0
Advanced Strategies and Analytics
for campus green revolving funds
Part 2 of an AASHE/SEI webinar series on green revolvin...
Rob Foley
Consultant
Sustainable
Endowments
Institute
Speakers
Joe Indvik
Consultant
ICF
International
John Onderdonk
Dire...
Implementation Series
Introductory Guide to
Implementation and Management
January 2013
“Implementation Strategies for Camp...
History of the BDGC
Billion Dollar Green Challenge
History of the BDGC
The Green Revolving Fund Model
1. The fund must finance
measures that reduce resource
use, save energy...
Introduction
Implementation Guide Research Process
Facility Managers
Energy Managers
Presidents
Students
Trustees
CFOs
Sus...
7
Employing M&V
Focus of today’s
presentations
Available at
GreenBillion.org/guide
8
Employing M&V
Upcoming Opportunities
To learn more about Green Revolving Funds
and sustainability in higher education
AA...
Effective M&V
Fund Analytics
Introduction
Using smart data to track,
design, and manage a GRF
9
A Tale of Two Funds
Caltec...
10
Fund Analyticsto evaluate, select, and track projects
11
Fund Analytics
Payback period =
Return on Investment (ROI)
Upfront cost ($)
Annual savings ($/yr)
Annual savings ($/yr)...
12
Fund Analytics
Net Present Value (NPV)
Internal Rate of Return (IRR)
Incorporates cost of capital and risk into discoun...
13
Fund Analytics
Net present what?Telling a good story that everyone can understand
14
Fund Analytics
Sample GRF Portfolio Performance Analysis
15
Employing
Effective M&V
Measurement and verification in a GRF context
16
Employing M&V
The IPMVP is a good place to start
Retrofit Isolation: Key Parameter Measurement
Retrofit Isolation: All ...
17
Employing M&V
18
Employing M&V
Pros
Cons
Considerations
• Increased confidence
• Protection against cost overruns
• Problem detection
• ...
19
Two Funds
How modeling can inform fund design
A Tale of
20
Fund #1 Fund #2
Projects repay 100%
of annual savings
Start with $1M
Total repayment
obligation of 120%
Projects repay ...
21
How do these funds perform
over a 10-year period?
A Tale of Two Funds
22
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
0
1
2
3
4
5
6
7
8
9
1 2 3 4 ...
23
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
0
1
2
3
4
5
6
7
8
9
1 2 3 4 ...
24
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
0
1
2
3
4
5
6
7
8
9
1 2 3 4 ...
California Institute of 
Technology
AASHE Webinar
Advanced Strategies and Analytics
for Campus Green Revolving Funds
26
caltech overview
quick facts:
private research university in Pasadena, CA
• 4.4 Million SF of buildings
• 125 acres in ...
caltech energy conservation investment program (CECIP)
Energy projects are financed from a capital 
revolving fund, the Ca...
Electricity
Gas
Water
CECIP
AB32
utility budget mix
28
37%
59%
4%
2009: $19.7M
Electricity
Gas
Water
CECIP
AB32
utility budget mix
29
2014: $15.6M
34%
36%
6%
18%
6%
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
MWh
fiscal year
1990‐2013
historical power consumption
30
CECIP Prog...
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
MWh
fiscal year
1990‐2013
historical power consumption
31
CECIP Prog...
historical power consumption
non‐CECIP energy drivers
32
110,000
111,000
112,000
113,000
114,000
115,000
116,000
117,000
1...
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
millions
program performance (2009 to present)
33
($9)
($8)
($7)
($6)
($5)
($4)
($3)
($2)
($1)
$0
$1
$2
$3
$4
$5
$6
$7
2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 20...
CECIP projection
35
CECIP Outflows
($9)
($8)
($7)
($6)
($5)
($4)
($3)
($2)
($1)
$0
$1
$2
$3
$4
$5
$6
$7
2009 2010 2011 201...
CECIP projection
36
CECIP Outflows
($9)
($8)
($7)
($6)
($5)
($4)
($3)
($2)
($1)
$0
$1
$2
$3
$4
$5
$6
$7
2009 2010 2011 201...
FY13 total budgeted vs actual (kWh)
37
0
50
100
150
200
250
300
350
400
450
500
0
2,000,000
4,000,000
6,000,000
8,000,000
...
how to make this happen
38
• establish program criteria early
• communicate the go/no‐go factors to the team
• overview of ground‐rules for evaluatin...
what has been done, where is it going
what has been done:
• low hanging fruit has been 
picked up
• campus wide lighting r...
BTU/Hr represents the energy required to heat or cool water
BTU/Hr = 500  x  gpm x  ΔT
500,000
engineering for a minute
=5...
