Potential 2015 Environmental/Energy Policy Issues

The public went to the polls on Nov. 4, and gave the Republicans control of both houses of Congress. There are now 31 states headed by Republican governors, of which a number have both houses of their state legislatures also controlled by Republicans. What may be the near-term future of environmental and energy rules and programs?

This political change may have a particularly strong impact on environmental policies as the partisan division on these policies has grown, with more of those identifying as Republicans in polls wishing to roll back many current environmental rules. With Republicans controlling the Environment and Public Works Committees, they have the power to bring up what they want for investigation and for voting. One area sure to be brought up is USEPA regulations on coal-fired power plants. President Obama issued an executive order earlier in 2014 designed to reduce CO2 emissions from the nation’s coal-fired power plants by 30% of 2005 levels by 2030. The USEPA is working out the details following guidance from the Clean Air Act. Plants will be given flexibility on how this is to be achieved. However, these rules regulating heavily-polluting coal have been called a “war on coal”, and their repeal even has support from some Democratic legislators from coal-mining states, arguing it unfair to target one industry and that it will cause jobs to be lost and electricity rates to rise. Republicans will likely attempt to pass a bill negating these rules. However, it is unclear if they have the 67 votes in the Senate to override an expected presidential veto. Even if they cannot overturn the rule, they could hold hearings or withhold the funding needed to enforce the provisions.

Another important area is the Keystone XL Pipeline, a proposed pipeline to transport mainly Alberta tar sands oil to Nebraska where it will then be transported by existing pipelines to oil refineries in Texas and Louisiana. Proponents (mainly Republicans) are in favor of it to diversify our energy sources. Opponents point to the risk of leaks and contamination and the encouragement of using a source that is very inefficient (takes a lot of energy to extract oil from the tar sands) and causes high greenhouse gas (GHG) emissions. President Obama has waited for studies to be complete to make the decision on whether or not to build the pipeline. In 2015, the Republicans may try to pass a bill “forcing” the President to approve the Keystone XL Pipeline.

Another issue of importance is climate change, and whether the US will or will not be a leader in the global battle to reduce GHG emissions to limit the effects of climate change. Next year a major climate change conference will be held to make “binding decisions” on worldwide future steps. The new Chair of the Senate Environmental & Public Works Committee is expected to be James Inhofe, a known climate change denier. He has openly stated that he will do all that he can to stop any steps by the US to be leaders in climate change or to push any federal legislation through. President Obama will continue to issue executive actions to address climate change, such as ordering federal agencies to reduce GHG emissions, raise fuel standards, and reduce GHG emissions from coal combustion. However, these will not be as encompassing or effective as nationwide regulation. Any global climate change agreement that comes out of next year’s conference may have trouble being approved by the US Senate as is required; however, President Obama may try to frame it as an agreement that does not require US Senate approval.

Finally, there are calls on the extreme right of the Republican Party to de-fund or even shut down all together the USEPA and/or the Dept of Energy. To these people, they are seen as purveyors of wasteful programs and may cost the economy jobs. Mainstream Republicans understand the polls that a majority of Americans are concerned about the environment and admire renewable energy research. While Congress, which controls appropriations, may cut back on the budgets of the agency and department, impacting enforcement and research operations, it is unlikely that a bill shutting them down altogether and rescinding rules like the Clean Air Act and Clean Water Act can have enough votes to override a presidential veto.

As for energy, the new Republican majorities, supported by the oil industry, are likely to pass bills that favor existing fossil fuel combustion. They purport to an “all of the above” strategy to give maximum flexibility and opportunity in terms of energy sources. There is some discussion about ending programs that favor or provide incentives for renewable sources. However, leaving all energy sources out there on the playing field for the market to decide would hurt cleaner renewable sources (solar, wind, etc.) which are newer and less established financially. It is unclear whether the new Republican-led Congress will repeal or reduce the scope of current renewable energy incentives. Of course, there is a chance that ending all or most renewable energy incentives may backfire on the Republicans, as more Americans are getting used to renewable power and believe it is a powerful solution to many ills (climate change, pollution, etc.).

As for states, it is impossible to predict what more Republican-led states may do in the energy and environmental realms. Many state environmental rules are mandated by federal rules, so they cannot be repealed or not enforced. Many states that have participated in cap and trade for GHG emission reductions (Northeast in RGGI) and have Renewable Portfolio Standards have seen an increase in revenues (without having to raise taxes) and/or reduction in infrastructure spending (electric lines). Therefore, it is hard to believe that these states would take major action to repeal or rescind the standards.

