virginia tech guaranteed energy savings project using ... · 9 steam system repair $ 49,651 $...
TRANSCRIPT
1
Virginia Tech Guaranteed Energy
Savings Project Using Internal Funds
January 31, 2013
2
Introductions
D. Daryl Bishop, CEM
General Manager Pepco Energy Services
James (Fred) Selby, CEM
Energy Manager Virginia Tech
Robert (Bob) LaRose, PE, CEM
M&V Engineer Pepco Energy Services
3
Virginia Tech
State University located in Blacksburg, VA
2,600-acre main campus with more than 125 campus buildings
The Commonwealth’s most comprehensive university and its
leading research institution
VT offers 215 undergraduate and graduate degree programs to more than
30,000 students
VT manages a research portfolio of more than $450 million
VT a large energy consumer
1.85 trillion Btu’s of energy (electricity, coal, natural gas, fuel oil) consumed
in FY2012
More than $20 Million spent on energy in FY2012
Energy Use Intensity of 214.8 kBtu’s/GSF (down from 235.0 kBtu’s/GSF in
FY2008)
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Pepco Energy Services
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Agenda
Introductions Daryl
How Virginia Tech began this Journey
Pick 4 Procurement
Selection Process, MOU
Roadblocks and Solutions Fred
Challenges
Benefits
Preliminary Results – Implementation
Preliminary results – M&V Bob
Closing Comments Daryl
Q&A Panel
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How Virginia Tech Began This Journey
Adopted a Climate Action Commitment That Requires Being
Near Carbon-Neutral by 2050
Recognized a Need to Replace Assets That Were Beyond
Useful Life
Provide Additional Capacity / Reliability
Leverage Capital Improvement Budgets and Resources
Reduce Maintenance Costs
Generate Positive Cash Flow
Increase Performance and Efficiency
Incorporate Renewable Energy
Positive PR and Environmental Benefits
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Pick 4 - Procurement Process
Phase I - RFP Process for Energy Services Companies (ESCO)
The RFP was written for all public bodies in the Commonwealth.
The goal behind the pre-qualified pool is to provide for healthy competition
Phase II - Selection Phase of the ESCO for the project
The public body will select 4 or more ESCOs from the pool to provide an
approach to the Energy project.
This phase does not cost the public body anything; we call this “the back of the
envelope proposal”.
The public body will interview and select one or more ESCOs and negotiate a
contract with them for performing the formal energy audit- MOU
Phase III - Technical Energy Audit
This is the phase where the ESCO performs the energy audit-
If the public body goes forward with the project, then the financing needs to be
defined.
Phase IV – Financing The Project
Traditional Financing
Other Options
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Financial Considerations
0
20
40
60
80
100
120
1 2 3
O&M and Accrued CapitalReplacement
Lease Payment
Utilities (Gas, Water, Electric)
Utilities
Utilities
Utilities
O&M
O&M
O&M
Lease
Before
Project
After Project During
Project
Internal Financing does not change the guaranteed savings or the procurement
Financial Considerations
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BOE Audit - Energy Conservation Measures
ECM Description Savings Costs
Simple
Payback
(Years)
1 Lighting 85,632$ 538,639$ 6.29
2 HVAC Controls 98,626$ 267,043$ 2.71
3 Demand Control Ventilation 6,978$ 3,576$ 0.51
4 Steam Control 1,875$ 34,328$ 18.31
5 Economizer 25,288$ 75,808$ 3.00
6 Water Conservation 19,998$ 71,166$ 3.56
7 Domestic Hot Water Decentralization 36,991$ 706,341$ 19.09
8 Variable Frequency Drives Upgrades 18,337$ 480,978$ 26.23
9 Steam System Repair 49,651$ 119,504$ 2.41
10 Electric Motor Replacement 4,297$ 166,584$ 38.77
11 Fume Hood Efficiency Upgrades 188,932$ 2,328,815$ 12.33
12 Ventilation Energy Recovery 39,955$ 346,362$ 8.67
13 Variable Pumping Applications 18,997$ 107,718$ 5.67
14 Main Kitchen Hood Ventilation Upgrades 85,486$ 157,558$ 1.84
15 Food Court Hood Ventilation Upgrades 50,792$ 580,872$ 11.44
16 Cooling Tower Upgrades 21,178$ 13,409$ 0.63
17 Cooling Tower Water Treatment 6,609$ 109,492$ 16.57
18 Solar PV System 6,988$ 771,549$ 110.41
19 Energy Recovery -$ -$ -
20 Wind Turbine 52,450$ 1,524,733$ 29.07
21 Compressed Air Decentralization -$ -$ -
22 Windows 24,464$ 105,056$ 4.29
23 Destratification Fans 2,051$ 7,595$ 3.70
24 Vending Miser 2,443$ 10,070$ 4.12
