Saving Before You Start
Knowing how you use energy, with an energy audit, is a good start for tomorrow’s efficiency.
What do we have now? How do we use our energy? How much does it cost us? It seems sensible and practical to understand how we spend our energy (and our dollars) before we start taking steps to improve efficiency and performance. A competent energy audit makes sense for all those in charge of commercial, institutional, and industrial structures because it will tell them what they have, how they use their equipment, how efficient that equipment performs in its real environment, and how they might improve their energy efficiency and save money with new techniques or equipment. An energy audit will also confirm for you which aspects of your operations are already good while at the same time saving you from wasteful spending.
Let’s imagine a hotel, a hospital, county offices, and a manufacturing facility in an average community in the US. Those facilities use a lot of electricity. Who would benefit if the hotel, hospital, county, and manufacturer were more efficient and used less power? The whole community! When one or two entities consume a large proportion of the whole available power, everybody else may suffer in one way or another. Outages? Costs?
Think of how much energy waste there could be in a WWTP—an audit would find the weaknesses.
It’s this broadest view of energy use that can be seen by people like those at the Inter-American Development Bank (IDB). Those who are most interested in financing through IDB for better development and better communities are often the Ministries of Energy and the utilities in the communities concerned. “We use an energy audit by a competent auditor to determine a company’s current expenditure on energy and its pattern of use,” explains Christiaan Gischler, Senior Energy Specialist at IDB. “That pattern may be related to the time of day or the season of the year. We analyze the use and recommend changes in equipment, if that seems appropriate. We tell our potential customers what will happen if they change equipment and change their patterns of usage. We can forecast a payback time in energy savings, too. Minimizing waste is a key ingredient of the customer’s recipe for future success.”
An aspect of energy audits that demands careful attention is the qualification of the auditors to do the work accurately and honestly. The auditors are authorizing and buying the energy audit to decide which way to progress, how to spend more money on energy efficiency, and how to reduce dependency on fossil fuels—so the facts on which decisions are based had better be accurate and specific to each situation, not mere estimates or typical results for a similar company or institution. In the current economic conditions, one can expect banks to have a powerful say in energy audits, and they will surely demand professional standards from the auditors. New equipment can save an enormous amount of money because it is so much more efficient.
What are banks looking at when they require an energy audit? To whom are they lending money? One interesting and instructive example of a bank’s involvement comes from the IDB, already mentioned. The customer is abroad, but the details could be appropriate to the US. La International S.A. is a producer of denim and was planning increased production for its coming year. To assist La Internacional, IDB proposed an A/B loan of US $25 million to include two components: financing of capital investment totaling $19.6 million, and debt refinancing and working capital financing of $5.4 million. IDB’s financing will provide a tenor longer than available in the commercial banking market and will improve the stability of the company’s debt structure by incorporating existing commercial financing into the IDB’s B-Loan.
Inside large plants and factories an energy audit can reveal obvious (and elusive) ways to save energy and water.
Well-run office buildings are better run after an energy audit shows areas for potential energy savings.
Some building owners, private and public, have been wary of requesting energy audits because they felt they could not possibly afford all the improvements recommended. In today’s economy, that is even more likely; take heart. Think more specifically. If the refrigerator at home fails, do you buy a new house to replace it? In facilities, there are several energy users. Choose one for the first audit rather than the whole lot.
Lighting is one area where many buildings could improve their energy use. The lighting audit from New England Energy Management collects information about existing lighting technologies, about the current hours of operation and current energy usage. Based on that information, the company will propose recommendations for the facility, with a report that shows the difference between the energy used and the energy that would be used with improvements to the lighting. That report details kilowatt use and savings, potential dollar savings, and the incentives available to help you from the local utility.
After such an audit, New England Energy Management will note the lighting fixture count, the operating hours of each fixture (including those that are left on just because they are left on), the wattage of lamps, the type of ballast used, and details of fixture mountings and housings. A similar specialized audit could be done for different aspects of buildings and factories so that improvements would not have to be done in one costly swoop. In a factory, it could be the electric motors; in a college it could be the heating and cooling. Having an audit of specific energy uses can make sense for those seriously threatened by financial concerns. There are other ways, too, of meeting those financial challenges.
A method that has gained great popularity with both public and private entities for financing energy improvements is a performance-based solution. There is a most important word to be added to that phrase: guaranteed. Guaranteed Performance-Based Solutions (sometimes known as Energy Savings performance Contracts or just Performance Contracts) apply to situations when capital energy efficiency facility improvements are financed by the savings calculated from the projected avoided energy costs over a set period of time. A leading company in this field is Siemens Building Technologies, headquartered in Buffalo Grove near Chicago, IL. Siemens has guaranteed energy savings that have translated into billions in avoided energy and related costs over the last decade. Among beneficiaries have been school systems, healthcare facilities, and government agencies. To determine what will be needed, an energy audit is required. The audits have demonstrated what improvements and operating parameters could net the best results for the user.
