Energy Efficiency / Alliance to Save Energy - EE Global Conference, Brussels, April 2011 / Presentation


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Energy Efficiency / Alliance to Save Energy - EE Global Conference, Brussels, April 2011 / Presentation

  1. 1. Luca Mazzei VP, Global Strategy & Marketing Honeywell Building SolutionsAchieving Energy & Carbon Savings through Energy Performance Contracting
  2. 2. Agenda • Energy Is Honeywell’s business • The challenge ahead • Energy Performance Contracting • Who is benefiting? • What’s the holdup? • Solutions2Document control number Honeywell Proprietary
  3. 3. Energy Is Honeywell’s Business • Nearly 50% of Honeywell’s product portfolio is linked to energy efficiency – HVAC – Biodiesel – Turbochargers • The global economy could operate on 10-25 percent less energy just by using today’s existing Honeywell technologies3Document control number Honeywell Proprietary
  4. 4. The Challenge Ahead 20% Reduction in Carbon Emissions by 2020, 80% by 2050 Trend Will Deliver Less Than 10% by 20204Document control number Honeywell Proprietary
  5. 5. Where Should We Focus? €1 spent on more efficient energy use avoids €2 in investment in energy supply Source: IEA Supply Side Demand Side The Greenest Energy Is The One You Don’t Have To Generate!5Document control number Honeywell Proprietary
  6. 6. Where Should We Focus? Europe’s Buildings Waste €270B of Energy Every Year6Document control number Honeywell Proprietary
  7. 7. What Are The Options? • Upgrade your buildings Large capital outlay to fund improvements • Source government funding, zero % loans Only address ‘low hanging fruit’ • Do nothing Suffer the consequences • Use energy savings to fund energy efficiency measures Energy Performance Contracting The Money Is Already In Your Budget, Currently Paying For Wasted Energy7Document control number Honeywell Proprietary
  8. 8. What Is An Energy Performance Contract? • A programme of energy efficiency improvements to buildings funded from the savings they generate • Delivered via a partnership with an ESCO • Funded by the customer or ESCO’s Finance Partner • Energy savings are guaranteed by the ESCO • Project managed by the ESCO but installed by local companies and contractors Using Wasted Energy To Fund Carbon And Energy Reduction8Document control number Honeywell Proprietary
  9. 9. Why Use EPC? • No up-front capital required • Guarantee transfers financial and equipment performance risk to the ESCO – if the savings target isn’t made, the ESCO pays the difference • Unlike most capital investments, EPC reduces operating expenses • Immediate improvements are made – Buildings upgraded with modern, reliable energy efficient equipment – Comfort conditions are improved for occupants – Carbon reduction • Avoids ‘cream skimming’ to provide deep savings >20% • Creates job opportunities • Proven process Self Funded, Risk Free Improvement Programme9Document control number Honeywell Proprietary
  10. 10. EPC – How The Funding Works £ Energy savings Savings fund the improvement continue Energy / Energy programme Utility and Cost O&M Your Your Costs annual annual Energy costs Energy costs Your today during and annual and EPC costs Energy / O&M O&M after Utility Costs Costs EPC Cost Current During EPC Programme After EPC Programme There Is No Payback As There Is No Payment10Document control number Honeywell Proprietary
  11. 11. EPC Is A 4 Stage Process Changes in Contract energy use Preliminary closure accounting study Preliminary Detailed Guarantee Implementation audit analysis phase Planning, Energy Saving Detailed Guarantee installation, engineering measurement & project study verification service management (IPMVP) Enough inefficiency to Level of savings What are the finance & How do I know the fund an improvement delivered over what contractual savings are being programme? period? arrangements? delivered? No Commitment Until Contract Closure11Document control number Honeywell Proprietary
  12. 12. A Total Facility Approach Ventilation fans Lighting replacement, Building control systems & Management Systems Damper control Solar gain LEDsminimization Zone temperature control Voltage reduction Chiller upgrade/replacement & absorption cooling Plug load VSD motor control management On-Site Technical Resource Management High efficiency motors Boiler upgrades, controls Combined Heat & Power Agnostic Approach To Technology, Over 250 ECMs 12 Document control number Honeywell Proprietary
  13. 13. Deep Savings Delivered By EPC % Savings (EPC v Subset of 204 US DOE Projects) 180% 160% ESCO guaranteed savings & 140% Energy Proj forecast savings Energy projects actual savings 120% ESCO EPC actual delivered savings 100% 80% 60% 40% Performance Risk 20% 0% Year 1 Year 2 Year 3 Year 4 Year 5 Guarantee Accountability Delivers Results13Document control number Honeywell Proprietary
  14. 14. Who Is Benefiting From EPC In Europe Today?• Transport for London (UK)• Gwent NHS Trust (UK)• Lievensberg Hospitals (NL)• Atrium Hospital Complex, Heerlen (NL)• St Elisabeth Hospital, Herten (DE)• Landshut Clinic, Landshut (DE)• Erasmus University (NL)• City of Malmö (SW)• Ifö Sanitec (SW)• EHSAL School (BE)• Brigittenau Swimming Pool, Vienna (AT)• UniCredit Group, Milan (IT)• University of Art, Berlin (DE)• City of Berlin (DE)• Clinical Center Bremerhaven-Reinkenheide (DE)• St. Joseph Krankenhaus, Berlin (DE)• Municipality of Nyköping (SE)• City of Örebro (SE)• Swedish University of Agricultural Sciences (SE)• Municipality of Hollola (FI)• Municipality of Middelfart (DK)• University of Sheffield (UK)• Jewish Museum, Berlin (DE)• German Army Medical Co-ordination Centre, Diez (DE)• German Army Training Camp, Aulenbach (DE)14Document control number Honeywell Proprietary
  15. 15. EPC Summary • Building owners keep paying what they currently do but… – Obtain a complete upgrade of all their buildings – Implement a programme of guaranteed, significant carbon reductions across their buildings – Improve the reliability of the building’s energy system – Reduce operational costs – Improve working environment for building occupants – Use energy inefficiency as a tool to make improvements – Create jobsTake The Money Currently Paying The Utility For Wasted Energy & Use It To Invest In Improvements Across Buildings15Document control number Honeywell Proprietary
  16. 16. What’s The Hold Up In Europe? • US Energy Policy Act 2005 – More than $1.9 billion has been invested in over 400 EPC programmes – Over 30,000 new jobs created • The EPC solution exists • EPC is being used successfully in pockets across Europe • Lack of awareness • Reluctance to obtain 3rd party financing • Procurement difficulties • Selective financing • Lack of policy push and incentives • Reliance on government funding • Accounting & budgetary rules Central Support Needed To Overcome The Hurdles16Document control number Honeywell Proprietary
  17. 17. Solutions • Continue to prioritise energy efficiency • Drive awareness through Energy Agencies • Covenant of Mayors, Smart Cities • Support (with banks) 3rd party financing • Accounting treatment that doesn’t impact credit worthiness • Support and recommend the use of energy performance contracting with standard contracts, procurement processes, M&V & the ability for public sector to use 3rd party financing • Learn from others “The Invisible Hand Of The Market Alongside The Enabling Hand Of Government”17Document control number Honeywell Proprietary
  18. 18. Thank You18Document control number Honeywell Proprietary