The Role of Incentives in Advancing Energy Efficiency Initiatives
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Driving down energy costs through energy efficiency improvements is a key strategy for building owners & managers focused on increasing net operating income. Whether you drivers are lowering utilities, reducing GHG emissions, satisfying a sustainability initiative, or emulating best practices, your investments in energy efficiency will benefit your clients, tenants, and the environment. The Independent Electricity System Operator recently announced a new six year conservation first framework (CFF) with an objective of reducing electricity consumption by 400 million kilowatt-hours in Hydro Ottawa territory by December 31, 2020 – that’s equivalent to removing about 100 commercial office towers in the downtown core off the grid. Achieving this target means that Building Owners and Managers will receive about $75,000,000 in incentive funding over six years to make investments in energy efficiency -projects more financially attractive.
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The Role of Incentives in Advancing Energy Efficiency Initiatives
- 1. Shawn Carr, P. Eng. The Role of Incentives in Advancing Energy Efficiency Initiatives saveONenergy Programs
- 2. WHY WE ARE HERE Conservation Goals and Results Introduction to new Conservation First Framework (CFF) Show you what programs and incentives are available Case Studies – The role of incentives in improving building energy efficiency
- 3. WHY HYDRO OTTAWA? Conserving Power is Part of License since 2011 1,330 MW 410,000 homes off grid $100s of billions Ontario’s aging infrastructure Replace coal fired generation Green economy
- 4. 6,552,993,397 kWh saved (109% of Provincial target) Cost: $0.04/kWh 10,000,000 energy efficiency products purchased 2011 – 2014 PROVINCIAL SAVEONENERGY RESULTS
- 5. 414,864,124 kWh saved (110% of target) 64% of savings from our Business Programs ≈1000 Retrofits incented Annually ≈ 50 Audits incented Annually ≈ $12,000,000/yr incentives issued 2011 – 2014 HYDRO OTTAWA SAVEONENERGY RESULTS
- 6. WHY ENERGY EFFICIENCY PROJECTS ARE NOT COSTS BUT ASSETS TO BE MANAGED Lowering Operating Costs Reducing GHG’s Satisfying sustainability initiatives Green Building Certification and Labelling Systems Improving tenant comfort Demonstrating Leadership through benchmarking Emulating Best Practices in other buildings Responding to a mandate Preparing for mandatory disclosure Productivity Impact
- 7. Open for business We need your continued support Streamlined Framework August 2015 until 2020 400GWh target within our territory (7 billion KWh in ON) 2015 – 2020 CONSERVATION FIRST FRAMEWORK
- 8. Funding kWh Program Simplified Previous programs end December 31, 2015 Update on Business Programs First, meet our growing team CONSERVATION FIRST
- 9. Manon Galipeau Kevin Quinlan Shane LaBrash Program Officers
- 10. Adrienne Lesage Mark Schell Grace McConnachie Program Officers
- 11. Shawn Carr Imran Ebrahim Charles Zaloum Energy Managers
- 13. Retrofit Program – Incentives to lower project costs for upgrading old or inefficient equipment Audit Funding and EB commissioning – Incentives for energy audits to assess the potential for energy savings. Process and Systems – Incentives for studies and energy efficiency upgrades in complex systems BUSINESS PROGRAMS
- 14. INCENTIVES Covers up to 50% of project costs
- 15. Three ways to apply for maximum flexibility − Prescriptive – Engineered/Custom – Custom pays: • $0.10/kwh or $800/kw for non-lighting • $0.05/kwh or $400/kw for lighting RETROFIT PROGRAM
- 16. Replacing existing equipment with more efficient equipment Adding new efficient equipment where none previously existed Implementing new operating procedures Includes installing tools and technologies to obtain or increase the effectiveness of EMS/BAS. TYPES OF PROJECTS
- 17. Improve thermal performance of building envelope with insulation, high performance windows/glazing Eligible Measures Lighting, controls, chillers, unitary AC, free cooling, motors, VFD’s, building envelope, EMS, BAS, pumps, sensors, metering equipment TYPES OF PROJECTS
- 18. HOW TO PARTICIPATE? Establish Eligibility Determine Incentive Submit Information Pre-approval Receive Cheque Engage us early in your project planning process Provide scope of work, projects costs, equipment specs, client & building information, worksheets Hydro Ottawa helps you with business case, prepare applications Complete your project Provide invoice, confirmation of disposal, and if needed, validate energy savings Submit Final Information LDC approves project and remits payment
- 19. AUDIT FUNDING AND EB COMMISSIONING Electricity Survey and Analysis – Up to $25,000 in incentives Detailed Analysis of Capital Intensive Modifications – Additional $10,000 in incentives Building Systems Audit – Up to $5,000 per system Electricity Survey and Analysis for Tenants – Up to $7,500 in incentives EB Commissioning – Incentives to evaluate and increase chilled water system efficiency.
