Category Archives: Energy Efficiency

USEPA Announces 2018 Renewable Fuel Standards

On December 12, 2017, the USEPA published in the Federal Register final volume requirements and associated percentage standards for its renewable fuel standards (RFS) program for calendar year 2018, as well as the biomass-based diesel volume requirement for 2019. See: https://www.epa.gov/renewable-fuel-standard-program/final-renewable-fuel-standards-2018-and-biomass-based-diesel-volume

As can be seen in the table below, he annual volume quotas for how much renewable fuel must be added to gasoline and diesel are virtually unchanged from 2017. These values set national standards for distributors to reduce the overall use of petroleum-based fuel.

Final Volume Requirements                     2017            2018            2019
Cellulosic biofuel (million gallons)           311               288                 –
Biomass-based diesel (billion gallons)       2.0                2.1              2.1
Advanced biofuel (billion gallons)              4.28              4.29              –
Renewable fuel (billion gallons)               19.28            19.29              –

The reaction to this was mixed. Many had feared that the USEPA would reverse the trend and lower significantly the required introduction of various biofuel, which current leadership sees as a hindrance to business. For them this is a victory.

However, many in the renewable fuel industry saw keeping requirements pretty much flat as harmful to business growth. The National Biodiesel Board and the governor of at least one corn-growing state complained that keeping requirements flat would harm many U.S. business sectors, including farmers, producers, truckers, and consumers.

Meanwhile, the petroleum industry was also disappointed with the flat RFS volumes of the coming year, and that the USEPA’s failed to repair a flawed program that answers to corn and other interests.

CCES has the energy experts to help you assess your fuel and electricity sources to maximize financial benefits and to strategize to ensure you have reliable fuel sources. Contact us today at karell@CCESworld.com or at 914-584-6720.

Lowering Energy Costs of Data Centers

Data centers and their servers within them are of growing importance to companies. As companies have painfully learned during non-functional periods, such as breakdowns, severe storms, or blackouts, the cost for a company of losing data is tremendous. It has been cataloged that many companies went out of business as a result of hurricanes or other natural disasters that caused data centers to stop functioning and lose data. After all, a lot of what a company is its data. Without which (for controls, sales, marketing, etc.) it can be existential. Even “small” companies realize the importance of a high-quality data center system.

Therefore, in utilizing larger and more redundant equipment and systems, companies are finding themselves paying a heavy energy cost penalty. Not only must they operate large amounts of energy-using equipment, but to prevent malfunctions (often due to excessive heating of systems), such data centers are often cooled 24/7 to very low temperatures, extracting a cooling energy penalty, too.

What can be done to maintain the reliability of a data center, or but save some energy costs, too?  The federal government’s Energy Star lists 12 items an operator can do to manage and minimize energy use and costs of a data center. See: https://www.energystar.gov/products/low_carbon_it_campaign/12_ways_save_energy_data_center These include decommissioning non-functioning systems, consolidating under-used servers, utilizing fans with variable speed drives, utilizing HVAC with air-side or water-side economizers, and others. The webpage lists several case studies.

Another way to reduce costs and improve reliability is to implement combined heat and power (CHP cogen) systems to supply electricity for data centers. CHP utilizes the waste heat from a boiler that would otherwise be lost to produce electricity, reducing the amount purchased from the local utility. Early data centers were often located remote from other offices or facilities of a firm, but the more recent trend is to co-locate a data center within an existing facility, often the corporate headquarters. This makes CHP more appealing, as it can produce electricity and steam for multiple functions besides a data center.

According to Persistence Market Research (https://www.persistencemarketresearch.com/mediarelease/us-combined-heat-and-Power-systems-market.asp), growth in CHP for data centers in the U.S. will be at 3.4% annually through 2024, as business owners see rising energy costs, and need to minimize the rising usage with maintaining a reliable data center. A growing number of utilities encourage companies to generate their own electricity and putting less demand onto the grid, and will provide financial incentives to incorporate. Revenue sales of CHP systems for data centers is estimated to reach $277 million in 2024, and will be predominantly high in five high-use energy states known to have corporate and data centers, California, New York, Washington, Texas and Massachusetts.

Data centers with greater and more sophisticated servers will become more common as the risk of losing data through natural disasters or loss of power becomes recognized as a critical issue for a company’s survival. These more redundant systems have an energy penalty associated with it, therefore, driving efforts to maintain such systems in a reliable manner while minimizing energy costs.

