USEPA Issues Final Rule To Amend PSD Permitting

On May 7, 2015, the USEPA published a direct final rule in the Federal Register (www.federalregister.gov/articles/2015/05/07/2015-10628), allowing for the annulling or rescission of certain Prevention of Significant Deterioration (PSD) permits under the Clean Air Act. This step was taken in response to the US Supreme Court’s decision last year in Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014).

In this decision, the Supreme Court struck down part of the USEPA’s “Tailoring Rule” which mandated that new or modified stationary sources emitting more than a certain threshold quantity of greenhouse gases (GHGs) annually obtain PSD permits, even if they do not emit any other PSD-regulated pollutants at levels that would otherwise trigger the requirement for a PSD permit and compliance without the Tailoring Rule.

The Supreme Court last year ruled against this rewriting of the PSD rule, stating that the USEPA cannot set its own thresholds for GHGs that depart from the thresholds already found in the Clean Air Act, which was approved by Congress. However, the Supreme Court acknowledged that the agency can regulate GHGs, which since the last Clean Air Act amendments has been ruled a pollutant that must be regulated by the Act. The court ruled that under PSD the USEPA can use the rule to limit GHG emissions on “anyway” sources, those that would be subjected to the PSD regulation anyway because they emit one or more traditional PSD pollutants at levels above its/their statutory threshold(s). It just cannot trigger enforcement of the regulation on pollutants which standards were not set in the Clean Air Act approved by Congress.

The USEPA was ordered to amend the changes in PSD due to the “Tailoring Rule” accordingly, and with this publication it has fulfilled this obligation. This direct final rule amends the PSD regulations to not allow the requirement of PSD permits for sources subject to the rule only because of GHG emissions and to begin the rescission process for PSD permits already issued to the sources that had been required to obtain such permits only because of their GHG emissions.

Please note that the new rule itself does not actually rescind any permit issued under these pretenses. It provides only the authority to do so for the issuing entity. PSD is regulated (and permits issued by), in some cases, a state or local program (those states which have PSD enforcement authority delegated by the USEPA) or the USEPA (for the remaining states in which the USEPA itself runs the PSD permitting program). Therefore, a source that wants its PSD permit that had been issued under these circumstances rescinded will need to request this of the agency that issued the PSD permit. In doing so, the source must demonstrate that it did not at the time of application nor still does not qualify as an “anyway” source. While this covers a small number of sources nationwide, it does remove all PSD requirements from them, a welcome relief.

One of the complaints that led to the court cases was the concern that by requiring PSD permits for sources solely on their GHG emissions and because sources in general emit GHGs in much greater quantities than they do pollutants commonly regulated by the Clean Air Act, applying the amended statutory threshold for GHGs could have required the USEPA to issue PSD permits to hundreds of thousands, perhaps millions of sources nationwide that otherwise would not have to go through the trouble of obtaining PSD permits and requiring their enforcement, an expensive proposition. The USEPA did amend PSD to raise the statutory threshold of GHGs to a much higher level. However, there was concern of a large number of facilities and smaller facilities having to address and comply with PSD.

The USEPA published this amendment of PSD as a direct final rule without seeking public comment because the USEPA was responding to a US Supreme Court ruling. If the USEPA does receive adverse comments, however, it could withdraw this direct rule and address the comments in a subsequent new final rule. The due date for submitting any comments is June 8, 2015.

CCES has the experts to evaluate your facility’s greenhouse gas emissions using approved methods and can assess other pollutant emission rates to determine your applicability to PSD and other federal and state air pollution regulations. We can help you strategize to determine cost-effective ways to comply with any regulations that must be achieved. Contact us today at 914-584-6720 or at karell@CCESworld.com.

New Federal Law to Encourage Energy Efficiency

President Obama signed the bipartisan Energy Savings and Industrial Competitiveness Act (ESICA or Shaheen-Portman) last week that will reduce energy use in commercial buildings and government offices. The law will help make the U.S. more energy efficient, increasing both our economic competitiveness and our energy security. None of the provisions of the bill will force the private sector to become more energy efficient, but will provide incentives and tools to help to help buildings do so.

