Energy Savings Performance Contracting

Transcription

1 Energy Savings Performance Contracting Achieving Corporate Financial and Environmental Sustainability Presented By Jorge G. Quintana Energy Solutions Account Executive Johnson Controls, Inc.

2 Executive and Facilities teams are meeting to develop the budgets for the upcoming fiscal year. During the meeting one of the attendees expresses that the company has received a patent for a new product and is actively seeking a cost effective site to commence manufacturing. Everyone in the meeting agrees that their site would be perfect. It has the available space, infrastructure and the current workforce can easily manage the migration to a new product.

3 However after a detailed analysis, executive teams have determined that given the constant increase in utilities and operational expenses this site will not be the best to manufacture this new product.

4 Puerto Rico: Drivers 99%reliant on imported fossil fuels for electricity generation. $5.2 billion annual capital leak: fuel imports (Petroleum and Coal).

5 JCI1 Puerto Rico: Drivers 70% dependency on petroleum-based fuels. High cost of energy 2X greater than the average electricity cost in the U.S. at $0.19/kWh for Industrial clients.

6 Slide 5 JCI1 Life Science Case Study 20% of annual utility budget spent in PR $250M/Yr or $680,000/day Johnson Controls, 10/9/2013

7 $ $ $ $ $ $ $- Puerto Rico: Drivers JANUARY APRIL JULY OCTOBER JANUARY APRIL JULY OCTOBER JANUARY APRIL JULY OCTOBER JANUARY APRIL JULY OCTOBER JANUARY APRIL JULY OCTOBER JANUARY APRIL JULY OCTOBER JANUARY APRIL JULY JANUARY APRIL JULY OCTOBER JANUARY APRIL OCTOBER JULY OCTOBER JANUARY APRIL JULY OCTOBER JANUARY APRIL Cost of Energy per kwh RATE ($/kwh) Expon. (RATE ($/kwh))

8 What this Means to You Do you believe the price of the energy will increase, decrease, or not change over the next 12 months? Source: JCI Institute for Building Efficiency, Urban Land Institute, International Facility Management Association (2013) Energy Efficiency Indicator. Results for 43 respondents in the life sciences industry

9 Increased Relevance of Energy Concerns In 2013, 67% of respondents said their company is paying more attention to energy efficiency now compared to 12 months ago. How important is energy management to you company/organization? Source: JCI Institute for Building Efficiency, Urban Land Institute, International Facility Management Association (2013) Energy Efficiency Indicator. Results for 43 respondents in the life sciences industry

10 Industry -Energy & Carbon Reduction Goals Which of the following best describes your company s goals? Source: JCI Institute for Building Efficiency, Urban Land Institute, International Facility Management Association (2013) Energy Efficiency Indicator. Results for 43 respondents in the life sciences industry

11 Industry -Energy & Carbon Reduction Goals Does your organization intend to achieve nearly zero, net zero or positive energy status for any of its facilities? Diversified Energy Mix Renewable Energy Fuel Diversification Combined Heat & Energy Source: JCI Institute for Building Efficiency, Urban Land Institute, International Facility Management Association (2013) Energy Efficiency Indicator. Results for 43 respondents in the life sciences industry

12 Corporate Commitments to Energy & Carbon Reduction Source: Carbon Disclosure Project (2012) CDP Global 500 Report 2011 Results for 31 pharmaceutical, biotechnology, and/or health care equipment or supply firms. 11

13 What Holds You Back

14 A Solution: Energy Savings Performance Contracting (ESPC) An ESPC is a financial mechanism used topayfor today s facility upgrades with tomorrow s energy savings without tapping your organization s capital budget.