CCES has the technical experts to help you assess all of your company’s or building’s energy needs and be able to have you function normally and reliably, while reducing your energy costs and getting additional financial benefits, as well (improve sales, reduce O&M, etc.). We are here to maximize your financial benefits for utilizing smart energy conservation methods. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Upcoming Trends In The LED Market

The use of more energy efficient LED lights to replace incandescents and fluorescent lights has reduced total carbon dioxide emissions by an estimated 570 million tons in 2017, according to a report issued by IHS Markit, or by 1.5%.

LEDs achieve this because they are more efficient than current light sources, using, on average, 40% less electricity for the same amount of light compared to fluorescents and about 80% less electricity than incandescents. An incandescent filament source needs about 7 watts to produce about 100 lumens of light. A fluorescent source needs about 2 watts to produce the same light. Metal halides and high-pressure sodium bulbs about 1 watt. LEDs, however, can produce this same amount of light using just 0.5 watt. Given this differential at many thousands of facilities, encompassing hundreds of thousands of light sources, that is many megawatts of power not needed and, therefore, all the more oil or gas or coal that needs to be combusted to make that power. Thus the major reduction in CO2 emissions.

Although LED lights are more expensive than current light sources, these electrical reductions make converting to LED lights quite economical, “low hanging fruit”.
Initially, there was objection to LED lighting based on their inability to be dimmed or the quality of light not being complementary to certain uses. But in time, these issues have been resolved, and LED lights today are dimmable and can have its intensity altered.

Upcoming Trends

Case studies have shown that spaces lit by the right LEDs have a whiter or higher quality of light, resulting in better worker productivity and better school performance. More vendors are specializing in such LEDs that will more likely result in better performance as their way of separating themselves from the pack.

Another item that has been driving the LED market is government or utility incentives. Such organizations have paid some of the upfront cost to building owners willing to change out large quantities of lights because this represents a relief to a stressed utility infrastructure. However, as LED light prices have been coming down, these organizations realize that the pure economic benefit of a building upgrading their lighting with LEDs is great enough; incentives will not add that much to the fine payback LEDs result in. The trend in utilities is to use incentive funds for other, more expensive energy-saving technologies and less for LEDs.

Finally, LEDs were initially more popular in states like NY, NJ, CT, MA, and CA, partially because energy-saving and greenhouse gas-reducing is part of their cultures, but also because the economics were better there because electric rates are higher in those states than in others. However, with more competition and the further drop in LED prices, even in other US states where electric usage rates are lower, converting to LEDs makes a lot of sense financially. Expect to see sales rise in the Midwest and the South.

CCES has the experts to help you assess whether now is the time to convert to LEDs for your commercial space. We can evaluate potential savings, payback, and IRR for you to determine if this is the right time. If you go ahead with a conversion, CCES can manage the project for you, saving you time to concentrate on other things, while ensuring that anticipated cost savings and other benefits are achieved. You reduce cost without the hassle. Contact us today at 914-584-6720 or at karell@CCESworld.com.

DOE Plans Major Changes To Its Appliance Energy Conservation Program

On November 21, 2017 the US DOE issued a Request for Information (RFI) that provides notice DOE is considering wholesale changes to its energy conservation standards program. The current program for reducing energy consumption contains mandatory, minimum efficiency standards for appliances and other consumer, commercial, and industrial products that must be revisited every six years. The RFI suggests that the Trump Administration may replace this mechanism with a more market-oriented one. The RFI specifically solicits feedback on how trading schemes might be applied to energy conservation. The Federal Register notice was published on November 28 (see https://www.federalregister.gov/documents/2017/11/28/2017-25663/energy-conservation-program-energy-conservation-standards-program-design) giving interested parties 90 days to comment (February 26, 2018).

The Energy Policy Conservation Act (EPCA) requires the DOE to set minimum energy conservation standards for over 60 consumer, commercial, and industrial products. Manufacturers and importers must test and certify that their covered products meet all applicable energy conservation standards prior to initial distribution and annually after that. EPCA also requires DOE to review each energy conservation standard at least every six years for potential revision. This contains an “anti-backsliding” provision, preventing the DOE from loosening energy conservation standards for any reason.