Buildings

The new law strengthens national model building codes to make new homes and commercial buildings more energy efficient while working with states and private industry to make the code-writing process more transparent. It will also encourage private sector investment in building efficiency upgrades and renovations by creating a Commercial Building Energy Efficiency Financing Initiative to lessen the upfront payments building owners need to make to replace equipment with higher level energy efficient equipment instead of replacing in kind. The law also establishes Building Training and Research Assessment Centers at a number of universities across the nation to train young people in energy efficient technologies, building materials, and construction to enable them to set up their own businesses and help the private sector.

Real Estate

ESICA establishes a voluntary “Tenant Star” program, similar to the Energy Star label for appliances, for commercial buildings that reduce their energy consumption, making available energy information for businesses looking to lease space.

Manufacturers

ESICA directs the DOE to work closely with the private sector to encourage research, development and commercialization of innovative energy efficient technology and processes for industrial applications. It will provide improved means to incentivize manufacturers to reduce energy use and become more competitive through more energy efficient equipment. It establishes a new DOE program, SupplySTAR, to help make companies’ supply chains more efficient.

Federal Government

While the new law does not require a private building to be more efficient, it does require the federal government – the single largest energy user in the country — to adopt energy saving techniques for computers, saving energy and taxpayer dollars. It allows federal agencies to use existing funds to update plans for new federal buildings, using the most current building efficiency standards and it allows federal agencies to use ESCOs and UESCs to install electric and natural gas vehicle charging infrastructure, making it easier for agencies to use these types of vehicles.

Municipalities

The new law will provide guidance and information to municipalities who wish to amend their building codes and laws to encourage or mandate green or more energy efficient new building or renovations.

CCES has the technical and policy experts to help your building become more energy efficient, helping you maximize the financial benefits (direct reduction in energy costs, reduced O&M, smoother operations, etc.) and helping you get the full incentives you are entitled to. Contact us today at 914-584-6720 or at karell@CCESworld.com.

How Can You Manage Electricity Demand to Cut Your Electric Bill?

What is the Demand Charge?
by Sandy Gutner, P.E., ROI Energy Services

It’s true that understanding all the elements of your electric bill can be a daunting task. But it’s important if you are trying to control your electricity use and costs. If your organization uses a lot of electricity, you will notice that your bill does not look like your bill at home.

If you have a Demand Charge rate structure, the two types of use affect your electricity costs – demand and consumption. The names vary among utilities but the effect is the same. Demand and consumption each have a separate rate in part because they are measured differently. Demand is measured in kilowatts (kW), while the total amount of electricity used is measured in kilowatt-hours (kWh).

Plus there are several other charges that vary depending on these two components (e.g., fuel charge, non-fuel charge, taxes, environmental charge, etc.) If you can cut your demand you reduce the cost of demand as well as all of the charges that use demand in their calculation.

If you have a demand-based tariff, your utility has installed a special demand meter that tracks and records the highest level of electricity demand for each 15-minute (or 30 minute) interval during the billing period. All of the affected charges are multiplied by the peak demand.

Why Should You Care About the Demand Charge?

Obviously, like most factors in business it’s the money. If you can control the demand charge without impacting your business you can significantly lower your electricity costs.

Peak demand charges can represent up to 30% of your utility bill. Certain industries, like manufacturing and heavy industrials, typically experience much higher peaks in demand due largely to the start-up of energy-intensive equipment, making it even more imperative to find ways to reduce this charge – but regardless of your industry, taking steps to reduce demand charges will save money.

Show Me the Math: How Demand Charges are Calculated?

Consumption is measured at a rate based on kilowatt-hours (kWh), or how many kW were used in every hour. Demand is measured in kilowatts (kW) or the peak number of kW used in a short interval and measures the intensity of power draw.

