Blueprint for energy cost control
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Blueprint for energy cost control

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Blueprint for Energy Cost Control...

Blueprint for Energy Cost Control
Careful planning is the key to the success of most businesses. That's also true of facility management. Capital improvement plans lay out expected facility capital expenditures, sometimes as much as 10 or 15 years into the future.
Despite the importance of planning in facility operations, too many facility executives abandon it when managing energy use. Instead, they undertake a series of uncoordinated activities that typically include equipment upgrades, system replacements and energy services contracting. In some cases, specific steps may even prove to be counterproductive. Too often, these measures simply mirror what other facility executives are doing without considering the needs of a particular facility. Implementing one “energy project of the month” after another may reduce the use of energy, but it isn’t energy management.
While energy conservation measures implemented without an overall plan reduce energy use and costs, they do so with an unequal impact. Since energy conservation budgets are not unlimited, facility executives need to implement those that produce the most favorable returns in terms of energy and cost savings for a given investment in a given facility.
Another problem with not having an energy management plan is missed opportunities. One of the key elements in an energy management plan is the identification of when, where and how much energy is used in the facility. Successful programs identify big energy users and focus efforts on them. Without that step, facility executives can’t know what measures will produce the best results.
Lack of an energy conservation plan also leads to uncoordinated – and often counterproductive – efforts. For example, installing high efficiency central chillers will improve the overall efficiency of the chiller plant, but under electricity deregulation, the installation of an alternative drive chiller, such as an absorption chiller or engine-driven centrifugal chiller, might reduce costs even more. Or upgrading to T8 lamps and electronic ballasts without first considering the lighting needs of the space may result in inefficiencies due to the overlighting of some areas.
Finally, lack of an energy conservation plan places the facility in a position where it must react to rather than anticipate marketplace changes in the supply and cost of energy. For example, deregulation is giving facilities the incentive to flatten electrical loads. Facility executives who have developed an energy management plan already know how their electrical loads vary with the time of day and the season of the year, so they are able to take steps to reduce load peaks.
Once the loads have been reduced, facility executives can further reduce their electrical load during periods of high rates by, for example, installing engine-driven chillers or gas-fired absorption chillers. Without an energy conservation plan already in place, facility executives would have little time to react to the changes introduced by deregulation.

A facility’s energy management plan is a road map to efficiency. The plan identifies where the facility is currently in terms of energy efficiency, where the facility needs to be and how it is going to get there. To make the plan successful, it must include all three elements. Skipping one or more may save time, but it will not allow a facility executive to manage energy use.
The energy management plan also should be flexible and able to respond quickly to changes in the marketplace. As facility executives have seen over the past year, the energy industry is volatile, with electricity price spikes, heating oil shortages and price instability.
Finding Out Where You Are
Before a plan can be developed to manage energy use, the facility executive must understand how energy is used in a facility. What types of energy sources are used? How much does the facility use? When does the use take place? Where is the energy used? Why?
Understanding ene

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Blueprint for energy cost control Blueprint for energy cost control Document Transcript

