advanced strategies and analytics for campus green revolving funds
DESCRIPTION
NOTE: Audio and visual may be out of sync if you use a browser other than Google Chrome. Download Chrome for optimum viewing. This webinar provides tools and tips for using data, analytics, and modeling to inform the design and management of a green revolving fund. The presentation is based on Green Revolving Funds: A Guide to Implementation & Management, a co-publication of AASHE and the Sustainable Endowments Institute released in August 2013.TRANSCRIPT
Advanced Strategies and Analytics for campus green revolving funds
Part 2 of an AASHE/SEI webinar series on green revolving fund implementation October 2, 2013
Rob Foley, SEI Joe Indvik, ICF International John Onderdonk, Caltech Matthew Berbee, Caltech
Rob Foley Consultant Sustainable Endowments Institute
Speakers
Joe Indvik Consultant ICF International
John Onderdonk Director of Sustainability Programs Caltech
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Insert picture
Matthew Berbee Energy Manager Caltech
Implementation Series
Introductory Guide to Implementation and Management January 2013
“Implementation Strategies for Campus Green Revolving Funds” Webinar April 2013
Green Revolving Funds: A Guide to Implementation & Management August 2013
History of the BDGC
Billion Dollar Green Challenge
History of the BDGC
The Green Revolving Fund Model 1. The fund must finance measures that reduce resource use, save energy, or mitigate greenhouse gas emissions.
2. The fund must have a formalized revolving component, so that at least some of the savings from projects are repaid to the fund.
Introduction
Implementation Guide Research Process
Facility Managers
Energy Managers
Presidents
Students
Trustees
CFOs
Sustainability Directors
Interviews Research and Data
Greening the Bottom Line 2012
School Case Studies
Experience
GRF Charters
Billion Dollar Green Challenge
Consulting
Conferences Partner
Organizations
Second Nature AASHE
ACUPCC
ICF
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Employing M&V
Focus of today’s presentations
Available at GreenBillion.org/guide
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Employing M&V
Upcoming Opportunities To learn more about Green Revolving Funds
and sustainability in higher education
AASHE 2013, next week in Nashville, TN! Green revolving fund events at AASHE include: •A plenary presentation on investing in energy efficiency
•A panel on the benefits and varieties of green revolving funds across institutions
•A student workshop on pitching a GRF on your campus
Effective M&V
Fund Analytics
Introduction
Using smart data to track, design, and manage a GRF
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A Tale of Two Funds
Caltech Case Study
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Fund Analytics to evaluate, select, and track projects
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Fund Analytics
Payback period =
Return on Investment (ROI)
Upfront cost ($)Annual savings ($/yr)
Annual savings ($/yr)Upfront cost ($)
i.e. rate of return, annual yield
Quick, easy, understandable, and commonly used
Does not account for cost of capital or volume of savings
Can be expressed as annual (here) or lifetime
Same disadvantages as payback period
Allows comparison with investment returns (with caveats)
=
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Fund Analytics
Net Present Value (NPV)
Internal Rate of Return (IRR)
Incorporates cost of capital and risk into discount rate
Unintuitive
Incorporates the time-value of money (i.e. discounting)
Unintuitive
Allows for use of a “hurdle rate”
=
= �𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 𝐒𝐒𝐒𝐒 𝐲𝐲𝐲𝐲𝐒𝐒𝐲𝐲 𝐭𝐭 $ − 𝐂𝐂𝐂𝐂𝐒𝐒𝐭𝐭 𝐒𝐒𝐒𝐒 𝐲𝐲𝐲𝐲𝐒𝐒𝐲𝐲 𝐭𝐭 $
𝟏𝟏 + 𝐝𝐝𝐒𝐒𝐒𝐒𝐝𝐝𝐂𝐂𝐝𝐝𝐒𝐒𝐭𝐭 𝐲𝐲𝐒𝐒𝐭𝐭𝐲𝐲 𝐭𝐭
N
t=0
Captures total volume of savings
Hinges on discount rate
Discount rate that sets NPV equal to 0
Does not account for volume of savings
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Fund Analytics
Net present what? Telling a good story that everyone can understand
14
Fund Analytics
Sample GRF Portfolio Performance Analysis
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Employing Effective M&V
Measurement and verification in a GRF context
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Employing M&V
The IPMVP is a good place to start
Retrofit Isolation: Key Parameter Measurement
Retrofit Isolation: All Parameter Measurement
Whole Facility Measurement
Calibrated Simulation
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Employing M&V
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Employing M&V
Pros
Cons
Considerations
• Increased confidence • Protection against cost overruns • Problem detection • Performance improvement over time
• Cost • Staff time • Advance planning
• To measure or not to measure Institutional politics Budgeting process Project size Technology type
• Phase out • Payment ceiling • Rolling metering plan • M&V as investment
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Two Funds How modeling can inform fund design
A Tale of
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Fund #1 Fund #2
Projects repay 100% of annual savings
Start with $1M
Total repayment obligation of 120%
Projects repay 90% of annual savings
Total repayment obligation of 100%
Slightly more aggressive Slightly less aggressive
Finance projects that cost $600k
with 3-yr payback
A Tale of Two Funds
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How do these funds perform over a 10-year period?
