How Financing Vehicles Drive the EE Market

Transcription

1 How Financing Vehicles Drive the EE Market Presentation for ACEEE Energy Efficiency Finance Forum May 13, 2014

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3 Vehicles, Savings, and Services 2

4 Financing Influences Scope Is the chosen financing a capital investment or an operating cost? Balance sheet = CAPEX Income statement = OPEX CAPEX: What is the total cost, the on-going savings, and the simple payback (SPB)? RESULT = project composed of energy efficiency measures (EEM) with SPB <3 years OPEX: Which EEM s optimize building performance and save you money on an operating basis? RESULT = project composed of integrated EEMs with SPB <7 years and immediately lowered operating costs 3

5 What is Under the Hood? 4

6 The ESA: Typical Project Profile Typical Project Scope Building automation & controls Lighting retrofits & controls Compressed air (leak detection & repair) Utility tariff rate optimization Heating, ventilation, & air conditioning Central plant systems Boiler replacement & system improvements Pumps, fans, motors, drives Cogeneration (onsite generation) Typical Project Profile Clients are typically private sector commercial, industrial, healthcare and higher education Multiple energy efficiency measures are blended into single project scope of work Total project size is typically $3-5 million Average simple payback on a project is usually between 3 and 7 years Project term is typically 10 years 5

7 ESA Structure & Key Contracts Customer Project Installation ESCO designs and installs the EE project and provides long-term maintenance. Broad Public Relations Platform As part of the DOE & White House Better Buildings Challenge, Customer will enjoy a prominent platform to advertise projects. Efficiency Services Agreement Metrus covers 100% of project cost. Customer repayment based on avoided energy use and reduced operating expense. ESCO/Contractor Efficiency Services Performance Contract (ESPC) Agreement Metrus and ESCO/Contractor enter into a turnkey project installation and maintenance contract, backed by a performance guarantee. 6

8 Delivering an Integrated Solution Metrus ESA structure removes first-cost barriers and charges only for realized energy and operational savings END TO END SOLUTION DEVELOP PROJECT FUND & IMPLEMENT ONGOING SERVICES Partner w/leading ESCOs Identify savings opportunities Develop services program Fund 100% of total EE project cost Minimize business disruptions Monitor performance Maintain equipment Identify new EE opportunities Roll-out across facilities 7

9 ESA with Kuakini Medical Center Multi-measure retrofit with deep energy savings and key facility upgrades Key stakeholders include Energy Industries, New Resource Bank and Energi Project Characteristics Total Project Cost: $5.8 million Project Scope: Key measures include new chiller plant, lighting upgrade, energy management system, new steam boilers and air-handling unit VFDs Savings: $1.1 million, savings include: Electricity: 3.4 million kwh Natural Gas: 10,800 therms Project Timing: Construction underway; project start-up at end of Q ESA Term: 10 years ESA Terms ESA Services Charge: Rate for kwh and therm savings is discounted from current utility rates. Metrus and customer share savings greater than projected performance Ongoing Services: ESA includes payments for ongoing maintenance and measurement & verification (M&V) costs Insurance Policy: Energy savings guarantee insurance from Energi (Hannover RE) 8

10 Facility Project Scope Customer Case Study: Metrus Energy has developed and financed approximately $8 million in energy efficiency improvements for global aerospace and defense contractor BAE Systems as a part of ongoing multi-facility energy efficiency roll-out initiative. Merrimack, NH Greenlawn, NY Nashua, NH NH Headquarters 492,000 ft 2 mixed-use office, 686,000 ft 2 mixed-use office, 509,000 ft 2 mixed-use manufacturing, manufacturing, office, manufacturing, environmental testing environmental testing environmental testing 467,000 ft 2 mixed-use office, manufacturing, environmental testing Lighting Retrofits Building Automation Air Compressor Replacement Transformer Replacement Demand Control Ventilation Operational Best Practices Lighting Retrofits Building Automation Boiler & Chiller Replacement Demand Control Ventilation Variable Frequency Drives for AHU & Water Pumps Lighting Retrofits Boiler Plant Improvements VAV & Control Upgrades Energy Policy Building Envelope Lighting Retrofits Boiler Replacements Variable Frequency Drives & Motors Energy Policy Building Envelope Project Cost ~ $1.0 million ~ $2.2 million ~ $2.3 million ~ $2.2 million > $200,000 in Utility Savings > 1.1 million kwh of Electricity > 31,000 therms of Natural Gas Total Annual Savings > $300,000 > 300,000 kwh of Electricity Total Annual Savings > $310,000 > 700,000 kwh of Electricity Total Annual Savings > $310,000 > 875,000 kwh of Annual Savings Various Non-Energy Operational > 125,000 therms of Natural > 125,000 gals Fuel Oil Electricity Savings Gas Various Non-Energy > 135,000 gals Fuel Oil ~ 400 tons of CO 2 Various Non-Energy Operational Savings ~ 800 tons of CO 2 Operational Savings ~ 950 tons of CO 2 Various Non-Energy Operational Savings ~ 1,150 tons of CO 2 Term Ongoing Services Provided Simple Payback: > 5 years ESA Term: 10 Years Metrus covers over $60,000 in annual project O&M and M&V services Simple Payback: > 7 years ESA Term: 11 Years Metrus covers over $35,000 in annual project O&M and M&V services Simple Payback: >6 years ESA Term: 10 Years Metrus covers over $37,000 in annual project O&M and M&V services Simple Payback: >6 years ESA Term: 10 Years Metrus covers over $50,000 in annual project O&M and M&V services 9

11 Delivering Enhanced Value Benefit Avoid Capital Outlay Use Savings to Pay for the Project Reduce Operating Expenses Enhance Reliability of Operations ESA Payments are an Operating Expense Reduce Exposure to Utility Uncertainty Expand Feasible Project Scope Description Metrus pays for all design and implementation costs, enabling customers to conserve capital for core business investments ESA service payments are based solely on the realized energy and operational savings created by the project ESA service payments are set below the current utility price, which immediately improve the bottom line Under the terms of the ESA, Metrus pays for periodic maintenance services to ensure long-term reliability and performance of the project equipment The ESA is designed to be an off-balance sheet financing solution with regular payments similar to a standard utility bill During the term of the ESA, service payments escalate at a fixed annual rate below historical utility price increases Metrus unlocks retrofit project that have longer paybacks (3+ year) and that generate deeper energy savings and operational benefits for customers 10

12 Questions? SAVED IS EARNED Bob Hinkle President & CEO x 101 bob.hinkle@metrusenergy.com 11