  • Blueprint for Energy Cost ControlCareful planning is the key to the success of most businesses. Thats also true of facility management.Capital improvement plans lay out expected facility capital expenditures, sometimes as much as 10 or15 years into the future.Despite the importance of planning in facility operations, too many facility executives abandon itwhen managing energy use. Instead, they undertake a series of uncoordinated activities thattypically include equipment upgrades, system replacements and energy services contracting. Insome cases, specific steps may even prove to be counterproductive. Too often, these measuressimply mirror what other facility executives are doing without considering the needs of aparticular facility. Implementing one “energy project of the month” after another may reduce theuse of energy, but it isn’t energy management.While energy conservation measures implemented without an overall plan reduce energy use andcosts, they do so with an unequal impact. Since energy conservation budgets are not unlimited,facility executives need to implement those that produce the most favorable returns in terms ofenergy and cost savings for a given investment in a given facility.Another problem with not having an energy management plan is missed opportunities. One ofthe key elements in an energy management plan is the identification of when, where and howmuch energy is used in the facility. Successful programs identify big energy users and focusefforts on them. Without that step, facility executives can’t know what measures will produce thebest results.Lack of an energy conservation plan also leads to uncoordinated – and often counterproductive –efforts. For example, installing high efficiency central chillers will improve the overall efficiencyof the chiller plant, but under electricity deregulation, the installation of an alternative drivechiller, such as an absorption chiller or engine-driven centrifugal chiller, might reduce costs evenmore. Or upgrading to T8 lamps and electronic ballasts without first considering the lightingneeds of the space may result in inefficiencies due to the overlighting of some areas.Finally, lack of an energy conservation plan places the facility in a position where it must react torather than anticipate marketplace changes in the supply and cost of energy. For example,
  • deregulation is giving facilities the incentive to flatten electrical loads. Facility executives whohave developed an energy management plan already know how their electrical loads vary withthe time of day and the season of the year, so they are able to take steps to reduce load peaks.Once the loads have been reduced, facility executives can further reduce their electrical loadduring periods of high rates by, for example, installing engine-driven chillers or gas-firedabsorption chillers. Without an energy conservation plan already in place, facility executiveswould have little time to react to the changes introduced by deregulation.A facility’s energy management plan is a road map to efficiency. The plan identifies where thefacility is currently in terms of energy efficiency, where the facility needs to be and how it isgoing to get there. To make the plan successful, it must include all three elements. Skipping oneor more may save time, but it will not allow a facility executive to manage energy use.The energy management plan also should be flexible and able to respond quickly to changes inthe marketplace. As facility executives have seen over the past year, the energy industry isvolatile, with electricity price spikes, heating oil shortages and price instability.Finding Out Where You AreBefore a plan can be developed to manage energy use, the facility executive must understandhow energy is used in a facility. What types of energy sources are used? How much does thefacility use? When does the use take place? Where is the energy used? Why?Understanding energy use in the facility is the first step in developing an energy managementplan, but this alone does not tell facility executives where they are. A facility might be highlyenergy efficient, or it might be an energy hog. Without a base of comparison, the facilityexecutive will not know where a facility stands or how much opportunity exists forimprovement.One method that can be used to help develop that understanding is benchmarking. Benchmarkingcompares the energy use in a given facility to the energy use of other similar facilities. Facilitiescan be benchmarked against published building energy use data. One source for publishedenergy use data is the U.S. Department of Energy’s Commercial Buildings Energy Consumptionand Expenditures. Listing energy use on a Btu per square foot basis for a wide range of facilitiesin different climates, the published data can be used to show where a particular facility stands interms of energy efficiency relative to other similar facilities.For office buildings and K-12 school facilities, EPA’s Energy Star Label for Buildings programhas developed an online energy benchmarking tool. The tool takes into account differences infactors like location and hours of operation and ranks a building on a scale of 1 to 100 for energyefficiency.Another method of benchmarking is to compare energy use in a given facility to the measuredenergy use in other similar facilities, particularly if those facilities are considered to be amongthe best in a class when it comes to energy efficiency. One must be careful, though, to compare
  • only facilities that are truly similar. Differences in how the facility is used, the hours of operationand the energy-using systems will result in invalid comparisons.By determining the energy use pattern for the facility and comparing it to that of other similarfacilities, facility executives can determine how energy efficient their operation is and how muchroom exists for improvement.Identifying OpportunitiesThe information gathered when identifying energy use patterns of the facility can be used to helpidentify energy conservation opportunities. Those patterns will show areas where energy use andcosts are the highest and therefore offer the greatest potential for savings.In identifying opportunities for energy conservation, savings estimates must be developed foreach item being considered. Those estimates can be used to determine the payback for the items,allowing comparisons to be made on the basis of savings produced and return on investment.Deregulation is generating additional opportunities for energy management and an even greaterneed for an energy management plan. Facility executives that have in place an energymanagement plan that takes into consideration the impact and requirements of electricityderegulation will be able to take advantage of the opportunities it creates. Those that don’t willend up paying higher rates for electricity – often higher than they were before deregulation.One of the key areas that must be addressed by the energy management plan under deregulationis real-time pricing. Under deregulation, electricity rates will vary by the hour based on a numberof factors, including the total demand for electricity and what it costs the utility to meet thatdemand. As the demand increases, so will the cost of electricity. While the implementationdetails of how real-time pricing are still being worked out, real-time pricing’s impact on the costof energy to facilities will be significant. Already, some users have found that the cost ofelectricity during periods of high demand has increased by a factor of between 25 and 100.Setting PrioritiesIdentifying opportunities tells a facility executive what can be done to reduce energy use but notwhich energy conservation activities should be completed first. Because the number of identifiedactivities always exceeds the available funding, priorities will have to be established. There areseveral ways to establish priorities, including payback, load reduction factors and need.Payback is the most common method. Although many different variations of paybackcalculations have been used to evaluate energy projects, all look at the expense of implementingthe project and the savings that will be produced. Those that offer the highest rate of return aretypically selected first for implementation.Sometimes, producing the quickest payback is not the best way to go. In general, the greatestpotential for energy savings in facilities lies in that facility’s major energy-using systems: thechillers, cooling towers, boilers and lights. If large savings are needed in a short period of time,
  • then the big systems are the ones to start with. Because of their high energy use, even relativelysmall improvements in operating efficiency can result in large savings. However, if the goal ofthe energy conservation program is to achieve the highest energy efficiency possible, then it isbest to start by minimizing building loads at their source first.Addressing building cooling loads at their source reduces the load on central equipment, such asbuilding chillers. When it comes time to upgrade those central chillers, smaller units can beinstalled. Those smaller chillers will be more closely matched to the actual building coolingloads than if the chillers had been replaced before loads were reduced. Matching chiller capacityto actual cooling loads allows chillers to operate more efficiently, saving energy.There are times when a project’s payback is secondary to the need to reduce energy use. When afacility is facing a shortage or a curtailment, payback is not as important as achieving a reductionin use. For example, the past two summers have seen high demand for electricity in some regionsof the country, demand so high that utilities have ordered cuts in electricity use in order toprevent possible widespread power outages. Faced with the alternative of reducing use or losingelectrical service, facilities have taken steps to curtail their demand. These steps can beimplemented effectively only if they have been planned ahead of time. When the utility is on thephone demanding a 5 or 10 percent reduction in electrical demand, it is too late to begin lookingfor electrical loads that can be reduced.The energy management plan should include items that can be implemented in short order. Theseitems may cause some level of disruption in operations, and they may not be fully cost effective,but in situations where significant load reductions must be rapidly achieved, they may be theonly alternative to loss of service or severe economic penalties.Most facilities have the potential to reduce energy use between 25 and 50 percent throughupgrades to existing energy-using systems, changes in the way existing systems are operated andimprovements in maintenance practices. Some measures will require significant investments innew equipment. Others will require simple operational changes and attention to details. But theprograms that will be most effective are those that examine all options and carefully lay out aplan for managing energy use.Julian Arhire is a Manager with DtiCorp.com – DtiCorp.com carries more than 35,000HVAC products, including industrial, commercial and residential parts and equipmentfrom Honeywell, Johnson Contols, Robertshaw, Jandy, Grundfos, Armstrong and more.