The Trump Administration has put on hold several new energy conservation standards promulgated late in the Obama Administration. DOE Secretary Perry has called this program “overly burdensome”.

The RFI solicits feedback and suggestions on how market-based approaches might be used to improve energy efficiency. The RFI uses as a model established market-oriented approaches in other areas, such as the automotive corporate average fuel economy (CAFE) standards, which permit automobile manufacturers to average the fuel efficiency of their automobiles across their entire fleet rather than have to comply with the individual fuel efficiency standard of each vehicle class. The RFI also cites the USEPA Acid Rain Program, a large regional cap-and-trade program, which succeeded in achieving significant reductions in power plant SO2 and NOx emissions by creating emission credits to be bought and sold to meet mandatory reduction goals. The RFI wishes to achieve energy use reductions at high efficiency and reduced cost.

The RFI is the DOE’s first significant attempt to modify the energy conservation standards program since it was enacted in 1987. Any changes to the rule can significantly impact energy and electricity usage and with that energy costs for all businesses and residents nationwide, greenhouse gas emissions and management of our electric grid, including the number and types of power plants nationwide. The public and manufacturers and importers of appliances have until February 26, 2018 to submit ideas and comments to the DOE for consideration in its redesign of the program.

CCES has the experts to help you plan and design your energy management program to maximize the direct financial benefits of minimizing energy use, including the most energy efficient equipment. Contact us today at karell@CCESworld.com or at 914-584-6720.

Another Financial Benefit of Energy Efficiency: Improved Space Utilization

This blog and newsletter have published many articles substantiating the many different ways a building owner, manager, or tenant will benefit financially from implementing smart proven energy efficiency strategies. Besides saving on one’s direct energy bill, there is improved asset value, making space more attractive to increase demand from tenants, reduced O&M, and higher productivity and retail sales. Now here is another one. Philips Lighting recently released a study estimating that businesses globally could reduce their office space per employee by as much as 50% and realize savings of up to $1.5 trillion just in reduced rental costs if office buildings were refurbished to the most efficient current standards. $220 billion of the savings is estimated for North America. Real estate costs are a major concern to any business; any opportunity to reduce the fixed cost of rental space can be very beneficial. See: https://www.businessgreen.com/bg/news/3017951/refurbish-offices-to-save-usd15tr-philips-lighting-tells-business

These estimations were based on the results of an actual move by a major Deloitte office into a space considered very advanced in terms of energy efficiency. Deloitte reduced their space utilization from 50.2 sq. ft. per full-time employee to 24.9, not only saving on the amount of space they needed to rent, but on their energy costs, too, as they had less space to condition, light, and service. Deloitte also attributed increases in worker productivity and wellbeing in the new space, in part, due to the energy efficiency improvements.

The new office space used by Deloitte uses LED lighting and smart technology allowing employees to adjust the lighting and temperature at their own workspaces via a smartphone app. The system also provides building managers with real-time data on both energy usage and office utilization to help maximize energy and operational efficiency, based on data collected by sensors embedded in the lighting.

CCES has the technical expertise to help your office or any other space become more energy efficient, whether your goal is, like Deloitte’s, to be high tech or whether your goal is more modest. We can help you incorporate the right technology for your budget and goals to attain the greatest financial benefit, whether it be controlling real estate costs, utility costs, or to boost productivity and asset value. Contact us today at karell@CCESworld.com or at 914-584-6720.

Address Your Peak Demand To Really Reduce Costs

It used to be that a building utilized an electricity meter, which recorded how much electricity was entering the building during a month (billing cycle), it would be recorded, and the building owner would be charged for that electricity used (in kilowatt-hours). Simple: the more usage, the more one would pay. But some time ago that changed for many utilities. As the economy grew and technology grew, electricity demand rose greatly. However, keeping up with the growth in demand became a challenge due to more farflung buildings and infrastructure upgrades to provide power. For many utilities, it is possible that they cannot deliver electricity to all users in an area, especially during peak demand, which is a hot, summer afternoon when there is maximum usage of air conditioning. Technology has made this worse. For example, people can be comfortable and well air conditioned in their offices and with their smart phones, at the same time, start their air conditioners at home, so the house is comfortable when they walk in.

