Optimizing Steam Energy Use & Reducing Operational Costs Opportunities in Healthcare

1. Optimizing Steam Energy Use & Reducing Operational CostsOpportunities in Healthcare Rock R. KaiserU.S. Department of Energy Qualified Steam System Energy Expert Sustainable Steam & Water Solutions Inc.

2. Why Should I Focus on Energy?(aka “What’s in it for me?) Like everything else, energy prices will continue to rise over time (although we are currently enjoying relatively “cheap” gas: Although the actual cost of natural gas varies from state to state, and hospital to hospital.

3. Why Should I Focus on Energy?(aka “What’s in it for me?) • A good purchasing strategy can help you obtain gas at a “relatively” low cost/unit but this is often out of the hospital’s control. • You have to satisfy the facilities demand, but you want to do this for the lowest possible cost. • Do you know your current cost of steam/1,000 lbs? • Do you know your current cost of 1,000 gallons of domestic hot water? • Do you produce domestic hot water with steam? Is this the best method with the availability of high efficiency hot water heaters? • You may know how much gas you are using on a monthly basis, but is this the best you can do? • Remember, the money saved in your steam/hot water system’s operation goes directly to your bottom line, or can be directed towards other areas within the facility.

4. Why Should I Focus on Energy?(aka “What’s in it for me?) • Below is the marginal steam cost ($/1,000 lbs of generated steam) for some of the facilities that I have assessed. Data has been put on a equal natural gas price basis of $10.00/MMBTU to ensure that the comparison is based upon the efficiency of the steam usage. • Indiana Pharmaceutical Manufacturing Plant: $12.75/1,000 lbs of Steam • Indiana Hospital (1) $12.75/1,000 lbs of Steam • Midwest Grain Processing Plant (1): $12.91/1,000 lbs of Steam • Indiana Hospital (2) $12.97/1,000 lbs of Steam • Kentucky Regional Medical Center $13.00/1,000 lbs of Steam • Indiana Hospital (3) $13.05/1,000 lbs of Steam • Indiana Alcohol Production Plant: $13.05/1,000 lbs of Steam • Indiana Hospital (4) $13.11/1,000 lbs of Steam • West Central Indiana Hospital $13.82/1,000 lbs of Steam • Midwest Food Processing Plant$13.92/1,000 lbs of Steam The range above is only $1.17/1,000 lbs – not much. However, using 5,000 lbs of steam per hour average as a basis, a difference of $1.17 can mean an extra $51,000 in operating expenses a year. Do you know where you fall on the above list?

5. Want Another WIIFM?(aka “Here Comes the Government”) • On June 26, 2009, the U.S. House of Representatives passed H.R. 2454, otherwise known as the American Clean Energy and Security Act of 2009. • Title III of the bill, designated “Reducing Global Warming Pollution” will likely have the greatest impact on business. • The list of regulated greenhouse gases (GHGs) includes carbon dioxide, methane and nitrous oxide (among others). • The bill specifically targets the largest industrial businesses with the current energy consumption target of 300 billion BTUs annually. • Although hospitals are likely not covered, it is probable that this target will decrease/become more stringent over time. • Emissions regulations will be facilitated through a “cap and trade” system. Emitters will be provided with GHG credits. If you need more to cover emissions, you buy them from a company who didn’t use all they were allocated or from a government auction. • You want to be the seller in this scenario!

6. Although Sometimes the Government can Provide You with Assistance New Energy Efficiency Grant Program To Launch March 15 • Program Makes Over $4 Million in Grants Available to Indiana Health Care, Higher Education, Small Business and Non Profits • (Indianapolis)--- Lt. Governor Becky Skillman announced the availability of over $4 million in competitive grants for energy efficiency upgrades.  Indiana Small businesses, health care facilities, institutions of higher education and non profit agencies are all eligible to apply for the grants.  The program will make grants up to $100,000 for any energy efficiency retrofit project available with a 50% local match. • Although this opportunity has ended, you can monitor http://www.energy.in.gov/ for future grant opportunities.

7. Great Information, But What Can We Do? • One solution is sufficient whether you want to be Green or you want to Reduce Costs. • A steam system assessment will help you identify which steam system savings opportunities meet your specific return on investment requirements. • A steam system assessment is designed to help you find opportunities to save money. It is not intended to make the hospital look bad for poor operation. • You are not alone, until relatively recently most facilities used more energy than necessary because it was relatively cheap. • But times are changing, and you want/need to devote as little resources as possible to utilities production. • A steam system assessment can help you identify and implement the most attractive energy savings opportunities at your facility, and not waste time on those without sufficient payback.

