the new face of energy performance contracting
DESCRIPTION
The presentation examines the intricate balance associated with embedding energy efficiency performance contracting within a comprehensive, inclusive and unique sustainability process that leads ultimately to actionable outcomes and reduced costs.TRANSCRIPT
The New Face of Energy Performance Contracting
Christopher BerryComprehensive SolutionsBusiness Development ManagerTrane / Ingersoll [email protected]
Kim Ketchem, CEMComprehensive SolutionsSenior Account ExecutiveTrane / Ingersoll [email protected]
John Canfield, CEM, CBEM, CLEPWYECIP ConsultantTrident Energy [email protected]
• Introductions• Definitions / Themes• What Does My Project Look Like?• Variations on a Theme – Case
Studies• A County in Wyoming – Traditional
/ WYECIP• A School District – Grants /
Rebates• Higher Ed• Sustainability
• The Wyoming Business Council – WYECIP
Agenda
What is Energy Performance Contracting (EPC )?
Energy Performance Contracting……Process through which energy efficiency and capital upgrade
improvements are funded (fully or partially) by the energy and maintenance cost savings generated by the improvements themselves when the cost savings are formally “captured” and used to pay back the funding source.
• A way to upgrade your facilities without dipping into your capital budget
• Use future energy savings to pay for projects
Energy Performance Contracting
– Energy Savings Measures funded through guaranteed savings.– Reallocate money already being spent in utility budget to purchase
efficiency and capital improvements
Energy Performance Contracting
2010 2015 2020 2025
Do Nothing: No EPC
Utility and O&M costs
Improved: Post-EPC
Emergency/unplanned equipment replacement
Rising utility rates drive increased energy costs over time for both scenarios, but with a lower energy use in the post-EPC scenario, you save more each year.
What is an Energy Service Company (ESCO )?
An ESCO is a one-stop shop for:
Energy opportunity identificationQuantificationFinancingImplementationStaff trainingA guarantee that the savings will cover the costs of the project.
But, Why?
The most obvious advantages to EPC and working with an ESCO:
The owner does not have to invest any upfront money The owner does not have to raise taxes The owner does not need to tie up staff resources managing:
Contracts Contractors Vendors
ESCOs provide turn-key services. The return on investment is guaranteed. It is a very secure investment, with limited liability and financial risk.
Energy Performance Contracting
Additional funding sources can supplement energy and maintenance cost savings.
• Utility Incentives• Grants• Capital Funds• Other?
Typical Facility Energy Savings Opportunity:
15% to 30% (or more)
Example : • $200,000 annual utility expense• 20% annual savings = $40,000• 12 year tax-exempt lease purchase
• $40,000 X 12 years = $480,000*
• Fund nearly $480k in improvements today and pay it back over 12 years with funds previously budgeted to your utility company.
* These estimates do not incorporate interest payments but are offered for simplicity.
Energy Performance ContractingPotential Energy Performance Contract
What Does My Project Look Like?
Ultimately YOU define What Works Best :Fit For Your Culture
ComprehensiveInclusiveReturn
Case Study:A County in Wyoming
Theme: Traditional EPC with a Twist
Challenge: Inefficient operations and energy use, system failures, increasing repair costs, aging equipment and infrastructure
Solution: EPC guaranteed savings, updating aging infrastructure and address capital improvements.
Results: Embrace WYECIP Wyoming Business Council; Pursue 0% interest Energy Loan Program
Case Study:Larger School Districts
Theme: Grants / Rebates; Multi Phase
Challenge: Inefficient operations and energy use, system failures, increasing repair costs, reductions in state funding
Solution: EPC guaranteed savings, updating aging mechanical systems in a multi-phase approach to improve the student learning environment.
Results: Annual energy savings of $830,000 per year in energy costs including savings in operations and maintenance. $1.3 million in rebate checks. Reached goal of providing school buildings that are energy efficient, comfortable, and healthy spaces for learning.
Case Study:Smaller School Districts
Theme: Grants / Rebates
Challenge: Inefficient operations and energy use, system failures, increasing repair costs, reductions in state funding
Solution: EPC guaranteed savings, updating aging infrastructure to improve the student learning environment and help ensure continuous system performance.
Results: Annual energy savings of $190,000 per year in energy costs including savings in operations and maintenance. $125,000 in utility rebates at startup.
Case Study:Higher Education
Theme: Renewable Energy
Challenge: Inefficient operations and energy use, system failures, increasing repair costs, reductions in state funding, interest in renewable energy
Solution: Investigate Geothermal / Solar additions to project; provide opportunity for curriculum development
Creating the Vision of Sustainability
EconomicReduced Costs
EnvironmentalA viable natural
environment
SocialImproved learning Environment
No New Taxes Economic Development
Sustainable development
Equitable social
environment
Sustainability Process
Preliminary Sustainability Assessment
Technical Sustainability Audit
Energy Performance Contract
Leveraged Energy and Water Savings
Benefits to Organization
Wyoming Business CouncilState Energy Office
“Support viable energy conservation efforts and energy resource development that contribute to Wyoming's long-term economic sustainability and the nation's energy independence."
Wyoming State Energy Office
Mission
Wyoming Energy Conservation Improvement Program
A state program, administered by the Wyoming Business Council through its State Energy Office to provide coordination, oversight, and support to agencies interested in Energy Performance Contracting.
http://www.wyomingbusiness.org/program/energy-performance-contracting-epc-/6308
What is WYECIP?
Who Can Participate?
• State Agencies• Higher Education
• Universities• Community Colleges
• Counties • Municipalities
• Cities• Towns
• K-12 schools
Benefits of WYECIP• WYECIP Pre-qualified ESCos
• Simplifies the selection process
• Ensures highest level of quality
• Continuous and annual review and re-approval process
• Standardized Process/Procedures
• Standardized Contract Documents
• Pre-qualified ESCos under contract with WBC WYECIP to use WBC WYECIP contracts and processes
• On-going guidance/support from WBC WYECIP
Key Elements
• Support from WBC State Energy Office– Help agencies identify potential projects– Provide technical & contracting assistance– Assist with project development– Review audits, proposals, contracts & reports– Monitor implementation– Review M&V of savings
Key Elements
• Investment Grade Audit & Project Development Contract– Standard form for use by agencies– Between agency and selected ESCo– Sets expectations for ESCo & agency– Defines process to be followed & deliverables– Costs can’t exceed max in Master Agreement– Establishes basis for Energy Performance Contract
to follow
Key Elements
• Energy Performance Contract– Standard form for use by agencies– Between agency and selected ESCo– Contains all aspects of project
• Scope of work - measures to be implemented• Costs and savings• Responsibilities of ESCo & agency• Measurement & Verification Plan• Savings Guarantee• Project Financials
When Will It Be Available?
• Program effective July 1, 2011
• Agencies may execute contract with the WBC and enjoy program benefits.
How Can My Facility Participate?
• Sign Agency-Wyoming Business Council Agreement– 1st step in process– Allows agency to participate with SEO/WYECIP– Commitment to adhere to guidelines
WYECIP REPRESENTATIVESSherry Hughes
Program Manager, Wyoming State Energy Office [email protected]
John CanfieldTrident Energy Services, Inc.
Consultants to the Wyoming Business Council’s WYECIP [email protected]
TRANE REPRESENTATIVESChristopher Berry
Comprehensive SolutionsBusiness Development Manager
Trane / Ingersoll Rand720-505-0096
Kim Ketchem, CEMComprehensive SolutionsSenior Account Executive
Trane / Ingersoll Rand719-229-1735