- 20. Preliminary Engineering Studies – Up to $10,000 Detailed Engineering Studies – Up to $50,000 Implementation – $200/MWh incentive – Up to 70% of project cost – Min 100 MWh savings potential Eligible Projects – CHP Systems PROCESS AND SYSTEMS
- 21. Engineered approach for Lighting and Unitary AC Custom approach provides incentives to Consultants for – Energy Modelling – Design Assistance when designing better than OBC Custom approach provides incentives to Owners for – New buildings or major renovations that exceed the electrical efficiency specified in the OBC. – Up to $800 per verified KW or $0.10/Kwh HIGH PERFORMANCE NEW CONSTRUCTION
- 22. 11 February 2016 Page 22 CASE STUDIES Assumptions: Discount Rate: 10% Re-investment Rate: 10% Inflation: 3% Utility Rate: $0.12/Kwh Analysis Period: Variable by Case Study Electricity cost savings only – no maintenance
- 23. Carleton University – Minto Case Building Voltage Harmonizer Annual kWh/kw saved 109558/13 Incentive Approved $14,211 Annual savings $13,146 % of PC Incented 20% Net Present Value $33,215 Simple Payback 4.4 years ROI 23% Modified IRR 15.1%
- 24. GWL Realty Advisors- 255 Albert St. VFD’s on Cooling Tower Fans Annual kWh saved 47,879 KWh Incentive Approved $9,198.56 Annual savings $5,745 % of PC Incented 50% Net Present Value $30,349 Simple Payback 1.6 years ROI 62.5% Modified IRR 27.3%
- 25. Giant Tiger– 2480 Walkley Road New AHUs, reduced OA volume in the store, lighting controls and BAS integration Annual kWh/kW saved 153,823/30.36 Incentive Approved $36,741 Annual savings $18,459 % of PC Incented 45% Net Present Value $121,317 Simple Payback 2.4 years ROI 42% Modified IRR 20.1%
- 26. Morguard Investments– 280 Slater and 333 Laurier New BAS and controls strategy on all central HVAC systems and lighting Annual kWh saved 324,724 Incentive Approved $24,354 Annual savings $38,967 % of PC Incented 13% Net Present Value $187,906 Simple Payback 4.1 years ROI 24.2% Modified IRR 15.8%
- 27. KRP Properties - 411 Legget (Pre-Approved Only) BAS Upgrade – DDC controls, equipment scheduling, DCV, CO2 sensors Projected Annual kWh saved 1,100,000 kWh Incentive Pre-Approved $110,000 Annual savings $132,000 % of PC Incented 50% Net Present Value $1,072,409 Simple Payback 0.8 years ROI 120% Modified IRR 28.9%
- 29. Canadian Tire Centre LED System and controls Annual kWh saved 898043 kWh Incentive Paid $148,080 Annual savings $107,765 % of PC Incented 22% Net Present Value $204,838 Simple Payback 5 years ROI 20.1% Modified IRR 13.6%
- 30. Bentall Kennedy - Sun Life Financial Centre Cooling Plant Replacement Projected Annual kWh saved 1,340,000 kWh Incentive Paid $536,839.9 Projected Annual savings $185,386 % of PC Incented 27% Net Present Value $209,169 Simple Payback 7.8 years ROI 12.8% Modified IRR 11%
- 31. SUMMARY Reducing Energy Use is a key Strategy across all Building Sectors. Makes properties more competitive, profitable, and valuable. We can work together to engineer better buildings. Our programs can help accelerate your efforts. We can help manage the application process Get in touch with us BEFORE the work begins!
