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Finance workshop Session 1 - Project Financing and Project Opportunities

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  • 1. EFFICIENCY FINANCE WORKSHOPS Session 1. Project Financing and Project Opportunities A Groundbreaking High-Performance Building District in Downtown Seattle
  • 2. Performance TargetsThe 2030 Challenge for PlanningExisting Buildings10% 50% reduction in 20% water 35% consumption 50% + 50% reduction in Vehicle Miles Traveled (VMT) for auto and freight
  • 3. STATEMENT OF ENERGY PERFORMANCE Seattle 2030 District Office Building Building ID: 0000000 For 12-month Period Ending: Dec 31, 20121Date SEP becomes ineligible: N/A Date SEP Generated: Jan 20, 2013FacilitySeattle 2030 District Office Building2030 DistrictSeattle, WA 98104Year Built: 1987Gross Floor Area (ft2): 350,000Energy Performance Rating2 (1-100) 60Site Energy Use Summary3Electricity - Grid Purchase(kBtu) 22,866,666Natural Gas - (kBtu)4 11,433,334Total Energy (kBtu) 34,300,000Energy Intensity5Site (kBtu/ft2/yr) 98Source (kBtu/ft2/yr) 252Emissions (based on site energy use)Greenhouse Gas Emissions (MtCO2e/year) 3,233Electric Distribution UtilitySeattle City LightNational Average ComparisonNational Average Site EUI 110National Average Source EUI 283% Difference from National Average Source EUI -11%Building Type Office/Retail
  • 4. S2030D Preliminary Assessment results savings $$ operational savings 20% - $ 52,185 system upgrade savings 60% - $ 156,556 shell improvement 20% - $ 52,185 savings water savings $ 9,736 cost $$ operational costs 4% - $ 65,232 - payback – 1.25 years system upgrade costs 43% - $ 782,781 - payback – 5 years shell improvement costs 53% - $ 974,476 - payback – 18.75 years water improvement costs $ 68,152 - payback – 7 years
  • 5. General Funding Guidelines• Pre-approval required SCL Commercial & Industrial kWh – Bring your ideas, even before the project Savings Breakdown has been clearly defined – Site visits can help assess opportunities Other HVAC 19% 20%• Incentive amount – based on total energy saved and Refrigeration measure life 8% – Funding capped at 70% of total cost (SCL and PSE)• Post-Installation – Inspection to confirm equipment and Lighting operation; may require trend-logs or 53% metering – As-built conditions used to calculate final savings - and -
  • 6. Technical Assistance• Site Visits – Recommendations for energy conservation and O&M measures – Identify measures that qualify for financial incentives – Review/assess bids for funding• Energy Analysis Assistance (SCL) – Funding for in-depth energy analysis done by a consultant or a design team – Ranked recommendations by cost/benefit analysis• Lighting Design Lab Assistance – Design assistance and mock-up services – Education and training - and - 8
  • 7. Prescriptive Rebates (SCL and PSE)• Fixed amount per unit• Pre-authorization required• Typical Rebates – Occupancy sensors for lighting (SCL, PSE) – Commercial kitchen equipment (SCL, PSE) – IT server virtualization (SCL) – PC power management and thin Client (SCL, PSE) – HVAC equipment (PSE) - and - Conserving Today. Sustaining Tomorrow. 9
  • 8. Standard Incentives (SCL)• For common measures in existing buildings – Lighting retrofits (fluorescents, exit signs, LEDs, etc) – Lighting controls (central and OS) – Chillers (air and water cooled) – Air conditioners (Standard, CRAC, and PTAC) – Heat pumps (air to air, hydronic, and PTHP) – VSDs for Fans and Pumps• Pre-formatted workbooks – Estimates savings and incentives – Can be filled in by contactors, customers or SCL energy analyst, step by step instructions – Contains all documents required, download via web - and - Conserving Today. Sustaining Tomorrow. 10
  • 9. Custom Incentives (SCL and PSE)• Customized calculations for non- routine measures – Typically includes multiple systems – May require pre-monitoring to determine baseline• Incentive based on savings and measure life• Numerous applications – HVAC (controls, heat recovery, chillers and cooling towers) – Data centers (hot/cold isle) – Special environments (labs, industrial, etc) - and - Conserving Today. Sustaining Tomorrow. 11
  • 10. Potential Incentives – Sample Building Savings % of Savings Savings Savings Savings Total Use kBtu Measure kWh therms $ Utility Rebates Electric Gas Current Energy Use 34,300,000 6,701,836 114,333 Retro- Operational Savings 8.8% 3,018,400 commissioning 884,642 $53,079 System Upgrade Savings 26.4% 9,055,200 Lighting 444,533 $102,243 HVAC 1,333,598 29,882 $306,728 $149,411 Shell Improvement Savings 8.8% 3,018,400 Shell 592,710 10,172 $59,271 $50,860 Total Savings 44.0% 15,092,000 3,255,484 40,054 $521,320 $200,271• Lighting – Prescriptive and standard incentives to upgrade lighting and lighting controls• HVAC Systems and Controls – Standard and/or custom incentives to upgrade equipment and controls• Shell Measures – Custom incentives for insulation, sealing, improved glazing, etc• Retro Commissioning – Enroll building in Retro commissioning program to capture operational savings - and - Conserving Today. Sustaining Tomorrow. 12
