Quarterly Energy and Environmental News

July 2016

News affecting the US energy and environmental areas happens. CCES will keep you up-to-date on important issues quarterly. We may not cover every issue and jurisdiction. Make sure you work with a qualified professional to determine how such news affects your business and career. But we hope this will help keep you up with changing US trends.

Reducing Methane Emissions

The Obama Administration is entering its final months, and there is concern that they have not properly tackled all options concerning reducing greenhouse gas (GHG) emissions in response to climate change. While the focus has been on reducing CO2 emissions from fossil fuel combustion, it is understood that methane (CH4) emissions (21 times more potent than CO2) must be reduced, as well. There is a debate on how to do this. Recent technological advances, such as fracking, has encouraged conversion of coal and oil plants to natural gas, effectively reducing CO2 emissions. However, increased usage of natural gas means greater leakage and emissions of CH4 such that GHG emissions are not being cut significantly in total. While the Republican candidates for President have not discussed the issue, different factions of the Democratic Party have different strategies, ranging from a total ban on fracking to supporting fracking under certain conditions, such as minimizing water and CH4 leakage. The platform of the Democratic Party deals with this in compromise form, requesting minimizing CH4 leakage, requiring companies to publicly list the chemicals used in fracking, and banning fracking in communities or states that oppose it.

The Obama administration has pledged to reduce CH4 emissions from the oil and gas sector by 40 to 45% below 2012 levels by 2025, and has begun to draft standards for CH4 emissions through the Clean Air Act, although they will likely not become law until the next administration.

US Court of Appeals Delays Hearings on Clean Power Plan

The US Court of Appeals for the DC Circuit announced that it was delaying oral arguments concerning the Clean Power Plan until September 27 in front of the entire Circuit. The Clean Power Plan would establish federal standards for CO2 emissions from existing power plants. The timing is such that a decision by the full Circuit would probably be made after this November’s elections. Who becomes the new President may itself alter the landscape and breadth of the Clean Power Plan. The losing party to a Court of Appeals decision after Election Day would likely appeal it to the US Supreme Court which could hear arguments and rule by June 2017.

The Obama Administration and the USEPA believe they have the statutory authority to amend the Clean Air Act to include such regulations. Arguments against the Clean Power Plan include whether the USEPA exceeded its authority under the Clean Air Act to set CO2 emission standards that rely on emissions beyond a facility’s control (if other facilities combust high-GHG emitting fuels or use renewables). The Clean Air Act allows the USEPA to only regulate activities at the actual power plant to reduce emissions (e.g., efficiency improvements). The USEPA responded by stating that the Clean Air Act allows it to take “generation-shifting” measures to determine emission reduction targets.

Obama Administration’s Initiative for Solar for Low, Moderate Income Housing

The federal government announced in mid-July the Clean Energy Savings for All Initiative, aiming to increase the use of alternative energy by 10-fold in low and moderate income housing. See https://www.whitehouse.gov/the-press-office/2016/07/19/fact-sheet-obama-administration-announces-clean-energy-savings-all.
The program aims to increase solar use by about 1 GW by 2020, covering about 1 million additional low and moderate income homes.

Key elements of the Initiative:

• New guidance to use Property-Assessed Clean Energy (PACE) financing;

• A “Community Solar Challenge” to award teams in many communities up to $100,000 in cash or technical assistance, to develop innovative models to increase solar installations and reduce low income communities’ electric bills;

• DOE will provide technical assistance to qualified low income housing groups;

• Solar-related job training for low- and moderate-income people; and

• Over 120 housing authorities, rural electric co-ops, power companies, and others in over 36 states have committed to investing $287 million for over 280 MW of solar energy projects in low- and moderate- income communities.

New NPDES Standards for Discharges from Construction

The USEPA is expected to shortly update its NPDES General Permit for Discharges from Construction Activities (GCP) to go into effect next year. The proposed updates to the GCP are intended to clarify current permit language and contain new requirements that non-stormwater discharges from external building washdown not contain hazardous materials such as PCBs, revise current effluent limits, require cover or other appropriate temporary stabilization for all stock or debris piles unused for 14 or more days, require waste containers to be closed or covered when not in use, and impose requirements on the demolition of structures exceeding 10,000 sq. ft. of floor space, which were built before 1980, to limit PCB-containing building materials entering stormwater.