15 Benefits of ESPC s Self-funded Solution Reduced Energy Costs Reduced Water Costs Reduced Operating and Maintenance Costs Long Term Accountability Improved Comfort & Productivity Increase Reliability Reduced Environmental Impact Enhances Asset Value Provides Technology Upgrades Guaranteed Results

16 ESPC at a Glance New Utility Cost Utility Cost Project Cost Savings Savings Before During After

17 Pay From Savings Pay Per kwh Saved Conventional ESPC Structure Project Installation ESCO designs and installs EE project and provides long-term maintenance and M&V. Customer Efficiency Service Agreement Finance covers 100% of project cost. Customer repays based on avoided energy use and reduced operating expense. ESCO Financial Partner Energy Savings Performance Contract (ESPC) Agreement ESCO executes turn-key contract with Financing Partner to cover all project installation, maintenance, and M&V Services.

18 ESPC Holistic Approach Continuous Improvement Process Goal & Policy Setting Set organizational goals and policies Measure and understand the status quo conditions Communicate Verify Measure Plan Monitor and benchmark to share best practices Short Term - Implement low cost operational improvements Long Term - Integrate capital upgrades into capital plan Optimize Perform ongoing monitoring and verification

19 Facilities Energy Mix 10% 10% 25% 65% 5% 5% 10% 15% 35% 30% Source: Energy Analysis Department, Berkeley National Laboratories, University of California.

20 Turnkey Energy Efficiency Projects Central Plant and HVAC Upgrades Lighting/Day-Lighting Water Treatment Plants CHP/Heat Recovery Renewable Energy Remote Diagnostics

21 Savings Streams Traditional List of Facility Improvement Measures (FIMs) Lighting/Lighting Controls Building Automation Systems Water/Sewer Conservation HVAC Upgrades Envelope/Weatherization Telecommunications Solar Thermal Solar Photovoltaic Wind Energy Curriculum & Training Non-Traditional List of Facility Improvement Measures (FIMs) Combined Heat & Power Waste Management Vehicle Fleet Management Alternative Fuels Other Ways to Save Operational Savings Maintenance Savings Utility Rate Structures

22 Who is Your Partner for the ESPC An ESCO, or Energy Service Company: This is a business that develops, installs, and arranges financing for projects designed to improve the energy efficiency and maintenance costs for facilities over a predefined time period. Typically, they offer the following services: develop, design, and arrange financing for energy efficiency projects; install and maintain the energy efficient equipment involved; measure, monitor, and verify the project's energy savings; and assume the risk that the project will save the amount of energy guaranteed.

23 Determining who is the Correct Partner In order for your project to be successful your partner ESCO must: -Have long-term experience in the Energy Services and Maintenance fields. -Be experienced and proficient in working in your type of facility. -Understand the particular needs of your business and goals. -Posses a solid track record demonstrating achieved savings and in case of shortfalls demonstrate how the situation was resolved. Other things to look for: -Industry Certifications (NAESCO National Association of Energy Services Companies) -Strong References

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25 Case Study: Integrated Energy Efficiency Retrofits Life Sciences Client in Ontario, Canada Background 23,000 m 2 facility includes office, R&D labs, and cafeteria areas. Customer seeking to reduce greenhouse gas emissions from internal operations across a global real estate portfolio. Seeking a partner to develop and execute projects in a way that is easy to manage. Solution Comprehensive package of 9 measures Includes low cost operational improvements + capital measures such as variable speed drives and CO2-based ventilation controls Benefits $52k (CAN) in utility incentives $138K/year (CAN) in energy savings, translates to <4-year return on investment

26 Case Study: Modular Chilled Water Plant Upgrade Medical Device Manufacturing Plant in New Hampshire Customer Challenges 1.5 million sq ft mixed-use medical device manufacturing and office campus Critical HVAC equipment approaching end of life, Chilled water distribution loops didn t provide the operational flexibility and redundancy required A few low-temp air handling units drive entire chilled water system temp down 24 inefficient air-cooled DX package units on roof 2MW co-gen system w/ unused thermal output The Solution New high efficiency modular chilled water plant including two 900-ton VFD centrifugal chillers (R- 134A), VFD pumps, 2 cooling towers, 480V feeders Chilled water system distribution upgrades to serve existing and renovated air handling units Supplemental desiccant systems installed for low temp load AHU s for low-humidity zones Utilize existing co-gen for hot water to AHUs Benefits Energy and maintenance cost savings US EPA Refrigerant Phase Out Compliance Utility incentive and corporate energy funding Business Case Summary Investment ($) $5,378,568 Utility Incentive ($) $97,770 Projected Savings* $765,400 ($/yr) Simple Payback (Years) 6.9 years 20 Year NPV ($) $4,088,000 * Blended Electricity Rate = $0.165/kWh