Being thus challenged, utilities began to confer an additional charge to certain customers for peak demand in addition to the electric usage charge. Having a very high demand (in kilowatts) for a short period – even for just 15 minutes – in a one-month cycle can become very costly. In fact, utilities often charge for peak demand on a sliding scale, with the highest such charges being conferred in the summer. Therefore, while a robust energy audit to reduce usage is a good thing, such an audit should reveal opportunities to also reduce that peak demand, as well.

To address the issue of peak demand, first study your electric bills and see for yourself what your peak demand charges are. How high are they? What rates does your utility use? What has been your historic peak electric rate (peak kW) and how does it vary by season? Once that is better understood, here are some inexpensive, but effective strategies to reduce the peak energy costs, yet still serve your building power needs.

Let’s use an actual example. A large building’s July electric bill indicates a peak demand of 136 kW during one short period due to several rooftop air conditioning units cooling most of the building, many rooms being lit, and a number of laptops, flatscreen TVs, and other plug load operating. The building owner pays $35 per peak kW, a very high rate

Reduce Usage – Reducing usage, of course, not only reduces that charge, but also your peak demand and charge. Simple example: a building replaces 100 fluorescents of 40 watts each with 100 LEDs of 16 watts each. Assuming 50 hours/week of operation, the reduction is 2.4 kW in peak demand and 520 kWh in usage per month. At $35/kW and $0.08/kWh, savings is over $125/month, with three-quarters of this from reducing peak demand. If building can de-lamp fixtures or dim LEDs, savings would be greater.

Modify Scheduling – This building is incurring this high peak demand cost because it is operating many energy intensive processes simultaneously. Modifying the schedule can alleviate this problem of multiple equipment operating, if certain equipment can cycle off during peak hours. Can the rooftop units be rotated such that there is no period when all are operating simultaneously? In other words, operate a couple of them earlier in the day and have them turned off during a particular hot period, but the rooms have been cooled sufficiently for comfort. A building management system (BMS) can be programmed to effect such a solution, such as turning off certain rooftop units during peak times and dimming certain lights, especially those near windows receiving sunlight. For example, a “typical” 20-ton rooftop unit has a demand of 24 kW of power (the actual number depends on its efficiency). If a BMS can ensure that 2 units are not operating at all times, then that peak demand of every unit being on would be reduced by 48 kW. At $35/kW, this would reduce the peak charge by $1,680, well worth the effort. And this is for one month, although the rate represents the summer months, so over one year, the savings would not be this figure times 12.

A related example of scheduling to reduce peak demand is to implement an HVAC scheduling program taking into account the predicted weather to turn on certain units during the night, even if the building is unoccupied, instead of a custodian turning on all of the units at the start of the day. This is applicable to both cooling (air conditioning) and to electric heating. Operating an electric heating unit when it may be very cold at night and the building is not occupied may increase usage slightly, but will reduce the need to use it during occupancy, and, thus, given high demand rates, will reduce peak demand and thus, reduce overall electric costs, even if overall usage rises slightly.

Peak Shaving – Another way to reduce electric demand in a peak period is to create electricity during other time periods to use during what would normally be your peak demand. During periods of low electricity demand, the building can charge batteries with electricity from the grid. Then during times of high electric demand, the building can use the stored electricity instead of having it provided then. Between the capital costs of the batteries and the loss of some electricity in time, this can be a costly option, but it may be economical if the building pays a high peak demand rate. This can also be applied specifically to cooling. Chillers can create ice at night, which is a cooling energy storage. Air can then flow through the ice to provide cooling for the building during a period of peak use, while using little electricity (just for the fans, not to make the cool air).

Alternative Energy – Renewable power, such as solar PV and wind can help reduce peak demand charges, as such sources of power does not require electricity from the grid. Whatever electricity is produced by the solar array is less to be supplied by the utility. Two negatives. One, such systems are expensive to install. Also, they depend on the presence of sun (or wind). If there is a hot day calling for a high cooling demand, but it is also cloudy, then the solar panels cannot produce the needed electricity to meet the basic building demand. Thus, there is no reduction in peak demand from the utility, and the building owner pays the same high demand charge as before.

CCES has the expertise to help your building or company reduce your energy costs, whether it be the usage or the demand portion. We can help you devise strategies to fit your needs for reliable power, while minimizing those high demand costs. Contact us today at karell@CCESWorld.com or at 914-584-6720.