We hope that this information is useful to you and your firm. Please speak to professionals in the appropriate fields before implementing any strategy or addressing any regulation. CCES can provide the technical advice to help you comply with a new environmental or energy regulation and to help you prosper as you do so. Contact us today at 914-584-6720 or by email at karell@CCESworld.com. And feel free to comment on these articles or suggest topics of interest.

Applying Green Building To Manufacturing Plants

July 2016

The “green” building movement as thought of by LEED standards has progressed well as applied to residences and commercial buildings, such as office buildings. But what about manufacturing? When we think of “factories”, we imagine large “clunky” buildings built for the necessities of 100 or more years ago, when energy and water were cheap and room was needed (and available) for assembly lines. With the decline in manufacturing in the U.S. over the last few decades, few have thought it worthwhile to invest in green features in old manufacturing buildings.

However, the U.S. Green Building Council recently released a short report “LEED in Motion: Industrial Facilities,” there are more than 1,775 LEED-certified industrial facilities, covering nearly 500 million square feet of space, with high future growth likely.

Many former industrial hubs have seen an increase in available, empty industrial buildings that are primed to be refurbished or repurposed. Meeting LEED certification standards by demonstrating excellent energy, water, resources, waste, etc. performance makes such efforts worthwhile. Pittsburgh is considered the leader in this effort, as its municipal government has encouraged repurposing and refurbishing its large stock of former factories through LEED.

Why is the “greening” of factories necessary and beneficial? First of all, the economics of operating a manufacturing plant has changed compared to decades ago. Energy, water, waste management were easily available and cheap; not so anymore. Space is more of a premium, too. Factories have to be more efficient in resource management to meet the new realities of the market. In addition, US industry is competing in global markets where labor costs, which are often much greater then resource costs, are cheaper. As “LEED in Motion: Industrial Facilities” states, U.S. manufacturing buildings must be more efficient when it comes to not only energy, water, and waste, but also labor productivity. LEED buildings of all types result in high-performing buildings where the health of the labor force is enhanced.

The first packaged-goods manufacturer to achieve a LEED Platinum rating is Method Product’s cleaning products factory in Chicago. Method heavily invested in renewable energy and the world’s largest rooftop farm, expected to produce 500 tons of food annually. Method estimated that the plant cost them about $30 million, about 33% higher had it aimed for a lower LEED rating, but that they would make the extra money back quickly in increased productivity, reduced costs, and reduced transportation costs.

CCES can assess your current or prospective industrial facilities and determine whether they are candidates for upgrades to become more “green” and to estimate the necessary investment, payback, and profit of different green strategies. We can assist whether you wish to do a complete green upgrade or want to address one issue at a time. Contact us today at 914-584-6720 or at karell@CCESworld.com.

The Perfection Trap

“If we’re going to do this project, it’s got to be right!” “There’s a lot riding on this. If it does not come out exactly right, on time, and on budget, then we’re (you’re) in trouble.”

Have you come across expressions like this before? I have, particularly on energy projects. While for other projects, it seems to be OK if it is a little less than perfect in execution or a little late or maybe even a little overbudget. But when it comes to an energy or sustainability project, that all goes out the window. Managers expect major cost savings and they be achieved quickly without any disruptions.

This is a managerial mind-set I have experienced myself with some clients, an obsession with perfection. The demand that a project go perfectly or else we won’t do it is wrong-headed for success and for motivating employees.

Energy and sustainability, like most projects, rely on innovation and adjustment to be successful. There is never a guarantee that a return on investment will hit the mark that was calculated in theory on a spreadsheet. Energy, like most projects, needs flexibility, including an openness for minor failures, and improvement from learning from errors.

