Page 1 Energy $aving $olutions for Hospitals How Combined Heat and Power Systems are saving...

Energy $aving $olutions for Hospitals

How Combined Heat and Power Systems are saving hospitals millions of dollars in operations and capital while helping protect the environment and public health.

Texas Hospital Association AudiocastTexas Hospital Association AudiocastNovember 1, 2005November 1, 2005

Austin, TexasAustin, Texas

Texas Hospital Association AudioCastTexas Hospital Association AudioCast November 1, 2005 November 1, 2005Energy $aving $olutions for HospitalsEnergy $aving $olutions for Hospitals

Purpose of Today’s AudioCastPurpose of Today’s AudioCast

Describe CHP and its Value Proposition in Describe CHP and its Value Proposition in Hospital SettingsHospital Settings

Encourage Hospital Executives to Evaluate Encourage Hospital Executives to Evaluate CHP in their FacilitiesCHP in their Facilities

Provide Information on How to Move Provide Information on How to Move Forward with CHPForward with CHP


IntroductionsIntroductions Moderator Moderator

– Robert MorozRobert Moroz, AIA, LEED AP, President, AIA, LEED AP, PresidentHealthcare Facilities Consultation and Planning; Austin, TexasHealthcare Facilities Consultation and Planning; Austin, Texas

SpeakersSpeakers– Dan BullockDan Bullock, Director , Director

Gulf Coast CHP Applications Center; The Woodlands, TexasGulf Coast CHP Applications Center; The Woodlands, Texas– Ed MardiatEd Mardiat, DBIA, Principal and Director of CHP Development , DBIA, Principal and Director of CHP Development

Burns & McDonnell Engineering Company; Kansas City, MissouriBurns & McDonnell Engineering Company; Kansas City, Missouri– Kim ShinnKim Shinn, P.E., LEED AP, Director of Sustainable Design, P.E., LEED AP, Director of Sustainable Design

TLC Engineering for Architecture; Brentwood, TennesseeTLC Engineering for Architecture; Brentwood, Tennessee– Gail VittoriGail Vittori, LEED AP, Co-Director , LEED AP, Co-Director

Center for Maximum Potential Building Systems; Austin, TexasCenter for Maximum Potential Building Systems; Austin, Texas


What is Combined Heat and Power (CHP)?What is Combined Heat and Power (CHP)?

Combined Heat and Power Plants:Combined Heat and Power Plants:– ““Recycle” normally wasted energy into steam Recycle” normally wasted energy into steam

and/or chilled water for use by the hospitaland/or chilled water for use by the hospital– Generates Electricity for a hospital on siteGenerates Electricity for a hospital on site

Provides 100% Primary (Normal) PowerProvides 100% Primary (Normal) Power Provides 100% Emergency backup powerProvides 100% Emergency backup power

– Are up to 250% more efficient at turning input Are up to 250% more efficient at turning input energy into useful energy than are energy into useful energy than are conventional electric utility plantsconventional electric utility plants


Why Hospitals?Why Hospitals?

CHP CHP “Best User” Profile“Best User” Profile is: is:– Coincident electrical and thermal loads Coincident electrical and thermal loads – 24 hour/day, 7 day/week, 365 day/year 24 hour/day, 7 day/week, 365 day/year

operationoperation– Low Seasonal Variation in loadsLow Seasonal Variation in loads– High Power Reliability NeedsHigh Power Reliability Needs

Hospitals fit the Hospitals fit the “Best User” Profile“Best User” Profile for for Combined Heat and Power applicationsCombined Heat and Power applications


Conventional Power Plants convert about 35% of their Conventional Power Plants convert about 35% of their primary input fuel into electricity; the remainder is lost “up primary input fuel into electricity; the remainder is lost “up the stack”. An additional 6% efficiency drop occurs in the stack”. An additional 6% efficiency drop occurs in transmission to the site. Overall, at the Hospital’s meter, the transmission to the site. Overall, at the Hospital’s meter, the result is roughly a result is roughly a 33% efficient primary fuel conversion to 33% efficient primary fuel conversion to useful energyuseful energy..

.33 BTU In

Power Plant Distribution System Hospital

.02 BTU LossCentralized Generation Model

How Typical Power Delivery WorksHow Typical Power Delivery Works

.65 BTU Loss

.35 BTU In1 BTU In


Combined Cooling, Heating and Power Plants can be Combined Cooling, Heating and Power Plants can be 75% 75% efficient at primary fuel conversion to useful energy and, efficient at primary fuel conversion to useful energy and, because they are located on site, have no transmission loss.because they are located on site, have no transmission loss.

This is a This is a 42% savings in primary energy utilization42% savings in primary energy utilization compared compared to the Typical Power Delivery Model.to the Typical Power Delivery Model.

