Mike Twedt on Green Energy Engineering
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Mike Twedt on Green Energy Engineering

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at Plain Green Conference 2009

at Plain Green Conference 2009

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Mike Twedt on Green Energy Engineering Presentation Transcript

  • 1. Michael Twedt, PE Tax Incentives, Grants and Low Interest Loan Programs for Energy Efficiency and Sustainable Facility Projects Presentation for the Plain Green Energy Efficiency Workshop April 17, 2009
  • 2. Speaker Introduction Michael Twedt, P.E., C.E.M. Mechanical Engineer, Energy Analysis and Efficiency Focus Director, Wind Application Center, SDSU WAC.sdwind.org Director, Energy Analysis Lab, SDSU Co-PI, CBRD & Biomass/Bioenergy Research Email: Michael.Twedt@SDSTATE.EDU Phone: 605.688.4303
  • 3. Energy Saving Benefits Overview Reduction in reliance on foreign energy sources Reduction in energy use = reduction in greenhouse gas Energy cost savings reduce facility expenses Promotes good practices; use less, save more Energy Efficiency Grant and/or Tax Deduction
  • 4. Energy Issues Energy issues in South Dakota • An extreme climate leads to extreme heating and cooling requirements • Limited and fixed budgets for most facilities • Rising energy costs • Limited information available for making better choices Addressing these issues • Focus on life cycle costs instead of solely on first costs • Purchase better materials, equipment, systems that will save money and energy
  • 5. Bio & Renewable Energy Benefits Overview Rising Energy Costs Global Warming / Pollution Dependency on Foreign Energy What can we do? Decrease our energy use (increase efficiency) Increase ‘home-grown’ energy Increase cost-effective, renewable energy
  • 6. How to Implement Energy Efficiency Utilize savings to pay for investments • Perform simple payback or life-cycle cost analysis • Consider: • Energy cost savings • Productivity/labor cost savings • Resource cost savings Utilize incentives to pay for investments • REAP/9007 Grants & Loans • Commercial building tax deductions (EPACT 2005) • Business Energy Investment Tax Credit (ITC)
  • 7. Energy Grants – REAP/9007 Rural Energy for America Program (REAP) Section 9007: • Designed to assist farmers, ranchers and rural small businesses with energy projects • Rural SD = not Sioux Falls or Rapid City • This program provides grants and guaranteed loans for renewable energy systems and energy efficiency improvement projects
  • 8. Energy Grants – REAP/9007 Rural Energy for America Program (REAP) Section 9007: • Energy Efficiency Improvements • Improvements to a facility or process that reduces energy consumption. Typically projects must show a 20% savings in energy audit to receive funding. • Renewable Energy - energy from: • wind, solar, biomass, or geothermal source, hydro or • hydrogen derived from biomass or water using one of the above energy sources
  • 9. Energy Grants – REAP/9007 Rural Energy for America Program (REAP) Section 9007: • Energy Efficiency Upgrades • Drying Systems • Motor Systems • Heating/Refrigeration • Renewable Energy Projects • Wind • Solar • Geothermal • 25% Eligible Cost Grant ($250K-$500K max) • 50% Eligible Cost Guaranteed Loan • ($25 million max)
  • 10. Resources – REAP/9007 Contact you local USDA Rural Development Office More Energy Efficiency Upgrades • Lighting • Refrigeration/Freezer Systems • Insulation (addition) • Automated Controls • Windows, Doors
  • 11. Energy Grants – REAP/9007 Rural Energy for America Program (REAP) Section 9007: • Competitive grant application • Applicants are scored on a variety of parameters • Energy replaced, generated or saved • 20% minimum, 35%+ excellent • Simple payback period (~ 11 yr max) • Technical merit • Environmental benefits • Grant only or Loan/Grant combination
  • 12. Energy Grants – REAP/9007 3rd Party Verification – Energy Efficiency: • Requires energy audit or energy assessment • $50,000 project cost (over or under) • Documents the energy savings • Documents the cost savings • Establishes the return on investment • Requires technical report and/or evaluation • $200,000 project cost (3rd Party if over) • Documents and evaluates the technical merit
  • 13. Energy Grants – REAP/9007 3rd Party Verification – Renewable Energy: • Requires business-level feasibility study • If over $200,000 total project cost • Documents and evaluates the feasibility • Documents the energy generation • Documents the cost savings • Establishes the return on investment • Requires technical report and/or evaluation • $200,000 project cost (over or under) • Documents and evaluates the technical feasibility
  • 14. Energy Grants – REAP/9007 3rd Party Verification – Renewable Energy: • Requires business-level feasibility study • If over $200,000 total project cost • Documents and evaluates the feasibility • Documents the energy generation • Documents the cost savings • Establishes the return on investment • Requires technical report and/or evaluation • $200,000 project cost (over or under) • Documents and evaluates the technical feasibility
  • 15. Energy Audit Objective The overall goal of an energy audit is to evaluate an individual facility for economically feasible, energy cost saving opportunities. Additionally: • Quantify the amount of energy waste • Translate energy waste into wasted dollars • Assist in good decision making • Required for some Federal Grants
  • 16. Energy Audit Steps • Analyze utility usage and costs • Perform site visit, collect data • Identify potential energy saving measures • Calculate energy and cost savings • Calculate cost of measures • Evaluate economic feasibility of each measure • Formulate an action plan for implementation • IMPLEMENT FEASIBLE MEASURES!
