifecycle yrs: 5 5 5 4 7


Co2 by Vehicle Type


Transport MAC Curve

£800£750£700£650£600£550£500£450£400£350£300£250£200£150£100

£0 £50-£50

-£100200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800

Cos

t / t

CO

2 sa

ved

WTW CO2 t

Vehicle Technology MAC Curve - WTW

t CO2 £ / t CO2

Trailer Aero Kit 71 -111LGV Tractor Methane † 898 £1LGV Rigid Methane † 611 £3LGV 7.5t Methane † 317 £18LGV 7.5t Hybrid 404 £96LGV 7.5t e 47 £221CDV Methane 76 £274CDV e 60 £280LGV Rigid Hybrid 147 £327CDV Hybrid - Full 11 £651

† Technology not yet in production


Case Study 2:

National Oil Company,Persian Gulf

in association with Booz & Co.

Demonstrating how to eliminate 16mt of Carbon and add USD $1 billion a year to the

profit margin with an IRR of 14%!


Abatement PotentialMt CO2e

CCS w/ EOR

Flare gas recovery

Optimization of steam systems

Optimization of motor systems



O&M optimization and continuous emission control program




Optimization of heater/ furnace/ burner/ boiler / combustion efficiency


Flare gas recovery




Site-wide process integration and optimization of heat requirements

Site-wide process integration and optimization of heat requirements

Flare gas recovery

Replace captive small-scale power generation with grid power

Capture and use CO2 as feedstock in urea processing

CO2 capture from hydrogen plant

Quantify savings opportunitiesFor each initiative, the abatement potential was calculated and costed…

Abatement CostUSD$ per tCO2e

Company-Wide Marginal Abatement Cost Curve 2030Abatement opportunities


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MtCO2 p.a. Abatement

IR R

Cumulative IRRIRR of individual initiatives

20%

30%

Internal Rate of Return(log scale)

1%

10%

100%

1000%

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

4.5Mt p.a. CO2 reduction with a 51% IRR

16Mt p.a. CO2 reduction with a 14% IRR

Investment Return Curve for EnergyConservation and Carbon Abatement Projects


New BuildingsIntegrative Design Process (IDP)and the work of Amory Lovins

and the Rocky Mountain Institute


Traditional Hierarchical Approach


Collaborative integrated design team approach

Green Building rating system expert (e.g.

LEED)

Building design/simulation

specialists: acoustics, thermal, comfort,

daylighting

Valuation / appraisal expert Real estate expert /

marketing

Sub-trades, product suppliers, and manufacturers

Building operator, utilities, and

maintenance staff

Systems specialists: commissioning agent,

control system and security experts

Regulatory authorities: government agencies, planners, code officials

Community advisory panel /

academic experts

Program user groups: employees, students,

residents

Site design specialists: soils, geoscientists,

ecologists

Prime consultant team: Mechanical, electrical,

structural, civil engineers; landscape architectArchitect

Contractor Client

Project managerIDP champion / facilitatorCost consultant


Case Study1:

United World College of South East Asia

Exemplary Singapore development achieving significant capex and energy savings through design


Area of Interest

Reference Model (kW/h)

UWCSEA Model

kW/h)

Modelled

Savings

Space Cooling

(60%)

3,729,537 1,844,571 50.54%

Lighting

(18%)

815,452.399 539,222.70 33.87%

Equipment

(8%)

N/A N/A N/A

Ventilation

(6%)

541,634 275,547 49.10%

Lifts and Escalators

(4%)

32,797 29,518 10.00%

Total Building modelled Energy Consumption

7,194,957 4,112,997 42.84%

The Results


Maximise indirect natural daylight, minimise solar heat gain


Naturally ventilated external stairwells

High thermal mass surfaces


99% 1%

hydraulic pipe layout

vs.

Minimizing Frictional Losses

1%

Boolean pipe layout

optional

99%


45o angled ductwork

High efficiency chillers


The Final, Unequivocal, Empirical Results!!

(in a tropical climate)• Budget SG $230m

• SG $30m under budget

• 10 months ahead of schedule

• Over 50% measured energy reductions

• Still ongoing monthly improvements from continuous re-commissioning


A Case Study from the “Blue Economy”


Free water, cheaper food & increased land value

Coastal & Island Agriculture


Eliminates investment in expensive reverse osmosis, saves energy, produces high quality organic food. Creates local jobs, increases local food security and increases the value of marginal arid coastal land

Coastal low pressure desalination


Thank You!!


www.martinblake.com

Email: [email protected]

Skype: martin_a_blake

LinkedIn: http://sg.linkedin.com/in/martinblake2010

Contact Details: Dr Martin A. BlakeBlake Advisory Ltd.


international green awards brisbane, australia 13 th august 2012 sustainability: the dollars and...

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