FM Issue: Energy Savings
By Mike Gordon
Published in the October 2007 issue of Today’s Facility Manager
Five years ago, the cost side of the energy conservation challenge mattered less. Today, prices fluctuate from day to day (and sometimes even hour to hour), so facility managers practically need to be financial wizards to protect their employers from serious exposure. Further, quasi-private and government agencies are changing the rules of the game every day.
Now, energy efficiency improvements and better building controls and information can not only be used to save money, but they can also earn cash back. Smart facility and building portfolio managers can garner big bucks if they can deliver reliable operations that keep building occupants happy.
Savings Into Earnings
It doesn’t matter for reliability’s sake whether a new power plant is turned on to meet extra demand or unnecessary consumption is shut down instead. That’s why, in most locations, markets now reward facilities for cutting power for approximately 10 to 20 hours each year. Additionally, large end users are routinely paid for every kW they shed when power plants must work overtime during an emergency or blackout situation.
There are also earnings opportunities for businesses that invest in upgraded systems. For instance, large power sales companies will fund upgrades in commercial properties in order to maintain their license to market electricity. So any building that installs new power saving equipment will be able to measure how much that building actually conserves over the years. The building will then register the verified savings in the form of a certificate.
Most power marketers will eventually have to purchase a certain number of these certificates for each unit of power it sells. For instance, Con Edison in New York City could buy certificates from buildings that installed newer, more efficient chillers. However, the building that installed the chiller will still own the savings certificates, even if another entity has helped to defray some of the initial installation costs.