At a Glance
Industrial Goods and Manufacturing
Commercial Energy Efficiency, Data Analysis
Falls Church, VA
Jordan Smith helped Northrop Grumman expedite the implementation of alternative finance mechanisms to initiate new projects in order to meet annual targets for emissions reduction.
One of the main initiatives of the 2018 EDF Climate Corps Fellowship at Northrop Grumman was to develop a process for identifying, tracking, and potentially retiring underutilized server assets across the enterprise. The primary targets were individual program servers which are not centrally managed by the Enterprise Services information technology (IT) organization. The motivation for this project was the potential opportunity to capitalize on retiring underutilized servers to drive energy efficiency, greenhouse gas reductions, and cost savings to the business sector; all through an initiative that would not require upfront capital investments.
As this was being implemented, EDF Climate Corps fellow Jordan Smith worked on a number of energy service agreements, which consisted of developing proposal request documents, reviewing submissions, and refining financial analysis tools. The objective of these efforts was to expedite the implementation of these alternative finance mechanisms to initiate new projects across Northrop Grumman in order to meet annual targets for emissions reduction.
The primary obstacle to improving server management was the identification of underutilized assets. Given the size of the organization, program-specific assets are geographically dispersed and overseen by a number of different technology program managers within each separate business sector.
Fact finding discussions with IT Directors in the company’s business sectors were used to determine relevant server management procedures in place. Internal databases were used to identify the program managers responsible for the different program servers. Discovery interviews with each program manager revealed those servers that were active, and those which were eligible for retirement or repurposing. The initiative has been transitioned to the Enterprise Services IT organization to manage enterprise-wide, and has been institutionalized to ensure it is repeated on an annual basis. Measures are also currently underway to extend these practices to additional areas within Northrop Grumman that will further scale the benefit to the company.
Smith was actively involved in the execution of new energy service agreements at multiple Northrop Grumman locations, and assisted with the development of standard analysis tools and scope of work templates for use in soliciting external bids for various energy efficiency initiatives across the company. Modeling tools were refined in order to evaluate aspects of project financing, structure, risk, performance, cost savings, and emissions reductions. These efforts produced a standardized method of requesting external bids, comparing proposals, and benchmarking key metrics, accelerating the pace at which the projects could be evaluated. This helped to reduce the time associated with presenting recommendations to stakeholders and decision makers in management.
These initiatives are significant because they require no upfront investment to achieve energy efficiency, greenhouse gas reductions, and cost savings for Northrop Grumman. Together, these projects would decrease Northrop Grumman’s total annual electricity use by an estimated 0.9% (11,000 MWh) and reduce total greenhouse gas emissions by 0.8% (4,100 MT CO2-e). They also yield an estimated $1 million in annual cost savings with an expected net present value of $15.9 million.
The recommendations for improving server management will benefit from an enterprise-wide approach to more efficiently manage technology assets after program use. Implemented across all proposed areas, these efforts have the potential to retire hundreds of program servers within the first year of introduction. Going forward, the initiative is projected to conserve 1,800 MWh of electricity on an annual basis, translating to emissions reductions exceeding 700 MT CO2-e per year. The server management program is projected to result in annual savings of nearly $400,000 from 2019-2028. After accounting for annual cost savings and cost avoidance from server redeployment, the project has an expected net present value exceeding $8 million.
Energy savings generated from energy service agreements are financed through investment partners who recover their investment by receiving a percentage of future savings to Northrop Grumman, and therefore no capital investment is required. Combined, these energy service projects represent an estimated $610,000 in annual cost savings, decreased power consumption of 9,120 MWh, non-electricity energy savings of 1,550 MMBtu, emissions reduction of 4,410 MT CO2-e and net present value of $7.9 million.