CCES has the experts to perform a technical assessment of the status of current and proposed changes to federal and state environmental and energy regulations and how they may affect your facilities. We can help you design technical solutions to demonstrate compliance at the lowest cost, and provide energy and operational flexibility. Contact us today at 914-584-6720 or karell@CCESworld.com.

US Gov’t Clean Energy Policy and Small Business

In June 2014, the USEPA proposed the first national standards to limit emissions of greenhouse gases (GHGs) from existing power plants, the Clean Power Plan, addressing climate change while bolstering new economic opportunities by:

• spurring innovation and investment in low and no-carbon technologies;

• helping create new energy infrastructure / energy efficiency technologies and services;

• providing the market signals businesses, entrepreneurs and investors need to move forward in energy and environmental policies; and

• helping with the global effort to mitigate the effects of climate change and extreme weather events by reducing GHG emissions.

While large operations are the focus of many environmental rules and many large businesses can afford to take the lead in investing in GHG emission and energy usage reductions, small businesses still represent a significant part of the US economy. But, lacking the resources of a large firm, small businesses have taken the brunt of impacts of recent extreme storms. Small Business Majority (www.smallbusinessmajority.org) has polled small business owners to understand their attitudes on clean energy and environmental policies, indicating that a majority of small business owners are worried about extreme weather events and understand the risk to their bottom lines; an estimated 25% of small to mid-sized businesses do not re-open after a major disaster.

A recent white paper from this group highlights these concerns of small businesses and that policies like CPP may be beneficial, as follows:

• Meaningful incentives to reduce GHG emissions to lessen climate risk. This includes maximizing the opportunity to invest in clean energy projects to reduce emissions and energy costs. This will also raise project opportunities for small business in construction, manufacturing, strategizing, and energy efficiency.

• Smart policies to incentivize the upfront costs of improving energy efficiency for long-term energy cost savings. Small Business Majority recommends that states implement targeted energy efficiency education programs for small businesses, subsidize the purchase and installation of energy efficient technologies by small businesses, and partner with utilities and regulators to develop targeted energy assistance programs for vulnerable or at-risk small businesses.

• Smart policies to drive energy innovation opportunities. Small Business Majority supports federal and state policies that will help bolster investment in renewable energy resources and energy efficiency, such as state Renewable Portfolio Standards. Small Business Majority further recommends that states consider allocating more resources towards disaster recovery and risk mitigation plans for small businesses to reduce impacts and improve resiliency and recovery.

CCES is a small business itself, and understands the constraints of your resources. We have the experts to help a small or mid-size business strategize to be more energy efficient using maximum outside incentive money and/or low interest loans to save you significant long-term costs with no or minimum upfront payments and provide a good payback and return on investment. We can also advise you on real extreme storm risks and how to cost-effectively plan to lessen them. Contact us at 914-584-6720 or at karell@CCESworld.com.

New Advances in and Benefits of Greener Stormwater Management

While I have written extensively for years on sustainability, I have emphasized energy, greenhouse gases, etc., and less on other important items, such as waste reduction and water conservation. So here I write about issues in stormwater management. As land becomes more developed, there is less natural area to absorb rain water. It must flow somewhere, and can be too intense to handle and cause damage as it flows. This will grow as an issue as the frequency of high-rainfall events increases. Savings from damage avoidance will result from implementing better stormwater management.

Historically, the philosophy of stormwater management has been to take the water from rain events and move water away. It is more efficient to have a single system to lead all of it away, such as swales, leading to a sewer system.  However, a paradigm shift has occurred. Now that it is better to spread water out. Spread it away, down, store water, reuse, etc. This involves increasing natural land to absorb water. Below are the relative fates of water in a developed vs. natural area.

Developed land – Runoff: 55% Evaporation: 30% Infiltration: 15%

Natural – Runoff: 10% Evaporation: 40% Shallow infiltr.: 25% Deep infiltr.: 25%

 

Strategies to better manage and spread out the growing quantity of water include:

• Swales (depression) with a cut at the curb to allow water flowing down a street to enter a sidewalk or a grassy area.

• Green roofs.

• Sidewalk rain gardens. Feed runoff from roof into rain gardens before running off.

• Porous pavement, such as a parking lot or a sidewalk to allow rain to flow to structural soil below to feed trees while still providing integrity to the sidewalk. This also allows tree roots to move horizontally instead of up, buckling sidewalks.

Per the last point, porous pavement (concrete or asphalt) is now competitively priced with conventional pavement, and actually lasts longer than conventional pavement (less cracking) because water is led away and does less puddling.