25 Transformers 15,340$ 279,794$ 18.24
26 Kitchen Appliance Replacement 63,655$ 286,066$ 4.49
27 Boiler Blowdown Recovery 51,954$ 82,866$ 1.59
28 Sensible Attemperators 94,348$ 482,737$ 5.12
29 Absorption Chiller 177,267$ 2,882,432$ 16.26
30 Powerhouse VFD Upgrades 108,688$ 750,781$ 6.91
31 Automatic Compressors Staging 7,578$ 71,517$ 9.44
32 Recover Heat from compressors 18,157$ 50,062$ 2.76
33 Compressor Water Shutoff 150$ 1,716$ 11.42
34 Install Anaerobic Digester 23,055$ 3,575,828$ 155.10
35 Energy Awareness 23,734$ 35,758$ 1.51
36 Metering -$ 64,365$ -
37 -$ -$ -
1,431,943$ 17,091,119$ 11.94 TOTAL PROJECT
Cost Savings Summary By ECM
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Roadblocks / Solutions
Roadblock #1: Getting a VT Budget Office “Go / No Go” Decision
Issue: VT Budget Office apprehensive of PC process, reality and
measurability of savings, guaranteed savings provision
Solution: Several meetings held with and presentations made to VT
Budget Office addressing PC benefits, ECM scope and financial details,
M&V protocols, Pepco successes at other facilities, etc.
Results: “Go” decision to proceed reached August, 2011
Roadblock #2: Project Financing
Issue: Outside financing would count towards University debt capacity
Solution: Decision made to finance internally
Result: Three separate internal funding methods implemented:
1. E&G Buildings – VT Budget Office Loan ($3.9 Million, 9-Year, 0.6% interest)
to VT Facilities Services
2. Dining Services – Borrow from their Reserve Accounts
3. Athletics – Fund from within their O&M Budgets
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Roadblocks / Solutions
Roadblock #3: ECM “Package” vs. Individual ECM Justification
Issue: With the decision to fund internally, VT Budget Office concerned
with bundling of: (1) reliability-centered ECM’s, (2) “green” projects
excessively long payback (i.e., solar PV array, wind turbine, etc.); and (3)
long-term financing of ECM’s with shorter life cycle than debt service
period
Solution: VT Financial folks developed a spreadsheet tool to assess
individual ECM credit-worthiness based on:
1. Is the Life Cycle > Payback Years?
2. Is the NPV of Life Cycle Savings > Cost?
3. Is the Life Cycle > Finance Years
Result: Several ECM’s not meeting all three requirements were either cut
(by individual building or altogether) or required to have special/extra
justification
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Challenges
Continually Evolving (and Increasingly Smaller) Project Scope
Back of the Envelope: $17.3 Million project, 36 ECM’s in 6 buildings
Technical Audit: $11.7 Million project, 47 ECM’s in 6 buildings
Post-T/A VT Facilities Services Scrub: $9.0 Million project, 24 ECM’s in
6 buildings
Final Package: $5.3 Million project, 18 ECM’s in 5 buildings
Required multiple Pro-Forma and Cash Flow Analyses from Pepco
Key Auxiliaries Stakeholder Education and Buy-In
Several meetings and presentations to Dining Services and Athletics
leadership to educate on process and specific ECM
Coordinating Around Athletics O&M Budget Requirements
Due to tight fiscal-year budgets, Athletics ECM implementation had to
be coordinated more around fiscal year cash flow than around
construction/contractor efficiency
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Challenges
Three Individual Projects in One (E&G, Dining Services, Athletics)
Required significant contract language and attachment/schedules
modifications
Each unit project required to have net positive cash flow each year
Multiple points of contact, coordination/scheduling requirements
More complicated M&V reporting
Elapsed Time (~2 Years) Between Technical Audit Release and
Implementation Contract Execution
Some ECM components already upgraded through renovation or
maintenance projects
Some ECMs impacted by previous or planned future changes in
building space layout and/or functionality
Equipment cost increases (i.e., lighting, transformers / wire due to
increases in copper price)
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Benefits
Real Energy and Emissions Reductions
Although starting relatively small, when completed, the final $5.3 Million
package will:
Install lighting retrofits, HVAC controls upgrades, water conservation
measures, variable frequency drives, kitchen ventilation upgrades, cooling
tower retrofits, building envelope sealing, and steam system repairs
Save $711k+ in annual energy costs (in current dollars)
