By John Schinter
Published in the October 2012 issue of Today’s Facility Manager
There are increasing pressures—economic, environmental, and social—to move toward a future powered by the efficient use of cleaner, alternative forms of energy. At AT&T, we see two equally important pathways to this future. One is to strive for the cleanest option possible—eliminating energy use we don’t require—by reducing consumption through efficiency efforts. The other pathway is transitioning away from non-renewable forms of energy where feasible.
U.S. DOD Pursues Solar Heating
By TFM Staff
The U.S. Department of Defense (DOD) is the single largest energy consumer in the world. On facility energy alone the DOD spends $3.5 billion per year. To help the military reduce their energy load, Eneref Institute, a Doylestown, PA-based research and advocacy organization for renewable development, reached out to the Pentagon to help expedite the implementation of solar heating on U.S. DOD facilities.
Installations of solar heating systems on commercial facilities are far outpaced by solar photovoltaic (PV) installations, according to the Eneref Institute. While solar heating—which simply uses the sun’s energy to heat water—is four times as efficient and one quarter the cost of PV, solar heating is less common in the U.S. This is perhaps because solar heating cannot send a facility’s electric meter running backwards the way PV can. But solar heating can substantially save energy costs, especially for facilities with a large hot water load. Hot showers, swimming pools, hospital laundry facilities, and even beer brewers can use solar heating to reduce their energy demand to heat water.
Beginning in mid-2012, Eneref Institute brought together a small group of solar heating industries leaders to work directly with the Pentagon. The group’s mission is to provide continual guidance on equipment, specifications, standards, contractor qualifications, third-party finance options, and monitoring practices in order to build a greater confidence for solar heating technology within the DOD. The goal is to expedite the implementation of solar heating on the department’s facilities worldwide.
“Of course both PV and solar heating make a lot of sense for military buildings,” explains Seth Warren Rose, founder and executive director of Eneref Institute. “However solar heating is especially practical where you have military housing complexes with a large hot water demand.”
Today, Camp Lejeune in North Carolina and Fort Hood in Texas are two military bases installing solar heating systems, with positive results.
Eneref Institute was asked by the military to examine ways to reduce or eliminate the initial cash outlay for these installations. In Camp Lejeune, solar heating collectors were installed on single family homes, duplexes, and multi-family homes. The funding for the project was paid for by a third-party finance company using a power purchase agreement (PPA). The finance company provides solar thermal energy at a rate that is about 25% below the cost of what Camp Lejeune was paying to heat water with electricity. And that rate is locked in and predictable. Today, numerous finance companies offer similar PPAs for both military and civilian facilities.
“We view our solar heating initiative with the military as a triple win for the United States,” says Rose. “Our military is reducing the long-term energy load, we are creating more solar installer jobs, and the DOD energy savings provides the American solar heating manufacturing industry the opportunity to scale up and offer lower cost systems to consumers.”
Our company’s effort to be more sustainable in its energy use was launched from simple beginnings. We realized that the first step was awareness, so we consolidated existing electricity usage data as a starting point from which to plan our efforts. With that core information, we put structures in place to increase the visibility and accountability of our energy efficiency efforts and keep employees invested in the energy reduction process. At the same time, we continued to learn the ways to introduce alternative energy into our energy mix. And all of this work was done in the context of a competitive business case process.
Here are two highlights from the dual track journey toward a lighter energy footprint, some lessons learned, and a glimpse of where we are headed next.
From the very beginning, we realized that efficiency was the most critical path forward, and we’ve seen marked improvements in this area over the last several years. Efficiency becomes even more important for a company like AT&T that is experiencing significant energy growth pressure because of the growth of our network. After all, the more voice, data, and video content we deliver, the more power is required to run our network. So we put a focus on reining in the associated energy needed to accommodate network capacity.
A few years ago, we developed an “intensity metric” that compares the amount of electricity used in kilowatt hours (kWh) to the amount of traffic we carry on our network (in Terabytes). This metric has been a guidepost to measure energy management performance. Since we set a baseline in 2008, we have realized almost a 47% reduction. We continue to emphasize improvement by setting a goal to reduce that intensity by 60% by 2014, as compared to the 2008 baseline.
The energy efficiency improvements we’ve made have also translated into real dollar savings. In 2011, we implemented more than 4,500 energy efficiency projects, which yielded annualized energy savings of $42 million. Combined with 2010 efforts, we’ve implemented 8,700 projects with annualized savings of $86 million.
These numbers gloss over the day-to-day actions that have made them possible. How did we stimulate these energy efficiency improvements company wide? It’s all about scale and visibility. Our real estate portfolio is extensive, which means that our facility managers (fms) are critical links in achieving company wide energy goals and implementing projects at the site level.