Per the 2nd and 3rd points, use whatever opportunity possible to replace pavement with trees. It’s not just aesthetics (it’s “pretty”). Besides reducing the amount of stormwater to treat, there is growing evidence that trees have distinct beneficial health effects for those nearby (http://www.dec.ny.gov/lands/90720.html) and that trees, roof gardens, etc. have a distinct effect on cooling nearby buildings, saving AC usage and energy costs.

CCES has the experts to help you evaluate and upgrade your stormwater management program to reduce costs, potential damage from storms, and energy use, and to improve the long-term health of your workforce. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Short Primer on Effective Energy Upgrades For You Part 2: Controls

This is the second in a series of articles on smart, effective energy upgrades that will not only save you significant energy costs (if done right), but will also result in many other benefits. In the first article last month, I discussed the revolution in lighting technology in the past few years, highlighted by LEDs, which can reduce electricity usage by two-thirds or more compared to conventional lights and have other benefits. Let me add one more thought. If you are worried that LED lighting is a risk or “experimental”, don’t think so anymore. Major financial firms, such as JP Morgan Chase and Deutsch Bank, have recommended in writing to their clients that they switch to LEDs. The technology works, they stated, is reliable, and the firms who supply them are, for the most part, financially secure. And in addition: those who invented LEDs just won a Nobel Prize. And now a final word: several LEDs have just gone on the market in the last month or so that exceed the magical 100 lumens per watt mark. For more, see: http://www.energymanagertoday.com/several-leds-surpass-100-lumens-per-watt-0106402/  In contrast, CFLs produce 55 – 70 lumens per watt, and incandescents produce 13-18 lumens per watt.  LEDs work and they are a cost saver!

Reducing electricity costs by two-thirds is great. But how about an opportunity to reduce lighting electricity costs to zero?! That’s lighting controls. Reliable technology has been developed that can control your lighting to levels appropriate for the use of a room or area, turning off or dimming lights when not in use. These are occupancy sensors.

Some claim they don’t need occupancy sensors because the janitors will turn off lights in rooms at night as they clean up. There are many examples of crews who routinely forget to turn off the lights. Occupancy sensors can react to situations and turn off, dim, or light an area quickly. Of course, you first need to do a total assessment of lighting needs. In fact, a simple switch of lights to LEDs is good, but is more beneficial if you also have done a lighting assessment to see if some areas are under- or over-lit. Also, determine which rooms or areas have the longest periods of non-use; these would be the best candidates for sensors. These would include conference rooms, lockers, bathrooms, individual offices, warehouses, and hotel rooms.

Once you determine which rooms or areas should have lighting controls, look for the best controls. Don’t go to Home Depot or Lowe’s and pick up a bunch of cheap ones; they will not be worth it. There are three types of sensors. First, there is Passive Infrared (PIR), which detects heat from humans. These are relatively inexpensive, but may not work well if people are behind partitions. Ultrasonic is becoming most common. It emits and receives sound waves and reacts to changes in reflections to adjust lights. It is programmable, reliable, and can cover an entire room. Finally, a relatively new type is microwave. These appear to work well, but their long-term reliability is unclear.

Occupancy sensors can work effectively if designed well. For example, I was at a multifamily residence recently with hallway lights controlled by sensors. As soon as I stepped out of the elevator – in less than a second – the hallway lights went from off to on. Traditionally, for security purposes, multifamilies have many lights on at full wattage all night even though almost no one uses the area. What a savings to provide security, but also have hallway lights off for over 90% of the long period of night!

And there is more. Controls can also regulate light (and, of course, electricity usage) based on the natural light in the room, known as daylighting. If sunlight comes into a work area, having all of your lights on at full blast is a waste. Let lights only be on when sunlight does not enter the area. Daylighting control sensors regulate lumens of light from fixtures based on light coming in; a consistent amount of light hits the target.

And one more thing. The same controls that regulate light usage can also control your temperatures, too. A smart building manager can save significant energy costs with controls that reduce the need for heating or cooling an area not being used. The sensor can adjust a thermostat so that an empty area is only heated or cooled when people are using it or if the temperature reaches an extreme. Another major area of cost savings.

CCES has the experts to help you plan out a lighting upgrade to determine where best to put lights, what types of lights, and how they can be controlled to maximize your energy cost savings, but still have a productive work staff. We can plan and buy smart for you, resulting in the greatest benefits to make you look good. Contact us at karell@CCESworld.com or at 914-584-6720.

Energy’s Changing Realities: Are You Taking Advantage?