Without the original energy audit, some attempts at energy efficiency could be well-intentioned but feeble. The audit will show exactly where a building or group of buildings is inefficient so that the remedies can be designed to fit a particular situation. If you thought an effective energy audit would be someone going through the building with a clipboard, a frown, and lots of confusing terms and phrases, think again.
The best audits are performed by engineers who know what they are looking for, who recognize problems when they see them, and who know that those problems can be solved. With a guaranteed performance-based solution, the financing of those solutions is taken care of. In these times when investment of any sort can be frightening, it’s happy and affordable progress for many entities, authorities, companies, and communities who never imagined they could solve their energy problems so practically. But it must start at the real beginning! The step forward must start from a position where you know exactly where you are and exactly where you can go to be successful. That’s the energy audit.
For the Bridgeport, CT, Housing Authority (BHA), Siemens is implementing energy efficiency and other improvements for single- and multi-unit public housing throughout the BHA system. Energy and resource upgrades will help 2,500 units, at six BHA complexes and more than 500 scattered sites. For this project, the preliminary audit showed that significant improvements could be made in the performance of HVAC systems, new boilers, interior lighting, and sensor-activated exterior security lights. Siemens will also implement sophisticated wireless building automation systems, which allows for remote system operation via the Internet at several BHA sites. Under the terms of the contract, which guarantees energy savings, avoided energy expenses over the next 20 years will provide the equity basis for the loans financing the project. According to BHA the energy efficiency work will reduce electricity use by 35%, natural gas by 24%, and water use by 45%. Once all the system upgrades and improvements are made, Siemens guarantees 837,637 kWh of annual electricity savings and 279,971 ccf in reduced natural gas consumption. Over the 20-year life of the performance contract, the energy saved will result in an overall reduction in Green House Gas emissions of some 96,6744,448 pounds, which translates to an equivalent impact of removing 9,447 cars from the road, planting 13,145 acres of trees or not consuming 4,979,021 gallons of gas or 101,692 barrels of oil. All those good results come from a competent energy audit that tells what you have and what you could have.
An aspect of the savings generated via Siemens for the Commonwealth of Pennsylvania’s Department of General Services (DGS) is the implementation of photovoltaic energy systems at agency facilities, showing the DGS commitment to renewable, alternative energy resources in their promotion of more sustainable operations. In preparation for these impressive energy savings in Pennsylvania were extensive engineering surveys—call them audits, in you prefer—and design improvement measures to calculate the potential energy savings. Following the interactive process of presentations and evaluations with DGS officials, Siemens secured an $8.2 million performance contract for a wide range of improvements, including a 10-kW solar energy system, building automation control improvements, HVAC system enhancements, and low-flow plumbing fixtures. The project also included the replacement of more than 2,000 of the DGS structures’ original windows. The structures in this instance were 50 years old, and they will achieve a 30% reduction in energy throughout the 750,000 square feet of office space. The Commonwealth of Pennsylvania will save the equivalent of nearly $800,000 in energy costs in the first year, escalating by about 5% per year after that. And, of course, it all started with experts discovering the true energy situation before any improvements were approved.
More Real Life Examples
The City of Grand Junction, CO, entered into a performance contract with Johnson Controls to conduct facility improvements and leverage renewable energy technologies to improve its overall energy efficiency. As a result, the city is expected to reduce its annual energy budgets by 19% and save $1.2 million in energy and operational costs over the life of the contract. At the same time, the improvements will lessen the impact on the environment. Grand Junction also formed an energy conservation team called CORE (Conserving Our Resources Efficiently) whose task is to assess and monitor the progress of proposed initiatives and current conservation practices, work to introduce new practices, and explore new conservation opportunities from other communities and outside entities. Specific goals for the city include a 20% reduction in energy consumption and 10% reduction in water consumption in the first five years.
Johnson Controls was one of four companies responding to CORE’s request for proposal and was awarded a performance contract to conduct energy efficiency improvements. Johnson Controls conducted a six-month energy audit on 39 facilities and worked with the CORE team to evaluate a wide variety of possible facility improvement measures. The team limited improvements to only those buildings that will still be in use in 15 years, the term of the performance contract. From the audit, projects were eliminated where the energy savings were not worth the upfront capital expenditure.
Included in the performance contract were the design and installation of solar photovoltaic systems at Grand Junction’s Visitor Center and its Two Rivers Convention Center. “Installation at these highly visible locations serves as a demonstration of what can be done as well as saving energy,” comments Jim Stavast, facilities service manager.