- 32. Shawn Carr, Energy Manager ShawnCarr@hydroottawa.com 613.738.5499 ext. 7474 THANK YOU
Editor's Notes
- Today I am going to be discussing the role of incentives in advancing energy efficiency initiatives in existing buildings. Many of you are already familiar with some of our programs and have taken advantage of them in the past when implementing projects. The Independent Electricity System Operator recently announced a new six year conservation first framework (CFF) which is going to give you access to long-term stable funding for years to come. There have been some recent updates to the programs as a result and today we will show you what that looks like. We do anticipate more changes to come in 2016 so unfortunately I don’t have all the details for you today. I am going to focus on our key business incentive programs that are the most relevant to your business. If there are any programs that you have questions about that I don’t highlight, please feel free to speak to one of the Hydro representatives in the room following the session. And I will finish up with highlighting a few case studies of common projects that provide compelling evidence to motivate action rather than delay.
- This slide talks about our goals in CDM. Energy conservation is one of our core businesses at Hydro Ottawa and we are working very hard to achieve our goal of ensuring a more sustainable energy future for our community. We continue to invest in renewable generation and some of you may have heard that in July last year Hydro Ottawa acquired 10 hydro electric facilities from Fortis Inc, in Ontario and upper New York State. This significantly increases our renewable generation capacity to about 48 megawatts enough to power 40000 homes a year. We are the largest municipally owned producer of green power in the province, with hydroelectric and landfill gas-to-energy generating facilities (Trail road and moussenie). Our objective is to further increase the amount of renewables in the electricity supply mix. Renewables include solar, wind, biomass and water.
- Conservation costs about $.04 cents a kwh, which is a good deal. Nuclear by comparison is about __________________
- As far as energy conservation initiatives go, within CDM, relative to the rest of the Province, we rank 1st in both residential and commercial accomplishments. We don’t do as well in Industrial because there is not much of a sector here. In terms of Kwh’s saved, year over year participation has increased significantly. Over 40% from 2013 to 2014 alone.
- Despite the challenges you have with respect to competition for competing investment priorities within your buildings and economic uncertainty, we are seeing more owners invest in energy efficiency projects than ever before. Driving down energy costs through energy efficiency improvements is a key strategy for building owners and managers focused on increasing their net operating income and asset value. Whether you drivers are lowering utilities, reducing GHG emissions, satisfying a sustainability initiative, or simply preparing for the mandatory disclosure that is coming our way shortly, your investments in energy efficiency will benefit your clients, tenants, and the environment. And although Energy costs still pale in comparison to overall tenant costs in a typical organization, more and more organizations are focusing on carbon, and if we look at the carbon footprint of an organization, it is dominated by energy. So in many cases, this is motivating action. We are also seeing more owners evaluate both the financial and non-financial benefits before implementing projects. Who would have thought that after retrofiting the lighting in convenience store refrigeration display cases, that ice cream sales would have increased by 19% which actually trumped the actual lighting energy savings. We are seeing more and more examples of this.
- So the good news is the new Conservation First Framework is now open for business and we hope these new programs will help you implement more projects. The Independent Electricity System Operator recently announced a new six year conservation first framework (CFF) with an objective of reducing electricity consumption by 400 million kilowatt-hours in Hydro Ottawa territory by December 31, 2020 – that’s equivalent to removing about 100 commercial office towers in the downtown core off the grid. Achieving this target means that Building Owners and Managers will receive about $75,000,000 in incentive funding over six years to make investments in energy efficiency -projects more financially attractive. For some programs, the new framework opened in August of last year, and others started in January. Although we have transitioned the different commercial programs to the new framework, some of the programs are still going through a review process in an effort to further streamline things so we do anticipate some more changes will come. In the case of the retrofit program for example, you will see that allot of the worksheets and incentives are the same ones that existed in the previous framework.
- In terms of a preview of what we will be seeing: - Still have Provincial targets but where as in the past we were concerned about both demand savings and consumption, and incented both of those as such, now we only have a consumption target. So this will likely case a shift in the programs and measures that are incented. There is a working group in Toronto that is evaluating if the kwh incentive should increase to accommodate this change. We don’t know when this shift to Kwh is taking place but we will giveyou plenty of notice. Anticipated start date (summer 2015 till 2020) Stable funding (where appropriate) but eventual change to incentive formula (kWh) ~40% quota increase (400GWh HO, 7TWh province, 7000 GW) = 400,000,000 KWH (1GWH = 1,000,000 KWH) = 100 commercial office buildings . Program delivery will be optimized for new framework These programs fund the studies required to identify and address building performance-related challenges related to energy and water efficiency and provide incentives for implementing commercially available energy saving technologies. In preparation for the next 6 years, the 1st thing we have done is ramped up our team.