The US Energy Information Administration (EIA) publishes nationwide and regional energy use data (http://www.eia.gov/forecasts/aeo/data.cfm). While changes from year to year are not great, a longer view reveals a lot. From 2007 to 2013, total US energy use dropped 5%, while the GDP rose 6%. The US is becoming more energy efficient.

Our mix of energy sources has changed over this time, too. The percentage of energy from coal dropped from 23% to 19%; oil from 39% to 33%. Meanwhile, the percentage of total energy from natural gas rose from 23% to 27% and from renewables (including hydroelectric) from 6% to just under 10% during that span. These trends will get greater in the future as prices of natural gas and renewables continue to drop relative to other fuels. For example, unit prices on solar panels fell by 80% from 2008 to 2013.

While some of this has been caused by big power companies shutting down units or whole power plants using coal or oil and replacing the demand with natural gas and renewables, another factor is the growth in distributed or decentralized energy (DE). More communities, corporate parks, and industrial facilities are beginning to build their own power plants to become independent of big centralized systems and to better manage power.

Combined heat and power (CHP) is a great example, raising thermal efficiency to as high as 80% or greater and generating electricity from the same fuel combusted. Communities are building microgrids, small power plants serving their needs. Finally, more buildings are using renewable power and/or fuel cells. These forms of DE will be beneficial as they result in much fewer transmission lines and reducing the loss of electricity. More and more states recognize the value of DE in terms of saving existing infrastructure, which otherwise would cost the utility or state many tens or hundreds of millions of dollars to maintain or expand for demand. Therefore, many states and utilities offer incentives for companies or groups to build their own DE plant.

How do these trends affect your company? Do you have facilities that may be fit for a fuel change or installation of DE? In general, switching to natural gas or installing renewables is relatively inexpensive with fairly quick paybacks because the fuel source is cheap (natural gas) these days or free (sun, wind, etc.). DE requires a much larger investment upfront, but it may be spread among a number of users of the technology. CHP, microgrids, etc. often are functional for 20 or 25 years or more. So while the payback of the initial investment may be relatively long, you have an opportunity to save quite a bit of money in total. Perhaps more important is the reduction in risk of costs from losing power in a storm (a tree taking down a faraway line that serves your facility).

What should you do? Perform an energy evaluation of your facilities. What energy source does each facility use for electricity and heat/hot water? Is it feasible to switch one’s boilers to natural gas (is there a natural gas line nearby)? To switch to CHP (room to install it, investment capital)? To install and operate renewables, such as solar, wind, geothermal (proper conditions)? What might the costs be to switch or install CHP, renewables, etc.? What are the potential savings based on current and projected energy prices? What added benefits may you gain from such an energy uplift (reduced risk, lower emission rates and permitting requirements, better productivity or fewer distractions of your workers, such as fewer oil truck visits)? A thorough energy evaluation can lead you in the right path and save you much money.

CCES has the experts to perform a meaningful, cost-saving energy evaluation for your facilities. We can pinpoint benefits of different options, including incentives which your facility may qualify for. We can manage the implementation of any energy upgrades (efficiency, fuel change, etc.) you choose and ensure you get the maximum benefits possible. Contact us today at 914-584-6720 or karell@CCESworld.com.

Preparing for the New Growth in US Manufacturing

Recent reports (http://www.ism.ws/ismreport/mfgrob.cfm, http://www.strategy-business.com/article/00297?gko=0d2ac&cid=TL20141016&utm_campaign=TL20141016) indicate the return to the US of manufacturing after several decades of operations going overseas. “Re-shoring” is being fueled by several factors, including the high availability and dropping costs of diverse US energy sources (i.e., natural gas and renewables), our infrastructure (more reliable than in Asia), improvements in automation and availability of robotics (one estimate states that the American worker is now seven times more productive than the equivalent one in Asia, negating the wage differential), greater ability to respond to changing customer needs and to supply chain disruptions, greater availability of capital, and the ability to perform robust R&D. This trend is also helped by the growth in incentives being offered by a number of states to relocate or expand.

This is wonderful news for the US economy. Manufacturing is the opportunity to take raw material of relatively little value and turn it into something of much greater use and value, allowing a markup and greater profit, in many cases, than in the service economy. Some have estimated that new US manufacturing startups and expansions can grow manufacturing sector jobs by 4 million in the next few years alone.

Having hundreds of new manufacturing plants and processes in the US has many implications, one of which is the environment. Compared to other countries, the US has relatively strict environmental rules. Most such rules are enforced at the state level, but contain minimum standards based on the Federal Clean Air Act and Clean Water Act.

