Geo Epc Merrigan
description
Transcript of Geo Epc Merrigan
colorado.gov/energy
Financing Energy Efficiency Retrofits with Performance Contracting
• Presented by: Conor Merrigan, LEED AP BD+C
Presentation Overview
• Governor’s Energy Office Overview
• Energy Performance Contracting Introduction
• National and State Perspectives
• How GEO Program Works
• Opportunities and Challenges
• New Markets
• Q & A
The Governor’s Energy Office (GEO) Mission
The Governor’s Energy Office promotes sustainable
economic development in Colorado through advancing
the state’s energy markets and industry to create jobs,
increase energy security, lower long term consumer
costs, and protect our environment.
Energy Markets Represent a Significant Opportunity for Colorado
MISSION
The Governor’s Energy Office promotes sustainable economic
development in Colorado through advancing the state’s energy market
and industry to create jobs, increase energy security, lower long term
consumer costs, and protect our environment.
Environment
Cost
Security
Jobs
Diversifying fuel types & geographic location & reducing
demand through resource efficiency reduces volatility &
increases reliability
Increased efficiency and maturation of renewable
energy and alternative fuels have resulted in new low
cost sources of energy
Tens of thousands of new jobs in the industry across
fuel types (emerging & legacy) & supply chain (R&D,
manufacturing, O&M)
Fuel consumption represents a major source of
emissions of local pollutants and greenhouse gases
Market Opportunities and Barriers in the Colorado Energy Sector
MISSION
The Governor’s nergy Office promotes sustainable economic
development in Colorado through advancing the state’s energy markets
and industry to create jobs, increase energy security, lower long term
consumer costs, and protect our environment.
Consumer Efficiency
Est. Colorado
Market Size
($ MM/yr)
Market Opportunities Market
Barriers
TBD* • Additional annual economic
consumer savings TBD FY12*
Natural Gas Production
Transportation Fuels
• Valuation by market makers /
regulators
• Consumer information
• Access to financing
$8,000 • 10% displacement of oil with
alternative fuels will keep
$8,077 mm / yr in Colorado
• Fueling infrastructure
• Economies of scale
• Price volatility concerns
• Accounting for externalities
$11,000 • Increased investment potential
in CO (amount TBD)
• Limited market demand and
export capacity
• Public perception driving
regulatory uncertainty
Power Generation (Export)
-$1,700
(CO is a net
importer)
• Displace imports (~10% of
consumption
• Export $1,000s CA, AZ, NV
energy markets)
• Transmission infrastructure
• Protectionist policies (CA)
Power Generation (In State)
$17,000 • Accelerate investment in new
technologies (driven by
environmental and security
factors)
• Full accounting of externalities
• Transmission infrastructure
• Technology maturity (eg clean coal,
solar)
GEO Promotes Policies that Support Private Sector Solutions
Societal Interest
Profit Opportunity
Why Buildings?
76% of all power plant generated electricity is used just to operate
buildings.
Buildings Account For Half Of All Greenhouse Gas Emissions.
Energy Performance Contracting
…Process through which energy efficiency
and capital improvements are funded (fully
or partially) by the energy and
maintenance cost savings generated by the
improvements themselves when the cost
savings are financed over a period of time.
When to pursue Energy Performance Contracting
Investigating an EPC generally makes sense if: • Your facilities have an average annual utility spend of over about $400,000 • Your have a single-owner scenario with a relatively uncomplicated lease arrangement • The Owner has an appetite for energy improvements and/or capital improvements AND • A willingness to accept a longer term finance period (7-10 years minimum)
Energy Performance Contracting
• A way to upgrade your facilities without dipping into your capital budget
• Use future energy and maintenance savings to pay for projects
Energy Performance Contracting
• Energy Savings Measures funded through guaranteed savings.
• Reallocate money already being spent in utility budget to
purchase efficiency and capital improvements
Energy Performance Contracting (Public)
• Financed through lease-purchase agreement (typical)
• Funds from multiple sources may be combined.
• Guaranteed cost savings pay lease-purchase
• Annual cost savings meet or exceed annual payments
Energy Performance Contracting (Public)
• Up to 25-year term depending on equipment lifetime
• Typical finance term between 12 and 15 years.
