One of the major challenges to implementing energy efficiency is deciding where to focus limited capital and human resources to prioritize initiatives. As a result, organizations end up installing quick low cost/fast payback projects, replacing equipment only when it breaks, or spending countless hours weighing options. Fortunately, there are strategies to get the most out of the projects your organization decides to implement.
Retrocommission and Maintenance First
Building owners can save 5-20% annually on their energy bills by implementing operations and maintenance (O&M) best practices. Well-developed operations and maintenance programs helps ensure equipment is functioning as efficiently as possible and can identify performance issues before they become equipment failures. Implementing robust operations and maintenance are low cost or budget neutral and end up saving both energy and maintenance staff time. Many O&M best practices align with the planning best practices discussed in Action 1: Have a Plan. Making commitments, setting goals, staffing, communication, and regular program assessments are all features of an effective maintenance program.
Retro or re-commissioning is the process of ensuring that existing energy using systems are installed, functionally tested, and capable of being operated and maintained according to the owner’s operational needs. Retrocommissioning can reveal low or no cost savings opportunities such as malfunctioning sensors, equipment schedules that do not align with occupancy, or set points outside design values. Retrocommissioning costs 10-60 cents per square foot and can save 10-75 cents per square foot. Simple payback ranges from 3 months to 3 years. Retrocommissioning and O&M programs work hand in hand. Retrocommissioning at the outset of any O&M program helps ensure facility staff is maintaining proper equipment function, rather than reinforcing poor function. Training and O&M programs help maintain the savings achieved by retrocommissioning.
ENERGY STAR offers a series of helpful Operations and Maintenance reports including Fifteen O&M Best Practices for Energy Efficient Buildings and Putting the “O” Back in O&M: Best Practices in Preventive Operations, Tracking, and Scheduling.
Understand Your Utility Bills
Taking a closer look at your energy utility bills and rate structures can reveal where to focus your energy efficiency attention. Your City facilities may use energy from a number of sources including grid electricity, renewable electricity, natural gas, chilled water and steam. Collect bills from all facilities for all fuel sources to understand the full scope of energy costs. Generally, electricity represents the largest share of energy cost for municipal facilities and has more complex billing structures.
Electricity bills for commercial buildings may include the following categories of charges:
- Customer/Meter Charges: Flat charges assessed on a per customer or per meter basis.
- Consumption (kWh) Charges: Charge per kilowatt-hour (kWh) typically charged by your Retail Energy Provider (REP) in competitive portions of the state. Consumption rates are negotiable with your REP and shopping different rates with REPs may lower cost of energy.
- Demand (kW) Charges: Charge per kilowatt, determined as the 15-minute interval of highest demand during billing period. Demand charges are typically charged by your Transmission, Distribution Service Provider (TDSP) and are not negotiable. Annual peak demand calculations and demand ratchets influence demand rate ($/kW).
- Miscellaneous Charges and Taxes: These include miscellaneous charges such as Nuclear Decommissioning Fees, other environmental fees, and taxes. These charges cannot be influence by energy efficiency efforts but should be factored into cost calculations.
Take time to understand facility bills to know where to focus efficiency efforts. See Power Factor, Ratchets and Your Electric Bill for a high-level explanation of electricity bill charges. The Public Utility Commission of Texas website offers definitions of terms that may appear on utility bills in Texas.
Reduce Demand Charges
Understanding the difference between electricity consumption and demand can help identify high impact and high value savings opportunities. Electricity consumption is measured in kilowatt-hours (kWh) and represents the amount of electricity consumed over time. Electricity demand is measured in kilowatts (kW) and is the rate that electricity is consumed. (Figure 1) A 100 watt lightbulb demands 100 watts (0.1 kilowatts). If that light bulb is on for 10 hours it consumes 1 kilowatt-hour (0.1 kW x 10 hours). Demand increases as more devices are turned on. Electricity utilities charge customers for peak demand, the 15-minute interval during a billing cycle where a facility is using electricity at the highest rate.
Figure 1: The relationship of electricity demand and consumption in a typical day
Demand charges can account for 30-70% of a commercial electricity bill so reducing peak demand can amount to considerable savings. Furthermore, electricity used during times of peak demand tends to be more carbon intensive and polluting as producers turn on older and less efficient coal and diesel generators to meet demand. The rate the utility charges for demand is determined by the average peak kW measured in each of the four hottest months of the year. Known as “4 Coincident Peaks” or 4CP. Third party or in-house efforts to anticipate and reduce these four peaks can mitigate the demand rate for the following calendar year. Scheduling of existing equipment to avoid all systems running simultaneously can flatten a facility’s demand. Replacing existing equipment with more efficient options permanently reduces a building’s total potential demand. Resources such as SECO’s Preliminary Energy Assessments can help explain utility bill charges/rates and identify efficiency strategies that target demand savings.
Take a Comprehensive and Systemic Approach
Notice that this action is not titled “Focus on low cost efficiency?” Sometimes only focusing on low cost efficiency projects may not be the best approach to ensuring long-term efficiency and cost savings. Lighting upgrades and inexpensive sensors are celebrated for their fast payback while large HVAC equipment upgrades suffer from massive upfront costs and long payback periods. As a result, quick payback projects are installed while large capital expenditures are put off until major equipment failure.
The US Environmental Protection Agency’s Energy Efficiency in Local Government Operations recommends a five-phase approach to optimizing efficiency savings:
- Conduct retrocommissioning.
- Install energy-efficient lighting.
- Reduce supplemental loads (e.g., by purchasing ENERGY STAR labeled equipment).
- Install fan system upgrades.
- Install heating and cooling system upgrades.
This comprehensive or blended approach can help justify larger expenditures within payback requirements. Projects with rapid payback periods are stacked into a portfolio of projects, offsetting and subsidizing the longer payback projects (Figure 2). Approaching efficiency systemically can also enhance overall efficiency because efficient LED lighting reduces a building’s HVAC load, potentially reducing the size of replacement equipment (Figure 3).
Figure 2: Savings from fast payback lighting and plumbing retrofits help lower the comprehensive payback of HVAC and Solar improvements.
Figure 3: Phasing projects can result in reduction of overall cooling capacity requirements, further improving cost savings. (US EPA)
Further Reading and Resources
Conducting a preliminary audit, either through SECO’s Preliminary Energy Assessment program or through your utility or another service provider can help identify the high impact and high value efficiency opportunities in your facility. Overall performance and longevity of building equipment is optimized by taking a systemic and long range perspective in prioritizing efficiency improvements.