Unlocking the benefits of Energy Efficiency

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Presentation by John W. Conover IV at the "Green Building Focus Conference"

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Unlocking the benefits of Energy Efficiency

  1. 1. Unlocking the Benefits of Energy EfficiencyJohn W. Conover IVSenior Vice President, Ingersoll RandPresident, Security Technologies SectorGreen Building Focus ConferenceCharlotte, NCWednesday, April 20, 2011
  2. 2. Ingersoll Rand Mission We are a world leader in creating and sustaining safe, comfortable and efficient environments Helps Satisfy Critical Needs Growing Resource Urbanization Conservation • Enhancing the human environment • Improving quality of life • Promoting energy efficiency and sustainability Feed • Increasing customer productivity Growing Drive for Population Competitiveness Comfortable, Safe, Efficient Environments Unifying Strategy — Guides Our Actions and Leads Our Growth 2 Green Building Focus Conference 2011
  3. 3. Sustainability is Becoming a Differentiator A company’s vision and strategic goals Compliance and Creating Options Avoiding Risks Reducing Costs and Adding Value • Satisfy customers • Stay in compliance • Enable entry into new • Reduce accidents and markets • Avoid supply chain injuries risk • Create new products • Reduce costs through • Avoid negative press • Establish partnerships eco-efficiency to innovate and grow • Maintain license to • Avoid fees and fines operate • Stay competitive + • Increase shareholder Differentiate • Satisfy investors value • Enhance brand Conventional wisdom on sustainability continues to evolve 3 Green Building Focus Conference 2011
  4. 4. Global Energy Environment is Dynamic World energy consumption Urbanization projected to grow 60% by 2030 Drive for Competitiveness Regulatory Compliance Source: Energy Information Administration An unprecedented global energy and operating environment 4 Green Building Focus Conference 2011
  5. 5. Buildings Have a Huge Carbon Footprint 79% % of carbon emissions attributed to existing buildings <30% But still 30% significant 30% New York U.S. World Buildings are the single largest contributor to global warming 5 Green Building Focus Conference 2011
  6. 6. Why Energy Efficiency as an Energy Resource? Energy Efficiency and Conservation Improvements Since 1973 Have Reduced Annual Energy Consumption by 52 Quads in 2008 Energy Efficiency and Conservation 52 Petroleum 37 Natural Gas 24 Coal 22 Nuclear Electric Power 8 Biomass 4 Conventional Hydroelectric 2 Geothermal, Solar and Wind 1 0 10 20 30 40 50 60 Quads Energy Efficiency and Conservation 2008 Domestic Production Net Imports Compared to other energy to Save Energy, June 2009 efficiency measures are: Alliance resources, energy Energy efficiency is clean, secure (homegrown) and quicker to develop than other sources of energy 6 Green Building Focus Conference 2011
  7. 7. Executive Survey Uncovers Issues withImplementing Energy Efficiency Programs • Partnership with Economist Intelligence Unit • Focus on C-level and senior execs ‒ 278 execs surveyed, wide range of industries, worldwide • Included online surveys and interviews with leading organizations including: ‒General Electric ‒Tata Motors ‒Carbon Trust Standard Co. ‒World Resources Institute Because energy efficiency programs require C-suite leadership, funding and commitment – their perceptions are important 7 Green Building Focus Conference 2011
  8. 8. Dilemma: Energy Efficiency and Strategy • Nearly 80% of executives say energy efficiency will be more important to their business in 5 years yet only 26% have ever done an energy audit • 61% of non C-level execs said their organization does not do enough to integrate energy efficiency into its strategy Companies see value but struggle with implementation 8 Green Building Focus Conference 2011
  9. 9. Responsibility Must be Assigned AcrossOrganization • Energy efficiency still perceived to be the CEO’s job • Companies must appoint a respected owner and drive accountability throughout the organization • Successful initiatives often have senior leaders driving the campaign – not necessarily the CEO ‒ Only 20% say an energy efficiency manager or EHS manager is responsible for energy efficiency Few have dedicated sustainability staff or energy management experts 9 Green Building Focus Conference 2011
