By Peter Fairbanks, P.E.
Published in the March 2010 issue of Today’s Facility Manager
There are opportunities in almost every facility to reduce energy consumption and cost. Although facilities vary greatly in their energy consumption and potential for improvement, at least one of the following conditions typically exists.
- Systems are configured for worst-case conditions despite being operated in more favorable conditions.
- Systems are configured with a large margin of error beyond design conditions. Expediency and risk aversion often take priority over energy efficiency.
- Space usage or system requirements have changed over time.
- Equipment was purchased on a lowest, first cost basis rather than a life cycle basis.
- Outdated, inefficient equipment is being used.
- Equipment is operating at low efficiency due to lack of maintenance.
- Control system failure is causing inefficient equipment operation.
- Untrained personnel are running equipment unnecessarily.
The first step to reducing energy consumption and costs is for facility managers (fms) to perform an energy audit of their facilities. The usefulness of an audit is a direct function of how well the desired result is defined and, then, how well it is executed. There are numerous reasons why energy audits are performed (with varying degrees of usefulness).
- Increasing energy costs cause management to want to know where energy is being used and how to reduce its use.
- A plant expansion is anticipated, and energy usage and distribution must be identified to plan for the integration of new equipment.
- The desire to be “green” promotes interest in energy conservation.
Audits To Capture Utility Incentives
Within the broad scope of energy audits, the process also enables fms to identify and develop cost-effective efficiency improvements that will also meet financial criteria for installation set forth by the organization’s upper management.
Energy utilities and government agencies offer numerous incentive programs that can offset anywhere from 20% to 70% of the installed cost of energy conservation measures (ECMs). And new incentive programs roll out each year. An energy audit is that much more useful when the parties involved understand the incentive programs that may be applicable to the facility and how to take advantage of them.
Many of these programs are nuanced with different levels of incentives for different types of ECMs. Commodity efficiency measures such as simple lighting upgrades or variable frequency drive (VFD) installations may qualify for “prescriptive” incentives that are usually relatively easy to obtain. Meanwhile, custom efficiency measures (such as lighting redesign or installation of a “free cooling” heat exchanger in a chilled water system) typically require engineering analysis to qualify for incentives. Some programs also provide significantly enhanced incentives for bundled measures or “comprehensive treatment” that may require significant amounts of engineering analysis and modeling of the facility.
An example of a comprehensive treatment is the recent efficiency upgrades installed at Caritas Carney Hospital in Dorchester, MA. ECMs in that project included:
- installing two 550-ton VFD controlled chillers;
- converting the chilled water system to variable pumping;
- installing VFDs on pumps and fans;
- retrofitting 5,000 lighting fixtures;
- upgrading the energy management system; and
- converting air handling systems from constant volume to variable air volume.
The economics of this comprehensive treatment included:
- Total installed cost: $2,150,000
- Utility incentive: $600,000
- Annual savings: $500,000
By bundling measures and treating the facility comprehensively, the resulting utility incentive was approximately twice as much as it would have been if measures were installed individually over time.
In order to provide an optimized energy audit, the Energy Services Provider (ESP) performing the audit must be well versed in the applicable incentive programs for the specific facility. Additionally, a facility energy audit should be a collaborative process between the ESP and the fm rather than a single event. This typically consists of several phases.
Phase 1: Discovery
The energy audit should start with a discussion between the fm and the ESP to share information and define goals. The discussion would include:
- defining how the facility uses energy;
- defining operating hours, occupied hours of equipment, and lighting;
- identifying threshold of return (i.e., two year simple payback, four year simple payback) and level of sophistication of analysis (simple payback, return on investment, life cycle analysis) necessary to obtain commitment of funds for project implementation;
- identifying the age of equipment, planned system upgrades, or capital improvements;
- obtaining at least a year’s worth of monthly cost and consumption of energy; and
- defining nuances of the incentive program that would be applicable.
Through discussion of these items, the ESP will then be equipped to perform a preliminary walk-through of the facility to identify potential efficiency measures that will meet the fm’s financial standards.
Phase 2: Development
From the Phase 1 information, the ESP can perform preliminary calculations and shape the scope of the energy audit to address efficiency measures that maximize utility incentives and meet the payback goals. A proposal can now be developed that, for each proposed measure, will estimate design and implementation costs, energy savings, and utility incentives. The proposal would also contain an estimate of the cost for the ESP to provide a detailed analysis of each measure.
From this proposal, fms can decide which measures they would like to pursue with a detailed analysis. With a contract to perform the desired analysis, the ESP can begin the detailed energy audit. This detailed audit should be in the format required by the utility to qualify measures for incentives. The ESP should include all information (e.g., metering data, trend log information, modeling) that will sufficiently document the potential savings in order to meet the incentive program requirements.
Estimated installed costs of ECMs are typically required by the incentive programs, and the ESP should develop these costs using contractor quotes, project construction estimating guides, equipment quotes, etc. Utility reporting requirements will also typically include a description of the facility, its systems, and how it uses energy.
The intended product of the Development phase is to provide a utility approved audit report that allows the fm to make well-informed decisions regarding implementation of the measures. The report will include information for each measure that, within an accuracy of +/- 10%, will list installed cost and annual savings. Either in the report or based on the report, the estimated utility incentive amount for each measure will be provided. The report may also outline specifications for each efficiency measure that utilities require to insure the installed measure will meet the savings target.
Phase 3: Project Implementation
With the completed analyses of Phase 2, it should now be clear which efficiency measures meet the fm’s criteria for project cost-effectiveness and in what order implementation is desirable. At this time, final analysis and engineering by the ESP can address outstanding design issues. Strategies can be developed to phase in the efficiency measures with minimal disruption to facility operations.
Discussion between the fm and the ESP can determine implementation methods and preferences. Having an engineering firm provide plans and specifications for contractor bids is one method of implementation.
An alternative method is provided by some ESPs that conduct turnkey design/build services. The ESP will install approved ECMs for the costs listed in the audit report and accept incentive money directly from the utility as partial payment. This removes the risk of qualifying for the incentive from the facility and takes the guesswork out of final project cost. It also avoids the months of delay in realizing savings that result from the plans/specifications/bid process.
Fms know energy audits help them to identify opportunities for increasing efficiency and reducing costs. Taking the process one step further—by focusing on utility incentives as a goal—can help to make such improvements a reality.
Fairbanks is president of Bluestone Energy Services (www.bluestoneenergy.com), an energy engineering firm that has performed energy audits and design/build efficiency solutions for over 20 years. He can be reached at email@example.com.
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