I have also come across clients who wonder why we perform analyses of likely success and potential financial gain. Why not just “go to Walmart and buy a few hundred of the darn technology and just install it.” No, that’s not the way a successful project works. Yes, one can overdo pre-project analysis. But every building and company is different and it’s important to plan out the energy upgrade or sustainability study, see how it will likely affect the company’s operation and bottom line, and then design it for the best results, taking data to see if adjustments must be made along the way.

This is the best way to approach an energy or sustainability project and will most likely lead to success for your company. Slow, sure, collect data along the way, and learn from mistakes. With that in mind, it is crucial to communicate the progress of your project, so the managers will know what’s going on, why things may be deviating from original plans, but with the understanding of why this is ultimately beneficial.

“If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception, it is a prevailing attitude.”
– Gen. Colin Powell

CCES can help your company organize, design, and develop your sustainability, green, or energy program to maximize financial benefits for your individual operations and buildings. We can help you learn from others and communicate progress effectively. Contact us today at 914-584-6720 or at karell@CCESworld.com.

EHS Programs Have Great Financial Benefits

Effective environmental, health and safety (EHS) programs traditionally are viewed as “backoffice” operations, existing only to prevent fines and reduce risk of accidents. But a proactive EHS program that also addresses sustainability issues also helps firms make and save money, according to an Ernst & Young report. http://www.ey.com/Publication/vwLUAssets/Make-money-save-money-and-manage-risk/$FILE/Make-money-save-money-and-manage-risk.pdf

BP paid $25.4 billion in EHS cases brought by federal regulatory agencies since 2010, according to a database called Violations Tracker. While this is the most in the US, several other major firms have paid over $1 billion because of federal EHS violations in the past few years that could have been reduced had they had robust EHS programs.

The report says that in addition to decreasing the number of enforcement actions, fines, and injury costs, a robust EHS and sustainability program also helps companies reduce raw materials used and cut waste and energy and water costs used in operations, which all lead to major cost savings. These cost savings include not only smaller outlays to utilities and suppliers, but reduced O&M and other labor expenses, too, and attendant reduced insurance costs and risks.

But well-organized EHS programs can also lead to:

• increased revenues by enhancing reputation with the public,

• improved employee morale (thus improving productivity and reducing inefficiencies of training so many replacement workers),

• improving relations with leaders and politicians which may allow the company to move forward on a project that some may oppose, and

• putting their products in a more favorable position in the marketplace.

Robust EHS programs also have a balloon effect, improving the technology and providers of such services. Greater programs incentivize better technologies and applications of existing technologies to environmental and safety applications. Robust EHS programs leads to increased spending on the right technology, EHS consulting, and software.

In an era where some Presidential candidates disparage EHS and its importance, these studies demonstrate the many-pronged value of a strong EHS program to companies, municipalities, and the public.

CCES has the experience and expertise to help you organize a robust EHS program for your firm to provide options to realize these advantages and to maximize financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com

This Is The Time To Fix Inefficient Boilers

May 2016

It has taken longer than usual, but warmer weather is finally headed to the US Northeast and Midwest, and boilers to provide heat and comfort can be shut down for awhile. While it may be “out of mind”, this is exactly the time to perform upgrades to save you money in the next heating season. We have seen recently fuel prices rising (fuel oil and natural gas), so savings will be even greater next heating season.

Heating and hot water supply can account for over one-third of a building’s energy consumption, justifying the investment in improved efficiency. Heating costs can be cut by up to 30% by implementing simple measures such as insulation, maintenance, optimized on/off controls (improved modulation), and energy monitoring.

The simplest upgrade with a good payback is insulating or repairing the existing insulation on boilers, condensate tanks, pipes and valves in steam or hot water service. Putting your hand on such areas (very briefly) will illustrate the loss of heat which must be made up by combusting more fuel. Insulating such areas can save up to 10% of fuel consumption.

It is important to find a reliable company to review, test, and upgrade maintenance of your boilers. Not just go through the motions, but spend extra time inspecting boiler tubes, brickwork, fuel lines, etc. to determine whether they are operating optimally. Have combustion testing done to determine efficiency, O2, CO, and CO2 levels at both high and low loads, etc. Given that you have invested so much in capital costs for your boilers, it would be a shame to have you have to buy new units prematurely because warning signs have not been even observed, not to mention addressed. Quality summertime maintenance of boilers pays for itself in the long term.