  • 17. Energy Conservation How Much Can You Save?????????? • How much are you currently spending? • Example: a school spends $9,000/yr on propane for heating. Can a new heating system save $20,000/yr in propane energy costs? • A grain handling system uses $600/yr in energy costs. Can you save $2,000/yr in energy costs by buying a new, ‘energy efficient’ system?
  • 18. Energy Use Summary Sample Phase I Energy Use M M Btu/yr electricity natural gas
  • 19. Energy Audit – On Site On site • Confirm utility usage and costs • Site visit • Inspect equipment and systems • Identify potential energy saving measures • Collect detailed information on these systems • Operating parameters • Operating hours • Building occupancy • Temperatures
  • 20. Energy Audit – Identify On site – what to look for: • Equipment/systems that can be shut off • How? How often? • Equipment/systems that can be turned down • How? How often? • Old/inefficient equipment • What is current efficiency? How much is it used? • Heating/cooling systems • Can you recover energy? How? How often?
  • 21. Energy Audit – Energy Use Calculate current energy use and cost: • How much energy is each equipment/system consuming? (energy/year) • What is the current cost? (energy/yr x energy cost) Calculate new energy use and cost: • How much energy would the new systems consume? (energy/yr) • What is the new cost? (energy/yr x energy cost)
  • 22. Computer Simulations Provide a tool for investigating physical systems • Uses: • Forecasting/prediction • Energy use • Comparing alternatives • HVAC systems • Examples include: • Indoor Air Quality • Airflow • Thermal comfort • Equipment performance • Building energy modeling
  • 23. Building Energy Modeling Used to evaluate the performance of buildings • Evaluates energy, cost, and comfort • Performance monitored for full year • Includes most building systems • Envelope • HVAC • Lighting • Service hot water • Scheduling • Controls
  • 24. Building Energy Modeling Some examples of software include: • EnergyPlus, BLAST, DOE-2, many others Typical modeling environment: • Consists of interaction between several ‘modules’ • Complex computational environment
  • 25. Building Energy Modeling Why is it important? • Buildings use approximately 1/3 of all energy • Simulation can and has helped reduce building energy consumption • Allows energy alternatives to be investigated • Leads to an energy- and cost-optimized building • Can help isolate operational problems in existing buildings • Necessary for many incentive programs • Required for LEED • Compare proposed building to ASHRAE Standard 90.1-2004
  • 26. Energy Modeling Sample Facility Energy Usage $82,201/yr
  • 27. Energy Audit – Savings Calculate energy and cost savings for each measure: • Energy Savings = Current Energy Use – Proposed Energy Use (energy/year) • Cost Savings = Current Energy Cost – Proposed Energy Cost ($/year) Compare savings to implementation cost: • Simple Payback Period = cost / $ savings per yr • Evaluate the feasibility for your facility • Generally 3 year payback or less is very good
  • 28. Energy Modeling Energy Savings – Increase Envelope Insulation $77,749/yr $4,452/yr savings
  • 29. Energy Modeling Energy Savings – Geothermal $63,761/yr $18,440/yr savings
  • 30. Energy Modeling Energy Savings – Thermostat Setbacks $69,947/yr $12,254/yr savings
  • 31. Energy Modeling Energy Savings – Heat Recovery $65,006/yr $17,195/yr savings
  • 32. Energy Modeling Energy Savings – Lighting & Equipment $76,419/yr $5,782/yr savings
  • 33. Energy Modeling Energy Savings – High Efficiency (All Systems) $31,506/yr $50,695/yr savings
