New Compressed Air Program

Trade Ally Workshop

April 12, 2011

• Introductions

• Jay Amundson: RCx Outreach and Project Coordinator, Nexant

• Dylan Matthews: Program Manager, ComEd

• Compressed Air Program Summary

• Prescriptive & Custom Compressed Air Incentives

• Comprehensive Compressed Air Study

• Case Study

• Trade Ally Opportunities

• Questions

Agenda

A Business Case for Energy Efficiency:The Triple Bottom Line

People (human capital):• Industry leadership among peers• Employee satisfaction• Attract forward thinking tenants/customers• Competitive edge among similar facilities

Planet (natural capital):• Reducing CO2 emissions produced by electricity & gas reduces

the greenhouse effect

Profit (economic value):• Real estate benefit, higher building value, tenant rates• Lower operational costs, extends equipment life• Reduced electric & gas bill

Compressed Air Program

Summary

The New Program Creates New Opportunities

• Addresses all aspects of the compressed air system:– Stand-alone Prescriptive & Custom– Studies with Cash Incentives

• Offers a more simplified incentive and study structure– Easier for Trade Allies, Service Providers and customers to navigate

• Encourages a complete system assessment, optimizing compressed air use according to best practices– Address capital upgrades as well as retro-commissioning (no/low cost) opportunities

Comparison of Old and New ProgramsOld New

Custom Incentive* $0.03 or $0.07 / kWh depending on measure life

$0.05 / kWhexcluding leaks

Prescriptive Incentives* VSDs on air compressor motors 200 hp VSDs on air compressors motors 200 hpNew compressor integrated VSD 100 hp

Studies Available Small Compressed Air Optimization150-500 hpOR

Industrial RCx for > 500hp

Comprehensive Compressed Air Study for >250 hp

Study Scope Low/no cost measures only Low/no cost measures AND

capital upgrades

Commitment Required for Study

$10,000 for measures with simple payback 1.5 yr

Repair 50% of leak volume

Incentive for Projects resulting from Studies*

$0.01 / kWh $0.05 / kWh

* Eligibility requirements and specific incentive caps apply

Smart Ideas Compressed Air Program

Capital Project , “Shovel Ready”

Prescriptive VSD

Install

Verify

Prescriptive IncentiveVSDs on Air Compressor

Motors 200 hpAir Compressors with

Integrated VSDs 100 hp

Custom Project

Install

Verify

Incentive $0.05 /kWh up to 50% of project costBased on bundle of

projectsLeaks not eligible

Opportunity for Compressed Air Study

Approved Provider performs Comprehensive Compressed Air Study

Study recommends: - Leak repair

- No/low cost fixes - Capital Upgrades

Study App

Pre-App

Final App

Pre-App

Final App

Customer Must:- Sign Program Agreement

- Repair 50% of leak volume- Select other measures for

implementation

Prescriptive & Custom Compressed Air Incentives

Prescriptive & Custom Compressed Air Incentives

• “Shovel-Ready” projects with established scope of work & price should continue to apply for incentives directly (no study required)

• Prescriptive Compressed Air VSD installation– VSDs on air compressor motors 200 hp: $60 / hp– New air compressors w/ integrated VSDs 100 hp: $100 / hp

• Custom Project Incentive for Compressed Air– $0.05 / annual kWh – Maximum incentive = 50% of incremental project cost– Pre-Approval required– Pre- or Post- M&V may be required

Comprehensive Compressed Air Studies: RCx & Capital Investment

Comprehensive Study• The study is fully funded by ComEd.• Must be performed using a pre-

approved contractor (RSP). • Customer must repair at least 50% of

leak volume identified by study. • The $0.05/kWh incentive is for all

compressed air measures and savings except leaks.

• The incentive is capped at 50% of the bundled, incremental costs.

• Owner and O&M staff must be actively involved in process.

What does the Comprehensive Study include?

• Perform system tune-up and adjust existing systems– Leak detection– Leak-down test– Supply & demand side assessments– Equipment inventory & system diagram– Investigation of system operation parameters– System monitoring

• Investigation of no/low cost improvements and capital investment upgrades

Typical Compressed Air Measures

• Compressed Air Leaks– Must be included in Comprehensive Study, but not eligible for cash incentive

• Other Eligible Measures– Reduce waste and inappropriate use:

• Install no-loss condensate drain valves• Install high-efficiency air nozzles

– Reduce compressed air system pressure– Improve control and sequencing optimization of compressors– Schedule end-use of compressed air– Compressor or dryer upgrades

• Ineligible Measures– Measures that rely solely on behavioral changes or fuel switching

Study Process

14

Bef

ore

Submit application

ScreeningKick-off Meeting

Site Assessment

Interview Operators

Collect DataPreliminary

Report

Investigation

Implement Measures

Incentive Payment

Incentive Pre-App

Select Measures

Detailed Investigation

Report

Sign Agreement

Verification

Case Study

Case Study: Chicago Area Auto Manufacturer

• The production facility averages over 1,000 units per day, with two shifts operating five days a week.

• Total cost of operation for electricity at the site was estimated at $7.9 million annually.

An automotive assembly plant uses compressed air for holding parts, clamping, and positioning. The assembled body travels to a point where compressed air is also used for painting.

Case Study: Chicago Area Auto Manufacturer

Case Study: Chicago Area Auto Manufacturer

Trade Ally Opportunities

How can Trade Allies Participate?

• Continue to encourage your customers to apply for incentives for “Shovel-Ready” projects– Prescriptive Compressor VSD Installation 200 hp– Custom $0.05 / kWh up to 50% of project cost

• Encourage eligible customers to apply for a Study• Become a Study Provider for Comprehensive Studies

– Nexant will be contacting all current Industrial RCx or Small Compressed Air RSPs– If not currently an approved service provider, submit RFQ forms (including example

reports) to Nexant– Study providers are responsible for identifying opportunities and quantifying energy

impacts

Make a business case for energy efficiency

• Without ComEd funding, a Comprehensive Study is often difficult to fund (not part of operations budget)

• The Comprehensive Study is a win-win situation– The Customer is not obligated to implement any projects until

reviewing preliminary results– Customers choose measures that best fit their business operations– Bundling no/low cost measures with capital investments will make the

large projects more enticing.

Your Advantages to Participating• The Comprehensive Study typically results in significant, attractive

opportunities

- If quickest payback measures are selected, simple payback without incentive is often < 1.0 years

- With incentive, payback often 3-6 months• Advantages for Trade Ally or RSP to the Comprehensive Study

- Increase customer engagement through multi-month study process

- Uncover opportunities to sell additional services installing energy efficient equipment or implementing energy efficient strategies

- Aid the sale of larger projects by bundling with no/low cost projects- Potential to set up a routine leak maintenance program

Trade Ally & Service Provider Marketing

• Trade Allies and Service Providers are a key component of overall program marketing efforts

• Marketing includes controlling customer expectations throughout the program process

• Presentations, press releases, etc. are acceptable marketing efforts with approval from Nexant and ComEd.

• Deliver the triple bottom line message (people, planet, profit)• ComEd & Nexant will support your marketing efforts

Thank you…Questions?