MWEA Infrastructure Project Funding Monetizing Savings How to Make - PowerPoint PPT Presentation

MWEA Infrastructure Project Funding Monetizing Savings “How to Make Your Savings Work for You” Daniel R. Mack Peter V. Cavagnaro, P.E. Energy Solutions, Project Development Engineer, Johnson Controls Johnson Controls

Agenda  ESPC (Energy Savings Performance Contract)  Funding Sources for ESPC  Typical Improvements  Examples – Waste Water  Selecting and ESCO Partner  ESPC – Process  Summary 2

Energy Saving Performance Contracting Features A Design/Build partnership between an owner and an Energy Services Company (ESCO) to:  Identify Cost Saving Steams to Fund Capital Projects  Implement Comprehensive/Complex Efficiency Projects  Provide Guarantees on Savings, Costs & Performance (Transfers Risk from Owner to ESCO)  Includes Engineering, Installation, Project Management, Training, Service & Support (Turnkey)  Flexible Funding Options “A mechanism for procuring and implementing capital improvement projects today, through the guaranteed energy & operational savings that they create in the future.” 3

Energy Saving Performance Contracting Key Points  Purpose o Obtain Long-Term Energy and Cost Savings o Leverage Existing Operating dollars to Fund Capital Projects  Alternate Procurement Mechanism that Provides Guarantees and Financing Options  Growing Momentum in Public Sector Utilities  Promotes Development of Alternate Sources of Energy  Used by the State of Michigan and the Federal Government 4

Energy Saving Performance Contracting Your Current Operating Costs Utility Bill Before Performance Contract  Owner’s utility budget can be reduced Before by replacing old inefficient equipment 5

Energy Saving Performance Contracting Your Operating Costs During Payback Period Immediately begin to enjoy the savings Utility Bill Payment for Efficiency Upgrades Customer Savings During Performance Contract  Energy Services Company develops and installs energy efficient equipment Before During  Savings monitored & verified  Owner pays back investment with portion of utility savings 6

Energy Saving Performance Contracting Your Operating Costs After Payback Period Enjoy the full savings Utility Bill Payment for Efficiency Upgrades Customer Savings After Performance Contract  Owner keeps all the savings Before During After after initial investment is paid off 7

Energy Saving Performance Contracting Funding Options Traditional ESPC Funding Options  ACT 99 Installment Purchase Agreement  Qualified Energy Conservation Bonds (QECB’s)  Traditional Bonds  Incentives  Utility Rebates  Renewable Energy Credits  Grant Funds - State, Federal (USDA, DOE) “Preserves Capital for Other Priorities. Leveraging ESPC Allows You to Get more Done Within Existing Operational Budget” 8

Energy Saving Performance Contracting Typical Facility Improvements  Heating Systems  Ventilation Systems  Air Conditioning Systems  LEED / Energy Star  Temperature Controls  Renewable Energy  Energy Management Systems  Predictive Preventive Maintenance  Lighting Controls & Improvements  IT Infrastructure  Windows - Doors- Seals Typical project includes a combination of improvements 9

Energy Saving Performance Contracting Typical Waste Water Treatment Efficiency Improvements  Create a Waste Water Baseline  Dewatering Optimization  Aeration System Optimization  Power Monitoring  Biological Phosphorous Removal (Blowers, Diffusers, Controls)  Digester Gas to Energy  Renewable Energy  Digester Upgrades  Overall Plant Energy and o Mixing, Feed Pump, Covers, Storage Process Optimization  Pumping Improvements o VFD’s/Control Strategies o High Efficiency  SCADA Upgrades 10

Energy Saving Performance Contracting Waste Water System Absolutes “Meeting Permit is Paramount” “Safety of Personnel is Essential” “Redundancy and Reliability Critical” “Public Perception is Important” 11

Energy Saving Performance Contracting Typical Water System Efficiency Improvements Water Loss & Efficiency Strategies :  AWWA Water Audit  Automated Leak Detection  Meter Upgrades/Replacements  Large Meter Testing & Repair  Large Meter Right Sizing & Typing  AMR/AMI Selection and Implementation  AMR/AMI Backhaul  Billing System Upgrades  SCADA Upgrades 12