Demand Charge shows how one business can pay over $50,000 per year more for electricity than the other even though they both use the same kWh. This example shows how managing the demand peaks saves over 12% even with the same consumption.

Sandy Gutner, P.E., is the President of ROI Energy Services, Weston, FL.
Website: www.ROIEnergyServices.com
Phone: 1-888-855-5471
E-mail: sgutner@ROIEnergyServices.com

ROI Energy Services is an engineering firm that offers energy saving solutions with a unique financial proposition for our commercial and industrial clients. Our financially viable turnkey solutions help reduce one of the most challenging operating expenses – energy consumption– and are paid for by the savings from reduced electricity costs.

Guaranteed Energy Savings Offers Unique Financial Proposition
ROI Energy offers a unique financial proposition to commercial and industrial energy consumers by creating energy savings solutions tailored specifically to meet their financial requirements. With a useful life many times greater than the payback period our clients reap long-lasting financial rewards. If the energy savings is less than our guarantee, we pay 100 percent of the shortfall –guaranteed

Renewable Energy, Water, Wastewater and More – 25 Years Engineering Consulting
The ROI Energy team has more than 25 years of experience providing engineering consulting services to public and private sector clients. We have represented owners’ interests in a wide variety of large-scale infrastructure projects including renewable energy, water, wastewater, and many others. The insight gained from this perspective has led us to our primary focus, which is adding value in everything we do.

Communicating Your Green Achievements

A growing number of companies and municipalities are producing reports highlighting their sustainability achievements of the previous year. If your business or municipality is not currently creating such a report to highlight your green achievements (whether done to impress those interested in green achievements or not) is missing an opportunity to communicate a positive story in an open way to critical stakeholders who are craving reading such positive news. A Sustainability Report is an essential piece of any communication effort, but is often overlooked in working on the program, as many focus only on making the goals. But a success not communicated reduces its impact.

Reporting efforts do not have to be a major undertaking. To get started first determine who your audience is. Which stakeholders are most likely to read the report and what facts or style are they looking for? Sustainability will impact different parts of your entity, but by focusing on who follows such news the most, you can keep it short and simple while establishing the credentials to satisfy your most important stakeholders.

With this information, identify the focus of your report and the message you want to get across to the key stakeholders who care deeply about sustainability. What information do you want to give to the readers and how do you want to get it across to them? Should it be short and factual in nature? Or by a narrative as if you are telling a story?

Whether your report is factual with bullets or with more text, at one point your report will communicate facts and data about your sustainability program or projects. Therefore, it is critical that it state data and it needs to be right. What metrics are you using to demonstrate progress? Is it the same commonly used by other organizations? Double check that, for example, the reductions in energy or water usage that were calculated are correct and beyond reproach. Data will likely be checked by stakeholders or perhaps those who may be critical of your effort. If the data is off or not the whole truth in summarizing the project, your entity may be criticized and worse off.

As you can tell, this is a complex effort and should not be undertaken by a single, even smart, well-meaning person. Because you are looking at message, data, and people, a team effort is the best approach to prepare your sustainability report. The draft report should also be reviewed by those outside the preparation process before issuance.

Once the report is released (as a webpage in your company’s website or a pdf), make the effort to promote it through the entity’s website, social media, annual reports, and marketing materials. Attempt to get feedback through the Internet from the stakeholders you had focused on to determine whether they read the message you wished to get across. Did significant numbers of people in other groups who were not your focus also read the report? If so, were they satisfied with the progress? Use this as a learning experience to improve the process and message put out in future reporting.

CCES has the technical personnel to prepare a successful sustainability or “green” program with concrete successes and can help you communicate your successes to your key stakeholders in a clear manner. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Are You Suffering From EEPA (Energy Efficiency Performance Anxiety)?

By Sandy Gutner, P.E., President, ROI Energy Services

EEPA, or Energy Efficiency Paralysis by Analysis, needlessly affects millions throughout the US, and the world. Some call it Energy Efficiency Performance Anxiety. EEPA is nothing to be ashamed of. It’s just a number. And it can be easily fixed.