• Not impacted by TABOR (annually renewable & subject to
non-appropriations)
• Endorsed (strongly encouraged) by state legislature &
Governor
Potential Annual Energy $ Savings
Typical Facility Energy Savings Opportunity:
15% to 30% (or more)
Potential Energy Performance Contract
• Example:
• $500,000 annual utility expense
• 20% annual savings = $100,000
• 10 year tax-exempt lease purchase
• $100,000 X 10 years = $1,000,000
Fund nearly $1M in improvements today and pay it back over 10 years with funds previously budgeted to your utility company.
ESCO project investments tend to be concentrated in heavily populated states with supportive enabling policies; Colorado is a growing market.
Energy Performance Contracting Relative Activity of Other States
17
Energy Performance Contracting National outlook
Total Savings from the GEO EPC Program
Total Projects Costs $191,342,779
Total Cost Savings $44,471,181
Total Energy Savings 655,934 MMBtu or 192,189mWh
Total O&M cost savings $963,087
Total Energy Cost Savings $7,960,766
Average Term 11.4 months
Average Payback 15.5 years (from 3-52)
-Construction Completed Data from 1994 to Sept. 2011
Recent EPC Activity in Colorado
Total project
Cost Total Energy
Savings Total Cost
Savings
2008 $17,188,529 23,058 MMBtu or
6,756 mWh $495,339
2009 $10,853,789 33,988 MMBtu or
9,958 mWh $794,417
2010 $52,801,631 118,967 MMBtu or 34,857 mWh
$2,948,685
2011- So far.. $5,466,315 9,813 MMBtu or
2,875 mWh $220,919
Average (2008-2010)
$26,947,983 58,671 MMBtu or
17,191 mWh $1,114,191
-Based on date construction completed
• To simplify the process, and ensure the highest level of quality the GEO has pre-approved 14 ESCOs to implement performance contracts in Colorado
• The GEO will work with State, Higher Ed, Counties, Cities, K-12 Schools, and Special Districts to navigate the energy performance contracting process
• You and an energy service company (ESCO) enter an agreement that allows efficiency upgrades to be paid for with savings achieved through decreased energy consumption and maintenance costs
Energy Performance Contracting
GEO’s EPC Process
• GEO Pre-qualifies ESCOs • Simplifies the selection process
• Ensures highest level of quality
• Annual review and re-approval process
• Standardized process/procedures
• Standardized contract documents
• ESCOs under contract with GEO to use GEO contracts and processes
• On-going guidance/support from GEO
• Technical reviews of deliverables
GEO EPC Process
PARTNER WITH GEO
GEO will provide support throughout EPC process
STEP1 INTRODUCTORY STAGE
STEP 2 ESCO SELECTION STAGE
STEP 3 TECHNICAL ENERGY AUDIT STAGE
STEP 4 PERFORMANCE CONTRACTING STAGE
STEP 5 MONITORING & VERIFICATION STAGE
FAQ: What about the audit cost?
How much does an audit cost?
• ~$0.20 - $0.30 per square foot
• Process plants will be estimated separately
• Audit cost is disclosed as part of ESCo selection
When you sign an audit contract, you agree:
• If you go forward with EPC,
audit cost is rolled into package and is paid for through savings
• If you stop after the audit,
you pay for the audit then.
What does this mean for planning?
• Decide if you need to encumber funds for this possibility.
Case Studies in EPC State EPC Case Study
Department of Human Services, DYC Phase III Total energy retrofit on facilities with stringent operational requirements
Statistics
• Bottom Line: $9.9M project, $893K annual savings, 13 year term
• 708,668 SF, 12 Buildings
• 24 Energy Conservation Measures
• ESCO: Siemens
• Status: 1st year M&V to be complete within a month, construction complete in March 2010
• Estimated Cost Savings: $629K Energy/Water, $263 O&M
• Actual Cost Savings: About $25K better (preliminary)
• Not on balance sheet: $4.5M in avoided controlled maintenance costs
– Costs the state would not have recovered due to replacing aging equipment
• Annual Water Savings: 64,063,000 Gallons
• Annual Electric Savings: 4,231,087kWh
• Annual Gas Savings: 19,395 MMBtu
• Total Annual CO2 Savings: 8,332,704 lbs/ 4166 tons
• $300K Capital Contribution, $9.5M financed
• $90K Utility Rebates
K-12 EPC Case Study
Mesa County Valley 51, Phase I
Lighting and HVAC upgrades
Statistics
• Bottom Line: $4.1M Project, $383K annual savings, 15 year term
