6 distributed gen-public-projects-jon-fortune
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Distributed Generation and Public Agencies
by Jon Fortune, PE, CEM, DGCP
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CCSE Mission: To foster public policies and provide programs, services, information and forums that facilitate the adoption of clean, reliable, renewable, sustainable, and efficient energy technologies and practices.
• Independent, non-profit, organization founded in 2001
• 65 full-time employees consisting of economists; engineers; program managers; and energy policy and market outreach experts
• > 3,000 energy projects
• > $65,000,000 in project incentives and rebates
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Alpine Unified School District
Balboa Park Cultural Partnership
Bonsall Unified School District
Cajon Valley School District
Capistrano Unified School District
Carlsbad Unified School District
City of Carlsbad
City of Chula Vista
City of El Cajon
City Of Escondido
City of Lemon Grove
City of Ontario
City of Poway
City of San Diego
City of Vista
County of San Diego
Desert Water Agency
El Cajon School District
El Cajon Valley School District
Encinitas Union School District
Escondido Union HS District
Hemet Unified School District
Lakeside Union School District
Lemon Grove School District
Marine Corps Base Camp Pendleton
Miramar Marine Corps Air Station
NAVFAC
Navy Medical Center
Oceanside Unified School District
Padre Dam Municipal Water Agency
Port of San Diego
Ramona Unified School District
Roseville Electric
Ruben H Fleet Science Museum
San Diego Airport Authority
San Diego Convention Center
San Diego Mass Transit System
San Diego Natural History Museum
San Diego Unified School District
San Diego Workforce Partnership
San Dieguito Union High School District
San Elijo Joint Power Authority
San Pasqual Union
San Ysidro School District
San Diego Zoo
Turlock Irrigation District
University of California San Diego
US Department of Energy
Valley Center School District
Vista Unified School District
• 50 different public agencies and growing
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Distributed Generation (DG) Defined
Small-scale power generation technologies (typically in the range of 3 kW to 10,000 kW) used to provide an alternative to or an enhancement of the traditional electric power system.
Fuel cells, IC engines, solar, wind, microturbines, etc.
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DG Projects In a Nutshell
System Performance Characteristics
Energy Use Characteristics
Historical Utility Costs
Alternative Utility Rates
Federal IncentivesState Incentives
Technology Equipment Costs
Operations and Maintenance
Future Utility Costs
Renewable Energy Credits
Fuel Costs
Economies of Scale
Energy Modeling
Power Purchase Agreements
Bond Financing
Performance Guarantees
Avoided Utility Costs
Opportunity Costs
Incentives and RebatesProject Costs
Financing Costs/Method
Other Considerations
Future Changes to Energy Use
LeasesPurchase Options
System Size
Financial Pro-Forma
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Audience Poll
How many of you would consider yourself a utility rates analysis expert?
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SDG&E Utility Rate Price Comparison
AL-TOU versus DG-RSummer
On-Peak Semi-Peak Off-Peak On-Peak Max/NCAL-TOU $0.105/kWh $0.086/kWh $0.067/kWh $12.54/kW $14.03/kW
DG-R $0.191/kWh $0.118/kWh $0.099/kWh $1.05/kW $7.02/kW
% Difference 81% 37% 47% -92% -50%
WinterOn-Peak Semi-Peak Off-Peak On-Peak Max/NC
AL-TOU $0.102/kWh $0.093/kWh $0.073/kWh $5.39/kW $14.03/kWDG-R $0.138/kWh $0.125/kWh $0.104/kWh $0.23/kW $7.02/kW
% Difference 35% 34% 43% -96% -50%
Note: Neither tariff has a semi-peak demand cost component.
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So?
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ENERGYSAVINGS
Sole-Sourced
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RFPOpen RFP
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Independent, Third-Party Consultant
• Works directly for the owner, often paid directly by the owner
• Not affiliated with installing vendors or financially benefiting from the sale of the project scope
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A better approach using independent, third-party owner representatives…
I. Assess
• Define the Opportunity
II. Procure
• Manage the RFP Process
III. Monitor
• Verify Project Success
APM Program
• Pre-defines project outcome expectations• Eliminates vendor bias from financial projections• Educates owner about important project elements• Reduces owner confusion about technology and vendor selection
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Alpine Union School DistrictAt a glance…
• 5 Elementary Schools -- 2000 students
• 11 Electric Utility Meters
• Benchmarked energy use less than 75% of CA schools (CBECS)
• Complex mix of new and old equipment, some solar PV, and various utility rates
• Qualified School Construction Bond
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• District-wide energy monitoring system
• Indoor lighting upgrades (lamps, ballasts)
• Occupancy sensors
• Replace aging HVAC package roof-top units
• Install new wall heat pumps
• Reinforce and resurface aging roof on one school
• Install 147 kW of solar PV
Alpine Union School DistrictUnder construction…
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• Project costs paid for by energy savings, complying with California Government Code 4217
• $80k in annual energy savings from generating power with solar PV
• $27k in annual energy savings from energy efficiency
• Reduced annual use of grid power by 400,000 kWh
Alpine Union School DistrictExpected project outcomes…
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• Interested in exploring solar PV opportunities
• 40+ electric meters tied to water pumping and some to office buildings
• Various SDG&E commercial utility rates including water pumping rates
• Curious about whether to self-own or finance through a power purchase agreement
Local Water DistrictAt a glance…
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• CCSE identified four electric meters for further consideration
• Payback for self-ownership model was greater than 20 years
• Payback for PPA financed project expected between 15-20 years, although combined project capacity was less than needed to attract PPA financing
• District has opted to delay issuance of RFP to avoid unnecessary administrative costs
Local Water DistrictAnalysis outcomes…
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Lessons Learned
• Financial evaluation of a DG project is complex and accurate utility rate analysis is fundamental
• Trusting a DG project vendor to accurately model and justify energy costs and savings is risky business
• Third-party analysts lower owner risk by:• Conducting high-level identification of savings opportunities
• Crafting precise RFP specifications for apples-to-apples evaluations
• Assisting and educating the owner about project components with clear, transparent, validated information
• Working for the owner’s best interest
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Jon Fortune, PE, CEM, DGCPManager, Energy Advisory Service
858.244.1196 (o)
845.594.4517 (m)
www.energycenter.org