You know energy efficiency is a universally accepted “win-win”. You know it will boost your bottom line make your organization more competitive. You even know it will improve your sustainability profile. If this describes you, you’re probably suffering from EEPA.

What are the Causes of EEPA?

OK, I’ll admit it. I made up the term EEPA, but the reality is most businesses are missing opportunities to improve their bottom line. How do you know if you have it?

• You feel confused and overwhelmed with information
• You don’t know whom you should trust.
• You’ve gotten many new insights about your energy use, now you think there is so much more to explore, and maybe you’d better do some more research.
• You feel like you need even more information before making a decision but in your heart you know that more information might make your EEPA worse.

If any of these indicators or similar excuses is stopping you from cutting electricity costs, you probably have EEPA.

How did you get to this point? You’ve been thinking about energy conservation, but…..
• “You’ve done an energy audit, and one of your contractors/suppliers/advisers/vendors (circle one) has other suggestions”;
• “Your engineering or technical staff wants to study it further”;
• “You’ve heard renewables are looking more attractive”;
• “Someone in your golf foursome, poker game, advisory committee (circle one), mentions that technology is advancing so quickly that it would be better to wait a couple of years”.

Most likely, you do not even realize you have EEPA.

How Is EEPA Affecting You?

Simply stated, if you have EEPA you’re giving the cash that could be used to streamline your operation and giving it to your electric utility. Unlike other capital investments, the cost for energy efficiency solutions are already covered by the savings gained. When these costs are financed the savings exceed the finance costs yielding a positive cash flow. You can see an example of this right here. On the flip side, delaying energy efficiency is actually costing you money. The Cash Flow Opportunity Calculator, developed by Energy Star can help you determine the actual and opportunity costs of waiting.

How Can You Treat EEPA?

The solution to EEPA is not more information, just better information from a trustworthy source, that addresses your specific and unique needs, and that provides clear actionable steps. The most important information for most management and executives is:
• “What is the payback”,
• “Will it affect my operations or workspace environment?”
• “What will I have to do?”
• “How do I know I will really see the savings?”

That is why ROI Energy Services takes the approach of managing the details and delivering a package that meets a guaranteed payback and ROI. We study your system, design a solution that is customized to your needs, meets your required ROI and payback period, and whose savings is guaranteed. Our approach delivers a specific, actionable recommendation with a firm not-to-exceed cost, and guaranteed ROI. We will worry about whether LEDs are cost effective, and where, or whether other methods are better. We will determine how to make your existing equipment more energy efficient without costly replacement.

Important Side Effects

Implementing energy efficiency may result in higher profitability, better equipment reliability, longer lasting equipment, improved sustainability, productivity improvement, and many other benefits. Please consult with ROI Energy Services to discuss how to achieve these results.

Sandy Gutner, P.E., is the President of ROI Energy Services, Weston, FL
Website: www.ROIEnergyServices.com
Phone: 1-888-855-5471
E-mail: sgutner@ROIEnergyServices.com

ROI Energy Services is an engineering firm that offers energy saving solutions with a unique financial proposition for our commercial and industrial clients. Our financially viable turnkey solutions help reduce one of the most challenging operating expenses – energy consumption– and are paid for by the savings from reduced electricity costs.

Guaranteed Energy Savings Offers Unique Financial Proposition

ROI Energy offers a unique financial proposition to commercial and industrial energy consumers by creating energy savings solutions tailored specifically to meet their financial requirements. With a useful life many times greater than the payback period our clients reap long-lasting financial rewards. If the energy savings is less than our guarantee, we pay 100 percent of the shortfall –guaranteed

Renewable Energy, Water, Wastewater and More – 25 Years Engineering Consulting

The ROI Energy team has more than 25 years of experience providing engineering consulting services to public and private sector clients. We have represented owners’ interests in a wide variety of large-scale infrastructure projects including renewable energy, water, wastewater, and many others. The insight gained from this perspective has led us to our primary focus, which is adding value in everything we do.

