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Big Ten Sustainability Conference November 14-15, 2010 Funding Strategies: Energy Savings Projects and Seed Grants Funding Strategies. Energy Savings Projects. Energy Savings Projects Program Components. Commissioning Continuous Commissioning (CCX) Rapid Commissioning (RCX) - PowerPoint PPT Presentation
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Big Ten Sustainability ConferenceNovember 14-15, 2010
Funding Strategies:Energy Savings Projects and
Seed Grants Funding Strategies
Energy Savings Projects
Energy Savings Projects and Seed Grants Funding Strategies
Energy Savings Projects Program Components
3
• Commissioningo Continuous Commissioning (CCX)o Rapid Commissioning (RCX)
• Guaranteed Energy Savings Projects (GESP’s)
• Energy Savings Projects (ESP’s)
• Energy Conservation Measures (ECM’s)o Seed Grants
Energy Savings Projects and Seed Grants Funding Strategies
Annual Budgets
4
• Guaranteed Energy Savings Projects (GESPs) and Energy Savings Projects (ESPs ) – 10 yr payback
• $5,000,000 to $10,000,000
• Applies to all University facilities
• Energy Conservation Measures (ECMs) – 5 yr paybacko Commissioning = $580,000o Stand alone = $500,000o Incorporated in Projects = $500,000o Applies only to E & G facilities
Energy Savings Projects and Seed Grants Funding Strategies
PENN STATE’sTraditional Guaranteed Energy Savings Project (GESP)
Contracting Process
Energy Savings Projects and Seed Grants Funding Strategies
UNIVERSITYIMPROVEMENTS
ANNUAL UTILITY BUDGET
UTILITY PAYMENTUTILITY
COMPANYREVENUE
ENER
GY SAVIN
GS
$ spent should not increase as a result of a GESP
Measurable or Guaranteed Results
Energy Savings Projects and Seed Grants Funding Strategies
Organized Process
7
The Guaranteed Energy Savings Act (GESA) is provided for under Chapter 37 of Act 57 (1998),and as amended by Act 77 (2003).
In the Commonwealth of Pennsylvania, energy performance contracting was standardizedthrough the procurement code………………
Energy Savings Projects and Seed Grants Funding Strategies
Traditional Guaranteed Energy Savings Program Process
8
Month 1 2 3 4 5 6 7 8 9 10 11 ?
Site
Selection
Letter of Interest
ESCO Proposals
Investment Grade Audit
Funding/ Contracts
Construction
Energy Savings Projects and Seed Grants Funding Strategies
Penn State’s Process
9
1. Select Project Sites2. Issue Request for Letters of Interest3. Select up to 3 ESCOs from LOIs and Issue RFP4. Evaluation and Selection of ESCO5. Execute Energy Audit Contract6. Audit conducted by ESCO approved by Penn State7. Negotiate and execute GUARANTEED ENERGY SAVINGS
CONTRACT8. Determine financing method and secures monies9. Construction Period begins10. Project accepted and approved11. Guaranteed period commences12. Ongoing project monitoring
Energy Savings Projects and Seed Grants Funding Strategies
GESP Process
10
1) Select Project Sites• A campus or group of buildings• Similar customers• Similar needs• Target projects of $2,000,000 to $4,000,000• Establish the selection committee
Example: Penn State Altoona 2007 FY utility cost = $1,400,00020% Expected Savings = $280,000 over 10 years = $2,800,000Selection Committee:
• Director Housing & Food Service• Director Business Operations• Assistant DBO• Foreman Operation and Maintenance• Heat & Vent Technician• Project Manager• Mechanical Engineer
Energy Savings Projects and Seed Grants Funding Strategies
GESP Process
11
2) Issue request for letters of interest (LOI)• List of 18 qualified ESCOs from the DGS site• ESCO reference projects• Team member qualifications• ESCO financial information
3) Select 3 ESCOs and issue the RFP• The RFP establishes the foundation of the GESP• Requirements, terms, and conditions• Expectations and selection process• Schedules for meetings, proposals and presentations
4) Evaluation and selection of ESCO• From 3 proposals select 1 ESCO to complete an IGA• Written proposal evaluation• Interview Evaluation• DGS forms available
Energy Savings Projects and Seed Grants Funding Strategies
GESP Process
12
5) Execute the Investment Grade Audit Agreement (IGA)• The next step in the contractual process• Builds on the RFP• The IGA agreement is absorbed into the GESA