Interest In New Gensets Is Growing

The number of facilities choosing to generate their own electricity using generators or “gensets” is growing. Companies are recognizing that the physical and business impacts of even one severe storm can undo all the planning a business does and even wipe out or severely hurt the business. In addition, with the acceptance of climate change as real the chances of a severe storm impacting a facility will rise in the future. A facility having its own secure source of electricity independent of the grid and its wires and vulnerable infrastructure can better ensure that basic functions can be maintained in a storm, saving personnel and processes and having electricity to maintain operations during such events. As a result, the genset market has been growing.

Part of this growth is due to another phenomenon, some utilities provide financial incentives for facilities to procure and operate gensets to relieve them as they are unsure of reliable power and don’t want to hurt key users in their area. In addition, several such programs require the genset operator to go off the utility’s grid and operate the genset for distinct periods during peak demand periods (hot weather) to relieve pressure on the grid. These programs, often called “Demand Response” or DR, can be lucrative for facilities. The utility pays most of the capital cost of the genset, the facility fully owns it, and they get paid a fee each time a DR event occurs and a genset is used.

One complication of such programs, however, is environmental. The federal Clean Air Act, followed by nearly all states, specifically exempts from permitting and meeting emission standards gensets that are used only in emergencies (this includes the necessary regular exercising of a unit). However, once a facility uses a genset in a DR program, this exemption goes away. Therefore, facilities entertaining joining a DR program must set aside budget and effort to obtain the proper air permit (or modify its existing one) and comply with any applicable emission standard. Nitrogen oxide (NOx) is the most common pollutant that is regulated. If the NOx emissions of your genset exceeds the regulatory standard, it may be necessary to retrofit the unit with Selective Catalytic Reduction (SCR) or equivalent technology. The cost of such a retrofit can approach 6 figures. The USEPA designates models as meeting certain “tiered” standards. Tier 4 gensets are the most advanced and will likely currently meet all applicable emission regulations. Tier 3 gensets probably meet most of them. Tier 2 units probably do not meet many of them, again, if applicable. So if you are procuring a new genset, look to invest in a Tier 4 which should meet all applicable NOx emission standards. Particulate matter (PM) is sometimes regulated, too. A sure way to meet any PM standard is to combust natural gas, not to mention it is currently cheaper than oil. Natural gas-fired gensets are particularly selling well these days.

Finally, another variation of the genset that many facilities are considering is combined heat and power or CHP, where both steam and electricity are produced by the unit. The improvement in efficiency can save significant fuel costs. It is important for an experienced engineer to evaluate whether your demand for both steam and electricity and when the demand occurs will make CHP a good investment.

CCES can help your firm determine whether a genset or a CHP can be beneficial for you, as well as manage its procurement, installation, testing, and use to maximize the financial benefits. We can determine likely financial costs and savings. We can perform the needed environmental permitting and determine whether it meets existing applicable emission limits. Contact us today at karell@CCESworld.com or at 914-584-6720.

Underevaluated Source of Energy Usage: Plug Load

When a building owner or manager calls for an energy audit, they are usually looking for ways to upgrade lighting, HVAC, insulation or windows to save energy. The big items. Technology has improved markedly in recent years in these areas to justify upgrades resulting in significant energy use savings.

However, one area that is sometimes overlooked in an energy audit is plug load. According to the US Energy Information Administration, plug load can comprise up to 30% of total energy consumption of a commercial building. It should not be neglected.

Plug load is energy demand (almost always electricity) from devices plugged into electrical outlets (one notable exception is a stove/oven, plugged into a supply of natural gas. These devices include computers, speakers, printers, monitors, scanner, copiers, chargers, TVs, space heaters, fans, refrigerators, microwaves, coffee machines, vending machines, task (desk) lighting, and others. These are mainly small items and taken for granted because they are so commonplace. However, while each item may draw less electricity compared to a large AC, cumulatively they can use significant energy and if not properly planned and controlled, can impact your energy costs.

3 Things You Can Do To Lower Plug Load Energy Costs

Use Efficient Equipment

While these may be “small” items one just “runs in” and purchases quickly, there are differences in energy use among similar equipment. The USEPA and USDOE have a joint program called “Energy Star” which compares many plug load items. Brands that are Energy Star-certified generally use at least 20% less energy (usually, electricity) than the average for the item, yet performs the same. Such items have an Energy Star logo displayed prominently on the equipment and box. A McKinsey study lists different strategies to reduce GHG emissions (usually matched with energy reduction), and puts plug load programs like Energy Star at or near the top in terms of economic effectiveness. See page 5 of the report from: https://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/impact-of-the-financial-crisis-on-carbon-economics-version-21. Many Energy Star products may be a few more dollars (or for larger equipment, $50) more expensive than the average one, but the energy savings will pay back that extra upfront cost very quickly, normally in just a few months. And then the savings for the rest of the time you own the equipment is “gravy”.