The two systems can generate up to 5 and 15 kW of electricity, respectively, and account for about $4,000 of the projected annual electrical utility savings. Grand Junction understands that employee education and buy-in are critical to maximizing energy reduction; an energy audit usually shows where employee operational patterns may be improved.
“As employees become more efficient, it saves the city and taxpayers money,” observes Kathy Portner, Neighborhood Services Manager for the City of Grand Junction. “The employees can benefit at home, too. This is a great project for the city and the community.”
Servidyne Inc., headquartered in Atlanta, GA, was awarded the 2011 Energy Star Sustained Excellence Award by EPA earlier this year. (Servidyne is part of SCIenergy Inc., a cloud-based energy management platform for building owners and operators created from a merger between Servidyne and Scientific Conservation.) “Helping our customers save energy and operate more sustainable buildings is what we do, so to be selected for these high distinctions is incredibly gratifying,” comments Alan R. Abrams, Servidyne’s Chairman and CEO. “We’ve been at this for many years, but never has energy efficiency been more important for the planet than today.”
For one project, the Veterans Affairs medical Center in Miami, FL, Servidyne was challenged to decrease energy consumption due to lighting. The first step was to audit, design, and analyze the hospital to determine areas of saving. Then there was an upgrade of existing lighting fixtures to promote savings and increase light levels. The results were a reduction of energy consumption, material standardization, a reduction of maintenance costs with that standardization, improved lighting features for the building, and improved occupant satisfaction, thanks to better lighting levels. It started, of course, with the audit, to see what might be accomplished.
Servidyne has also performed thorough energy audits for investment companies that own real estate and wish to keep the management of the buildings involved efficient and economical. A sustainability analyst at one company asserts that the Servidyne evaluations are comprehensive and identify good opportunities that lead to energy efficiency measures that more than pay for the study. One example was when an audit pinpointed excessive use of HVAC systems during off-peak hours. When that was corrected with improved controls, the savings were immediate.
In the last two decades, Schneider Electric has completed hundreds of energy-saving performance contracts (ESPCs) and helped clients around the world save nearly $1 billion.
“A comprehensive energy audit should answer four questions,” recommends Kevin Vaughn, program Manager, Federal Energy Solutions, Building Business, Schneider Electric. “Firstly, what are the objectives for doing an energy audit? Typical objectives include reducing energy use and cost, using energy savings to replace obsolete equipment, and optimizing the use of renewable energy with energy efficiency. That first question means: What problems need to be solved? The second question asks what energy conservation measures [ECMs] should be implemented to the objectives just mentioned. Thirdly, how can the ECMs be paid for? There are many ways to pay for the ECMs including capital investment, utility rebates/incentives, utility rate optimization, and third-party financing with performance guarantees. The fourth question asks for the plan of implementation of the ECMs.”
“We have found there are two fundamental best practices for successful energy audits that lead to implementation,” adds Vaughan. “Engage the key stakeholders, including management and finance, throughout the audit process. Have a clear definition of the objectives of the audit. The objectives should be developed with the input of those key stakeholders.” Schneider Electric has an interesting energy audit story related to the US Coast Guard (USCG) in Puerto Rico. The energy audit resulted in a very comprehensive project. The USCG had three key objectives:
- Meet various federal mandates for energy efficiency, renewable energy, water conservation, etc.
- Replace as much obsolete equipment as possible and reduce the O&M burden.
- Improve living conditions for the USCG personnel in Puerto Rico.
The energy audit uncovered opportunities for water conservation, lighting, mechanical system upgrades, roof replacement, and nearly 3 MW of photovoltaic renewable energy. This energy audit also included an implementation plan and a measurement/verification plan for energy savings. Schneider Electric is constructing 300 solar PV systems on the facilities, resulting in guaranteed production of more than 4 million kWh per year. The photovoltaic electricity production, combined with new cool roofs, will result in an overall reduction of utility-purchased electricity by an estimated 40%.
One most significant result of an energy audit and consultation with those top companies who perform audits is its emphasis that energy efficiency affects more than the electrical equipment and appliances in buildings. An energy audit will remind us that all our concerns for efficiency—whether we’re talking about a hotel, an office building, a buildings complex, a municipality, or a whole community—are connected and interdependent. Electricity, water, natural gas, sewers, and all the sources of renewable power that are becoming so important in both private and public facilities are connected. The “energy audit” may demonstrate the weakness of a lighting system, the waste of power in some motors, but it will also show how all the practical sources of efficiency like water and electricity are linked. Perhaps a building owner or community can only address one aspect of inefficiency (the lighting, for example) at this time, but the concept of guaranteed performance-based contracts must change our thinking about what can be done now rather than someday when we think we can. It all starts with a competent audit to know what we have now and what we can do to improve everything.
Author's Bio: Paul Hull is a frequent contributor to Forester Media publications.