Alternatives to Traditional Rooftop Solar Panels

Solar PV has come down in price markedly in the last few years. Adding incentives from a number of government agencies and utilities, solar PV has become a technology that pays back in a timeframe acceptable to most. However, many buildings cannot have traditional rooftop solar PV panels because of the age of the roof or because of shade from trees or other items. Now alternatives exist for buildings to still benefit from generating electricity from the sun, and get around these issues.

A North Carolina State University team demonstrated that water gel-based solar PV called “artificial leaves” can produce electricity. The analysis was published in the Journal of Materials Chemistry. These plant-like units are composed of water-based gel containing light-sensitive molecules (like plant chlorophyll) coupled with electrodes coated by carbon materials, such as carbon nanotubes or graphite, which can be activated by the sun’s rays to generate electricity, similar to plants synthesizing sugar. And therefore, these units can be stored in wooded areas or in bodies of water.

In many cases, owners of buildings with old roofs think that installing a new roof is the only way to support the weight of solar panels. One argument is that the cost savings of using solar PV can pay some or all of the costs of a roof upgrade. But for those that cannot use this logic, there are now solar PV built into roof shingles. So instead of laying a new roof and place panels on top of them, new roof shingles can be installed containing the silica and other elements to convert sunlight to electricity. Such units cannot be used on certain types of roof (i.e., slate).

If a roof is old or some sunlight is blocked, it may be possible to install solar PV at ground level in open areas. Of course, such available space is rare. However, several firms have developed solar PV panels that can be placed in outdoor parking areas to serve as shading panels on islands. These shields collect sunlight and produce electricity which is directed to the building from cables underneath the parking lot. But besides generating power, the panels create shade so cars are not too hot in the summer. Plus, the panels can direct snow to specific areas, reducing plowing needs.

Finally, entrepreneurs have developed ways for people and companies to benefit from solar-generated electricity or hot water without having it on their roofs or property. In recent years, the concept of “community solar gardens” has started up. CSG is the placement of a large number of solar panels in an open area (unused land in a corporate footprint or of a municipality). The electricity that is generated goes right into the grid for the benefit of all who live or work nearby. People and companies can buy shares in the community solar garden, composed of an initial payment representing a fraction of the total solar garden or a certain number of panels plus pay an annual upkeep fee. The investors would then be rewarded with savings on one’s electricity bill, even if that person lives far away, as well as a share of any awarded incentives. This concept may be ideal for a municipality with unusable land, perhaps an old, treated contaminated site with a population that cannot install solar PV (many multifamily units), but would be willing to invest and be part of the benefits and feel good investing in clean, green energy.

CCES has the experts to help you manage, see through, and maximize the benefits of renewable energy, including solar PV, whether through traditional installation of solar panels or alternatives, such as these discussed here. We can provide you with comprehensive technical advice on all energy issues to gain the greatest financial gains. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Energy Risk Expected To Rise in U.S.

There is a growing concern that large sections of the U.S. and other countries will be at greater risk of blackouts or periods of electricity shortages due to a number of factors. This can have grave consequences on the economic growth of many companies. Uneven electricity production and delivery is common in developing countries which have problems with both power plants plus the infrastructure to deliver reliable power to people and industry. Much has been written about countries in Africa, Asia, and South America which are investing in economic growth, but cannot achieve it because of unreliable power. As a result, there is either dangerous (explosions, fires) power supply or limited growth, as investors demand surety in utilities. But even North America and Europe are beginning to show increased risk of disruptions, too. These issues, called “fuel poverty”, have gotten the attention of major governments and power companies.

Increased risk of unreliable energy supply has been influenced by affordability, security, and sustainability issues. Many areas have seen a sharp increase in electricity demand in recent years and the capital cost to upgrade infrastructure to produce and deliver the additional power is very large. In some cases, necessary upgrades are not affordable without large rate increases or government assistance, two areas that politicians prefer to avoid. Many utilities recognize that offering incentives to be more energy efficient is cheaper than implementing full infrastructure upgrades, but will take longer and is a gamble of whether this will be sufficient to reduce the needed investments sufficiently. Thus, more people and business will be at risk of “fuel poverty” in the future.