If you have not installed this, you should consider installing monitors and software to determine whether all areas of your building are receiving adequate heat and feeding back either to adjust the rate of steam or hot water travel or the fuel feed rate. While the monitors and software may be initially expensive, the detailed determination of your heating success not only will save you energy costs, but also provides proof that you are providing adequate heat to all tenants.

CCES has the technical experts to help you identify potential upgrades for your boiler, domestic hot water, and other heating systems, and can manage upgrade or replacement projects for you to maximize the cost savings and other benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Look Into Right-sizing To Reduce Energy Usage

No one wants to be responsible for building a system that is under-sized. But when equipment is oversized, energy efficiency drops, reducing its cost-effectiveness.

This is commonly seen with pumps. Everybody wants the pumps to feed the maximum rate of air or a substance to the process. But what if a control, such as a valve, is placed to reduce flow to the optimal rate and that valve is partially closed nearly all the time? The pump was over-designed. It is operating at a continual high rate and then additional equipment, using energy, damps down the rate. This is like always stepping hard on your car accelerator and then quickly pumping the brakes.

Not only does this cost your facility needless energy usage and demand, but the inefficiency often leads to overheating and increased wear and tear, reducing the life of your equipment (raising long-term capital costs) and increasing O&M costs, too.

This is especially a problem in older systems, which are often over-designed as a cultural matter. The design engineer would recommend a pump with a capacity 20% greater than needed (“just in case” things change); the vendor would recommend a specific pump that was 20% greater than that for the same reason. This was tolerated as the cost of such over-conservatism – energy – were quite low back then.

The solution for many pumps and fans is to determine the proper size based on the worst-case usage and to utilize a variable frequency drive (VFD). A right-sized pump for worst situations plus VFD to adjust the usage for need can reduce energy usage for a given pump or fan by 50% or more and reduce wear and tear. In addition, many utilities and state incentive programs will pay you part of the cost of its purchase.

For pumps alone, they may account for up to 60% of total electrical energy usage in an industrial facility. 58% of a pump’s life cycle cost is energy. Therefore, by optimizing a pump system, annual energy consumption can be reduced by 30-50%. And this does not include increased O&M costs caused by wear and tear.

This mathematics is also true for other systems, such as HVAC fans, common in many more facilities.

CCES has the technical experts to help you evaluate your pump and fan systems and help right-size your systems to save you much in energy and O&M costs. Contact us today at 914-584-6720 or at karell@ccesworld.com.

The Key Is Not Less Lighting, But Right Lighting

Energy conservation is on more and more people’s minds – particularly building owners and managers and corporate officers. Energy is a growing cost for any business and with recent discoveries in technology that saves energy use, more and more businesses are turning to energy savings to gain many diverse economic benefits.

Among the best ways to save energy is through lighting upgrades. Changing to more energy efficient lights is one of the best “low hanging fruits” for energy savings. But, it is critical that you do not just run to the hardware store and buy new lights labeled “energy efficient”. Changing to the wrong lights may save you some energy costs now, but actually cost your company much more money when it comes to worker productivity.

Work and, Therefore, Lighting Needs Have Changed

For example, in commercial spaces, the way that offices are operated has changed in recent years. Most offices used to be a collection of private rooms for each employee, based upon size (larger ones for senior management), with little common space and hallways. Now, more and more offices are “open” with one or a few large rooms for many employees. Fewer lights are needed because there are fewer walls and separations. Put another way, lighting for one person in one office can now adequately provide proper lighting for several people’s work spaces.

The nature of work has changed, too. Office work used to be based on reading or writing on paper. But now much more work is done on personal computers, tablets, and other devices. Less artificial light is needed because these devices give off light.