A Tale of Two Funds
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$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
0
1
2
3
4
5
6
7
8
9
1 2 3 4 5 6 7 8 9 10
F1 Projects
F2 Projects
F1 Savings
F2 Savings
Fund #1 Projects Complete
Fund #2 Projects Complete
Year
Proj
ects
Savings
Modeling Results
A Tale of Two Funds
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$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
0
1
2
3
4
5
6
7
8
9
1 2 3 4 5 6 7 8 9 10
F1 Projects
F2 Projects
F1 Savings
F2 Savings
Fund #1 Projects Complete
Fund #2 Projects Complete
Year
Proj
ects
Savings
Modeling Results
A Tale of Two Funds
R R R R R R R R R
R R R R R R R R
R R R R R R
R R R
R R R R
R R
R
R
R
R
R
R
R
R
R
R
R
R
R
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$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
0
1
2
3
4
5
6
7
8
9
1 2 3 4 5 6 7 8 9 10
F1 Projects
F2 Projects
F1 Savings
F2 Savings
Fund #1 Projects Complete
Fund #2 Projects Complete
Fund #1 Cumulative Savings
Fund #2 Cumulative Savings
Year
Proj
ects
Savings
Modeling Results
A Tale of Two Funds
California Institute of Technology
AASHE WebinarAdvanced Strategies and Analyticsfor Campus Green Revolving Funds
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caltech overview
quick facts:private research university in Pasadena, CA
• 4.4 Million SF of buildings• 125 acres in urban setting• $2.4B replacement value
campus population: ~7,000 • 300 faculty; 600 research scholars; 2,200 students; 3,900 employees• Caltech named top university in the world (Times Higher Education)• 31 Nobel Laureates• founders of Intel, DirecTV, Beckman Instruments, MATLAB
energy use• 120+ GWH electricity annually
− energy Intensity ~285 MBTU/SF− average UC Campus ~ 180 MBTU/SF
• $15M+ annual utility bill
challenge: facilitate development of the newest technology and entrepreneurial spirit of Caltech while minimizing energy consumption
caltech energy conservation investment program (CECIP)
Energy projects are financed from a capital revolving fund, the Caltech Energy Conservation Investment Program (CECIP).
