Transcript Reducing Operating Costs while Improving Comfort and

Passaic County Division of Economic Development
Greening Your Company in 2014:
Opportunities to Improve Cash Flow and Maximize Environmental Benefits
A Road Map to Energy Savings:
Elements of a Comprehensive Energy Plan
Presented by:
Kenny Esser, Senior Associate
June 18, 2014
Table of Contents
 Energy Initiatives
 Energy Planning
 Energy Procurement
 Energy Audit Process / Energy Efficiency Initiatives
 Renewable Energy
 Demand Response
 Financing Energy Initiatives
 Keys to Success
 Summary
Energy Planning
Comprehensiveness in approach is key
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 Create a short and long range plan incorporating
both supply and demand side strategies
Other: Combined heat and Power, Micro-grid strategies,
battery storage, renewable energy
 Facility owners/managers must understand where
their facilities stand today.
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First step is to establish existing benchmark.
Energy Planning
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 Understand your energy use through billing
information and energy audits.
 Establish EnergyStar Baselines for comparative
purposes
 Identify problem sites
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Higher energy usage sites compared to EnergyStar rating.
Utility cost per sq ft of site
Sites with comfort, humidity, mold, etc issues.
Prioritize list of sites based on above information
 Comprehensive Energy Master Plan Approach.
 Evaluate both supply and demand related systems.
Energy Procurement
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Energy Components
 Delivery Component
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Regulated Service
Provided by Local Distribution Company
 Commodity Component: The shopping credit is the
part of the utility rate which customers avoid when
they switch suppliers
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Competitive Service
Provided by:
LDC - Basic Generation Service (BGS)
 Third Party Supplier (Competitive Market)
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Market based Rates
Energy Procurement
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 Cost of Electricity and Natural Gas:
 Delivery by Utility
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Average about 20-30% for Elect and about 15-20% for natural gas of
total price
Both Regulated; very stable
 Power Supply
 Average about 70-80% for elec. and about 80-85% for natural gas of
total price
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Capacity, interstate transmission about 20-25% of supply cost
Energy costs about 75-80% of supply cost
For electricity capacity and transmission costs relatively stable,
although capacity prices can move with market
Pipeline costs relatively stable, although can move with market
Energy Costs and commodity extremely volatile
Energy Audit Process
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 Initial Meeting
 Gather utility bills, floor plans, drawings.
 Ask general facility questions, ie largest consumers of
electricity, operating parameters, etc.
 Discuss problem areas to address: hot/cold spots,
inadequate light levels, indoor air quality, etc.
 Discuss financial parameters for project.
 Discuss goals for project. Is it a capital improvement
project vs. energy savings.
 Discuss recently approved projects, long range plans, etc.
 Discuss sustainability initiatives and goals.
 Discuss economic market drivers and programs
Energy Audit Process
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Site Visit: Conduct an inspection of each site and its
operations; Include interviews with facility personnel.
Conduct a review and audit of all mechanical and electrical
equipment and systems in each facility to understand the
following; Condition, Age, Operating characteristics, etc.
Identify potential energy savings or operational
improvements associated with these systems.
Investigate Demand Response Strategies
Note potential failure scenarios for major equipment based
on input from the staff, equipment age vs. mean life
expectancy.
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Use industry standards
ASHRAE life expectancy for equipment life.
Energy Audit Process
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 Types of Technologies To Consider:
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Lighting and Lighting Controls
Motors and Pumps
Variable Frequency Drives (VFDs)
Energy Management Systems
HVAC
Combined Heat & Power (CHP)/Cogeneration/Peak Shaving/Demand
Response
Boiler Upgrades
Geothermal Systems
Fuel Cells/Microturbines
Building Envelope (windows, roofs)
Water Technologies
Transformer Technologies (power factor)
Solar Systems (photovoltaic and thermal)
Wind
Process Improvements
Battery Storage
Energy Audit Process
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 Energy audit completed including:
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Existing and proposed conditions and energy efficiency measures for
improvement
A financial analysis with project costs and savings estimates by
technology
Available financial incentives
Life-cycle cost analysis
Summary of environmental benefits (reduction in GHGs).
 After reviewing the report, decide which projects to move
forward with.
 Selected projects will require final engineering with cost
estimates, to prepare bid specifications.
 Coordinate funding.
Renewable Energy
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 NJ Solar Economic Drivers:
•Solar Renewable Energy Certificates (SRECs)
SREC value has stabilized over last year as a result of legislation
signed into law in July2012.
Spot prices were as high as $180 in January/February and currently
at around $170-180.
New PSE&G Solar Loan Program has been approved by the BPU.
•First auction occurred and PSE&G currently reviewing
proposals.
•Federal Investment Tax Credit (30% of capital cost until 2016)
•Accelerated Depreciation
•Electricity revenue
 Lower overall installation costs enabling projects to be
developed despite lower SREC values.
 PPA Rates in the $.08-$.13/kWh range based on type of project
Demand Response
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 The region’s power administrator, PJM, offers
payments to utility customers who are willing to
curtail their power demand during utility peak
periods.
 By curtailing power usage during peak power
usage periods, customers also save on energy costs.
 These two benefits can make Demand Response a
lucrative opportunity for energy customers.
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Keys to Success
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 Property owners, facilities managers and CFOs all
must be on-board with the concept.
 Decide on a financing mechanism.
 Treat the proposed program like a wish list.
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Look at every possibility for savings and building
improvements.
You can always eliminate items before you finalize the bid
specs or establish multiple phases for the improvements.
 Do not base your investment decision on lowest
first cost. Instead, look at life-cycle cost.
Summary
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 Enables company to upgrade mechanical and
electrical equipment and make much needed
capital improvements.
 Good for the environment.
 Cuts back on U.S. dependency on foreign fuel.
 ENERGY & OPERATIONS SAVINGS
Contact Information
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Joe Santaiti, Vice President
Gabel Associates
417 Denison Street, Highland Park, NJ 08838
t. 732-296-0770;
e. [email protected]