Project Financing for Industrial Energy Projects · 2016-08-18 · 5 Energy Exchange: Federal Sustainability for the Next Decade AMC Energy ‐Summary • AMC uses 17% of All Army

Energy Exchange: Federal Sustainability for the Next Decade

Project Financing for Industrial Energy ProjectsVictor Lopez

Corpus Christi Army DepotAugust 10, 2016

Project Financing for Industrial Energy Projects


• Background of AMC Organic Industrial Base• Energy demands of CCAD• CCAD experience with ESPC• Using ESPC for Industrial Facilities and Operations

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According to CCAD (my outline)

Energy Exchange: Federal Sustainability for the Next Decade3

AMC Installations

Crane AAA•Produce Navy Items

•Supply Depot Operations•GOGO

McAlester AAP•Bomb Production

•Supply Depot Operations•GOGO

Lake City AAP•Small Caliber•Active Plant

BlueGrass AD•Chemical Defense Equip•Supply Depot Operations

Hawthorne AD•Western Area Demil Facility

•Contractor Operated•Supply Depot Operations

Tooele AD•Supply Depot Operations

•Ammunition Peculiar Equipment

•Marine Corps Training Ammo Storage

Pueblo Chemical Depot

•Chemical Demil Facility•Chemical Storage

Sierra AD•Supply Depot Operations

•Demil Storage

Holston AAP•Explosives RDX/HMX

•Active Plant

AAP = Army Ammunition Plant

AD = Army Depot

CF = Chemical Facility

MC = Munitions Center

Ars = Army Arsenal

Milan AAP•Load, Assemble

and Pack•Active Plant

Iowa AAP•Missile Warheads

•Load, Assemble & Pack•Active Plant

p y

Joint Systems Manufacturing Cntr – Lima

•Combat Vehicles•Weapons Systems

Corpus Christi AD•Helicopters

Red River AD•Bradley and MLRS•Tactical/Combat Wheeled Vehicles

•Missile Recertification

Anniston AD•Combat Vehicles

•Small Arms•Artillery

Letterkenny ADTactical MissileGround Support

Equipment

•Chemical Demil Facility•Chemical Activity

Tobyhanna AD•Communications &

Electronics•Avionics

•Missile Guidance & Control

Watervliet Ars (WVA)

•Tank Cannons•Mortars

•Towed Artillery

MOT Concord

MOT = Military Ocean Terminal

Pine Bluff Arsenal•White/Red Phosphorus•Smoke/Obscurants

•Supply Depot Operations•AMCOM Missiles•DA Missile Recycling Cntr

MC = Manufacturing Center

•Tactical Missiles•Navy/Air Force

MissilesConv Ammo Storage

pMOT Sunny Point

Ammunition Terminal Group

Scranton AAP•Projectile Metal Parts

•Active Plant

Radford AAP•Propellants•Explosives•Active Plant


•Sierra Army Depot

•Herlong, CA

Primary Energy Consumers

Rock Island ArsenalRock Island, IL

Milan Army Ammunition Plant

Milan, TN

Letterkenny Munitions Center

Chambersburg, PA

Pine Bluff ArsenalPine Bluff, AR

Tobyhanna Army Depot

Tobyhanna, PA

Scranton Army Ammunition Plant

Scranton, PA

Radford Army Ammunition Plant

Radford, VA

Holston Army Ammunition Plant

Ammo Plant

Lexington – Blue Grass Army Depot

Lexington, KY

Crane Army Ammunition Activity

Crane, IN

Red River Army DepotTexarkana, TX

Tooele Army DepotToole, UT

Hawthorne Army DepotHawthorne, NV

Lake City Army Ammunition Plant

Independence, MO

McAlester Army Ammunition Plant

McAlester, OK

Watervliet ArsenalWatervliet, NY

Iowa Army Ammunition Plant

Middletown, IA

Corpus ChristiArmy Depot

Corpus Christi, TX

= Depot

= Arsenal

= Ammo Facility

Government-Owned,Contractor Operated=

Providing maintenance, manufacturing, and production necessary to sustain the lifecycle readiness of war

fighting weapon systems and equipment

Joint Systems Manufacturing

CenterLima, OH

Anniston Army Munitions Center

Anniston, AL

Anniston Army Depot

Anniston, AL

Letterkenny Army Depot

Chambersburg, PA

Army’s Organic Industrial Base


AMC Energy ‐ Summary

• AMC uses 17% of All Army installation energy*• AMC mission is energy and water intensive• AMC facilities and industrial processes in large part remain the

same as when first constructed in the 1940’s

Wood framed building constructed during WWII (typical of AMC facilities)