CHP Plant Hospital

CHP Model

How CHP WorksHow CHP Works

1 BTU In

.25 BTU Loss

.75 BTU In


CHP Electric Generation EquipmentCHP Electric Generation Equipment

Reciprocating Engines Microturbines

Gas TurbinesGas Turbines


CHP Heat Recovery SystemsCHP Heat Recovery Systems

Steam and Hot WaterSteam and Hot WaterExhaust GasesExhaust Gases


CHP Thermally Activated TechnologyCHP Thermally Activated Technology

Absorption ChillersAbsorption Chillers

Desiccant DehumidificationDesiccant Dehumidification


CHP Technology is ProvenCHP Technology is Proven

Installed in > 200 Hospitals in the U.S. Installed in > 200 Hospitals in the U.S. todaytoday

Average System Size = 2 MWMedian System Size = 230 kW


Texas Tech Health Science CenterTexas Tech Health Science Center LubbockLubbock 25 MW25 MW TurbineTurbineNatural Natural

GasGas 19901990

Lackland AFB HospitalLackland AFB Hospital San AntonioSan Antonio10.4 10.4 MWMW TurbineTurbine

Natural Natural GasGas 19981998

UT Health Science CenterUT Health Science Center DallasDallas 4.6 MW4.6 MW EngineEngineNatural Natural

GasGas 19781978

Dell Children’s Medical CenterDell Children’s Medical Center AustinAustin 4.3 MW4.3 MW TurbineTurbineNatural Natural

GasGas 20052005

Providence Memorial HospitalProvidence Memorial Hospital El PasoEl Paso 4.2 MW4.2 MW EngineEngineNatural Natural

GasGas 19871987

R.E. Thomason HospitalR.E. Thomason Hospital El PasoEl Paso 2.4 MW2.4 MW EngineEngineNatural Natural

GasGas 19961996

Austin State HospitalAustin State Hospital AustinAustin 2.2 MW2.2 MW TurbineTurbineNatural Natural

GasGas 19901990

RBJ Health CenterRBJ Health Center AustinAustin 200 kW200 kW Fuel CellFuel CellNatural Natural

GasGas 20022002

Vista Hills Medical CenterVista Hills Medical Center El PasoEl Paso 180 kW180 kW EngineEngineNatural Natural

GasGas 19861986

CHP installed in Hospitals in TexasCHP installed in Hospitals in Texas


Who Benefits?Who Benefits?

PatientsPatients HospitalsHospitals Capital PartnersCapital Partners Utility CompaniesUtility Companies The PublicThe Public Federal, State and Local GovernmentsFederal, State and Local Governments The EnvironmentThe Environment


Benefits to PatientsBenefits to Patients In local and regional disasters, patient transfers and In local and regional disasters, patient transfers and

evacuations can be deadly. evacuations can be deadly. Loss of power puts patients currently undergoing Loss of power puts patients currently undergoing

critical procedures at risk.critical procedures at risk. ““Brown outs” and “Voltage Sags” can shut down Brown outs” and “Voltage Sags” can shut down

sensitive diagnostic equipment and interrupt non-sensitive diagnostic equipment and interrupt non-critical procedurescritical procedures

A facility that can remain A facility that can remain fully functional fully functional can avoid can avoid these risks to its patients.these risks to its patients.


More Reliable Normal Power: More Reliable Normal Power: It is bad It is bad enough now when a hospital has to go on enough now when a hospital has to go on emergency power, but when a hospital emergency power, but when a hospital converts to fully digital Medical Records, converts to fully digital Medical Records, RFID/Bar Code Scan Drug delivery, RFID/Bar Code Scan Drug delivery, Computerized Physician Order Entry, etc., Computerized Physician Order Entry, etc., Health care delivery stops if the “lights go Health care delivery stops if the “lights go out”. out”.

Benefits to HospitalsBenefits to Hospitals


Higher Quality Normal Power:Higher Quality Normal Power: Local Local generation provides fewer sags and surges. generation provides fewer sags and surges. Moving from normal power to grid backup Moving from normal power to grid backup is measured in “cycles”, not “seconds”.is measured in “cycles”, not “seconds”.

““Island” Power:Island” Power: In the event of a grid In the event of a grid failure due to natural, technical, or terrorist failure due to natural, technical, or terrorist causes, your strategic community asset will causes, your strategic community asset will remain in operation when needed most.remain in operation when needed most.

Benefits to Hospitals (continued)Benefits to Hospitals (continued)


More Backup Power:More Backup Power: CHP supplies 100% of the CHP supplies 100% of the Hospital’s needs; not just Life Safety Hospital’s needs; not just Life Safety requirements. (FYI, Texas Licensing Code does requirements. (FYI, Texas Licensing Code does not require Chillers to be on Backup.)not require Chillers to be on Backup.)

