EDF Climate Corps fellow | April 17, 2013
“Knocking down a brick wall by yourself with your bare fists is next to impossible. But organize a team equipped with sledgehammers and a plan, and it gets a whole lot easier,” said Gwen Ruta in a Fast Company Op-Ed explaining the concept behind EDF Climate Corps.
This blog post is the 11th in a series, highlighting our team of ‘sledgehammers’ – the 2012 EDF Climate Corps fellows– and their plans for breaking down the barriers to energy efficiency at their host organizations.
Name: Bret Collazzi
Host Organization: Grubb Properties
School: Cornell University Samuel Curtis Johnson Graduate School of Management
Opportunity: Grubb Properties, a real estate investment, development and management firm wanted to investigate energy efficiency opportunities at its 3,000 North Carolina apartment complexes and one million square feet of commercial office and retail space.
Solutions Identified: As an EDF Climate Corps fellow at Grubb Properties, Collazzi worked on dozens of energy and cost-saving projects. One of his most interesting projects included recommendations for reducing the cooling load of 80 tons worth of HVAC units and picking greener replacements for them.
Potential Savings: Ultimately, the energy efficiency opportunities Collazzi helped uncover included lighting upgrades, digital control systems, hyper-efficient swimming pool pumps and more. Together, his recommendations could cut annual costs by $65,000, paying for themselves in less than five years and saving enough energy to power 50 homes a year.
Quote: “There’s no shortage of reasons for property owners to get excited about energy efficiency: boosting cash flows, hedging utility hikes, improving tenant comfort and reducing carbon emissions, to name a few. But here's one more: energy efficiency is cheap and abundant, right now. Forward-thinking real estate firms and their investors ought to embrace it and get their slice of the trillion-dollar-pie now, while they still can.”
Name: Randy Armstrong
Host Organization: Procter & Gamble Company
School: Yale University School of Management
Opportunity: Procter & Gamble hired Climate Corps fellow, Randy Armstrong to review their Duracell plant in LaGrange, Georgia for efficiency opportunities.
Barrier: The Procter & Gamble Duracell plant was well on its way to optimal energy efficiency when Armstrong arrived. The plant recently upgraded its Building Automation System (BAS), started a compressed air management program and retrofitted its offices with occupancy sensors. The plant was even installing a white roof with six inches of insulation. P&G hired an energy services company to review the plant for efficiency opportunities, but found that none of the recommended upgrade opportunities met the company’s payback requirements.
Solutions Identified: After wondering where to look for more savings, Armstrong discovered a simple answer – scrutinize existing building systems. He found a number of cost-saving opportunities, listed below.
- Recent shifts in the plant's operating hours, for example, meant that some BAS zones were improperly scheduled.
- The economizers had also been set to open only at extremely low temperatures because of humidity concerns – the humidity sensors that were already in place could be modified to open at higher temperatures, fixing the problem.
- Due to compatibility issues, there were several areas of the plant not covered by the BAS, a gap easily solved by giving each space its own programmable thermostat.
- Recent changes on the manufacturing floor put plant lighting out of sync with production zoning – a bit of re-wiring and switch installation reduced the lighting loads even further.
- A multi-stage cooling tower was recently installed to replace an inefficient single stage tower, but the “stages” of the new cooling tower had been calibrated at the same level as the old tower, effectively negating the staging effect.
Quote: “It turned out that with such a good base of projects already completed or underway, the LaGrange plant was not in need of a high-level review. Instead, to eke out that last little bit of energy savings, its existing systems just needed some fine tuning.”
Name: Jenny Kim
Host Organization: Los Angeles Department of Water and Power (LADWP)
School: Nicholas School of the Environment, Duke University
Opportunity: Kim had the opportunity to work with LADWP in improving energy efficiency at nonprofits.
Barrier: Nonprofits oftentimes lack funding and dedicated staff for energy retrofits.
Solutions Identified: LADWP had an ARRA-funded energy efficiency and water conservation program, which covered up to 100 percent of retrofit costs for local nonprofit organizations. The reimbursement checks averaged $20,000 and covered a wide range of energy efficiency measures, including efficient lighting, HVAC, double pane windows, and cool roofs. The program, now closed, offered enhanced rebates to eligible organizations. Kim continued the efforts of LADWP in the nonprofit realm by developing a social and productivity network for organizations, which allows nonprofits leaders to share best practices, programs and resources. Most importantly, it enables them to participate in a dialogue on energy efficiency.
Quote: “LADWP is the nation’s largest publicly-owned utility, and the impacts of its nonprofit work ripple beyond the Los Angeles area. We're hoping that other utilities can learn from what we've done.”
Name: Phillip Lai
Host Organization: Staples
School: Nicholas School of the Environment, Duke University
Opportunity: Staples was interested in expanding its usage of renewable energy by installing solar PV systems.
Barrier: Solar PV systems come with large up-front capital costs, and financing agreements to overcome these up-front costs can also be complex.