Another advantage of Energy Star is that it is an energy cost saving approach that does not rely on engineering or any kind of “work.” It is simple: a change in policy by Purchasing to purchase only Energy Star products allow you to lock in cost savings.

Controls

Smart controls allow you to program equipment for, say, “sleep” mode during certain hours or off altogether. For example, software can turn a vending machine’s lights and refrigeration off or reduce them slightly during non-office hours to save energy, yet keep food fresh. Sensors can turn off computers or lights when not in use. Make sure controls can be overridden, when necessary. This allows you to keep energy from being used when not needed, yet does not involve daily manual efforts to do so, which rarely work.

Raise Awareness

Make sure your employees/residents understand the importance of plug load as contributing to energy costs, which affect their costs as employees and renters. In time, they will be motivated to turn off equipment when not in use, saving energy. And they’ll do so at home, saving them costs, as well.

CCES can help your building or company review and analyze your energy use, including equipment, software controls, and operations with the intent of finding common sense and technological solutions to enable you to save significant energy costs while enhancing productivity. Contact us today at 914-584-6720 or at karell@CCESworld.com.

U.S. Climate Change News October 2017

Trump Administration Takes Steps To Repeal the Clean Power Plan. On October 10, 2017, USEPA Administrator Scott Pruitt submitted to the Federal Register proposed legislation to repeal the Clean Power Plan, President Obama’s signature legislation to significantly reduce U.S. greenhouse gases (GHG) by developing stringent GHG emission standards for power production. As coal-fired power plants cannot reasonably meet these emission standards. The USEPA believes it is unfair to have legislation to target a particular fuel type, and began the repeal process to encourage growth in coal usage from U.S. mines. This is quite controversial as coal, a high emitter of GHGs, as well as other and toxic compounds, is still a major source of energy in the U.S. electric industry. By encouraging coal production and use, the U.S. would be hard-pressed to meet the Paris Climate Accord goals, although President Trump has already announced that the U.S. will leave the Accord anyway. In addition, much has been written that this move may make little difference, as other economic factors makes coal a non-ideal choice as a fuel for a utility (see below), such as the declining cost of building and operating a renewable plant. The public has 60 days from initial publication in the Federal Register to comment after which the USEPA must respond before making the repeal official.

States, Cities And Private Businesses Put U.S. Halfway To Paris Climate Accord Goal. According to a study released on September 25 by New Climate Institute and the Climate Group, efforts to address climate change by states, cities and corporations have already put the U.S. halfway toward its Paris Accord climate goal despite the current Administration’s attempt to reverse recent federal efforts. The study estimated that such efforts will cause GHG emissions to drop by 12-14% below the 2005 baseline by 2025. The study, based on certified data from the Carbon Disclosure Project, found that U.S. private sector commitments were the biggest factor in reducing GHG emissions. The decline in emissions are being caused mainly by these commitments of switching from fossil fuel combustion to renewable power.

First State-Wide, Economy-Wide Carbon Tax Is Proposed. Earlier this year, a bill was introduced in the Massachusetts House and another in the Senate that would establish a tax on fossil fuels with the goals to reduce GHG emissions and return the proceeds to consumers and businesses. https://malegislature.gov/Bills/190/H1726. Both bills would impose an initial tax of $10 or $20 per ton of CO2 emissions, rising to $40 per ton in the future. Several years ago, the USEPA estimated that the cost of a ton of GHG emissions was about $42 per ton, which was why they chose this endpoint. It was understood it needed to be approached gradually. Both bills require refunding of some or all of the tax proceeds to households and businesses.
It is estimated that should either bill become law the price of gasoline and heating fuel in Massachusetts would eventually rise by about 35 cents per gallon. The bills contain rebate programs to incentivize energy efficiency, rewarding businesses or households that reduce energy usage per employee (or member), not just energy usage as a whole.