I will focus on Air since that is usually the most time-consuming. If you are building a new plant from scratch or performing a major expansion of an existing one, the first matter to consider (the bottleneck) is a rule called PSD, a pre-construction permit. One is forbidden legally to even begin construction until a PSD Permit is issued. PSD is a lengthy process, often taking many months to over a year for full approval by both the State agency and the USEPA (with public comment). So if your company plans to build or expand, it is important to address this fully and early. Simply put, PSD states that if you propose a major increase in emissions of certain compounds, proper control technology must be installed and modeling performed to estimate how much ground-level concentration will increase to determine whether standards may be exceeded.

The CAA also requires facilities that exceed a threshold of “potential to emit” to apply for and maintain a “Title V” air permit. These permits are legal documents and open to the public, so care is needed to make sure it is prepared properly and, once issued, compliance maintained. The hallmark of a Title V permit application is a listing of all Federal and State air regulations that are applicable to the operations you plan to perform at the new site (or modified existing facility). While the Title V application requires a list of regulations that are applicable to the operations and why, it is just as important to prepare – at least internally – a document explaining why certain rules are not applicable and need not be listed in the application.

Finally, most states have air pollution rules pertaining to specific types of operations, such as boilers and furnaces, coating and painting, pharmaceuticals, iron and steel, and others. Do a thorough review of the laws in your state and determine whether any are applicable (and if not, why) and how best to comply. Also, federal NESHAP rules for toxic compounds are process-specific, as well, and should be reviewed.

Yes, your company may join others in moving manufacturing operations “home” soon and that’s good news for everybody. And yes, that means work for you as the environmental professional to comply with applicable rules. But good preparation and planning can make the situation proceed smoothly and the costs relatively low to the eventual long-term savings and safety improvements.

CCES has the experts to help you estimate emissions from new plants or processes, to research and advise (technically, not legally) on State and Federal air and other environmental regulations that may be applicable to such new operations, and can manage the implementation of strategies and obtain the proper permits to allow you to comply with environmental rules and begin operations quicker and seamlessly. Please contact us today at 914-584-6720 or at karell@CCESworld.com.

How To Answer Sustainability Program Doubters

We’re coming to the end of the year – the time that companies consider future change. Financial performance data is in; you know where you stand. You begin to think about improvements. If your firm does not already have an energy or sustainability program or has a middling one, there may be no better change to make in the new year than to get a quality one off the ground or grow the one you have. There will be doubters in management as energy/sustainability is a foreign concept to many (this will change; sustainability is becoming a staple in business schools – I lecture on the topic at one!). Here are some arguments sustainability doubters may make, and good responses.

Companies that spend effort on being sustainable are losers. Not true. Some doubters think that doing anything different from core product or services is wasted effort. Would those people not have a Legal, Accounting, or HR staff, too? In fact, companies with robust sustainability programs have come out to be winners. Published papers have shown a correlation in Fortune 500 firms: those that address sustainability issues, such as reducing energy and water usage, had higher valuations than those that did not. Is this a coincidence or have these become better performing companies? Finally, it is true that some projects to reduce water, energy and waste production have long paybacks. However, many have additional, hard-to-measure benefits to consider, such as reducing O&M costs, freeing up workers to perform other needed projects and raising worker productivity. While hard to quantify, these benefits are real and should be recognized.

We must wait for government rules about sustainability or else we will need to repeat the effort once they come. While sustainability is not required by any government (except, in California), many agencies are incentivizing sustainability through tax credits, grants, and indirect rules. While these may appear changeable, it is not a good idea to wait and hope that policies and incentives will become uniform. Take advantage of what is right for you. Similarly for procedures, it may be awhile before government sets precise policies on how to become more sustainable, such as an energy audit. However, existing standards (ASHRAE) will likely be part of any future requirements.

Sustainability has no effect on our business. In the US, this may be true in sales. Only a small block of consumers consider sustainability reputation in making purchase decisions. However, more investors take this seriously. A growing number of lenders and shareholder groups have investment or loan policies which favor those with positive energy or sustainability records. Such groups certainly affect company performance.

There are no or there are too many metrics to measure sustainability. Yes, sustainability achievements are difficult to quantify because they often affect parameters that are hard to measure (productivity, company culture). But do note that sustainability metrics exist, such as the Global Reporting Initiative, to measure sustainability. It is important to research the right metrics for your company. But it has been done successfully.