ESPC Examples - Waste Water City of Baltimore, MD Backwater WWTP Opportunity  1,000,000 cfd DG Flared  Siloxanes in Digester Gas  Comfort Issues Solution  Gas Conditioning – All Gas on Site  (3) 1 MW Engine Generators  Heat Recovery Steam Generator  Engine Jacket water heat recovery, preheating boiler feedwater Benefits  Reduced Reliance on The Grid  $13.6M Worth of Improvements 13

ESPC Examples – Waste Water City of Rome, NY WWTP Opportunity From Mechanical Aeration  Surface aerators  Exceeded the useful life  Spare parts difficult to obtain  Manual adjustment to control DO Solution  Diffused aeration  High efficiency diffusers  Automatic control Benefits  Reduced energy  Added capacity  Increased revenue To Fine Pore Diffused  $6.54 Worth of Improvements Aeration 14

ESPC Examples - Waste Water City of Fort Worth, TX – Village Creek WRF Opportunity  Aging Infrastructure  City Wide Effort to Comply with State Legislation  Recognition that energy savings could be used as an alternative source of project funding Solution  Aeration improvements  Waste heat recovery  Codigestion & Anaerobic Digester Improvements Benefits  Total Annual Benefits $2.8 million  $35 Worth of Improvements 15

ESPC Examples – Waste Water City of Warren, MI WWTP Opportunity  Greatly reduced flows  Aging pumping, incinerator, facilities, aeration  High energy & chemical cost Solution  New rightsized turbo blower, aeration controls  Incineration upgrades  Extensive Pumping upgrades including VFD’s  SCADA Upgrades including Power Monitoring  Biological Phosphorous Removal (Bio-P)  Solar PV  Extensive Lighting & HVAC Improvements Benefits  17% Reduction in Utility Costs  More Reliable Operations  $8M Worth of Improvements 16

ESPC Examples – Waste Water City of Monroe, MI WWTP Opportunity  Older Centrifuge Dewatering System at Risk  1935 Vintage HVAC System  Aging Pumping Stations Solution  Demo Abandoned Belt Filter Press and Failing Centrifuge’s to make way for (3) new Screw Presses and Associated Support Equip.  Extensive Pumping upgrades (Plant and Pump Stations - Pumps, VFD’s, Valves, Piping)  Extensive HVAC Improvements Benefits  Reduction in Utility & Operational Costs  More Reliable Operations, Specifically Dewatering  $10.4M Worth of Improvements 17

Energy Saving Performance Contracting Selecting an Energy Services Partner Does Performance Contracting Make Sense  Identify Potential Infrastructure Needs  Energy & Operational Costs (Are they sufficient to fund a project) ESCO’s Role  Partner With Owner to Identify the Need  Build Team of Experts to Design/Implement Optimal Technical & Financial Solution  Develop & Build Final Solution  Financially Guarantee Results Through M&V 18

Energy Saving Performance Contracting Selecting an Energy Services Partner How To Find An ESCO  National Association of Energy Service Companies (www.naesco.org)  State Energy Office  Peer Experience ESCO Selection  Qualifications (ESCO, Team Members & Partners)  Michigan Water & Wastewater Experience  Financial Strength  NAESCO Accreditation  How Are Excess Savings Addressed 19

Energy Saving Performance Contracting Process ESCO Selection and Request for Approvals & Qualification Development Contract Agreement Maintenance, Project Measurement Implementation and Verification Detailed Detailed High Level Analysis Analysis Preliminary Analysis Conceptual Plans & Design Specs 20

Energy Saving Performance Contracting Benefits “Overcomes Lack of Resources” “Single Point of Responsibility” “Real, Verifiable Savings” “Access to Expertise…Extension of Existing Staff” “Limits Costly Change Orders” “Self Funded - Not Restricted by Capital Budget” “Multiple Improvements Implemented Quickly” 22

Reference Material  National Association of Energy Services Companies (NAESCO) - http://www.naesco.org/resources/esco.htm  IPMVP Protocol - http://www.nrel.gov/docs/fy02osti/31505.pdf  USEPA Energy Star Program - www.energystar.gov/index.cfm?c=guidelines.guidelines_index  Water Environment Federation, Energy Conservation in Water and Wastewater Treatment Facilities  Consortium for Energy Efficiency - http://www.cee1.org/ind/mot-sys/ww/resources.php3 23

Questions Daniel Mack (248) 330-7908 daniel.mack@jci.com Peter V. Cavagnaro, P.E. (734) 255-5523 peter.v.cavagnaro@jci.com