More Reliable Backup Power:More Reliable Backup Power: Probability of Probability of failure of the traditional Hospital “grid plus failure of the traditional Hospital “grid plus backup” is 67% according to Primen backup” is 67% according to Primen Perspective’s Perspective’s R RXX for Health Care Power for Health Care Power

FailuresFailures, DE-PP-24, 11/2003 , DE-PP-24, 11/2003

Benefits to Hospitals (continued)Benefits to Hospitals (continued)


Intangible Benefits to HospitalsIntangible Benefits to Hospitals

Sustainable Design: Sustainable Design: Green Guide for Green Guide for Health Care (GGHC) points and Leadership Health Care (GGHC) points and Leadership in Energy Environmental Design (LEED)in Energy Environmental Design (LEED)

Public Relations: Public Relations: – Positive Press CoveragePositive Press Coverage– Community SupportCommunity Support

Philanthropic “edge”: Philanthropic “edge”: Foundations are Foundations are becoming interested in “Green” Buildingsbecoming interested in “Green” Buildings


Economic Benefits to HospitalsEconomic Benefits to Hospitals Initial Capital Savings: Initial Capital Savings: A CHP plant owned A CHP plant owned

by a capital partner allows a hospital to by a capital partner allows a hospital to redirect it’s own capital (that would redirect it’s own capital (that would otherwise have been spent on chillers, otherwise have been spent on chillers, emergency generators, switchgear, boilers, emergency generators, switchgear, boilers, pumps and the Physical Plant Building to pumps and the Physical Plant Building to contain this equipment) towards its core contain this equipment) towards its core healthcare mission thus potentially saving healthcare mission thus potentially saving millions of dollars in construction costs.millions of dollars in construction costs.


Economic Benefits to Hospitals (continued)Economic Benefits to Hospitals (continued)

Operating Cost Savings:Operating Cost Savings: At the hospital’s At the hospital’s option, capital savings can be traded for long option, capital savings can be traded for long term operating cost savings by:term operating cost savings by:– Increasing hospital equity in return for lower Increasing hospital equity in return for lower

power and thermal ratespower and thermal rates– Using portions of capital savings to improve the Using portions of capital savings to improve the

energy performance of the hospital itself energy performance of the hospital itself through demand side energy conservation through demand side energy conservation improvementsimprovements


The The “Numbers Pencil”“Numbers Pencil” from the Investor’s from the Investor’s perspectiveperspective

Low Risk of investing in a Low Risk of investing in a “Utility-Like”“Utility-Like” ventureventure

Investors are comfortable with Investors are comfortable with “Longer “Longer Returns”Returns” on Investments on Investments

Investing in these types of energy projects is Investing in these types of energy projects is their their “Core Business”“Core Business”

Benefits to Capital PartnersBenefits to Capital Partners


““Demand Side Management”Demand Side Management” costs less than constructing costs less than constructing new conventional power plants. new conventional power plants.

Places Places “Velvet Handcuffs”“Velvet Handcuffs” on a large customer in on a large customer in deregulated utility marketsderegulated utility markets

Useful to Utilities for grid power managementUseful to Utilities for grid power management Avoids Utility Investment where the grid is insufficient due Avoids Utility Investment where the grid is insufficient due

to congestion or in rural areas where it is underdeveloped.to congestion or in rural areas where it is underdeveloped.

Benefits to Utility CompaniesBenefits to Utility Companies


Benefits to the PublicBenefits to the Public

Helps reduce respiratory illnessesHelps reduce respiratory illnesses– Less NOx, SOx, and PM Less NOx, SOx, and PM

Reduces green house gas emissionsReduces green house gas emissions– Less than half CO2 emitted per kWhLess than half CO2 emitted per kWh

Improved trade balancesImproved trade balances– More domestic, less imported energyMore domestic, less imported energy

Energy efficiency is good public policy!Energy efficiency is good public policy!


Benefits to Federal, State, & Local GovernmentBenefits to Federal, State, & Local Government

CHP AdoptersCHP Adopters– VA Hospitals, Prisons, Emergency RespondersVA Hospitals, Prisons, Emergency Responders

Disaster PreparednessDisaster Preparedness– Creates powered islands for sanctuary, medical Creates powered islands for sanctuary, medical

care, public safetycare, public safety Homeland SecurityHomeland Security

– Enhances communications, service delivery, and Enhances communications, service delivery, and recovery in affected areasrecovery in affected areas


Benefits to the EnvironmentBenefits to the Environment

Because CHP plants are so efficient at Because CHP plants are so efficient at “recycling” waste energy, they produce 1/3 “recycling” waste energy, they produce 1/3 of the pollution just due to lower fuel usage of the pollution just due to lower fuel usage per unit of useful energy produced. per unit of useful energy produced.