  • 11. Contact us to get Started• Please remember to contact us BEFORE you start a project so that we can discuss eligibility and help you with the rebate process • Call us: (206) 684-3800 Seattle City Light Energy Advisors • Email us: SCLEnergyAdvisor@seattle.gov • Visit us online: www.seattle.gov/light/conserve • Call us: (800) 562-1482 Puget Sound Energy Advisors • Visit us online: http://www.pse.com/savingsandenergycenter/ForBusinesses/Pages/Co mprehensive-Building-Tune-Up-Program.aspx - and - Conserving Today. Sustaining Tomorrow. 13
  • 12. Energy Services Contracting A different mindset Design-spec-build Integrated Delivery • Segmentation • Single point of accountability • 1st cost • Total Cost of Ownership • Task/problem driven • Holistic view and deep dive on • Diffused responsibility building systems • Fix the root cause, not the symptom • Guaranteed project outcomes • Cost • Savings • Take advantage of grants and incentives • CPW • P4P/Utility rebates • Low–cost financing
  • 13. Optimizing the Capital Stack Utility Rebates Cash 25% 10% Incentives 15% Debt 50%
  • 14. Energy Services Contracting Financing• ESCO finance• ESCO Brokerage • See handout for cash flows of model building at commercial rates• Property Assessed Clean Energy (Commercial PACE) • Senior lien property tax assessment to fund efficiency measures and/or renewable energy on private commercial property • Concept in infancy, slowly gaining traction • Not available in Washington State at this time• Qualified Energy Conservation Bonds • With enactment of King County’s Green Community Initiative, private property owners will be able to access QECBs for energy efficiency improvements • QECBs enable rates of ~ 2.0%-3.0% and tenors up to 24 years • See King County Green Community Initiative handoutContact: Rachel Brombaugh, rachelb@mckinstry.com, (206) 832-8132
  • 15. The Sustainable Energy Program: Qualified Energy Conservation Bonds and Beyond…Avi JacobsonSenior Sustainable Energy CoordinatorWashington State Housing Finance Commissionavi.jacobson@wshfc.org206-254-5359
  • 16. The Sustainable Energy Program• Introduction• What are QECBs? How Do They Work?• QECB Aggregation Efforts• Green Communities Programs• Sustainable Energy Trust• Conclusion• Questions
  • 17. QECB Aggregation:WSHFC as State QECB Clearinghouse • Washington State: o $67.8M Allocated across WA o ~$32M Issued o In conjunction with WA Department of Commerce, have contacted all jurisdictions with remaining QECB Authority o $27M reallocated to WSHFC, $13.5M+ issued, more promised so far…
  • 18. What is a Green Community Program?Two Required Elements: • Program Purpose • Program goal must be to promote energy conservation, energy efficiency or environmental conservation initiatives related to energy consumption. • General Public Use or Broad Public Availability • Financing must involve either: • Property available for general public use, or • Loan or grant program broadly available to members of the general public.
  • 19. Financing Energy Efficiency Projects: Presented by: Dan Clarkson Energy Efficiency Finance Corp. dclarkson@eefinance.net 206-310-8733
  • 20. Energy Efficiency Pays Off
  • 21. Offer to Building Owner• Energy Services Agreement (ESA)• No upfront capital costs; preserve capital for other purposes• Turnkey implementation by ESCO: engineering, equipment procurement, installation, commissioning, services, savings monitoring, savings guarantees• Grant/incentive funds used for subordinated debt financing, debt service reserve, & carbon reduction incentives• Project paid through operating cost savings; breakeven savings are guaranteed by ESCO• Payments on utility bill reduces risk for investor
  • 22. How it Works Seattle City Light Utility Incentives Energy Services Turnkey Agreement Energy Project Sub- Loan Capital ESCO Customer Solutions CPW Energy supplyIncentive & Reserve Fund Retail Energy Lock Box Utility Steam & EE project payments via ESA Payments Escrow Services Agreement
  • 23. ECS Cashflow Model12000001000000 Retrofit 22% Net Customer Savings800000 Savings ESA Payments600000400000200000 Utility Costs Cumulative Customer Savings 0 Year -3 Year -2 Year -1 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10