Objetivos del Seminario

1. Introduction to Energy Savings Performance ContractingJuan C. Patino Peralta, PE, MBA ,PMP,CEM,LEED AP

2. Objetivos del Seminario • Discutir algunos conceptos importantes sobre la industria y la energía. • Discutir el concepto de Energy Savings Performance Contracting (ESPC). • Entender los potenciales beneficios de un proyecto de este tipo. • Ver a fondo un proyecto real y discutir sus resultados.

3. Energía y el Futuro

4. Energia • A commodity is a good for which there is demand, but which is supplied without qualitativedifferentiation across a market. It is fungible, i.e. equivalent no matter who produces it. Examples are petroleum, notebook paper, milk or copper.

5. Energia Se ha convertido en un riesgo por el aumento y la variación en el precio.

6. Energía y el Futuro The Future of Corporate Energy Management • Global Business Network (GBN), a member of the Monitor Group, in cooperation with the U.S. Environmental Protection Agency (EPA), gathered senior executives from twenty major U.S. companies to consider the potential energy impacts that U.S. businesses may face over the next decade. Based on four plausible scenarios of the world in 2020, the report Energy Strategy for the Road Ahead identifies a set of strategies that will help businesses act now to prepare for future energy-related risks.

7. Energía y el Futuro • “As business leaders, it is essential that we plan for the future. Energy Strategy for the Road Ahead provides guidance to help companies prepare for future energy-related risks. Acting now just makes good business sense.” — Willie Deese, President, Merck Manufacturing Division, Merck & Co., Inc.

8. Energía y el Futuro • Considering changes in global economic patterns and shifts in U.S. policy and regulation towards climate change as key factors that would affect the shape of the future ahead, the following four scenarios were created by the corporate executives who participated in the GBN workshops

9. Escenarios para Planificar el Futuro • The Same Road — where the world continues much in the same direction it appears to be going now in regard to energy and environmental concerns around climate change. • The Long Road — where the world undergoes a significant shift in the economic, geopolitical and energy centers of gravity. • The Broken Road — where the world continues much in the direction of today, but is then hit by a severe event that overturns established systems and rules. • The Fast Road — where reasoned decisions and investments about energy and climate risk are made early enough to make a difference. • Source: http://www.energystar.gov/index.cfm?c=business.bus_energy_strategy_future

10. Businesses leaders involved in the workshops were asked to explore the impacts of these four “road” scenarios on energy strategy and management in their companies. They identified five robust steps that companies should take to prepare for the future

11. Plan para el Futuro • Master the fundamentals of energy efficiency. • Take both a longer and a broader view of investments and strategic decisions about energy. • Search out business transformation opportunities in the way the company manages, procures, and uses energy. • Prepare contingent strategies for emergent future scenarios. • Take personal action. • Source: http://www.energystar.gov/index.cfm?c=business.bus_energy_strategy_future

12. Energy Conservation Vs. Energy Efficiency

13. Energy conservation is any behavior that results in the use of less energy – behavioral change. Energy efficiency is the use of technology that requires less energy to perform the same function – technological change.

14. Energy efficiency is defined as using less energy to provide the same level of service. Some examples of energy efficiency are better insulation of buildings, using energy saving light bulbs, buying cars with better gas mileage. Energy efficiency is achieved primarily by means of a more efficient technology or processes rather than by radical changes in individual behavior.

15. Energy Savings Performance Contract

16. ¿What is an Energy Savings Performance Contract? • An ESPC is a partnership between a Federal agency and an energy service company (ESCO). The ESCO conducts a comprehensive energy audit for the Federal facility and identifies improvements to save energy. In consultation with the Federal agency, the ESCO designs and constructs a project that meets the agency's needs and arranges the necessary financing. . Source: http://www1.eere.energy.gov/femp/financing/espcs.html

17. What is an Energy Savings Performance Contract? • Energy Savings Performance Contracting (ESPC) is a method for developing and implementing a comprehensive project, which may include energy efficiency, renewable energy, distributed generation, cogeneration or combined heat and power, and/or water efficiency measures. http://www1.eere.energy.gov/wip/solutioncenter/financialproducts/ESPC.html

18. What is an Energy Savings Performance Contract? • A performance-based procurement method and financial mechanism for building renewal whereby utility bill savings that result from the installation of new building systems (reducing energy use) pay for the cost of the building renewal project. Source: http://energyperformancecontracting.org/

19. ¿Como funciona? • A planning agreement is signed • An IGA is performed • Owners approves measures • An ESA is signed • The project is implemented • M&V Verification are performed • Payments are made to financier • Annual reconciliation Source: Performance Contracting Expanding Horizons, Shirley J. Hansen

20. Métodos para manejar los ahorros Ahorros Compartidos Vs. Ahorros Garantizados

21. Flujo de Efectivo Ahorros Compartidos CLIENTE BANCO Financing Loan Payment Share of Savings ESCO Contracted Services Source: Performance Contracting Expanding Horizons, Shirley J. Hansen

22. Ahorros Compartidos • Customer and Esco share a predetermined % split of the energy cost savings • ESCO carry the financing risk • Financing for the customer is often off balance sheet • Equipment is owned by the ESCO • ESCO carry performance and credit risk • The economic feasibility rests on the price of energy Source: Performance Contracting Expanding Horizons, Shirley J. Hansen