BTU/Hr represents the energy required to heat or cool water
BTU/Hr = 500  x  gpm x  ΔT
500,000
engineering for a minute
=5...
now the important part:
proving it works
43
measure and prove the performance
• CECIP takes measurement and 
verification to another level
• In‐house business process...
one of the ways projects wont payback
45
one of the ways projects wont payback
46
‐$
‐$
‐$
‐$
0
2
4
6
8
10
12
14
16
the adjustments accumulate quickly
N = 132
0
2
4
6
8
10
12
14
16
the adjustments accumulate quickly
N = 132
Take away:  How does operations currently 
track BMS conf...
active energy management (AEM)
Visualizations for efficiency
Y= mx + B
Optimal Operating Line
energy management 
integrated with maintenance
key areas
• building automation warranty 
management
• operating mode valid...
Questions?
Questions?
Rob Foley, Sustainable Endowments Institute
rob@endowmentinstitute.org
Joe Indvik, ICF International...
52
Thank
You!
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Advanced Strategies and Analytics for Campus Green Revolving Funds

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This webinar provides tools and tips for using data, analytics, and modeling to inform the design and management of a green revolving fund.

The presentation is based on Green Revolving Funds: A Guide to Implementation & Management, a co-publication of AASHE and the Sustainable Endowments Institute released in August 2013.

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Transcript of "Advanced Strategies and Analytics for Campus Green Revolving Funds"

  1. 1. Advanced Strategies and Analytics for campus green revolving funds Part 2 of an AASHE/SEI webinar series on green revolving fund implementation October 2, 2013 Rob Foley, SEI Joe Indvik, ICF International John Onderdonk, Caltech Matthew Berbee, Caltech
  2. 2. Rob Foley Consultant Sustainable Endowments Institute Speakers Joe Indvik Consultant ICF International John Onderdonk Director of Sustainability Programs Caltech 2 Insert picture Matthew Berbee Energy Manager Caltech
  3. 3. Implementation Series Introductory Guide to Implementation and Management January 2013 “Implementation Strategies for Campus Green Revolving Funds” Webinar April 2013 Green Revolving Funds: A Guide to Implementation & Management August 2013
  4. 4. History of the BDGC Billion Dollar Green Challenge
  5. 5. History of the BDGC The Green Revolving Fund Model 1. The fund must finance measures that reduce resource use, save energy, or mitigate greenhouse gas emissions. 2. The fund must have a formalized revolving component, so that at least some of the savings from projects are repaid to the fund.
  6. 6. Introduction Implementation Guide Research Process Facility Managers Energy Managers Presidents Students Trustees CFOs Sustainability Directors Interviews Research and Data Greening the Bottom Line 2012 School Case Studies Experience GRF Charters Billion Dollar Green Challenge Consulting Conferences Partner Organizations Second Nature AASHE ACUPCC ICF
  7. 7. 7 Employing M&V Focus of today’s presentations Available at GreenBillion.org/guide
  8. 8. 8 Employing M&V Upcoming Opportunities To learn more about Green Revolving Funds and sustainability in higher education AASHE 2013, next week in Nashville, TN! Green revolving fund events at AASHE include: •A plenary presentation on investing in energy efficiency •A panel on the benefits and varieties of green revolving funds across institutions •A student workshop on pitching a GRF on your campus
  9. 9. Effective M&V Fund Analytics Introduction Using smart data to track, design, and manage a GRF 9 A Tale of Two Funds Caltech Case Study
  10. 10. 10 Fund Analyticsto evaluate, select, and track projects
  11. 11. 11 Fund Analytics Payback period = Return on Investment (ROI) Upfront cost ($) Annual savings ($/yr) Annual savings ($/yr) Upfront cost ($)i.e. rate of return, annual yield Quick, easy, understandable, and commonly used Does not account for cost of capital or volume of savings Can be expressed as annual (here) or lifetime Same disadvantages as payback period Allows comparison with investment returns (with caveats) =
  12. 12. 12 Fund Analytics Net Present Value (NPV) Internal Rate of Return (IRR) Incorporates cost of capital and risk into discount rate Unintuitive Incorporates the time-value of money (i.e. discounting) Unintuitive Allows for use of a “hurdle rate” = = � 𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 𝐒𝐒𝐒𝐒𝐒𝐒 𝐢𝐢𝐢𝐢 𝐲𝐲𝐲𝐲𝐲𝐲𝐲𝐲 𝐭𝐭 $ − 𝐂𝐂𝐂𝐂𝐂𝐂𝐂𝐂 𝐢𝐢𝐢𝐢 𝐲𝐲𝐲𝐲𝐲𝐲𝐲𝐲 𝐭𝐭 $ 𝟏𝟏 + 𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝𝐝 𝐫𝐫𝐫𝐫𝐫𝐫𝐫𝐫 𝐭𝐭 N t=0 Captures total volume of savings Hinges on discount rate Discount rate that sets NPV equal to 0 Does not account for volume of savings