Sustainability is just low-hanging fruit and is of little true importance. This is simply not true. Sustainability is all about conserving resources before they become scarce and expensive. It is a risk hedging program. For example, if your company produces a product dependent on water, and your manufacturing plant is in an area that has either a contaminated water supply or one it must share with residents, farmers, etc., then you know that its price rise and even availability may become an issue. This can become an existential problem for your business. Ways of minimizing water needs would, therefore, have major positive risk outcomes for your business. Also, it is now acknowledged that climate change has and will have major effects on our way of life which, of course, affects business. May the greater frequency of extreme storms, hot weather, and droughts affect your cost of or even the ability to do business, such as access to energy, water, etc.? Might climate change bring on a global depression or at least affect consumer tastes? A sustainability program puts you ahead of the curve in terms of evaluating and addressing such risks.

There is no accepted standard for sustainability. This is true. There is no single standard that says this product is sustainable, and this one is not. This is why it is important that your sustainability program have a strong communication element. Goals, strategies, and practices need to be established and publicized in-house and to the public, easily seen on one’s website or other communications. The public can see the full case you have made about what you are doing to achieve your goals (reduce energy use, greenhouse gas emissions, water use, waste generation, etc.) within the parameters you control. You can quantify such achievements and undeniably say that you are working toward a sustainable future for the world and for yourself.

CCES has the experts and experience to help you develop a robust sustainability program to achieve maximum benefits (and to answer all doubters). We can help you with the technical, policy, and economic phases and develop and achieve goals seamlessly. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Short Primer on Effective Energy Upgrades For You Part 1: LED Lighting

This is the first in a series of articles on smart and effective energy upgrades that will not only pay for itself and save significantly on energy costs (if done right), but will also result in other economic and productivity benefits. These articles will discuss technical issues, but will emphasize benefits, economic and others. There has been – literally – a revolution in energy technology in the past few years. If you have not had an energy audit done in the last 4 years, there’s a lot to gain by doing a comprehensive one.

For most, a great “low hanging fruit” for energy savings is lighting. Facility managers are increasingly turning to LED lighting technology to reduce energy costs. You probably already know that LED lights use well under half of the electricity of incandescents and T-12 fluorescents for the same amount of lumens. LEDs now can be adjusted and dimmed and come in a variety of colors (CCT ratings) to optimize their effectiveness. New LED fixtures can now fit right in place of the fixture being replaced. And cost savings are not “down the road”, but start immediately upon replacement.

Besides the immediate electricity cost savings, LEDs have other major advantages resulting not only in more money, but also in greater productivity. LED lights do not burn (unlike the other types mentioned) and last much longer. Typical office LEDs are warranteed for as much as 50,000 hours of operation. Given 12 hour/day, 5 day/week operation, that’s a little over 10 years until they have to be replaced; a lot longer than standard types. That frees up your office maintenance crew to do other things and reduces their number of trips up the ladder (reducing risk and inconvenience to staff).
In addition, the light from LEDs (if the right ones are procured) is whiter without the tints that other lights may have and has less glare. LEDs do not flicker, unlike fluorescents, reducing eyestrain. LEDs improve workers’ productivity. Here’s proof. A worker working through the morning will need to take at least a short break just because of eyestrain from the glare / flicker of fluorescents. The actions of an added break – walking down the hall to get water or coffee, returning, sipping the water/coffee, resting – before resuming work must take at least 5 minutes, and more likely 10, which is 2% of a typical workday. Avoiding such a break in the afternoon, and now you have a 4% improvement in productivity right there. And if the person taking a break stops to talk to a colleague, … Workers with lower eyestrain need to take fewer breaks and are thus, by definition, more productive and effective, all because of improved lighting – a significant and real added economic benefit to installing LEDs.

Of course, there is a cost involved. While LED prices are dropping, for a large office, warehouse, or multifamily residence, the upfront cost may be six figures. However, in many places, incentives exist to pay you back some of these costs and low interest loans are available so you can install LEDs without having to pay anything upfront. You can pay back these loans from the cost savings as they are earned. Waiting for LED prices to drop further is not a good idea. Incentives do go away and the energy cost savings (70% or greater) that you will achieve will likely be greater than the probable future reduction in LED prices. If you wait even one year, that’s one more year of high electricity costs to pay. So now is the time. If you think you can only afford to convert only part of your facility to LEDs right now, then consider which areas currently have the oldest and highest energy usage lighting and have the greatest number of workers who will benefit from reduced glare and no flickering.

