Energy Efficiency / Alliance to Save Energy - EE Global Conference, Brussels, April 2011 /...
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Transcript of Energy Efficiency / Alliance to Save Energy - EE Global Conference, Brussels, April 2011 /...
Achieving Energy & Carbon Savings through Energy Performance Contracting
Luca MazzeiVP, Global Strategy & Marketing
Honeywell Building Solutions
Honeywell Proprietary
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Agenda
• Energy Is Honeywell’s business
• The challenge ahead
• Energy Performance Contracting
• Who is benefiting?
• What’s the holdup?
• Solutions
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Energy Is Honeywell’s Business
• Nearly 50% of Honeywell’s product portfolio is linked to energy efficiency
– HVAC– Biodiesel– Turbochargers
• The global economy could operate on 10-25 percent less energy just by using today’s existing Honeywell technologies
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The Challenge Ahead
20% Reduction in Carbon Emissions by 2020, 80% by 2050Trend Will Deliver Less Than 10% by 2020
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€1 spent on more efficient energy useavoids €2 in investment in energy supply
Source: IEA
Where Should We Focus?
Supply Side Demand Side
The Greenest Energy Is The One You Don’t Have To Generate!
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Europe’s Buildings Waste €270B of Energy Every Year
Where Should We Focus?
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What Are The Options?
• Upgrade your buildingsLarge capital outlay to fund improvements
• Source government funding, zero % loans Only address ‘low hanging fruit’
• Do nothing Suffer the consequences
• Use energy savings to fund energy efficiency measuresEnergy Performance Contracting
The Money Is Already In Your Budget, Currently Paying For Wasted Energy
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What Is An Energy Performance Contract?
Using Wasted Energy To Fund Carbon And Energy Reduction
• A programme of energy efficiency improvements to buildings funded from the savings they generate
• Delivered via a partnership with an ESCO
• Funded by the customer or ESCO’s Finance Partner
• Energy savings are guaranteed by the ESCO
• Project managed by the ESCO but installed by local companies and contractors
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Why Use EPC?• No up-front capital required• Guarantee transfers financial and equipment
performance risk to the ESCO– if the savings target isn’t made, the ESCO pays the
difference• Unlike most capital investments, EPC reduces
operating expenses• Immediate improvements are made
– Buildings upgraded with modern, reliable energy efficient equipment
– Comfort conditions are improved for occupants– Carbon reduction
• Avoids ‘cream skimming’ to provide deep savings >20%
• Creates job opportunities • Proven process
Self Funded, Risk Free Improvement Programme
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Energy / UtilityCost
EPC – How The Funding Works
Current
Energyand O&MCosts
£ Savingscontinue
Yourannualcoststoday
During EPC Programme
Energy / UtilityCost
Energyand O&MCosts
Energy savings fund the
improvementprogramme
YourannualcostsduringEPC
After EPC Programme
Energyand O&MCosts
Yourannualcostsafter EPC
There Is No Payback As There Is No Payment
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EPC Is A 4 Stage Process
Detailed analysis Implementation
Contract closure
Changes in energy use accountingPreliminary
study
Detailed engineering
study
Planning, installation,
project management
Energy Saving Guarantee
measurement & verification service
(IPMVP)
Preliminary audit
Guarantee phase
No Commitment Until Contract Closure
Enough inefficiency to fund an improvement
programme?
Level of savings delivered over what
period?
What are the finance & contractual
arrangements?
How do I know the savings are being
delivered?
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A Total Facility ApproachLighting replacement,
control systems & LEDs
On-Site Technical Resource Management
Chiller upgrade/replacement & absorption cooling
BuildingManagement Systems
Zonetemperature
control
Boiler upgrades, controlsCombined Heat & Power
VSD motor control
Ventilation fans
High efficiency motors
Voltage reduction
Damper control
Plug loadmanagement
Solar gainminimization
Agnostic Approach To Technology, Over 250 ECMs
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Deep Savings Delivered By EPC
(EPC v Subset of 204 US DOE Projects)
PerformanceRisk
% Savings
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Year 1 Year 2 Year 3 Year 4 Year 5
ESCO guaranteed savings &Energy Proj forecast savingsEnergy projects actual savingsESCO EPC actual delivered savings
Guarantee Accountability Delivers Results
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Who Is Benefiting From EPC In Europe Today?• Transport for London (UK)• Gwent NHS Trust (UK)• Lievensberg Hospitals (NL)• Atrium Hospital Complex, Heerlen (NL)• St Elisabeth Hospital, Herten (DE)• Landshut Clinic, Landshut (DE)• Erasmus University (NL)• City of Malmö (SW)• Ifö Sanitec (SW)• EHSAL School (BE)• Brigittenau Swimming Pool, Vienna (AT)• UniCredit Group, Milan (IT)• University of Art, Berlin (DE)• City of Berlin (DE)• Clinical Center Bremerhaven-Reinkenheide (DE)• St. Joseph Krankenhaus, Berlin (DE)• Municipality of Nyköping (SE)• City of Örebro (SE)• Swedish University of Agricultural Sciences (SE)• Municipality of Hollola (FI)• Municipality of Middelfart (DK)• University of Sheffield (UK)• Jewish Museum, Berlin (DE)• German Army Medical Co-ordination Centre, Diez (DE)• German Army Training Camp, Aulenbach (DE)
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EPC Summary
• Building owners keep paying what they currently do but…– Obtain a complete upgrade of all their buildings– Implement a programme of guaranteed, significant carbon reductions
across their buildings– Improve the reliability of the building’s energy system– Reduce operational costs– Improve working environment for building occupants– Use energy inefficiency as a tool to make improvements– Create jobs
Take The Money Currently Paying The Utility For Wasted Energy & Use It To Invest In Improvements Across Buildings
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What’s The Hold Up In Europe?• US Energy Policy Act 2005
– More than $1.9 billion has been invested in over 400 EPC programmes
– Over 30,000 new jobs created
• The EPC solution exists• EPC is being used successfully in pockets
across Europe
• Lack of awareness• Reluctance to obtain 3rd party financing• Procurement difficulties• Selective financing• Lack of policy push and incentives• Reliance on government funding• Accounting & budgetary rules
Central Support Needed To Overcome The Hurdles
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Solutions
• Continue to prioritise energy efficiency• Drive awareness through Energy Agencies• Covenant of Mayors, Smart Cities• Support (with banks) 3rd party financing• Accounting treatment that doesn’t impact credit
worthiness• Support and recommend the use of energy
performance contracting with standard contracts, procurement processes, M&V & the ability for public sector to use 3rd party financing
• Learn from others
“The Invisible Hand Of The Market Alongside The Enabling Hand Of Government”
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Thank You