  • 34. Sample Energy Savings Sample Building 1 Summary 8.5% reduction in annual energy use • $42,956/yr total energy cost reduction • 8.1% reduction in annual energy costs • 4.7 year total simple payback period for all recommendations combined Sample Building 2 Summary • 7.0% reduction in annual energy use • $34,894/yr total energy cost reduction • 6.9% reduction in annual energy costs • 1.6 year total simple payback period for all recommendations combined
  • 35. Energy Savings Summary Sample Building 1 Phase I Energy Savings M M Btu/yr energy savings
  • 36. Energy Conservation – Measures Additional Examples of Energy Efficiency: • High efficiency heating & cooling systems • Heat recovery • Modulation controls (turn down/shut off) • Lighting • Replace incandescent with HE fluorescent • Replace mercury vapor with HPS/MH/HE fluor. • Heating systems • Temperature setbacks – freeze protection • Plug leaks / prevent infiltration • Turn Down • Shut off
  • 37. Incentive Programs EPAct 2005 Federal Tax Deduction • Commercial Building Tax Deduction: Provides a tax deduction for exceeding ASHRAE/IES Standard 90.1-2001 to the property owner for which the energy efficient expenditures are made • New construction or renovations
  • 38. Incentive Programs Commercial Building Tax Deduction • Allows for up to $1.80/sf tax deduction • Fully qualifying property • Saves at least 50% in energy costs through improvements in the following • Envelope • Lighting • HVAC/SWH
  • 39. Incentive Programs Commercial Building Tax Deduction - Subsystems • Partially qualifying property up to $0.60/sf in each • Saves at least 10% in envelope • 20% in lighting • 20% in HVAC/SWH
  • 40. Incentive Programs Commercial Building Tax Deduction – Lighting Subsystem Details • Interior Lighting Tax Deduction: Lighting energy consumption is estimated to represent approximately 1/3rd of commercial building energy use • Outperform the ASHRAE/IESNA Standard 90.1- 2001 lighting requirements by 25-40% . Eligible tax deduction per sqft will be between $0.30- $0.60
  • 41. Incentive Programs Commercial Building Tax Deduction Provides a tax credit AND energy savings! • Client qualified for $1.07/sqft tax credit • Installed high-performance insulation • Qualified for full $0.60/sqft • Installed efficient lighting technologies • Qualified for $0.47/sqft Required energy model and comparison of ASHRAE 90.1-2001 baseline and actual installation Example Provided by Derek Hengeveld, PE BTU Engineering, Inc. hengeveld@BTU-Engineering.com
  • 42. Incentive Programs Business Energy Investment Tax Credit (ITC) • U.S. Dept. of Treasury • Commercial, Industrial, Agricultural • Only tax paying entities are eligible • 30% (Solar, Wind) or 10% (Geothermal) of system cost tax credit • May take tax credit as a cash grant from the U.S. Department of Treasury • The U.S. Department of Treasury has not released guidelines and is not accepting applications currently for this grant (expected late spring’09)
  • 43. Incentive Programs Business Energy Investment Tax Credit (ITC) • U.S. Dept. of Treasury • Categories (partial) • Solar water or space heat • Wind • Photovoltaic • Hydroelectric • Biomass • Landfill gas • Geothermal electric • Geothermal hp • Fuel cells
  • 44. Energy Conservation – Summary Best Solution: • No single magic bullet for total energy savings • Best solution: make informed decisions and integrate a combination of many items • Consider utilizing Federal incentives to leverage resources
  • 45. Energy Help Resources • Your utility company • Building Energy Codes – request that your builders follow applicable energy codes • Read energy labels, compare Wattage, consider Energy Star models • REAP/9007 - Contact you local USDA Rural Development Office Energy Audits • Self audit worksheets – available from State and Federal sources • Your utility company may offer assistance • 3rd Party energy audits
  • 46. Thank You Questions? Michael Twedt, Mechanical Engineering Dept. South Dakota State University (605) 688-4303 Email: Michael.Twedt@SDState.edu