23. Flujo de Efectivo Ahorros Garantizados CLIENTE Contracted Services Loan Payment Savings Guaranteed Financing ESCO BANCO Source: Performance Contracting Expanding Horizons, Shirley J. Hansen

24. Ahorros Garantizados • The amount of energy saved is guaranteed. • Value of energy saved is guaranteed to meet debt service obligations down to a stipulated floor price. • Owner carry the credit risk. • Risks to owners and ESCOs are less than with shared savings. Source: Performance Contracting Expanding Horizons, Shirley J. Hansen

25. Presupuesto Anual

26. Savings Total Energy + O&M Cost Savings ESCO Payment Energy + O&M Energy + O&M Agency Cash flow ($) During ESPC Before ESPC Flujo de efectivo

27. Equip performance, model assumptions, etc. weather, energy prices, etc. ESCO Payment ESCO Payment + = + = Savings Energy + O&M Energy + O&M Energy + O&M Agency Cash flow ($) Typically fixed Before ESPC During ESPC Flujo de Efectivo Ajustado

28. Comparación de Métodos

31. Case Study

32. Case Study Doctors’ Center Hospital Inc. Carretera #2 Km 47.7 Manati, PR 00674

33. Metas del Proyecto • Reduced energy consumption and operating costs • Provide a healthy, safe and comfortable environment • Improve hospital patient and guest comfort • Provide a long term plan for preventive and repair maintenance • Enhance personnel development and training • Provide financial solutions with guaranteed results • Provide 25% extra cooling capacity for future expansion • Provide over $301 thousand dollars of positive yearly cash flow

34. Perfil del Hospital • 220 Camas • 250,000 pies cuadrados • 11,416,680 Kwhrs por año • Total de galones anuales-8,459,558 • Empleados 990 • Visitantes Diarios 525 • 365 Dias

35. Perfil del Hospital Tarifas Electricas • 1er Bloque $0.028/kwh • 2do Bloque $0.024/kwh • Carga Contratada 1,100 Kva • Costo Carga Contratada $7.70/Kva • Costo Exceso $9.60/Kva • Costo de Energia $0.035/kwh • Costo de combustible $0.124/kwh

36. Perfil del Hospital Costos de Agua Potable • Fijo $274.96 • Bloque 1 $2.80/mc • Bloque 2 $2.93/mc • Bloque 3 $3.50/mc

37. Technical Solution • ECM 1: HVAC Improvements • ECM 2: Lighting Retrofit • ECM 3: Domestic Water Retrofit • ECM 4: Energy Management System

38. ECM 1: HVAC Improvements

39. ECM 1: HVAC Improvements

41. ECM 1: HVAC Improvements 1.1 Replace Air-Cooled Chiller with Energy Efficient Chiller • The air-cooled chillers currently serving the Main Hospital, Emergency Center and Dialysis Center are not energy efficient. The units serving the Emergency Center and the ICU area are past their expected useful lives. Although the units serving the surgical units and portions of the main hospital are only 10 years old, the measured energy efficiency of these units is poor.

42. ECM 1: HVAC Improvements • Demolish two (2) 50-ton air-cooled chillers, associated chill water pumps, and associated de-super heater units serving the ICU Area. These units were located on the roof the ICU center.

43. ECM 1: HVAC Improvements • Demolish 80-ton air-cooled chiller, associated chilled water pumps, and associated de-super heater units serving the Emergency Center. This unit is located adjacent to the engineering building between the Emergency Center and the main hospital building.

44. ECM 1: HVAC Improvements • Demolish Existing Pumps serving 125-tons chillers located adjacent to new surgical building.

45. ECM 1: HVAC Improvements • Demolish existing pumps serving 100-tons chillers located on roof of new patient rooms

46. ECM 1: HVAC Improvements • Install one (1) 270-ton air cooled high efficiency chiller with a variable frequency drive to be located in same area as existing 80 ton unit.

47. ECM 1: HVAC Improvements • Replace Air Cooled Direct Expansion Coils with Chilled Water Coils • Several roof mounted air handlers have been removed from the chilled water system and have had direct expansion coils installed in their place. Additionally, as cooling requirements have increased at the facility, due to expansion, roof mounted direct expansion packaged units have been installed to serve the increased loads. In order to increase the energy efficiency of the cooling systems, the DX coils were replace in the roof mounted air handler units with chill water coils. • Replace existing DX coil in air handler AHU-82 serving the Admissions area. • Replace existing DX coil in air handler AHU-84 serving the Admissions area. • Replace existing DX coil in air handler AHU-31 serving the Old ER area. • Replace existing DX coil in air handler AHU-49 serving the ER Lounge area. • Replace existing DX coil in air handler AHU-73 serving the Laboratory area. • Replace existing DX coil in air handler AHU-42 serving the Nursery area. • Replace existing DX coil in air handler AHU-48 serving the Pediatrics area.

48. ECM 1: HVAC Improvements

49. ECM 1: HVAC Improvements • Install Primary-Secondary Chill Water Pumping System • The existing chilled water pumping system is a constant volume pumping system. • In this type of arrangement, chilled water is bypassed around the chill water coils when chilled water loads are below design capacity.

50. ECM 1: HVAC Improvements • Chilled water returning to the chiller is lower than design conditions in this arrangement. • This has a negative effect on the efficiency of the chilled water system. • Additionally, the energy consumed by the chilled water pumps is constant, regardless of the system cooling load. • A primary, secondary pumping system allows the power used in the chill water distribution to modulate with the system cooling load, resulting in reduced power consumption