Energy Efficiency / Alliance to Save Energy - EE Global Conference, Brussels, April 2011 /...

Achieving Energy & Carbon Savings through Energy Performance Contracting

Luca MazzeiVP, Global Strategy & Marketing

Honeywell Building Solutions

Honeywell Proprietary

Honeywell.com

2Document control number

Agenda

• Energy Is Honeywell’s business

• The challenge ahead

• Energy Performance Contracting

• Who is benefiting?

• What’s the holdup?

• Solutions


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Energy Is Honeywell’s Business

• Nearly 50% of Honeywell’s product portfolio is linked to energy efficiency

– HVAC– Biodiesel– Turbochargers

• The global economy could operate on 10-25 percent less energy just by using today’s existing Honeywell technologies


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The Challenge Ahead

20% Reduction in Carbon Emissions by 2020, 80% by 2050Trend Will Deliver Less Than 10% by 2020


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€1 spent on more efficient energy useavoids €2 in investment in energy supply

Source: IEA

Where Should We Focus?

Supply Side Demand Side

The Greenest Energy Is The One You Don’t Have To Generate!


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Europe’s Buildings Waste €270B of Energy Every Year

Where Should We Focus?


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What Are The Options?

• Upgrade your buildingsLarge capital outlay to fund improvements

• Source government funding, zero % loans Only address ‘low hanging fruit’

• Do nothing Suffer the consequences

• Use energy savings to fund energy efficiency measuresEnergy Performance Contracting

The Money Is Already In Your Budget, Currently Paying For Wasted Energy


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What Is An Energy Performance Contract?

Using Wasted Energy To Fund Carbon And Energy Reduction

• A programme of energy efficiency improvements to buildings funded from the savings they generate

• Delivered via a partnership with an ESCO

• Funded by the customer or ESCO’s Finance Partner

• Energy savings are guaranteed by the ESCO

• Project managed by the ESCO but installed by local companies and contractors


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Why Use EPC?• No up-front capital required• Guarantee transfers financial and equipment

performance risk to the ESCO– if the savings target isn’t made, the ESCO pays the

difference• Unlike most capital investments, EPC reduces

operating expenses• Immediate improvements are made

– Buildings upgraded with modern, reliable energy efficient equipment

– Comfort conditions are improved for occupants– Carbon reduction

• Avoids ‘cream skimming’ to provide deep savings >20%

• Creates job opportunities • Proven process

Self Funded, Risk Free Improvement Programme


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Energy / UtilityCost

EPC – How The Funding Works

Current

Energyand O&MCosts

£ Savingscontinue

Yourannualcoststoday

During EPC Programme

Energy / UtilityCost

Energyand O&MCosts

Energy savings fund the

improvementprogramme

YourannualcostsduringEPC

After EPC Programme

Energyand O&MCosts

Yourannualcostsafter EPC

There Is No Payback As There Is No Payment


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EPC Is A 4 Stage Process

Detailed analysis Implementation

Contract closure

Changes in energy use accountingPreliminary

study

Detailed engineering

study

Planning, installation,

project management

Energy Saving Guarantee

measurement & verification service

(IPMVP)

Preliminary audit

Guarantee phase

No Commitment Until Contract Closure

Enough inefficiency to fund an improvement

programme?

Level of savings delivered over what

period?

What are the finance & contractual

arrangements?

How do I know the savings are being

delivered?


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A Total Facility ApproachLighting replacement,

control systems & LEDs

On-Site Technical Resource Management

Chiller upgrade/replacement & absorption cooling

BuildingManagement Systems

Zonetemperature

control

Boiler upgrades, controlsCombined Heat & Power

VSD motor control

Ventilation fans

High efficiency motors

Voltage reduction

Damper control

Plug loadmanagement

Solar gainminimization

Agnostic Approach To Technology, Over 250 ECMs


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Deep Savings Delivered By EPC

(EPC v Subset of 204 US DOE Projects)

PerformanceRisk

% Savings

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Year 1 Year 2 Year 3 Year 4 Year 5

ESCO guaranteed savings &Energy Proj forecast savingsEnergy projects actual savingsESCO EPC actual delivered savings

Guarantee Accountability Delivers Results


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Who Is Benefiting From EPC In Europe Today?• Transport for London (UK)• Gwent NHS Trust (UK)• Lievensberg Hospitals (NL)• Atrium Hospital Complex, Heerlen (NL)• St Elisabeth Hospital, Herten (DE)• Landshut Clinic, Landshut (DE)• Erasmus University (NL)• City of Malmö (SW)• Ifö Sanitec (SW)• EHSAL School (BE)• Brigittenau Swimming Pool, Vienna (AT)• UniCredit Group, Milan (IT)• University of Art, Berlin (DE)• City of Berlin (DE)• Clinical Center Bremerhaven-Reinkenheide (DE)• St. Joseph Krankenhaus, Berlin (DE)• Municipality of Nyköping (SE)• City of Örebro (SE)• Swedish University of Agricultural Sciences (SE)• Municipality of Hollola (FI)• Municipality of Middelfart (DK)• University of Sheffield (UK)• Jewish Museum, Berlin (DE)• German Army Medical Co-ordination Centre, Diez (DE)• German Army Training Camp, Aulenbach (DE)


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EPC Summary

• Building owners keep paying what they currently do but…– Obtain a complete upgrade of all their buildings– Implement a programme of guaranteed, significant carbon reductions

across their buildings– Improve the reliability of the building’s energy system– Reduce operational costs– Improve working environment for building occupants– Use energy inefficiency as a tool to make improvements– Create jobs

Take The Money Currently Paying The Utility For Wasted Energy & Use It To Invest In Improvements Across Buildings


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What’s The Hold Up In Europe?• US Energy Policy Act 2005

– More than $1.9 billion has been invested in over 400 EPC programmes

– Over 30,000 new jobs created

• The EPC solution exists• EPC is being used successfully in pockets

across Europe

• Lack of awareness• Reluctance to obtain 3rd party financing• Procurement difficulties• Selective financing• Lack of policy push and incentives• Reliance on government funding• Accounting & budgetary rules

Central Support Needed To Overcome The Hurdles


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Solutions

• Continue to prioritise energy efficiency• Drive awareness through Energy Agencies• Covenant of Mayors, Smart Cities• Support (with banks) 3rd party financing• Accounting treatment that doesn’t impact credit

worthiness• Support and recommend the use of energy

performance contracting with standard contracts, procurement processes, M&V & the ability for public sector to use 3rd party financing

• Learn from others

“The Invisible Hand Of The Market Alongside The Enabling Hand Of Government”


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Thank You

Energy Efficiency / Alliance to Save Energy - EE Global Conference, Brussels, April 2011 /...

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Transcript of Energy Efficiency / Alliance to Save Energy - EE Global Conference, Brussels, April 2011 /...