• Third‐Party Financing authority presents a significant opportunity for AMC

• Leverage energy cost savings to recapitalize and modernize AMC facilities and industrial processes and equipment

*Army FY15 Data in AEWRS

• Trending towards more use of industrial modernization. AMC ESPC & UESC awarded to date: >$285M with additional FY16 awards.$70M. Many include industrial savings components.


• Avg Annual• Peak • Typical Users• Whirl Tower Two – 2 ‐2500

Hp motors

• XTC‐18 ‐3500 Hp at full test

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CCAD Energy Intensity


• Next Task Order in Feasibility Study• Moving towards industrial process support equipment• Plant compressed air systems• Dust Collector Filtration• Make‐up air systems• Moving towards greater O&M savings

Leveraging Energy Projects for Industrial Modernization

• Task Order 1 ‐ $24M awarded 30 SEP 2015• Traditional energy saving measures:

HVAC systems, building envelope andcontrols, low flow water fixtures, coolingtowers, LED lighting, and high efficiencytransformers.

CCAD Current ESPC


• Phase 1a ‐ $24M awarded & underway

• Phase 1b – concept Solar PV power generation

• Phase1c – B8, Compressed Air, & B340 Process Improvements

• Phase 1d – Recapitalization of B340 Plating Shop

CCAD Current ESPC cont.


• Big Three Deltas – M&V– Top Cover/Support– Improved Contracts

Leverage and Partnering

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CCAD Approach


• Distinguishable approach: Three Buckets• Energy/Utility Savings – mostly energy savings• Support Process – more O&M savings• Change Process – mostly O&M savings

Energy Savings to Industrial Modernization


Replacement of batch plant and supporting infrastructure:• Replacement of chemical vats• Replacement of electrical rectifiers• Replacement of process chillers and boilers• Replacement of air scrubbers and make up air units• Replacement of push air and agitation air blowers• Replacement of existing SCADA controls

• Airflow control based on vat conditions• Implementation of automated chemical mixing system

• Replacement of RO/DI Water System• Replacement of IWW system and evaluation of improved IWW recycling• Various additional upgrades

Economics

Cost Range Utility Savings O&M SavingsSimple Payback

$50‐60M $400‐500k $5.0‐6.0M 10‐12 years

Building 340


• What makes B340 make sense?– Facilities efforts– Process Engineering efforts– Toxic Metal Reduction (TMR) effort– Largest energy user per SF on the Depot

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Building 340 cont.


• Balance Payback with Life Cycle• Rebates – get all available & decide when to use

• Contributions up front• Scheduled contributions

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Financial Strategies


Themes

Outside the Box

Think Different

Embrace the Partnership


• Need to provide flexibility to meet production/process requirements

• Significantly improve equipment lifecycles• Avoid wasted investments ‐ Build performance periods

around production cycles • Think like a private enterprise; Embrace the manufacturing

revolution in the United States that has occurred in the last 15 years; Look to adopt industry best practices

Industrial Modernization Benefits


• Integrate lifecycle management (it’s guaranteed!)• End state impact to production • Monitor O&M savings as well as energy savings • Account for production requirements

– Maintain capability during implementation– ESCO repair response times– Different M&V for process improvements

Avoid Process Pitfalls


• Leverage Industry Experience • Sustainability goals• Energy Mandates• Creative thinking and soundboard

Embrace the Partnership


• EMCS upgrades: Claiming of materials and labor for upgrades to system components (e.g. valves, sensors, actuators), commissioning (includes continuous and retro) and replacement of pneumatic controls with DDC.

• Production Ventilation Control Improvements. Often these result in increase of 10% in productivity but will only allow energy savings to be counted

O&M Savings Considerations

Documents

Project Financing for Industrial Energy Projects · 2016-08-18 · 5 Energy Exchange: Federal Sustainability for the Next Decade AMC Energy ‐Summary • AMC uses 17% of All Army