Reduce energy consumption by more than 10 percent in the respective
buildings (including 4.0 Million kWh of electricity and 28,000+ MMBtu’s of
steam per year)
Reduce annual CO2-e emissions by approximately 4,200 metric tons
Reliability Upgrades
Although not to the original extent, two key reliability issues will be
addressed:
Dietrick 750 kVA Transformer Replacement
Replace obsolete Cassell Coliseum air handler unit
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Benefits
Improved Personnel Comfort
Brighter lighting in building hallways (with less energy consumption)
Improved temperature conditions in McBryde Hall stairwells (window
film)
Improved temperature consistency throughout Cassell Coliseum main
arena area (destratification fans)
Win-Win VT-Pepco Partnership
VT suggested an ECM to Pepco (removable insulation blankets)
Pepco investigated VT’s recommended vendor and found the savings to be
real and the product robust
Pepco included this in VT’s Phase 1 PC project and is using in other
applications as well now
Our hope is that demonstrated success in Phase 1 will lead to future
phases across VT campus buildings
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Delivered – Phase 1 Project
ECM Description Savings Costs
Simple
Payback
(Years)
1 Lighting 107,942$ 761,451$ 7.05
2 HVAC Controls 66,728$ 466,464$ 6.99
6 Water Conservation 1,772$ 13,278$ 7.50
8 Variable Frequency Drives - AHUs 5,003$ 51,960$ 10.39
14 Main Kitchen Hood Ventilation Upgrades (Melink) 40,511$ 286,236$ 7.07
16 Cooling Tower Upgrades 11,747$ 76,711$ 6.53
22 Window Film 14,264$ 52,825$ 3.70
23 Destratification Fans 6,110$ 64,822$ 10.61
24 Vending Miser 821$ 4,589$ 5.59
25 Transformers (GE Copper) 12,400$ 308,532$ 24.88
27 Boiler Blowdown Recovery 41,910$ 277,870$ 6.63
31 Automatic Compressors Staging 9,148$ 122,371$ 13.38
36 Metering -$ 183,396$ -
39 Building Envelope Sealing-New 14,798$ 145,436$ 9.83
53 ECM-30 Powerhouse VFD Upgrades (Toshiba 18pls) 188,616$ 2,139,311$ 11.34
54 ECM-9 Steam System Repair (Option 1) 53,221$ 150,085$ 2.82
55 ECM-9 Steam System Repair (Option 2) 21,740$ 90,532$ 4.16
64 Install Insulation Blankets 45,531$ 138,399$ 3.04
642,261$ 5,334,266$ 8.31 TOTAL PROJECT
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Preliminary Results – Implementation
Cassell Coliseum Weather Stripping
McBryde Hall Window Film
Powerhouse Steam Traps
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Preliminary Results – Implementation
Former Dietrick Hall 750 kVA Transformer New High-Efficiency Transformer
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Preliminary Results – Implementation
Cassell Coliseum Destratification Fans Powerhouse Insulation Blanket and
Inverter-Duty Motor
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Preliminary Results – M&V
M&V plan minimizes risk to both parties
IPMVP Options A & B
Provides reasonable security of ECM
performance relative to cost of the M&V activities
Many post-measurements conducted during the
construction period
Preliminary assessment of project savings
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Verified Savings to Date
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Reference Projects
PES developed projects have consistent track record of over performance
Roanoke County Public Schools ,
VA
North Carolina Department of
Administration
Salisbury University , MD
Penn State University –
Altoona
Penn State University –
Chemistry
Building
National Institutes of Health
Projected
Savings $400,361 $2,074,000 $331,378 $363,124 $ 588,389 $2,289,235
Verified
Savings $537,738 $2 ,389,500 $690,219 $386,275 $ 647,249 $2, 3 8 8 , 763
Percent of Guarantee
134% 115 % 208% 106% 1 1 0 % 10 4 %
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Summary
Projects can be successfully completed where belief
in Performance Contracting is questioned
Internal financing reduces scope but can provide the
needed funds to a phased approach
Bringing more stakeholders into the project selection
process has it’s challenges and rewards
Given that the concern about debt is universal -
internal financing can prime the pump that measured
and verified results can drive to the next phase of
savings
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Questions
Ask Fred, Daryl or Bob any question you may have.
Thank you!
Follow up questions:
D. Daryl Bishop, CEM
General Manager
Pepco Energy Services
804-347-9037