  13. 13. 13 Fund Analytics Net present what?Telling a good story that everyone can understand
  14. 14. 14 Fund Analytics Sample GRF Portfolio Performance Analysis
  15. 15. 15 Employing Effective M&V Measurement and verification in a GRF context
  16. 16. 16 Employing M&V The IPMVP is a good place to start Retrofit Isolation: Key Parameter Measurement Retrofit Isolation: All Parameter Measurement Whole Facility Measurement Calibrated Simulation
  17. 17. 17 Employing M&V
  18. 18. 18 Employing M&V Pros Cons Considerations • Increased confidence • Protection against cost overruns • Problem detection • Performance improvement over time • Cost • Staff time • Advance planning • To measure or not to measure  Institutional politics  Budgeting process  Project size  Technology type • Phase out • Payment ceiling • Rolling metering plan • M&V as investment
  19. 19. 19 Two Funds How modeling can inform fund design A Tale of
  20. 20. 20 Fund #1 Fund #2 Projects repay 100% of annual savings Start with $1M Total repayment obligation of 120% Projects repay 90% of annual savings Total repayment obligation of 100% Slightly more aggressive Slightly less aggressive Finance projects that cost $600k with 3-yr payback A Tale of Two Funds
  21. 21. 21 How do these funds perform over a 10-year period? A Tale of Two Funds
  22. 22. 22 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 0 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 10 F1 Projects F2 Projects F1 Savings F2 Savings Fund #1 Projects Complete Fund #2 Projects Complete Year Projects Savings Modeling Results A Tale of Two Funds
  23. 23. 23 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 0 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 10 F1 Projects F2 Projects F1 Savings F2 Savings Fund #1 Projects Complete Fund #2 Projects Complete Year Projects Savings Modeling Results A Tale of Two Funds R R R R R R R RR R R RRRRRR RRRRRR RRR R R R R R R R R R R R R R R R R R R R
  24. 24. 24 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 0 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 10 F1 Projects F2 Projects F1 Savings F2 Savings Fund #1 Projects Complete Fund #2 Projects Complete Fund #1 Cumulative Savings Fund #2 Cumulative Savings Year Projects Savings Modeling Results A Tale of Two Funds
  25. 25. California Institute of  Technology AASHE Webinar Advanced Strategies and Analytics for Campus Green Revolving Funds
  26. 26. 26 caltech overview quick facts: private research university in Pasadena, CA • 4.4 Million SF of buildings • 125 acres in urban setting • $2.4B replacement value campus population: ~7,000  • 300 faculty; 600 research scholars; 2,200 students; 3,900 employees • Caltech named top university in the world (Times Higher Education) • 31 Nobel Laureates • founders of Intel, DirecTV, Beckman Instruments, MATLAB energy use • 120+ GWH electricity annually  − energy Intensity ~285 MBTU/SF − average UC Campus ~ 180 MBTU/SF • $15M+ annual utility bill challenge: facilitate development of the newest technology and  entrepreneurial spirit of Caltech while minimizing energy consumption
  27. 27. caltech energy conservation investment program (CECIP) Energy projects are financed from a capital  revolving fund, the Caltech Energy Conservation  Investment Program (CECIP). 27 “The cost to the utility budget during a CECIP  project does not change (vs. budget).  What  does change is that a portion goes to utility  bills, and a portion to debt service”  ‐‐ Brewer, M. Caltech, Controller, 2012 Guiding Financial Mantra Capital Revolving Fund Implement ECM Utility Savings
  28. 28. Electricity Gas Water CECIP AB32 utility budget mix 28 37% 59% 4% 2009: $19.7M
  29. 29. Electricity Gas Water CECIP AB32 utility budget mix 29 2014: $15.6M 34% 36% 6% 18% 6%
  30. 30. 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 MWh fiscal year 1990‐2013 historical power consumption 30 CECIP Program Inception 2009
  31. 31. 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 MWh fiscal year 1990‐2013 historical power consumption 31 CECIP Program Inception 2009  ‐  2,000,000  4,000,000  6,000,000  8,000,000  10,000,000  12,000,000  14,000,000 Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug kWh 2008‐2013 2008 2009 2010 2011 2012 2013