Currently, Massachusetts enforces GHG reduction rules targeted to power plants. However, with electric generation comprising just 28% of GHG emissions in Massachusetts, legislators felt it was time to regulate other sectors, as well, particularly, the transportation sector, which accounts for about 30% of statewide GHG emissions.

While certain business groups are concerned about competitiveness and disproportionate impacts, the bills have many co-sponsors. Therefore, it is likely that some such bill will pass and with a sympathetic governor, a carbon tax would become law in Massachusetts, perhaps signed in 2018, going into initial effect in 2019.

CCES has the technical experts to help you assess your energy needs and help you be more energy efficient, which has many financial benefits, including preparing for future carbon taxes or monetization of GHG emission credits. Contact us today and we can help at 914-584-6720 or at karell@CCESworld.com.

Why Energy Should Be Incorporated As Part of Your Company’s Strategy

It’s approaching the end of the year, which means self-evaluation of your company. What went well; what did not. What can be changed or should be incorporated to ensure growth moving forward? Historically, companies focus on sales and profits. Look at the headlines in major business journals: “XYZ Reports Auto Sales Jumped by X% In 1 Year”, etc. Expenses are pretty important, but the one that most companies seem to focus on is labor, as in how can it be lowered (lay off workers, increase automation, etc.). While companies cumulatively spend billions on energy annually, that expense is considered a fixed expense with little need for managing. This is a mistake. Companies can reduce energy costs and at the same time reduce risk and improve resilience.

Energy should be more important to a corporation given the fixed supply of it and issues involving regulations due to environmental, climate change, and business trends. Companies can now make choices about its energy sources and usage that it could not have made before with impacts on profit, costs, and flexibility. This is exemplified by the shift in the U.S. from traditional industrial manufacturing to more IT, cloud-based services by corporations, where energy costs can be a potential deal breaker.

Sources

Companies now have many more options of where energy comes from than before. A major new force is renewables. Solar, wind, hydro have been around for a while, but major technological advances now make building an operating a solar PV farm comparable to purchasing electricity from the local utility or running your own cogen. With the growing number of states who want to achieve a higher percentage of power derived from renewables and utilities wanting to get more facilities to become independent because of infrastructure concerns, incentives exist to sweeten the pot even more if one wants to invest in renewable power.

Another approach is to look at site-specific approaches and restrictions. You have a specific facility in a certain country or region. What are the sources of energy that are most easily accessible and plentiful in that region? Companies should make sure that equipment is capable of using that fuel or be ready to invest in new plants to secure that energy source. And they should take the long view. Which fuels may be impacted by future climate change rules or by future shortages for political or technical reasons?

Usage

Obviously, reducing usage of a fuel critical for your operations will reduce costs. But doing so will also improve your operational flexibility. If there is a looming shortage of a critical fuel, and you use less of it than your competitors, that flexibility puts you in a more commanding position, needing less. Being able to use more than one type of fuel for critical operations is beneficial, too, and gives your firm tremendous flexibility to ride price upheavals.

An overlooked issue in minimizing energy usage and improve flexibility is treatment of heavy equipment. Boilers, AC equipment, electric generators all need to be maintained and replaced at the appropriate times. It is a positive investment to perform retro-commissioning to maintain that the equipment is operating as you wish it; for you, the owner, to get your money’s worth. Also overlooked is proper training. Sometimes the first to be let go are maintenance workers; they appear not to contribute to the “bottom line”. But good maintenance people and managers (overseeing good procedures) can lengthen the effective life of equipment and keep down usage and costs very effectively.

How-To

A key to getting energy to be taken seriously as a top-of-the-line corporate interest is to have the top person, the CEO, involved. He/she should understand the importance of managing energy in a robust way and what the benefits are to the company’s moving forward. There may be doubters in the C-suite, including people who may not want Energy to “elbow its way” into decision making. But if the CEO understands the ultimate value of considering, tracking, and managing energy sources and usage, then those doubters can be silenced. So invest time in educating the entire C-suite, but particularly the CEO and update him/her on developments.

Make sure that energy is tracked as well as other business items, such as sales, workforce, profits, etc., and is included in business reports. Make sure that gains and benefits are explained and recognized.

CCES can help your company develop a robust energy program to serve your company. Its infrastructure, as well as technical evaluations of strategies to raise its value in the company and to demonstrate financial benefits. Contact us today at karell@CCESworld.com or at 914-584-6720.