Illinois Energy Now SAVINGS THROUGH CREATIVE ENERGY MANAGEMENT. energy

Transcription

1 Illinois Energy Now SAVINGS THROUGH CREATIVE ENERGY MANAGEMENT energy

2 Energy Management On average, energy costs represent 28% of total operating expenses for office and community buildings. 30% of energy consumed in these buildings is used unnecessarily or inefficiently. Based upon these figures, almost 10% of operating expenses can be avoided by implementing an energy management program. Energy Management provides an opportunity for building owners and operators to reduce costs, improve property fundamentals, building asset value, and increase their ROI via building energy upgrades.

3 What Do We Really Want? When paying our electric and natural gas bills each month, we tend to not care too much about kilowatt-hours or therms, just the bottom line in dollars. We do care about the services that energy provides: lighting, heating, cooling, fresh air, hot water, etc. We do want to receive these energy-based services at the lowest possible cost. We also want better comfort, higher quality work space, and more productive employees.

4 Some Examples You have mercury vapor wall-packs mounted outside your building for security. Replace these with LED fixtures could save up to 90% while increasing the lighting level and reducing maintenance costs. And you could save more by turning off half at midnight with a timer. Your workers complain of eye fatigue and headaches when working under the flickering glare of old T-12 fluorescent lamps. Replace these with HO T-8s and electronic ballasts, reduce the amount of lamps, install occupancy sensors, and save 50% on energy while having more productive workers, better color rendering in the space, less sick leave, and less air conditioning load.

5 The Cost of Delay We generally think of upgrade projects in terms of simple payback how fast does pay for itself. We don t usually recognize the other side of this equation for each month or year that you delay your upgrade projects, you completely lose that potential savings forever.

6 Return on Investment Consider a business with annual electrical costs of $25,000. A comprehensive energy assessment shows this business could reduce consumption by 30%, saving $7,500 per year. Assuming the cost to implement is $22,500 giving a 3-year simple payback. Delaying this project forfeits a low-risk investment opportunity having a 32% return on investment.

7 Investment Enhancement What if the capital cost is reduced through IEN incentives? Assume the capital costs of the project is $15,000 instead of $22,500. The simple payback is now 2 years, but the return on investment is now 49%. This is an even better return on your investment with little or no risk and a faster time to positive savings.

8 Hurdle Rates

9 Economic Indicators Simple Payback (SPB) Net Present Value (NPV) Internal Rate of Return (IRR & ROI) Meaning # of years to recoup additional costs from annual savings Total value of project in today s dollars Annual interest yield of project during its lifetime Example Criteria 5 year simple payback $100,000 Invest/$40,000 savings/yr = 2.5 years Payback < n years $364,000 NPV (15 7%) Positive indicates profitable project 17 % IRR IRR > discount rate (17% > 5%) Comment Misleading Ignores financing & long-term cash flows Use when cash is tight Good measure User must specify discount rate Long time horizon Can be fooled when cash flow goes positive-negativepositive Shorter horizon

10 Hidden Benefits of Efficiency There are many benefits to efficiency improvements that don t come into the equation, but are real and tangible. Improved comfort helps with employee retention and attraction. Personnel productivity is higher with better lighting, more control, and better conditioning. Equipment runs less and at lower loads in an efficient building requiring less maintenance and extending its life.

11 Hidden Benefits of Efficiency Sealed and well-insulated ducts are quieter and get the conditioning air to where it is needed providing better performance and enhancing productivity. When you reduce your lighting load, in the summer you also reduce your air-conditioning load and your peak demand from both the lights and the AC. Reduced consumption means reduced air emissions and carbon footprint.

12 Hidden Benefits of Efficiency Energy/carbon footprint reduction investment has become a more significant component of property value and risk due to climate change. As the demand for energy efficient property increases, properties that are well positioned relative to energy/carbon footprint will increase in value and those that are not will lose value due to economic and functional obsolescence Good will in the community. Security against future price increases.

13 Some Myths Need Debunking Leaving computers on helps them last longer NOPE, today s equipment doesn t mind frequent on and off cycles, and shutting them down reduces dust buildup inside and extends their life. Fluorescent lights last longer if not frequently switched on and off Yes, but any time the lights are not needed for 10 minutes or more, it is more cost effective to turn them off.

14 More Myths We should only replace old equipment on a breakdown basis NOPE, there is no reason to wait, you can start saving energy and maintenance money right away, especially with lighting systems (20-90% savings). It takes more energy to heat up a space or cool it down in the morning start-up than you save with setbacks & -ups NOPE, if the system has enough capacity, returning to proper space conditions uses much less energy than having the system run all night at normal settings.