A word on economics. Most companies want to know the payback of the upfront cost of LED procurement and installation. It will vary based on the number and the types of lights being replaced and can range from under one year to over 4. Some companies have policies on payback (they will not approve a project if the payback is more than X years). But remember, payback is only one way of measuring economic benefits. Let’s say there is a proposal to replace lights with LEDs at an upfront cost (after incentives) of $120,000, and the payback is on the high end of the range, say 3 years, beyond company policy. In 3 years the company will have gotten its $120,000 back. But the company has at least 7 (and likely more) years to reap extra money. If anything, the energy savings later on will be greater than $40,000 per year for two reasons. One, the future unit cost of electricity (cents/kWh) will likely increase, by 3-4% per year typically. So, in 7 more years, you will have avoided at least $280,000 (and more likely between $350,000 and $400,000) in costs. Even assuming the lower figure, by implementing this project (and spending the $120,000) your company will have saved $280,000 minus $120,000 or $160,000 over a 10 year period. The rate of return would conservatively be 13.3%/year. Tell me, does your company earn a rate anything near this for its cash? The second reason is that your existing lights will need to be replaced anyway – likely several times during the 10-year period. You will need to pay that capital cost, which could easily exceed the $120,000 for the LEDs – and you won’t get the cost savings.

Finally, buy smart. There are a growing number of manufacturers of LEDs. Some produce better quality lights than others. Do not buy on price alone. An energy professional can help you assess just what your lighting needs are, exactly what lights need to be replaced, the best LEDs to do so, manage the installation, and help you get the proper incentives and financing (if needed) you are entitled to. Maximizing these and the other benefits and ensuring reliability is worth the cost of an experienced expert.

CCES has the experts to help you plan out a lighting upgrade to maximize not only your energy cost savings, but also the productivity improvements and maintenance reductions. We can help you design the right lighting to maximize productivity with the least interference. We can plan and buy smart for you, resulting in the greatest benefits to make you look good. Contact us at karell@CCESworld.com or at 914-584-6720.

New Proposed Federal Commercial AC Efficiency Standards

On Sept. 18, 2014, the US DOE issued a proposed notice of rulemaking to revise the Energy Policy & Conservation Act (EPCA) with updated energy efficiency standards for commercial air conditioners (http://energy.gov/sites/prod/files/2014/09/f18/2014-09-18%20Issuance%20cauc_noticeofproposedrulemaking.pdf). A public hearing to discuss the proposed measures will be held at DOE Headquarters in Washington on Nov. 6.

The following table summarizes the proposed standards, which would go into effect 3 years after publication of the final rule in the Federal Register, estimated in late 2015. After the three-year period, no applicable unit can then be manufactured or sold in the US unless it meets the following energy efficiency standards:

Packaged AC or Air-Cooled Heat Pump (HP) ≥65,000 Btu/h to <135,000 Btu/h cooling capacity
AC Elec. resistance or no heating 14.8 IEER
All other types 14.6 IEER
HP Elec. resistance or no heating 14.1 IEER 3.5 COP
All other types 13.9 IEER 3.4 COP

Large Commercial Packaged AC or Air-Cooled Heat Pump (HP) ≥135,000 Btu/h to <240,000 Btu/h cooling capacity
AC Elec. resistance or no heating 14.2 IEER
All other types 14.0 IEER
HP Elec. resistance or no heating 13.4 IEER 3.3 COP
All other types 13.2 IEER 3.3 COP

Very Large Commercial Packaged AC or Air-Cooled Heat Pump (HP) ≥240,000 Btu/h to <760,000 Btu/h cooling capacity
AC Elec. resistance or no heating 13.5 IEER
All other types 13.3 IEER
HP Elec. resistance or no heating 12.5 IEER 3.2 COP
All other types 12.3 IEER 3.2 COP

IEER = integrated energy efficiency ratio; COP = coefficient of performance (for heat pumps).

The DOE presented an economic analysis where they believe the payback in energy cost savings on the additional capital needed to procure such energy efficient units will range from 2.2 to 6.6 years. Given the average lifetime of such equipment of 18.4 years, the building owner would realize a strong economic benefit. The DOE also estimates that the standards would reduce electricity use by about 1.3 trillion kWh.

CCES can perform an assessment of your building for the efficiency of your heating and air conditioning systems to determine if it makes economic and comfort sense to switch now to a new, more efficient unit. We can also help you improve your current system’s efficiency by evaluating your building for air leaks, poor insulation, etc. Contact us today at karell@CCESworld.com or at 914-584-6720.