  10. 10. Companies Lack Measurement, Expertise • Measurement helps monitor usage and equipment efficiency, identify cost savings ‒ Only 26% of organizations have conducted an energy audit ‒ 15% audited by a third party ‒ 22% do no measurement at all • With a proactive maintenance approach – including energy audits – companies can better gauge energy usage and track the efficiency of their equipment Lack of expertise may hinder companies’ progress Lack of in-house expertise hinders many companies’ progress 10 Green Building Focus Conference 2011
  11. 11. Companies View Regulation Positively • Business leaders generally see benefit of regulations ‒ Large companies believe they level the playing field and create new markets • 69% believe companies are only meeting the “minimum” required by policy – room for improvement exists • Almost 75% believe taxpayers need to bear some of the cost of energy efficiency strategies Building owners welcome policy and incentives that Companies welcome policies that enhance ROI of enhanceefficiency measuresinitiatives ROI of efficiency 11 Green Building Focus Conference 2011
  12. 12. Energy Efficiency Seen as an Internal Issue • Only a fraction of respondents are working with their suppliers “In the present model of ‒ 8% said energy efficiency is a manufacturing automobile units, priority for suppliers 70-80% is outsourced. ‒ 4% are working with their suppliers on energy efficiency So it’s not enough for us to measure our carbon footprint. We need to also measure the carbon footprint of • However, this is changing our suppliers.” ‒ Wal-Mart said it will require suppliers to disclose their -A.S. Puri, Vice President , Tata Motors environmental impact Pressure mounts for vendor participation in energy initiatives 12 Green Building Focus Conference 2011
  13. 13. Practices and Policies Drive Changed Practices • Make energy efficiency and sustainability part of business strategy • Assign responsibility across the organization • Look to vendors to capture carbon footprint Policies • Change standards and codes to drive minimums up • Develop incentives to encourage incremental investment that meets all stakeholders’ needs “For a long time, people thought it was all about technology. But what we’re learning is that, really, it’s all about people. How do you get people to do something differently?” Gwen Ruta Director & Vice President for Corporate Partnerships Environmental Defense Fund 13 Green Building Focus Conference 2011
  14. 14. Buildings Offer Promising Global Opportunity • Buildings account for one- Current and Projected Building Sector Emissions by World CO2 Emissions (MtC) Region 2010 Emissions third of world energy use, 180 0 150 2030 Emissions GHG emissions 0 120 0 900 600 300 • GHG emissions from 0 North America, Central and Asia Latin Africa Western Europe, Eastern Europe, America buildings will double by 2030 and Pacific OECD Former Soviet Union Non-OECD/EIT* GtCO2-eq/yr EIT 7 • Poorly designed buildings 6 OECD World total 5 lock in inefficiencies for 4 decades 3 2 1 0 • Small investments cut energy Energy Transport Building Industry Agricultur Forestry Waste use 30-50% Supply s e Issues argue for change in how we build, operate, imagine buildings 14 Green Building Focus Conference 2011
  15. 15. High Performance Building Solutions Exist Today High performance buildings: • Are safe, comfortable and efficient • Help owners and occupants achieve their business mission • Use design and operating standards that are created, measured and continually validated to deliver established outcomes within specified tolerances • Are created using a unique methodology – combining financial, operating and energy analysis with specialized service offers and available financing • Meet specific standards for energy and water use, system reliability and uptime, environmental compliance, occupant comfort and safety and other factors Enhanced security, comfort, and building efficiency enables growth and helps management deliver the business mission 15 Green Building Focus Conference 2011
  16. 16. A Whole Building, Whole Lifecycle Approach • Typical buildings have occupied lives of 50-75 years or even longer • Operating costs account for 60-85% of building lifecycle costs – compared to 5-10% for design and construction costs • High performance buildings reduce lifecycle costs so organizations can invest in other priorities • Standards are created, measured & validated continually to deliver desired outcomes • Standards are typically set for: – Energy and water consumption – System reliability – Environmental compliance – Occupant health, safety and comfort Huge opportunities exist to improve building performance 16 Green Building Focus Conference 2011