- We have more program officers, program agents, and energy managers waiting to serve you. The team has been set up as a sales and support organization. What does this mean for you? More support for you Streamlined process Better overall customer service We try hard to eliminate the pain points for you. We can do everything we’d like but we tried to do what we can to make things smooth on your end.
- And then there are others like Richard Thorne, Bruce Bibby, and Linda who preferred to remain anonymous.
- We are seeing more and more owners retro-commission their building systems or having energy audits done that are focused more on O&M improvements. These improvements make existing equipment work better, leading to energy cost savings that are typically faster, easier, and less costly to implement. BAS and controls are typically at the heart of those types of improvements. Our Energy Audit programs can help fund a building recommissioning study, a building energy audit, or an audit on a specific building system which would identify the energy saving opportunities, quantify the savings.
- Project Planning: We will: Advise you if your project is incentive eligible Determine which track is right for your project Advise you of available incentive amounts for different solutions you are proposing to your client. Help you prepare a business case Prepare applications TIPS: Put incentive clauses in RFP documents Take pictures of the existing equipment Engage us before equipment is purchased
- EB commissioning: $2,500 for scoping, $30K for investigation, $5,000 for implementation, $2500 for commissioning report
- If you are an industrial or institutional organization, withcomplex systems and processes that contribute to a significant portion of your electricity costs and you are considering behind the meter generation projects such as combined heat and power systems, there is funding available to identify, implement, and validate the energy efficiency projects. If you have more questions, I suggest speaking with Richard Thorne after todays session. Up to 70% of project cost and $200/MWh incentive Small projects (<$1M) and Large project incentive (>$1M) with no limit Available for traditional retrofit projects and new installations of BMG (Behind the Meter Generation) systems More rigorous application process which includes greater contractual and M&V (Measured & Verified) requirements Less than 100kW generator CHP (combined heat and power system) sizing requires only a simple grid connection agreement Greater than 100kW generator CHP sizing requires more complex connection agreement Less than 100kW CHP systems are perfect for sustainable occupancy strategy for buildings (prolonged emergency power situations) and CHeP systems CHP systems are a hedge against rising electrical costs Waste heat by product used to offset hot water boiler costs Replacing a boiler? Consider CHP as replacement option 20 year engine lifespan with examples of 5 year or less simple payback
- Discount Rate: The minimum rate of return required by the investor. Re-investment rate considers what return you can achieve if you re-invested the annual savings from your energy efficiency project over the life of that equipment. Analysis period considers the life expectancy of the equipment being analyzed. ROI is the reciprocal of Simple Payback. NPV = PV of the outflows +PV of the inflows. MIRR corrects the shortcomings of IRR.
- The Harmonizer saves energy by safely reducing a buildings voltage while keeping voltage within standard industry specifications. If excess power is supplied to a building in the form of high voltage, the Harmonizer will adjust voltage to an efficient level to save energy and money. Power and voltage delivered to a facility are typically higher than necessary due to an inefficient and aging power grid, and the unavoidable physics behind line loss resistance. Because of this, most buildings receive more power than needed, and this directly impacts a building’s overall electrical energy consumption. Legend Power eliminates this hidden energy waste and provides guaranteed energy savings. The amount of savings realized depends on the building and the electrical supply but a typical commercial facility that’s a good candidate for this technology can expect to save anywhere from 2 to 8% energy savings. Ideal candidates are buildings that use more than 1M Kwh annually, have high lighting loads, long hours of operations. Most power utilities supply customers with electricity between 575V and 625V (460V- 504V USA) and if your building is on the higher side of this range, you are wasting energy. Payback of 4.1 years Installed in Dec 2014. M&V done in June 2015.
- The applicant is proposing to install two variable speed drives to modulate two 25HP cooling tower fans. As integral parts of the chiller plant, the cooling tower savings were calculated using the ER-E M&V guidelines; at 60% part-load. kWh was calculated using the IPLV distribution of load and time. The calculations are presented in the attached document “supporting calculations.pdf”.