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“The cost to the utility budget during a CECIP project does not change (vs. budget). What does change is that a portion goes to utility bills, and a portion to debt service”
‐‐ Brewer, M. Caltech, Controller, 2012
Guiding Financial Mantra
Capital Revolving
Fund
Implement ECM
Utility Savings
ElectricityGasWaterCECIPAB32
utility budget mix
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37%
59%
4%
2009: $19.7M
ElectricityGasWaterCECIPAB32
utility budget mix
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2014: $15.6M
34%
36%
6%
18%
6%
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
MWh
fiscal year
1990‐2013
historical power consumption
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CECIP Program Inception2009
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
MWh
fiscal year
1990‐2013
historical power consumption
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CECIP Program Inception2009
‐
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
kWh
2008‐2013
2008 2009 2010 2011 2012 2013
historical power consumptionnon‐CECIP energy drivers
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110,000
111,000
112,000
113,000
114,000
115,000
116,000
117,000
118,000
119,000
120,000
MWH
FISCAL YEAR
100,000 sqft added5 fume hoods added
64,000 sqft added102 fume hoods added
47,000 sqft added
45,000 sqft renovated13 fume hoods added
30,000 sqft renovated24 fume hoods added
campus energy drivers since CECIP inception211,000 sqft added
192,000 sqft renovated144 fume hoods added
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
millions
program performance (2009 to present)
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($9)($8)($7)($6)($5)($4)($3)($2)($1)$0$1$2$3$4$5$6$7
2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 2019 2020Millions
Paybacks PWP Incentives Original CECIP Model (2009)
CECIP projection
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CECIP projection
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CECIP Outflows
($9)($8)($7)($6)($5)($4)($3)($2)($1)$0$1$2$3$4$5$6$7
2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 2019 2020Millions
Paybacks PWP Incentives Original CECIP Model (2009)
CECIP projection
36
CECIP Outflows
($9)($8)($7)($6)($5)($4)($3)($2)($1)$0$1$2$3$4$5$6$7
2009 2010 2011 2012 2013 2014* 2015 2016 2017 2018 2019 2020Millions
Paybacks PWP Incentives Original CECIP Model (2009)
CECIP CASHFLOW
FY13 total budgeted vs actual (kWh)
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0
50
100
150
200
250
300
350
400
450
500
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
CDDkWh
Actual kWh Budgeted kWh 2011 CDD 2012 CDD 2013 CDD
how to make this happen
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• establish program criteria early• communicate the go/no‐go factors to the team• overview of ground‐rules for evaluating retrofit opportunities in laboratory and other critical facilities
• energy retrofit training requirements• detail project closeout requirements beyond traditional punch/O&M/warranty
• requirements to “prove the efficiency benefit”
Projects Must:Exhibit verifiable savings
♦Contain a plan for periodic
measurement & verification
♦Return on Investment greater than 15%
standard operating procedures
SOP is an energy retrofit “play‐book” that outlines data acquisition requirements per energy retrofit type
what has been done, where is it going
what has been done:• low hanging fruit has been picked up
• campus wide lighting retrofit• premium efficiency fan motors• free cooling, rCx economizers
where are we going:• building air handling optimization
• laboratory HVAC energy retrofits
($8/SQFT to $3/SQFT) Constant to Variable Volume with Demand Control (6 ACH/4 ACH)
• chilled water distribution optimization
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BTU/Hr represents the energy required to heat or cool waterBTU/Hr = 500 x gpm x ΔT
500,000
engineering for a minute
=500 x 500 x 2 (LOW ΔT )
=500 x 200 x 5 (LOW ΔT )
=500 x 100 x 10 (Moderate ΔT )
=500 x 50 x 20 (Good ΔT )
=500 x 33 x 30 (Excellent ΔT )
Increase ΔT, reduce flow, same heat transfer
BTU/Hr represents the energy required to heat or cool waterBTU/Hr = 500 x gpm x ΔT
500,000
engineering for a minute
=500 x 500 x 2 (LOW ΔT )
=500 x 200 x 5 (LOW ΔT )
=500 x 100 x 10 (Moderate ΔT )
=500 x 50 x 20 (Good ΔT )
=500 x 33 x 30 (Excellent ΔT )
Increase ΔT, reduce flow, same heat transfer
Take away: What am I doing to maximize Delta‐T at my facility?
now the important part:proving it works
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measure and prove the performance
• CECIP takes measurement and verification to another level
• In‐house business processes to sustain savings
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one of the ways projects wont payback
45
one of the ways projects wont payback
46
‐$
‐$
‐$
‐$
0
2
4
6
8
10
12
14
16
the adjustments accumulate quicklyN = 132
0
2
4
6
8
10
12
14
16
the adjustments accumulate quicklyN = 132
Take away: How does operations currently track BMS configuration changes?
active energy management (AEM)
Visualizations for efficiency
Y= mx + B
Optimal Operating Line
energy management integrated with maintenance
key areas
• building automation warranty management
• operating mode validation• system configuration
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Questions?
Questions?
Rob Foley, Sustainable Endowments Institute [email protected]
Joe Indvik, ICF International [email protected]
John Onderdonk, Caltech [email protected]
Matt Berbee, Caltech [email protected]
Submit questions in the “Questions” pane of the toolbar on the right side
of your screen.
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Thank You!