  32. 32. historical power consumption non‐CECIP energy drivers 32 110,000 111,000 112,000 113,000 114,000 115,000 116,000 117,000 118,000 119,000 120,000 MWH FISCAL YEAR 100,000 sqft added 5 fume hoods added 64,000 sqft added 102 fume hoods added 47,000 sqft added 45,000 sqft renovated 13 fume hoods added 30,000 sqft renovated 24 fume hoods added campus energy drivers since CECIP inception 211,000 sqft added 192,000 sqft renovated 144 fume hoods added
  33. 33. $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 millions program performance (2009 to present) 33
  34. 34. ($9) ($8) ($7) ($6) ($5) ($4) ($3) ($2) ($1) $0 $1 $2 $3 $4 $5 $6 $7 2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 2019 2020 Millions Paybacks PWP Incentives Original CECIP Model (2009) CECIP projection 34
  35. 35. CECIP projection 35 CECIP Outflows ($9) ($8) ($7) ($6) ($5) ($4) ($3) ($2) ($1) $0 $1 $2 $3 $4 $5 $6 $7 2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 2019 2020 Millions Paybacks PWP Incentives Original CECIP Model (2009)
  36. 36. CECIP projection 36 CECIP Outflows ($9) ($8) ($7) ($6) ($5) ($4) ($3) ($2) ($1) $0 $1 $2 $3 $4 $5 $6 $7 2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 2019 2020 Millions Paybacks PWP Incentives Original CECIP Model (2009) CECIP CASHFLOW
  37. 37. FY13 total budgeted vs actual (kWh) 37 0 50 100 150 200 250 300 350 400 450 500 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 CDD kWh Actual kWh Budgeted kWh 2011 CDD 2012 CDD 2013 CDD
  38. 38. how to make this happen 38
  39. 39. • establish program criteria early • communicate the go/no‐go factors to the team • overview of ground‐rules for evaluating retrofit  opportunities in laboratory and other critical facilities • energy retrofit training requirements • detail project closeout requirements beyond traditional  punch/O&M/warranty • requirements to “prove the efficiency benefit” Projects Must: Exhibit verifiable savings ♦ Contain a plan for periodic  measurement &  verification ♦ Return on Investment  greater than 15% standard operating procedures SOP is an energy retrofit “play‐book” that outlines data  acquisition requirements per energy retrofit type
  40. 40. what has been done, where is it going what has been done: • low hanging fruit has been  picked up • campus wide lighting retrofit • premium efficiency fan motors • free cooling, rCx economizers where are we going: • building air handling  optimization • laboratory HVAC energy  retrofits  ($8/SQFT to $3/SQFT)  Constant to Variable Volume with  Demand Control (6 ACH/4 ACH) • chilled water distribution  optimization 40
  41. 41. BTU/Hr represents the energy required to heat or cool water BTU/Hr = 500  x  gpm x  ΔT 500,000 engineering for a minute =500 x 500 x 2 (LOW ΔT ) =500 x 200 x 5 (LOW ΔT ) =500 x 100 x 10 (Moderate ΔT ) =500 x 50 x 20 (Good ΔT ) =500 x 33 x 30 (Excellent ΔT ) Increase ΔT, reduce flow, same heat transfer
  42. 42. BTU/Hr represents the energy required to heat or cool water BTU/Hr = 500  x  gpm x  ΔT 500,000 engineering for a minute =500 x 500 x 2 (LOW ΔT ) =500 x 200 x 5 (LOW ΔT ) =500 x 100 x 10 (Moderate ΔT ) =500 x 50 x 20 (Good ΔT ) =500 x 33 x 30 (Excellent ΔT ) Increase ΔT, reduce flow, same heat transfer Take away:  What am I doing to maximize  Delta‐T at my facility?
  43. 43. now the important part: proving it works 43
  44. 44. measure and prove the performance • CECIP takes measurement and  verification to another level • In‐house business processes to  sustain savings 44
  45. 45. one of the ways projects wont payback 45
  46. 46. one of the ways projects wont payback 46 ‐$ ‐$ ‐$ ‐$
  47. 47. 0 2 4 6 8 10 12 14 16 the adjustments accumulate quickly N = 132
  48. 48. 0 2 4 6 8 10 12 14 16 the adjustments accumulate quickly N = 132 Take away:  How does operations currently  track BMS configuration changes?
  49. 49. active energy management (AEM) Visualizations for efficiency Y= mx + B Optimal Operating Line
  50. 50. energy management  integrated with maintenance key areas • building automation warranty  management • operating mode validation • system configuration 50
  51. 51. Questions? Questions? Rob Foley, Sustainable Endowments Institute rob@endowmentinstitute.org Joe Indvik, ICF International joe.indvik@icfi.com John Onderdonk, Caltech john.onderdonk@caltech.edu Matt Berbee, Caltech matthew.berbee@caltech.edu Submit questions in the “Questions” pane of the toolbar on the right side of your screen. 51
  52. 52. 52 Thank You!
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