6) Audit conducted by ESCO• Partnership between the ESCO and the owner• Commonly takes 3 to 6 months• Measure from the proposal are refined• Cost and savings can not vary by 10%• The IGA report becomes the basis of the GESA
7) Negotiate and Execute Guaranteed Energy Savings Contract
Energy Savings Projects and Seed Grants Funding Strategies
GESP Process
13
8) Determine the financing method• Penn State uses internal financing• ESCO offer a wide range of options
9) Construction Period begins
10) Project accepted and approved
11) Guaranteed period commences
12) Ongoing project monitoring
Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
14
Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1PSU Fees $5,000 $12,000Upfront Capital (MM) $575,000Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
15
Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1PSU Fees $5,000 $12,000Upfront Capital (MM) $575,000Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
16
Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1PSU Fees $5,000 $12,000Upfront Capital (MM) $575,000Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
17
Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1PSU Fees $5,000 $12,000Upfront Capital (MM) $575,000Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
Energy Savings Projects and Seed Grants Funding Strategies
Sample GESP (Altoona Campus)
18
Total Projected Savings = $ 363,124Payback = 8.1 years on financed amount
Cost Savings Payback Cost Contribution Savings Payback($) ($/yr) (years) ($) ($/yr) (years)
Lighting Improvements $189,509 $23,100 8.2 $444,060 $65,793 6.7Water Conservation $251,387 $34,743 7.2 $169,178 $23,224 7.3Building Automation Systems $19,919 $1,237 16.1 $693,238 $74,073 9.4Weatherization $20,229 $1,487 13.6 $119,219 $10,344 11.5Energy Awareness $7,377 $2,000 3.7 $15,635 $5,000 3.1Mechanical System Improvements $184,357 $21,851 8.4 $927,799 $575,000 $42,407 8.3Adler Building Systems $443,467 $57,865 7.7
Totals (Hard Costs) $672,778 $84,418 8.0 $2,812,596 $278,706 10.1PSU Fees $5,000 $12,000Upfront Capital (MM) $575,000Amount Financed $677,778 $84,418 8.0 $2,249,596 $278,706 8.1
Finance Term of 10 Years at Annualized Interest Rate of 5.0%
Projected Financed Cost $2,927,374
ECMH&FS E&G
Total Project Cost $3,502,374
Energy Savings Projects and Seed Grants Funding Strategies
Energy Saving Program Process w/ In-House Labor
20
Month 1 2 3 4 5 6 7 8 9 10 11 ?
Site
Selection
Engineering Study and
Design
Funding/ Contracts
Construction
Simplified process for working with in-house forces
• Based on stipulated savings as determined by Penn State energy engineers
• Reduced cost due to elimination of ESCO profits
Energy Savings Projects and Seed Grants Funding Strategies
Sample ESP Projects
21
Energy Savings Projects and Seed Grants Funding Strategies
Sample ECMs
22
Energy Savings Projects with maximum 5 year simple paybacks
Continuous Process• Occupancy Sensors – HVAC – Many Buildings• Lighting – Many Buildings• Thermostatic Valves – Many Buildings
Batch Process – • Lab air flow adjustments – Wartik & Hosler• Valve replacement – Leonhard• Valve Replacement – South Henderson• Heat recovery ACF 1&2 – Research East• Heat Recovery – Althouse• 100% OA – Rec Hall rm 151 and HVF 05• RTU replacement – Research West
Sustainability Seed Grant Program:“Crowd Sourcing” New Ideas
Sustainability Seed Grant Program:“Crowd Sourcing” New Ideas
Energy Savings Projects and Seed Grants Funding Strategies
Goal : To foster basic and applied research, practice, education, and outreach as it relates to sustainability
• Penn State Institutes of Energy and the Environment partnership with Outreach, OPP & several colleges
• $350,000 funding available • Grants awarded May 2010• Grants need to be by June 30, 2012
Sustainability Seed Grant Program
Energy Savings Projects and Seed Grants Funding Strategies
Sustainability Seed Grant Program
75 proposals
13 awardees
Amount People$15,000 1
$40,000 2
$75,000 3+
EncouragingCollaboration
Energy Savings Projects and Seed Grants Funding Strategies
Energy Savings Projects and Seed Grants Funding Strategies
Results
28
BTU
/GSF
24% reduction
Energy Savings Projects and Seed Grants Funding Strategies
What’s next. . .?
29
Energy Savings Projects and Seed Grants Funding Strategies
Endowment Conventional Investments
ENER
GY SAVIN
GS
What’s next. . .?
Thank you. Comments? Questions?