This is also a long-term issue. While the recent recession tamped down energy demand, it is beginning to rebound. Several think tanks predict a worldwide doubling of energy demand between recent years and the 2030’s, something that cannot be met in terms of development and delivery without R&D and implementation of renewable energy, as fossil fuel availability is limiting, due to political and practical considerations.

What can your company do to reduce your risk of unreliable energy supply?

1. Preparation. Your company and facility should routinely develop an energy plan. How much and what types of energy does your company need to function? How much might it grow in the future? Where do you get your energy from? Are there other, more reliable sources? Looking forward, what energy sources may be more reliable for you in the future, such as renewable or certain sources plentiful near where your operations are? I was involved a few years ago with a confidential client that wanted to build new facilities in Asia, and I performed an evaluation of the energy sources around that region, and determined that wood is expected to be plentiful in the area, but fossil fuels not. Therefore, new boilers and cogen needed to be able to operate as well combusting wood as it does oil and gas, as wood should be plentiful in the next 20 years, but fossil fuels which has to be shipped in to region, may become more expensive in the future.

2. Invest in smart technology that will provide both information on energy use and paths to energy efficiency. Smart metering provides the opportunity for you obtain useful data on your energy usage and demand, which can provide you a truer picture of your costs, risks, and future. Knowledge of usage provides you with ideas to reduce your usage in the most cost-effective manner.

3. Renewables/clean energy is the long-term path to go. Depending on power from fossil fuels will be at risk in the future due to its finite nature, the more difficult it is to find and refine fossil fuels (raising its cost), and the political situation. Even in a positive scenario, fossil fuel costs will go up and down with conditions, and make planning harder. As renewable energy becomes more established and efficient, prices are coming down for installation, and the source of power is plentiful and free. Utilities in the US are being forced to generate more power from renewables; but they are realizing the advantages of these technologies.

CCES has the experts to help you establish short-term and long-term energy planning to increase your efficiency, reduce costs, and reduce risks of unreliable supply and delivery. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Investment in Clean Energy Grew Strongly in 2014

In this blog, I have talked a lot about energy efficiency and what a great investment it is. The relatively simple upgrades you can do for your existing systems in your buildings to improve the performance and get your money’s worth are a great investment in terms of cost savings and productivity.

But don’t just focus on energy efficiency. How about changing some of your systems altogether to clean energy? Clean energy has made great advancements in just the last few years, especially with prices coming down and becoming affordable. Worldwide investment in clean energy, such as solar and wind, rose 16% in 2014 alone, with investments totaling $310 billion, according to Bloomberg New Energy Finance. (http://www.bloomberg.com/news/articles/2015-01-09/clean-energy-investment-jumps-16-on-china-s-support-for-solar). This is particularly impressive given the global sharp decline in oil prices making any potential switch from fossil fuels less attractive. Demand grew sharply for both large-scale and for rooftop solar PV and a record $19.4 billion of offshore wind projects. This investment is than five times the spending one decade ago.

The increase in investment in clean energy in 2014 was 26% in Canada and 8% in the U.S. The increase was led by investment in new large renewable energy projects (slightly over half of the total), such as solar fields and off-shore wind, followed by small distributed capacity projects (a little over 25%), such as rooftop solar. Government and corporation clean energy R&D totaled $29 billion, while energy smart technologies, such as smart meters, came in at $16.8 billion.

Investment in solar rose 25% compared to 2013; investment in wind rose 11%. This indicates that despite the worldwide drop in oil prices, investors realize that in the long run renewable power, particularly for electricity production, is the best investment of funds and likely to be the most stable in terms of cost for the long-term. This should be beneficial for you, too.