Reducing Your Peak Demand for Electricity – Critical to Control Costs

Your operations – whether you manage one or several office buildings or industrial facilities – depend on electricity. You don’t have electricity, your company does not function. It’s as simple as that. Whether at home or at work, we are used to paying for electricity by how much we use (kilowatt-hours, kWh). Makes sense; you use it, you pay for it. But a new financial paradigm is impacting electricity cost and that is peak demand. On a hot summer day (and climate change will result in more such hot summer days), there is growing demand for electricity (in kW) as more buildings are being operated, with more space being air conditioned, plus more lights, laptops, and other electricity-using devices. Utilities know that reliability – getting electricity delivered in full – is expected. To reliably get electricity to all customers at all times utilities must grow their infrastructure, costing hundreds of millions of dollars or more annually – an expense that is difficult to recover. Also, with a number of coal-fired power plants being shut down at least in part because of stricter environmental and potential future greenhouse gas rules and nuclear plants shutting down because of age (and the high cost to build new plants), new electricity generation to meet peak demand may not be assured.

Therefore, there is a growing realization by utilities that it must get its customers to reduce peak demand, that period of just a few hours on a hot summer afternoon when demand is greatest. More utilities around the nation are encouraging customers to reduce peak demand to ensure complete electricity delivery and reduce the risk of a blackout, and are offering customers incentives to achieve real reductions.

In many parts of the US, facilities pay both usage and peak demand charges. The peak demand is based on the single 15- or 30-minute period during the month when you use the most electricity. It may be an outlier of your typical usage, but you are charged for it. Your goal is not only to reduce total usage, but also “shed” load during peak periods.

Many facilities are wisely looking into renewable energy to reduce electricity costs. This is terrific. If you can generate your own electricity and use less from the grid, you will save money. This is true, but only on the usage side. What if there is a single 15-minute period during a month when it is hot, your building is fully using all its laptops, AC, and lights, but it is cloudy (a thunderstorm coming) and your solar panels are not producing any electricity. Despite your solar investment, your demand from the grid for that short period will still be high and you would have to be pay the full high demand charge. Therefore, should you be considering the installation of solar PV or wind turbines, make sure to consider the existing demand charge as something that may not be reduced. Perhaps you can negotiate with your utility to reduce or eliminate your demand charge.

What can be done to reliably reduce your peak demand to reduce this charge?

1. Fully Understand Your Demand Charge. How much are you being charged for peak demand? What percentage of your electric bill is this? Is your demand charge based on your highest 15-minute period of demand during the entire billing cycle or is it for the peak period during the utility’s peak period of concern (often 2 pm to 6 pm)? The latter is called “coincident” demand, coinciding with the utility’s peak period to provide electricity. This is an important distinction and will influence your strategy to save costs.

2. Fully Understand Your Usage Throughout the Day. Make a reasonable estimate of your electricity usage throughout the day. Monitors can be purchased or leased to provide better accuracy. When might your peak demand occur? Software exists to track your usage and demand and may be worth purchasing and using. Such information can also help form an automated demand response program to determine best strategies.

3. Sensible “Behavioral” Changes To Reduce Peak Demand. Is it feasible to move certain operations to another time of the day – to an otherwise non-peak period? Might some workers be willing to work a non-traditional shift? Are there low-cost strategies to reduce your peak demand, such as shades on windows that get afternoon sun?

4. Feasibility of More Sophisticated Technologies. Given your demand charge and the growing number of incentive programs to decrease peak demand, it may be cost-effective to install and operate relatively sophisticated controls. One example is an expansion of what you may already have: using your backup generators to produce electricity during peak periods only. Yes, you will have to pay for gas or oil usage. But reducing that peak demand charge may make it worth it. Of course, you need to check and potentially modify your air permit to ensure that your backup generator can be used in such a non-emergency situation. But this can avoid grid electricity use and perhaps you can make a formal arrangement with your utility to sell it the excess electricity you produce for a profit. Another example is to automatically shift certain electricity-drawing operations to a short time before a peak period is coming up. To reduce electricity usage for air conditioning on those brutally hot days, systems exist to manufacture ice during the overnight hours and blowing air across the ice for cool air for the building. Electricity is used, but mainly at night (when the ice is being made), far from a peak period; little is used during the day. Also, look into batteries. Can excess power drawn at non-peak times be stored and used during the peak? Again, the economics of incentives and a reduced demand charge may justify such strategies.

Utilities around the country are either beginning to introduce or revving up peak demand charges in response to the pressure they are under to reliably deliver power during these periods. Reducing your peak demand will not only save you cost, but also provide you with greater flexibility and reliability. For most, it is worth investing resources for.

CCES has the experts to review and advise you on your energy costs and system, to help you gain the maximum financial benefits of both reduced usage and reduced peak electricity demand. Contact us today at 914-584-6720 or at karell@CCESworld.com.