  17. 17. Top 25 Energy Conservation Measures Major ECM Category ECM Type Technology/ECM Name Rating Controls General/Special Upgrade to Direct Digital Control 100% Industrial Compressed Air Implement Compressed Air Utility Management 100% Water Reduce Use • Many, many Energy Conservation Install Low Flow/Use Fixtures 96% Controls General/Special Retro/Recommission Controls for Optimizing Savings 94% Controls General/Special Measure (ECM) technologies and Install Lab Hoods Control - Flow Safe Lab Hoods 94% Supply Side Management Manage Energy Supply applications  need a methodology to Change Regulated Utility Rate/Tariff 94% Water Smart Metering Install Smart Meters & software -- for Billing & Accuracy 94% Electrical Lighting assess and rate Install Lighting Controls 92% Electrical Plant Lighting Boilers • Methodology developed using Six Sigma Replace T-8s for HiBays with T5s Install Tankless/Instantanious Water Heaters 92% 92% Supply Side Management Manage Energy Supply analysis processes and tools Change to Interruptible Rates and Use Electric Generators 92% Architectural Envelope Install Weather-Stripping 92% Electrical Lighting • Evaluation process based on 5 key Upgrade Fluorescent Fixtures w/ T8 or T5 Lamps and Electronic Ballasts 92% Electrical Lighting customer “importance factors” Retrofit Incandescent Lamps w/ Compact Fluorescent Lamps 92% Electrical Lighting Replace Exit Sign w/new LED Fixture 92% Plant Boilers – Savings potential, Practicality, Commercial Adjust Burner as Regular Maintenance 92% HVAC (Building/ Non-Plant) Unit Upgrade Convert CV to VAV viability, Risk management, Business 88% HVAC (Building/ Non-Plant) Unit Upgrade Convert Dual Duct to VAV 88% Electrical Lighting differentiation Replace HID HiBay fixtures with T5s or T8s 86% Electrical Architectural Lighting Roof Water Source Heat Pump • Score of 0-100% with 100% being the Add LED night lights in halls New Construction with Green Roofs (Plants) 86% 85% Plant Systems best ranking Install Water Source Heat Pump System 83% Plant Motors/Pumping Install VFD/VSDs for Pumps 81% Controls Resetting Reduce Outdoor Air To Design Level 78% Controls Resetting CO2-Based Demand-Controlled Ventilation 78% Use Six Sigma methods to choose best energy measures 17 Green Building Focus Conference 2011
  18. 18. Compelling Case for Improving LifecyclePerformance • Energy efficiency makes • Link the building to its primary more sense than ever business mission • Environmental performance • Determine the funding strategy is becoming more critical • Understand energy • Organizational performance conservation measures and and employee productivity their payback drive value, ROI • Focus on total cost of • Effective service strategy ownership over occupied life maintains lifecycle • Conduct the financial analysis performance – including cash flow Moving the building sector toward High Performance Buildings 18 Green Building Focus Conference 2011
  19. 19. HPB Based Success Story TIAA-CREF Headquarters – New York Solutions Applied: • Analyze building systems, energy use, rate structure and procurement methods • Recommend mission-focused ECMs • Design & install upgrades – State-of-the-art chilled water system – Rooftop thermal storage system – Reprogrammed central automation control system Results: • Infrastructure upgrades will save an estimated $765,000 per year in energy and operating costs and a 25% internal rate of return for TIAA-CREF. • The efficiency improvements are avoiding 6.1 million pounds of carbon dioxide emissions -- the equivalent of removing 560 cars from the road, or planting 828 acres of trees. 19 Green Building Focus Conference 2011
  20. 20. Internal Ingersoll Rand Energy Audits • DOE Save Energy Now LEADER Initiative – Over $4 million in energy cost savings – Program relies on skilled employee volunteers – Three tiers of energy audits • Treasure Hunts • Expanded Energy Audits • System Specific Audits 20 Green Building Focus Conference 2011
  21. 21. Bottom Line for Addressing Energy Efficiency • Energy efficiency must become part of business strategy • Success depends on leadership, accountability and expertise • Climate change cannot be effectively addressed without including commercial building sector • Our growing populations will seek greater security, efficiency and integrated approaches to increase quality of life. • Technology exists today to create High Performance Buildings that can mitigate GHG emissions while providing long term ROI for building owners High Performance Buildings help organizations achieve their mission 21 Green Building Focus Conference 2011
  22. 22. Thank You22 Green Building Focus Conference 2011
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