CCES can help your company assess the feasibility, advantages/disadvantages, and costs of different renewable energy technologies for your company and buildings. We can help you determine whether this is the time and how best to invest to make clean energy a good, long-term investment for you and maximize your benefits. We can manage the bidding and installation process and ensure and verify that the system meets your needs and goals. Contact us today at 914-584-6720 or at karell@CCESworld.com.

More Proof of the Great Value of Energy Efficiency

The American Council for an Energy-Efficient Economy (ACEEE) issued a report last year detailing the special value and benefits of becoming more energy efficient (for access, see: http://aceee.org/research-report/u1402). The report determined that improved energy efficiency costs on average 2.8 cents for every kilowatt-hour saved, while the average American spends 10 cents per kilowatt-hour used (of course, we in the Northeast pay much more), making energy efficiency a great value. Therefore, efficiency is the true cheapest form of energy and pursuing energy efficiency is, if done properly, a positive financial success for any business or families in their homes.

This and other papers drive home this point this way:

The unseen cost value of energy efficiency. Many energy efficiency projects are judged by the payback on the initial investment. Many companies have a threshold (i.e., 3 years or 4 years) above which they will not make the investment in the project. No matter what! Within limits of what money is available to be invested, this is a short-sited argument. The real value of energy efficiency is in the length of time the savings continues, as well as, the continued and growing value of the savings.

Here is a conservative example where I overestimate costs and underestimate benefits: a simple group of lights in one particular room is replaced with LEDs, say 20 60-watt fluorescent lights with 18-watt LED equivalent lights. Assuming the lights are on 12 hours/day, 5 days/week, then the electricity savings would be over 2,600 kWh/year. At $0.20/kWh, this alone would save $520/year. Assuming an installed cost of $80 per LED, the upfront cost would be $1,600, for a simple payback of just over 3 years. Not a bad payback. (Again, overestimating costs, underestimating savings) 2 “by the ways”: 1st, this does not include incentives from your state or utility for lighting upgrades, reducing the payback. 2nd, many buildings pay for electricity based on peak demand as well as usage. Reducing demand here by nearly 1 kW would further save costs.

What is often not included in such evaluations of energy efficiency upgrades is that the new lights will likely last for over 10 years. Many LED lights are waranteed for 50,000 hours of usage, which would be 16 years of usage at this rate. So after the investment is paid back, you will continue to save and come out ahead for the next 7 years, maybe 13 years or more. These lights would save >$3,600 in the lifetime on short end of range.

Remember, the savings calculations are just for one area of only 20 lights. Imagine how many lights your building actually uses and, therefore, the potential cost savings! And now add on improvements in your insulation, HVAC systems, etc., and the savings multiply. There is a special value to this. Depending on the size and complexity of a building, energy cost savings can be hundreds of thousands of dollars per year. That’s money in the company’s “pocket”. How else does a company make money? By increasing revenue; by selling more widgets. But if the average widget yields 10% profit, that’s an awfully lot of widgets that have to be sold to make up for energy efficiency savings. And, after a year, you have to go right out and sell even more widgets. Once you make the energy efficiency upgrades, the savings stick around with no additional work for a long time!

But even this underestimates the savings in two ways. Unit electricity prices change and only go up. Assuming the $0.20/kWh rate rises even 2% per year, cumulative savings will grow by about another 10%. Also, the fluorescent bulbs that would have replaced existing bulbs had LEDs not been used have a much shorter lifespan. They would need to be replaced much more often than LEDs, requiring additional capital costs and raising the cost savings of using LEDs.

Hard-to-measure added benefits. Energy efficiency projects also have many significant benefits that are good for a business or residence that are not directly energy-related and hard to quanitify, yet are significant. New, more efficient equipment generally needs less maintenance, freeing up your maintenance workers to perform other needed tasks. A more efficient HVAC system with smart controls (thermostats) will result in a more comfortable work staff, raising worker productivity and resulting in tenants who will complain less. Studies show that well-designed efficient lighting causes less eyestrain, not only also raising productivity, but also reducing sick days and even the number of “coffee breaks” a worker needs. How much this benefits a building owner or a business is hard to quantify and depends on the individual needs of the business; but nobody can deny that these benefits of energy upgrades are real and significant.