27 Case Study: Heat Pump and Piping Upgrade Life Sciences Client in Gurabo, PR Customer Challenges Existing reheat water plant uses oil-fired boilers wasting energy and GHG emissions Expected future chiller load exceeds current plant capabilities The Solution $7.2M retrofit with heat pump for energy savings Provide additional water-cooled capacity with upgraded distribution pumps/piping Benefits 3,500 metric tons CO2e/year in greenhouse gas footprint reduction $630K/year in energy cost savings Improved redundancy and capacity to meet future load Improved reliability as a result of the corrected chilled water flow problems

28 Case Study: Integrated Energy Efficiency Retrofits High-rise Building in New York, New York The Empire State Building is a pre-war, multi-tenant, trophy office building with 2.8 million square feet hosting retail, office and broadcasting uses. As a core element of the more than $500 million upgrade program at the world s most famous office building, a comprehensive energy-efficiency retrofit was created to serve as a leading example to other commercial office buildings around the world. Project Summary 2.8M Square Feet Initial Project Value $20M Projected Annual Savings $4M Mechanical Systems Upgrade Lighting Retrofits Building Envelope Over 6,500 Windows Replaced Lighting and Mechanical Controls Upgrades Sustainability Manager Dashboard for Tenants Project Benefits 38% Energy Consumption Reduction In top 25% of all U.S. Office Buildings Actual Savings After First Year $4.4M Building-wide Replacement of Windows Achieved a Score of 90 in Energy Star Program Reduced CO₂ Emissions by 105,000 MT This document contains trade secrets and proprietary information of Johnson Controls, Inc. Disclosure of this publication is absolutely prohibited without the express written permission of Johnson Controls, Inc Johnson Controls, Inc. All rights reserved Johnson Controls, Inc.

29 Case Study: Integrated Energy Efficiency Retrofits Military Base in San Juan, PR The US Army is committed to become energy and water neutral. Ft. Buchanan in Puerto Rico is viewed as the leader in this effort. Working with an ESCO, Ft. Buchanan has established a path to achieve energy and water neutrality while reducing their cost of operations by $119 million over 19 years. Project Summary Three (3) phases to date Project Value $75M Annual Savings $6M Solar PV & Thermal Wind Power Water Conservation Mechanical & Controls Upgrades Interior & Exterior Lighting Rainwater Harvesting Leak detection Potable water generation Energy Star Reflective White roofing Project Benefits More than $119M in guaranteed cost savings over 19 Years 57,994 Mbtu s/year of energy reductions Fort-wide Interior & Exterior LED Lighting Upgrades Renewable Energy generation capacity of over 6 Megawatts 70% reduction in purchased water

30 The Process is Most Successful When Key Qualifications Willingness to obtain and share 3 year usage history. Does your company have a Sustainability goal-or DESIRES to CREATE one? Is there an executive team responsible for achieving the goal? Will executive team be easily accessible and respond diligently to data and meeting requests? Paybacks is leveraged: Pay-Thru-Savings approach IRR

31 The EPC Cycle Energy Performance Contract (EPC), Project Procurement Process Overview Shared Information for Preliminary/Feasibility Study Project Development Agreement (PDA) EPC Concept Introduction to Corporate Stakeholders Initial Facilities Walkthrough/ Feasibility Study Presentation of Feasibility Study and Preliminary Approach Investment Grade Audit (Contract) Co-Author ECMs and M&V Workshop Performance Period Project (ECM s) Implementation

32 After completing the IGA the contracted ESCO developed and implemented a self funded energy project. The completed project produced enough savings to make the site competitive and it became a leader to follow.

33 Questions