To provide visibility of our performance, we use an Energy Scorecard, which measures the energy performance at the top 1,000 energy intensive facilities. The fms at these sites—the “Energy Champions”—are able to see their performance via a simple format similar to a report card, complete with grades from A to D. The Scorecards are available each month so that Energy Champions can review their progress and stay on target for energy goals.
Every quarter, I convene a meeting with our Energy Leadership Team to review the Scorecard performances. The scores are based on year-over-year energy consumption comparison, projects funded and completed, training undertaken, and a few other energy-associated variables.
It’s important to note that the heaviest weighting in the grade comes from our project work. While electricity reduction is the goal, we recognize that some elements that may drive consumption up (such as especially hot summers or increased occupants or equipment in a facility) are out of the control of the fms, so we put the greatest emphasis on project work. After all, these initiatives are the engine that will drive efficiency for the company.
We reached an important milestone with our fms this past year. One hundred percent of them had energy goals included in their annual performance review scorecards. We wanted to be sure that these critically important members of the company’s energy team would internalize the need for energy efficiency, and linking it to annual reviews gives them a stake in the goal. In 2011, Scorecard grades improved by 4.5% compared to 2010, so we’re confident that it is working.
Exploring New Forms Of Power
While focusing on increasing energy efficiency, we are also pursuing alternative energy. When the costs are comparable, we choose alternative energy sources to reduce dependence on “dirty” sources of energy. We currently have 13 contracted solar systems in California and New Jersey and purchase wind energy in Texas through Austin Energy’s GreenChoice program, but it’s the recent focus on fuel cell deployments in California that is showing increasing promise.
In 2011, we started working with Sunnyvale, CA-based Bloom Energy to install its “Bloom Box” fuel cell technology at 11 of our California facilities. All systems were online by the end of June 2012, and together, these will produce 62 million kilowatt hours (kWh) per year. This is equivalent to powering more than 5,331 homes each year,
The fuel cells produce power that is 50% cleaner than that which typically comes from the power grid, which means that these installations help our company avoid the carbon dioxide equivalent of the amount of carbon dioxide emitted by 3,700 cars.
It’s no secret that funding alternative energy projects can be difficult. The reality is that is takes the right mix of elements to make the business case work right now. We think we’ve found a good mix with the Bloom Energy fuel cell technology. With this, we use a variation of the traditional Power Purchase Agreement (PPA) format as the foundation. Then we layer in the available incentives and target the locations where the current electricity rate is high, in order to make the most compelling business case.
A key differentiator for fuel cells compared to solar or wind is that fuel cell electricity production is virtually constant. There’s no downtime when it’s dark or the wind is still. This allows us to view the fuel cell opportunity as a steady stream of electricity production that comes at a consistent cost, replacing the traditional electricity bill, which can be volatile and increasing. In a sense, we view it as part of an energy price hedging strategy, while also reducing the emissions that are associated with that electricity use.
Key Lessons Learned
As we continue to focus on the company’s energy profile—with energy efficiency and alternative sources as the major tracks—there have been several notable lessons learned. These include the following:
Work with human motivations. Humans are competitive by nature. Within a year of increasing performance visibility and tying a grade to it that linked to our fms’ annual performance reviews, we saw a measurable improvement in energy efficiency.
Make the business case for alternative energy when you can; be honest when you can’t. Use financial tools like PPAs and energy incentives to create competitive business cases for alternative energy projects. Fuel cell technology has been our most successful form of alternative energy to date, both in terms of scalability and the return on investment, so we’ll be exploring options for expanding those types of installations. At the same time, however, we have plans to install eight additional solar systems in 2012 and 2013.
Find the area where you can make the biggest impact. For us, our real estate footprint was the biggest source of our energy use. We targeted a select group of our largest facilities and implemented the Energy Scorecard to focus our efforts.
Going forward, AT&T will continue to pursue both increased efficiency and alternative forms of power. We expect that we’ll continue to see energy efficiency improvements due to our ability to view our progress with the Energy Scorecards. We are also looking to expand this concept by creating greater access to immediate performance data via near real-time dashboards.
Meanwhile, we continue to evaluate and pursue investments in alternative energy, while at the same time being honest about the challenges that even big companies face in making the business case for alternative energy installations. We are taking this two track approach in order to do our part to help the transition toward a cleaner energy future.
As executive director, Energy for AT&T, Schinter is the first appointed AT&T director that leads the group responsible for the operational strategy and execution of programs for energy, carbon, water, and dry waste across the AT&T Global enterprise. With 28 years of professional experience in the energy and environmental sustainability industry, his most recent position was founding President of the Global Energy and Sustainability Services line of business for Jones Lang LaSalle. Schinter is a Professional Engineer, and a past member of the U.S. Green Building Council’s LEED technical advisory group on energy and atmosphere. He is a Black Belt in Six Sigma, a Certified Energy Manager, and was awarded International Energy Engineer of the Year in 2008 from the Association of Energy Engineers.