Too Much Lighting Is Not Good Either

Therefore, you do not need to provide your employees with as much light as you used to. De-lamping, the strategic removal of light fixtures, effectively reduces wattage and energy costs. If done right, it will not adversely affect, but will improve worker productivity. Excess light, studies show, is actually not a good thing, potentially causing headaches, fatigue, stress, and even disrupting circadian rhythms.

The Illumination Engineering Society (IES) used to recommend a lighting level of 750 to 1,000 lux (lumens per square meter) in offices. However, IES now recommends a lighting level for open offices of about half of this: 300 to 500 lux. While a manager may be tempted to keep lighting levels as they are “to be sure” that everyone has sufficient light, this may not be a good idea for the reasons mentioned above.

Another matter to consider is the use of natural light. While allowing sunlight to enter an office as a replacement for artificial lights (whether by switching off lights or with a daylight control) is an effective energy saver, it can cause glare and solar heat gain, affecting worker productivity and adding to your air conditioner’s load and raising energy costs that way. Installing “low-e” film on the windows that allow sunlight will reduce glare and solar heat gain, providing the office the natural light with less of the downside.

Reducing lighting is a positive way to reduce energy costs and be more sustainable. However, your company will benefit more by doing this coupled with the right lighting.

CCES has the experts to help your company evaluate your current lighting and determine whether there are opportunities to not only replace your current lights with more energy efficient ones, but to also install the “right” lighting to improve productivity. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Our Crumbling Infrastructure and Climate Change

After several harsh winters, several major railroad disasters, and a greater frequency of severe storms, more and more people realize that we have ignored our infrastructure for way too long. Perhaps the tragedy with drinking water infrastructure in Flint, MI put us over the edge. While the focus there has been on who knew what when, this would not have been an issue if the Michigan government had not kept cutting their appropriations for all infrastructure. Even the Michigan Legislature began to support tax increases to support road and bridge repairs two years ago and even Chambers of Commerce, who have been major proponents of tax reductions and smaller government, now realize that potholes, sinkholes, improper water and energy delivery, and bridge failures are not good for the businesses they represent. The Federal government is discussing increasing appropriations for infrastructure upgrades, as well.

Let’s hope that any surge in infrastructure upgrade projects takes potential future effects of Climate Change into account. What is the use of re-paving a road, re-piping water mains, etc., if flooding due to sea level rise and strong storms may wipe out upgraded infrastructure? Therefore, the key concept is resiliency, how the structure will stand up to more rain, snow, longer periods of weather extremes, etc. Some key concepts:

o design, construct roadways, bridges, facilities, railroads, and piping to withstand weather extremes beyond the current norm and to require less maintenance, using materials which will perform more consistently in weather extremes.

o new designs of water runoff including permeable pavement and robust drain and river banks and ditches to handle large quantities of stormwater and less erosion.

o more, not less, roadside vegetation to ensure water uptake during severe storms, plus drought and erosion resiliency.

o larger capacity pumps/pump stations to prevent flooding in key areas.

o better sewer and cleaner water lines to adapt to greater and more frequent freeze-thaw, deeper frosts and drought and flood conditions.

A 2014 US GAO study, “Climate Change Energy Infrastructure Risks and Adaptation Efforts” reviewed likely impacts of climate change on US energy infrastructure, such as

o increased demands for electricity (cooling, pumps, etc.).

o physical risk of damage to the grid.

o risk of power plants’ reliability due to water shortages.

There appears to be momentum for politicians to approve more infrastructure upgrade projects, as the growing incidents are embarrassing politicians. Let’s hope that the engineering community gets more involved with design of projects and takes potential climate change impacts into consideration for long-term benefits, such as LEED.