Not all energy efficiency projects are created equal. Different types of energy efficiency projects are more cost beneficial than others. According to the McKinsey report: “Pathways to a Low Carbon Economy”, replacing lights with LEDs and installing more efficient appliances and electronics are the two most cost-effective ways to be more energy efficient. According to the report, other strategies are less cost-effective (upgrade motors, retrofit insulation, upgrade HVAC) and some are theoretically not cost-effective at all (renewable energy in absence of incentives, plug-in hybrid fleets), yet have many positive non-energy benefits.

How do you get the go-ahead to pursue an energy efficiency project that is beneficial, but may have a longer payback or reduced return on investment? There are two approaches. In the first one, an entity may concentrate on “low hanging fruit”, such as lighting and appliance and electronics upgrades, have management be aware of the quick reduction in the electricity bills and quick payback. With this money “in the bank” and the confidence that this instills, then begin to address slower payback strategies, using the money saved as upfront cost, a springboard to implementing these strategies.

The other approach is to perform a comprehensive energy efficiency upgrade of your facility and address several strategies at once. Calculate the expected payback and return on investment of the blended project. Average the “good” numbers from a lighting or electronics project together with the worse-appearing numbers for insulation and HVAC upgrades to provide an overall payback and return on investment that management will accept and allow you to do all of the projects and reap all the benefits.

CCES can help you organize, implement, and verify the success of a robust energy efficiency program to maximize both your financial and non-financial benefits, reduce your upfront costs, and to ensure that all elements of your organization is “on-board” and shares in the benefits. Our technical and policy experts can maximize your benefits and ensure that the projects proceed smoothly with minimal disruptions. Contact us today at 914-584-6720 or karell@CCESworld.com.

DOD Incorporates Climate Change into Planning

The US Dept of Defense (DOD), of course, does long-term planning, anticipating its necessary future actions, strategies, and technologies. A master plan for climate change adaptation was published recently by the DOD, and showed a major concern about the effects of climate change on DOD installations and operations (http://www.acq.osd.mil/ie/download/CCARprint.pdf). Climate change adaptation has now become a major part of DOD planning.

Perhaps the most important aspect of this report is that the effects of climate change are now integral parts of DOD’s organizational structure and planning. Climate change issues will be part of DOD’s normal decision-making processes and of people’s jobs.

The DOD began to address climate change issues after publication in 2010 of its Quadrennial Defense Review, which analyzes long-term strategic defense issues, and first linked climate change to national security by evaluating its impacts in areas around the world, such as disasters and access to water and food. These are issues that can potentially accelerate instability and conflict. The report also indicated that climate change impacts will likely impact DOD facilities and operations, and, unless anticipated and addressed, ultimately military effectiveness.

The latter concern weighs greatly on the DOD which oversees over 500 bases worldwide and operates buildings and infrastructure valued over $850 billion. Damage to such assets by flooding, sea level rise, intense storms, drought, and thawing of permafrost is rightfully a concern of the DOD. As a result, the DOD has determined that climate change issues will be taken into account in future installation management.

The document also recommended that the DOD implement strategies to reduce energy usage, including greater efficiency and to increase the use of renewable energy sources, in order to both reduce its own greenhouse gas emissions and to provide greater operating flexibility, such as to reduce dependence on large quantities of oil, which can be a target of enemy fire or terrorism.

The DOD promised to develop codes for its buildings to reduce the usage of energy, water, and other natural resources, to develop more resilient infrastructure, and to anticipate and plan for rapid recovery from damage that could occur due to severe climate change-driven situations (flooding, storms, etc.).

CCES has the experts to help your company and building plan to minimize your usage of energy and other natural resources and to plan for and be more resilient in the face of future climate change effects in your location. This effort can save you much money and reduce your risks. Contact us today at 914-584-6720 or at karell@CCESworld.com.