City of Austin
At a Glance
Commercial Energy Efficiency, Engagement and Behavior Change, Financial Evaluation and Planning, Sustainability and Energy Management Strategy
Kushal Malvania worked with the City of Austin (COA) Parks & Recreation Department (PARD) to design a financial analysis blueprint that helps to determine a suitable funding mechanism for implementing energy efficiency projects.
COA is a recipient of the Bloomberg American Cities Climate Challenge to reduce GHG emissions from the municipal buildings category. Interested in utilizing external or market financing mechanisms to tackle this challenge, PARD enlisted EDF Climate Corps fellow Kushal Malvania to explore funding options, determine their procurement process, and recommend a financial management practice to more effectively implement retrofitting and retro-commissioning projects.
Malvania held interviews with key stakeholders from the city departments of financial management, engineering and operations, and sustainability to understand the challenges and barriers to funding efficiency projects at PARD. He also conducted market research and connected with providers of energy financing mechanisms in the public sector to understand the benefits and disadvantages of obtaining these mechanisms. Using this research and understanding the requirements of stakeholders, Malvania developed a decision-making model to assess the profitability of various financing options based on the size and type of energy project. The resulting Discounted Cash-Flow (DCF) analysis model includes:
- Total fixed and variable costs of implementing a project
- Annual savings and other cash inflows
- Financing term, interest rates, and annual net payments
- Net Present Value (NPV), Internal Rate of Return (IRR), and payback period
Additionally, Malvania created a framework to help integrate best management practices into energy project planning at PARD. Using EDF’s Virtuous Cycle of Strategic Energy Management as a baseline, he recommended a circular process to help overcome the management challenges of funding efficiency projects.
Malvania’s research and analysis demonstrate the importance of assessing and establishing a strong framework for energy management programs. His findings reveal that the greatest departmental barriers to funding energy efficiency projects are the functional needs approach, absence of a centralized energy management program, and lack of useful data and appropriated budget for energy and sustainability projects. The financial management solutions Malvania developed and recommended to overcome these barriers provide stakeholders of PARD and other city departments with the necessary tools and resources to make better decisions for energy projects.