15 Energy Efficiency Efficiency is the cleanest, cheapest, safest, and most secure source energy we have. The cost of saving energy has been going down in real terms while the price of has been energy is starting to rise again. We have had a pause and reset in energy prices right now due to the US and global recession and new unconventional oil and gas production. Electrical and natural gas prices should remain stable for a few years and then may resume their climb.

16 Getting Started To find the best upgrades for your building and equipment, you will want to identify where your energy is going and what are your highest energy uses. Start with and energy assessment or audit which will include a review your energy bills for the past year or two and benchmark your facility. You can hire a firm to do this, use SEDAC, or do it yourself if talent is in-house.

17 Benchmarking Your Buildings Energy Use Intensity: Energy Used Per Year divided the Square Footage (kbtu/yr). Energy Cost Intensity: Energy Cost Per Year divided by the Square Footage ($/sf/yr). These numbers vary by building type, but can give you an idea if your facility is in the normal range or an above or below average user.

18 1 - MS 1 - MS 2 - Elem 3 - HS 4 - Elem 5 - Elem 6 - MS 7 - HS 8 - K Elem 10 - HS 11 - HS 12 - Elem 13 - Elem 14 - HS 15 - Elem 16 - Elem 17 - HS 18 - HS 19 - Elem 20 - Elem 21 - Elem 22 - HS 23 - K Elem 25 - Elem 26 - Elem 27 - MS 28 - MS 29 - HS 30 - Elem 31 - Elem 32 - Elem 33 - MS 34 - Elem 35 - HS 36 - Elem 37 - Elem 38 - Pre-K 39 - Elem 40 - Elem 41 - MS 42 - HS 44 - Elem 43 - HS 45 - Elem 46 - Elem 47 - HS kbtu/sf-yr $/sf energy SEDAC Illinois K-12 School Energy Use Intensities Electric kbtu/sf Gas kbtu/sf $/sf '09-' '08-'

19 Improving the Bottom Line This is a business decision how can I best insure that public funds are well spent. Consider the intangibles when evaluating a project will there be other benefits besides the energy savings? Include incentives in this calculation. Make maximum use of the incentives that are available such and IEN, ICECF, ISBE, and other DCEO programs.

20 The Need to Manage Energy We are at a fairly moderate point in energy costs today, but the situation is changing. That change won t be for the better. We must take an enlightened, self-interested approach our energy usage can be managed through efficiency increases and conservation (and be fully selfcompensating).

21 Energy Management Key Ideas Take a systematic measured approach for the necessary focus and follow through: Renewables can be fun, but we need progressive, continued success in energy efficiency. Make informed choices on upgrade measures: Understand the options and impact, the strategic ordering, make the best choice for you. Fit efficiency into your operating model: required return, planning horizon. Plan for continued success with ongoing monitoring, maintenance and training.

22 E N E R G Y S T A R G u id e lin e s F o r E n e rg y M a n a g e m e n t Taking a Systematic Approach A Continuous Improvement Process Plan, Do, Check, Adjust. Feedback Loop Essential. Energy audits help w/ assessment, action plan possibilities, ID of financial assistance. SEDAC can help review bids, find products, and service providers. Use IEN Trade Allies

23 Review Options for Management Apply tried and true methods or get specialized assistance. Common options fix, control, upgrade/replace, insulate, seal. Compare with best practices: SEDAC s Top 10 list, tip sheets. Use Illinois Energy Now incentive application as an outline of options. Don t Forget to right size HVAC equipment and lighting (don t replace in kind).

24 Ludlow Elementary School CCSD 142 Installed digital pneumatic wireless thermostats throughout the school. Total Project Cost: $15,518 Illinois Energy Now Incentive: $12,672 (includes 10% bonus) Total Cost to School: $2,846 Estimated Annual Savings: $3,129 Payback 1 yr Estimated Energy Saved: 3,840 therms/year

25 Dillon Elementary School Rock Falls ESD 13 Installed two high efficiency condensing boilers 567 kbtuh each. Total Project Cost: $105,000 Illinois Energy Now Incentive: $17,464 (includes 10% bonus). Total Cost to School: $87,536 Estimated Annual Savings: $12,000 Payback 7 yrs Estimated Energy Savings: 15,000 therms/year

26 Champaign Park District Virginia Theater Replace watt incandescent lamps with 12- and 13-watt LEDs. Total Project Cost: $19,985 Illinois Energy Now Incentive: $9,422 (include 10% incentive) Total Cost to Park District: $10,563 Estimated Annual Savings: $4,556 Payback 2 yrs Estimated Energy Savings: 56,950 kwh

27 QUESTIONS?