Solutions Identified: Solar power purchase agreements (SPPAs) are a great way for companies to enjoy the use of solar energy without the up-front capital costs of buying a solar PV system. In an SPPA, the customer agrees to purchase electricity generated by a solar PV system that is installed on their location but is owned and maintained by a vendor. Though they sound simple, SPPAs tend to be complex, long-term commitments. After researching industry best-practices for entering SPPAs, Lai learned that there are three important factors that determine the success of a project.
- Location, Location, Location - Obviously, locations that receive a lot of sunshine are ideal for solar PV installations. But, in addition to climate, it’s important for a site to be located in a state with favorable solar incentives such as renewable portfolio standards and tax credits. These incentives are an integral part of the solar industry’s business model and impact the electricity rate of the SPPA. The more incentives there are for vendors to recoup their costs, the more competitive the rates that they can offer you.
- Size Does Matter – With net metering programs, you can sell excess electricity that your building doesn’t use back to the grid. Utilities typically buy back electricity at retail rates (i.e. the rate that you pay when you buy electricity from them). Since you’re not paying for the up-front capital costs, if the rate you’re paying for solar is less than the utility retail rate, then installing the largest possible solar PV system might seem like a good idea. However, utilities typically only offer to buy back electricity at the retail rate up to the amount of electricity that you buy from them. Beyond that point, additional electricity that you sell back, called net surplus generation, is sold at a lower wholesale rate or even forfeited depending on state regulations. Therefore, it is important to understand the load profile of your building and choose a solar PV system size that avoids net surplus generation.
- The Price is Right – A common mistake when evaluating the SPPA rate is to compare it to the “bundled” utility rate – i.e., the total cost of the utility bill divided by the total amount of kilowatt hours (kWhs) consumed. However, the “bundled” rate actually inflates the per-kWh rate because there are components of the utility bill such as customer charges and peak-demand charges that are not based on kWh consumed.
It is important to understand the true per-kWh charges to compare to the solar rate. A solar PV system will also lower peak-demand charges, so those savings must be accounted for as well. The actual reduction in peak-demand, however, will vary based on a building’s load profile.
Another common feature of SPPAs is an annual escalation rate. Since SPPA’s are long term contracts, the escalation rate is used to account for future increases in electricity prices. It is important to compare this escalation rate to a credible forecast of future prices for reasonableness. Alternatively, you can consider a SPPA with a variable rate that is indexed to your utility rate.
Potential Savings: Lai identified $100,000 of solar generation credits that Staples qualifies for.
Quote: “Getting the location, size and price right will go a long way towards ensuring the success of any SPPA project.”
Name: Purvi Patel
Host Organization: AT&T
School: Columbia University Graduate School of Business
Opportunity: AT&T wanted to find a way to change the day-to-day energy-use behavior of its property managers.
Barrier: AT&T has a massive portfolio of real estate – thousands of facilities of all shapes, sizes and functions, and AT&T's property managers have difficulty keeping track of how those facilities consume energy because they are so busy with their extremely complex day-to day operational responsibilities.
Solutions Identified: Patel recommended installing real-time energy dashboards that can be viewed onsite or remotely via an “energy cloud,” which will help property managers understand the local impact of their energy use decisions. Perhaps most importantly, the dashboards display information in a way that's easy to understand quickly. That means that managers don't have to spend much time deciphering energy use data, so their current responsibilities don't have to suffer when they pay more attention to energy use. This could transform their energy use behavior. If installed, the dashboards would:
- Enable property managers to optimize energy use at the buildings in their care
- Display real-time energy use to all levels of management
- Enable managers to prioritize portfolio-wide budget decisions
- Inspire property managers to take ownership of their energy use
- Improve managers’ ability to monitor energy use, ensuring that efficiency investments are continue to make the returns promised
Potential Savings: Patel’s dashboard-installation plan for AT&T could save up to 5 percent of electricity consumption and costs at 600 locations.
Quote: “I look forward to the wealth of opportunities the dashboards and cloud will provide to AT&T managers. They will increase the utility of existing building management systems, translating and organizing large volumes of complex data into simple, easily understandable graphics. For a facilities portfolio as big as AT&T's, this will redefine the possibilities in energy management.”
About EDF Climate Corps
EDF Climate Corps (edfclimatecorps.org) taps the talents of tomorrow’s leaders to save energy, money and the environment by placing specially-trained EDF fellows in companies, cities and universities as dedicated energy problem solvers. Working with hundreds of leading organizations, EDF Climate Corps has found an average of $1 million in energy savings for each participant. For more information, visit edfclimatecorps.org. Read our blog at edfclimatecorps.org/blog. Follow us on Twitter at twitter.com/edfbiz and on Facebook at facebook.com/EDFClimateCorps.
About Environmental Defense Fund
Environmental Defense Fund (edf.org), a leading national nonprofit organization, creates transformational solutions to the most serious environmental problems. EDF links science, economics, law and innovative private-sector partnerships. For more information, visit edfbusiness.org. Read our blog at blogs.edf.org/business. Follow us on Twitter at twitter.com/EDFbiz.