8. What is a Steam System Assessment? • Your specific facility will be modeled using Department of Energy Tools, procedures and best practices:

9. What is a Steam System Assessment? All areas of the facility are reviewed as appropriate for opportunities to save energy and/or water.

10. What will I learn about my system? • Final report includes a detailed analysis of your facilities current operation. • Operating Costs • Annual Natural Gas Cost: $168,000/Year • Annual Make-Up Water Cost: $3,000/Year • Annual Operating Cost (Exc. Elect.) $171,000/Year • Emission Estimates • Carbon Dioxide Emissions: 1,907,000 lbs/Year • SOx Emissions: 0 lbs/Year • NOx Emissions: 2,000 lbs/Year • Utility Balance • Average Natural Gas Consumption: 1,873 S. Cubic Foot/Hour • Make-Up Water 66 Gallons/Hour • Steam Production (Annual Average): 1,600 lbs/hour • Steam Cost • Marginal Steam Cost: $13.30/1,000 lbs

11. What types of savings opportunities could an assessment identify? • Use High Efficiency Hot Water Heater to Generate Domestic Hot Water • The enthalpy of 40 psig steam is 1,175.9 BTU’s/lb, while 184oF condensate’s BTU value is 152.0 BTU/lb for a net of 1,023.9 BTU’s/lb. At a consumption rate of 318 lbs/hour this equates to 325,600 BTU/hr or 2,852 MMBTU/yr for 8,760 hours of operation. As a point of comparison, this would indicate that about 650 gallons/hour of 120oF water is consumed (11 gallons/minute or 5.7 MM Gals/yr). • The hospital is currently paying $10.25/MMBTU for natural gas. Therefore, if a 100% efficient hot water heater was used, the cost to generate the necessary hot water would be 2,852 MMBTU/yr x $10.25/MMBTU = $29,200/yr. At 99.7% efficiency this results in an annual cost of $29,300/yr. Therefore, annual savings = $37,050 - $29,300 = $7,750/year. • Gas Savings: $7,800/Year (4.6%) • Water Savings: $140/Year (4.6%) • CO2 Emissions Reduction: 88,500 lbs/Year (4.6%) • NOx Emission Reduction: 100 lbs/Year (4.6%)

12. What kind of savings opportunities might an assessment identify? • Total Estimated Project Savings • Estimated total savings includes synergies between projects (i.e. blowdown heat exchange and combustion economizer are not directly additive): • Natural Gas Savings: $44,000/Year (26.2%) • Water Savings: $2,000/Year (47.3%) • CO2 Emissions Reduction: 500,000 lbs/Year (26.2%) • NOx Emissions Reduction: 500 lbs/Year (26.2%)

13. Steam System AssessmentExample Project Savings • Specific Savings Opportunities Have Included: • Boiler Combustion Efficiency Improvement • $45,000/Year • Boiler Flash Steam Recovery • $80,000/Year • Economizer Project • $45,000/Year • Boiler Fuel Conversion • $140,000/Year • Boiler Combustion Air Project • $21,000/Year • Boiler Room Insulation Project • $12,000/Year

14. Steam System Assessment Focus Areas • Boiler Combustion Efficiency Determination • Boiler Combustion Efficiency Improvement Recommendations • Combustion Air Source Option Review • Economizer Applicability • Reverse Osmosis/High Purity Water System Savings • Blowdown Heat Exchange Applicability • Steam Trap Survey & Repair Savings Estimates • Personalized Steam System Insulation Table • Personalized Steam System Leak Repair Table • System Savings Opportunities (Autoclaves, Etc.) • Condensate Return • Domestic Hot Water System Savings Opportunities • Qualitative Review of Appropriate Metering • Advice on Steam System Safety Issues and Concerns • Basic Review of Water Treatment Systems

15. Thank You! • If you would like to find out more about having an assessment performed at your facility please contact: Rock R. Kaiser US DOE Qualified Steam System Energy Expert Sustainable Steam & Water Solutions, Inc. rkaiser@hughes.net (765) 720-1330 • Thank you for your attention, and let me know how I can assist you with your energy, water and emission reduction goals.