• 2,702,842 SF, 51 Buildings
• 17 Energy Conservation Measures
• ESCO: Trane
• Status: M&V on Phase I, Construction complete November 2010, $4.5M Phase II also complete, Phase III just completed, Phase IV(Solar) current
• Estimated Cost Savings: $358K Energy, $25K O&M
• Actual Cost Savings: exceeding estimated
• Annual Electric Savings: 3,528,488kWh
• Annual Electric Demand Savings: 15,576kWh
• Annual Gas Savings: 163 Therms
• Total Annual CO2 Savings: 6,644,425 lbs/ 3322 tons
• $100K Capital Contribution, $3.5M Financed
• $510K in Utility Rebates (part of $804K in total rebates, the largest check to date written by Xcel)
Colorado School Districts using EPC
• Adams 14 • Arriba-Flagler • Boulder Valley • Calhan • Campo • Cheraw • Clear Creek • Colorado Springs • DeBeque • Dolores RE-4A • Eads
• Lone Star • Las Animas • Mancos • Manitou Springs •Manzanola • Mapleton • Mesa County • Moffat County • Monte Vista • Montezuma-Cortez • CSDB • Plainview
•Platte Canyon •Platte Valley • Pritchett • Pueblo 60 • Pueblo 70 •Roaring Fork • S. Conejos • S. Routt • Stratton • Summit • Salida R-32 • Sierra Grande
•Eaton • Elizabeth • Gilpin County •Haxtun • Hayden • Holly • Julesburg •Karval •Kiowa •Kit Carson •Lake County • Lewis Palmer
• South Routt • Springfield • Stratton • Thompson • Walsh • Weld Re-1 • West End • Widefield • Wiggins • Windsor • Woodlin • Yuma
Colorado Cities and Towns using EPC
• Arvada • Aspen • Boulder • Breckenridge •Colorado Springs • Commerce City • Cortez • Crested Butte
• Grand Junction • La Jara • Lafayette • Littleton • Longmont • Manitou Springs • Meeker • Montrose
• Pueblo • Rifle • Salida • Silverthorne • Steamboat Springs • Westminster • Windsor
• Durango • Englewood • Florence • Fort Collins • Fowler • Frisco •Glenwood Springs • Golden
• Arapahoe County • Bent County • Chaffee County • Cheyenne County • Clear Creek County • Custer County • Delta County • Eagle County • El Paso County • Elbert County
• Freemont County • Garfield County • Gilpin County • Gunnison County • Jefferson County • Kit Carson County • La Plata County • Lincoln County • Mesa County •Moffat County
• Montezuma County • Montrose County • Otero County • Ouray County • Prowers County • Pueblo County • Rio Blanco County • Routt County • Sedgwick County •Washington County
Colorado Counties using EPC
• Human Services • Corrections • Transportation • Natural Resources, State Parks • Education • Personnel and Administration, Capital Complex
• Revenue • Wildlife • Agriculture • Public Health and Environment
Colorado State Departments using EPC
• UC Boulder – Housing • UC Colorado Springs • UC Denver • CSU – Ft. Collins • CSU – Pueblo • School of Mines • Adams State College
• Mesa State College • Western State College • Arapahoe CC • Colorado Northwest CC • Fort Lewis CC • Lamar CC • Pikes Peak CC
• Red Rocks CC • Northeastern JC • Northern Colorado • Trinidad State JC • Colorado Community College Systems
Colorado Higher Education using EPC
Opportunities and Challenges for EPC Opportunities • Cyclical; aging projects
become new projects • Innovative technologies • Growth industry • Underserved markets in
Colorado- Industrial, Commercial, Wastewater/Water Treatment, Housing Authorities, Private Sector, Special Districts, fleets, more. …
Challenges • Program Funding • Payback Term • Primary market saturation in 5-10 years • Finance
• Public: TABOR (or son of TABOR) • Private: IRR, ROI, etc.
Private Sector EPC
• DOE funding opportunity awarded in October
– $600,000 over 2 years, est. 10 private sector public projects
– Buy down cost of TEA and guide clients through process in exchange for identifying market barriers
– 5 pilots identified for first year, next 5 to be competitively selected
Find out more…
Governor’s Energy Office website www.colorado.gov/energy
Energy Efficiency - Commercial Buildings
Program - Performance Contracting
•Sample documents & contracts
•Case studies
•List of pre-approved ESCos
Support from the GEO
EPC information and support:
• Conor Merrigan, GEO’s Commercial Energy
Efficiency Manager-303.866.3965
The GEO’s Community Energy Coordinators (17)
www.colorado.gov/energy > Local Community > CECs
colorado.gov/energy
Questions?