- De-commissioned air handler, refrigeration compressors, rooftop condensors, boiler and hot water distribution network. Installed new high efficiency roof top units with variable speed fans, dcv, and dual-enthalpy economizers. Rooftop fans operate only on a demand for heating, coling and ventilations. They also refined the control of the store lighting.
- De-commissioned air handler, refrigeration compressors, rooftop condensers, boiler and hot water distribution network. Installed new high efficiency roof top units with variable speed fans, dcv, and dual-enthalpy economizers. Rooftop fans operate only on a demand for heating, coling and ventilations. They also refined the control of the store lighting.
- KRP properties is Ottawa’s largest business with 26 properties in Ottawa’s west end. The facility's HVAC consists of 3 large AHUs (DX cooling, resistance electric heat) with VAV boxes throughout the core of the building and perimeter baseboard heating on each floor. AHUs operate 24/7/365 and draw 15% OA continuously. Baseboard are manually controlled by occupants. Project to include installing new Bacnet DDC controls for 3 AHU's, including 210 VAV boxes on floors 1-7 and perimeter baseboards. Since the ductwork for all three AHUs are connected, only 2 AHUs will be used except in extreme weather. AHUs we previously fitted with VFDs, but were only manually. New BAS will modulated AHU SF and RF to maintain static pressure in the duct as it modulates with VAV boxes. AHUs will be turned OFF during non-working hours. Perimeter heating will be controlled by the BAS to maintain a temperature setpoint as opposed to the existing manual control. DCV will be implemented to reduce OA to 5% minimum during working hours and 0% nights/w-e/holidays. C02 controller will ensure that IAQ levels are maintained.
- $220,000 project cost which has a simple payback of less than 1 year.
- Total project cost of $685,069 Installation and recylcing carried out by Black and Mac. Lets look at the non-utility cost financial benefits -Wanted to improve the fan experience. The ice looked better on broadcasts. Instant on/off capability -- greatly enhanced game day show and the customer experience. They used to have to wait 10-15 minutes for lights to come on. Light show has now significantly improved which has improved the fan experience. -Removing the old heavy MH lighting removed a lot of excess weight on the roofing structure. Once it was removed, they could bring in the Katie Perry and Taylor Swift type-shows – who bring along 30 transport trucks full of gear – all to be hung from the ceiling -The A/C had to be run throughout every game (6 hours before and after) to offset the heat from the MH lighting – this ensured that the ice maintained a proper temperature range for NHL games. They didn’t have to do that anymore. -The lighting level doubled with the LED installation – no shadows on the ice – the TV broadcasters were really happy because their broadcasts looked sharper. So in this case, the project offered more than just energy cost and operational savings.
- savings were estimated from the chiller and cooling tower replacement and free cooling. Additional savings came from VFDs and motor replacement Total project cost about $2M. 1MWH = 1000KWH The Challenge: SLFC is a two tower 40 year old complex operating two connected cooling systems One of the cooling plants was approaching end of life Rather than look at the one system in isolation, they decided to evaluate the entire system across the complex The Process A firm was engaged to do an energy audit on the complex, build an calibrated simulation model, and do a design systems options analysis using the model to compare several different upgrade scenarios in addition to a simple like for like replacement. Each scenario was evaluated based on energy performance, GHG impact, cost, and ROI. A $24,500 incentive was provided by Hydro to cover half the cost of the study through our Audit Funding Program . EPL did a 10 year forecast on utility rates and that was included in modelling results. Solution Went with heat recovery chiller with a plate and frame heat exchanger A second chiller to replace two other existing units The chilled water pumping system was also changed from primary secondary sytsem to variable primary flow, which eliminated 3 60HP pumps further reducing operating costs. Free cooling also added - We also included a fairly extensive meter upgrade on all chilled water plant components (pumps, cooling tower, chiller)
- In summary, with an abundance of commercially available energy saving technologies available, talented consultants and contractors, and attractive incentive programs, there hasn’t been a better time to action some inspiring ideas you may have about how to save energy in your buildings. We have a team standing by to help you every step of the way and we thank you for your ongoing efforts towards making the buildings in our community an asset, rather than a burden, for future generations. I am now going to turn things over to Luigi Pisani who will introduce Enbridge’s similar programs to you.