CCES can help your firm assess its climate change risk, both physical and financial, from extreme storms, sea level rise, flooding, etc. We can help you design and manage solutions to improve your resiliency and benefit your bottom line. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Energy Conservation: A Great Financial Investment

Don’t think of energy reduction as a burden, but as a great financial investment. A robust program will effectively help your bottom line by reducing operating costs.
What is the other way to increase profits? Increase revenue. Fine, but how easy is that to achieve? Let’s say a building saves $100,000/year in operating costs through energy savings (not hard to imagine: less than $10,000/month). If your average “widget” results in a 10% profit, then you’ll have to increase sales by $1,000,000/year to get the same increase in profits as reducing energy. That means investing in more advertising, sales people, etc., and then there is no guarantee that you’ll reach that $1,000,000 annual increase in sales. It is more likely you will meet an energy savings goal than a sales goal. More important, even if you succeed in increasing sales accordingly, the next year you have to do it all over again. Keep the advertisements, salespeople, etc. going. How easy is that? But the energy conservation measures automatically keep saving you energy costs. In fact, savings will increase in future years as the unit cost of energy will only rise (will your utility keep the cost per kWh, per therm, etc. the same?). So the savings likely will be $103,000 in year 2, $107,000 in year 3, etc. for some time. But each future year, you have to invest and hope to get that million-dollar increase in sales.
Yes, think of energy savings as an investment to get the best return with your business’ hard-earned money. The basics of any financial investment is to get the highest return for the lowest risk. Energy efficiency achieves this as rates of return on many projects are conservatively in the teens percent per year, and often 25%, 30% or more per year. What bank or Wall St. investment pays this, with no risk (a light bulb is lower wattage, you will save; equipment is designed to use a certain amount of energy, etc.)?
Why is energy management such a good investment?
• Rate of return exceeds most financial investments (often >25%/year), with low risk. Technologies are well understood and perform well in “real life” conditions.
• Energy costs are a growing segment. Reducing these directly increases Net Operating Income for any business.
• These technologies last longer, meaning you need to have fewer in reserve, liberating space. Reliability is improved and maintenance costs are lower, freeing up O&M staff for other projects.
• Prices for these technologies are coming down as more get into the business. Plus, utilities and governments give incentives to pay part of the cost. But don’t wait for prices to come down further. Future capital cost savings will likely be lower than the lost opportunity to save energy costs in your buildings.
• The financial community knows energy efficiency projects have a high rate of return and are reliable. So they will compete to loan you upfront money for these projects. Financing can be arranged to produce a positive cash flow at all times.
Again, think of energy savings – if done right – as an opportunity to get a great financial return with little risk. CCES has the experts to help your company maximize the benefits of energy upgrades. We handle it all from assessment to planning to execution to benefit you the most. Contact us today at 914-584-6720 or at karell@CCESworld.com.

3 Ways To Get Building Owners To Say Yes To Energy Upgrades

March 2016

The CCES blog has returned. It was nice to take a break, but great to be back!!

A lot has been written about getting building owners and managers to invest in smart energy upgrades. We in the profession know they are beneficial in many ways. But how do you get somebody who may be scared by the technical aspects of upgrades to not stick with the status quo, even when presented with positive reasons? A recent article summarizes 3 barriers to overcome to get most such people to agree to move forward: http://www.slate.com/articles/business/the_juice/2016/03/ge_sells_1_4_million_leds_to_jpmorgan_it_s_the_most_important_light_bulb.html.

The three barriers are:

1. Does the technology work? Not only does it save significant energy, but does it do so without sacrificing any of the features of the technology it replaces or causes the user to sacrifice its lifestyle or workstyle to enable it to be used?

2. The finances. Is the simple payback reasonable and/or is the rate of return outstanding? As for the latter, we are looking at the energy cost savings plus other indirect benefits (reduced O&M, increased asset value, improved worker productivity) vs. the length of time the technology is used for.

3. See the project through and ensure that the technology works as designed. If the buyer just receives the technology and has to install something so new and different, it will get scared off.

If these concerns are suitably addressed for a given technology, whether it be solar PV or LED lights or anything else, then there is a good chance that even an unknowledgeable potential buyer will go forward.

CCES is an energy consulting firm helping buildings, companies, and municipalities to determine the best strategies and technologies to reduce their energy usage and demand, to reap maximum financial benefits from the upgrades, and to ensure that any chosen strategy is incorporated in the best way for your operations. Contact us today at 914-584-6720 or at karell@CCESworld.com.