CHP plants typically burn natural gas which, CHP plants typically burn natural gas which, while not a perfect fuel, is far preferable to while not a perfect fuel, is far preferable to coal, lignite or oil in terms of particulate and coal, lignite or oil in terms of particulate and green house gas pollution green house gas pollution


What is the Green Guide for Health Care?What is the Green Guide for Health Care?

A quantifiable sustainable design toolkit to help A quantifiable sustainable design toolkit to help hospitals plan facilities that are environmentally hospitals plan facilities that are environmentally friendly while enhancing patient and staff safety friendly while enhancing patient and staff safety and well being.and well being.

The GGHC supports the use of Combined Heat and The GGHC supports the use of Combined Heat and Power as a strategy for Hospitals for improving Power as a strategy for Hospitals for improving their emergency power systems and response their emergency power systems and response capabilities during disaster situations. capabilities during disaster situations.

Free download of the Free download of the “Guide” “Guide” at www.gghc.orgat www.gghc.org


A self-certifying guidance document for harnessing best practices in the health care industry.

GREEN GUIDE FOR HEALTH CARE


Sponsors

Convener

sponsors

Center for Maximum Potential Building Systems, www.cmpbs.org

Hospitals for a Healthy Environment, www.h2e-online.org

NYS Research and Energy Development Authority, www.nyserda.org

Merck Family Fund, www.merckff.org


The Green Guide for Health Care seeks to reward those organizations that voluntarily steward the environment in the interests of human health. It also creates incentive for the healthcare and related industries to change their practices, build sustainable environments, and enhance their overall accountability and performance.

industrytool


The design and operation of health care buildings is highly regulated with intense economic and life safety oversight

Health care facilities are often multiple building campuses of varying ages, conditions, systems

24/7 operations with patients in place require intensive coordination and redundancy of all services at all times.

Long ownership mean owners realize life cycle implications of their construction choices.1

2

3

4

overviewdesign attributes


Operational issues, such as mercury elimination, have defined industry’s environmental stewardship

5

operational attributesThe H2E is a voluntary program designed to help health care facilities enhance work place safety, reduce waste and waste disposal costs and become better environmental stewards and neighbors.

overview


6

7

8

Construction frequently occurs within or adjacent to occupied buildings (where health is fragile, or steadiness of hand required)

Infection Control Risk Assessment (ICRA) protocols to minimize the impacts of construction on occupants demonstrate leadership to the wider sustainable building industry

Healthcare construction managers can evolve a rigorous, sustainable set of practices for the healthcare industry that may inform wider construction practice

construction attributesoverview


constructionmanual

1 – Integrated Design2 – Sustainable Sites3 – Water Efficiency4 – Energy & Atmosphere5 – Materials & Resources6 – Indoor Environmental Quality

7 – Innovation

2 - 21 - 181 - 73 - 192 - 242 - 220 - 4

11 - 94

Section / Category Name Pre-Req. / Max. Total


operationsmanual

1 – Integrated Operation2 – Energy Conservation3 – Water Conservation4 – Chemical Management5 – Waste Management6 – Environmental Services7 – Environmental Purchasing8 – Innovation

4 - 83 - 181 - 81 - 51 - 60 - 90 - 110 - 7

10 - 72

Section / Category Name Pre-Req. / Max. Total


Intent

Health Issues

Reference Standards

Credit Goals

Technologies & Strategies

organization

Documentation


registration growth

overviewregistration

0

1000

2000

3000

4000

5000

6000

Nov-0

3

Jan-

04

Mar

-04

May

-04

Jul-0

4

Sep-0

4

Nov-0

4

Jan-

05

Mar

-05

May

-05


geographic distributionGreen Guide for Health Care Pilot 2.0

As of July 2005



profile


35%13%22%3%9%2%16%

growth profession


pilot growth

overviewpilot

growth profession


pilot projects

overviewpilot


Case StudiesCase Studies

Montefiore Medical Center, New York, NY Montefiore Medical Center, New York, NY Critical Access Hospital PrototypeCritical Access Hospital Prototype Dell Children’s Medical Center of Central Dell Children’s Medical Center of Central

Texas (DCMCCT); Austin, TexasTexas (DCMCCT); Austin, Texas Texas Tech Health Science CenterTexas Tech Health Science Center

(TTHSC); Lubbock, Texas(TTHSC); Lubbock, Texas


Montefiore Medical Center, NYCMontefiore Medical Center, NYC

14 MW Combustion Turbine CHP plant, cost $23 14 MW Combustion Turbine CHP plant, cost $23 million and saves $3 million/yearmillion and saves $3 million/year

August 14 Blackout plunged 50 million people into August 14 Blackout plunged 50 million people into darkness in the Northeastern U.S.darkness in the Northeastern U.S.

Hospital had full HVAC, kitchen service, surgical Hospital had full HVAC, kitchen service, surgical and full diagnostic support, in all, 95 to 98 percent and full diagnostic support, in all, 95 to 98 percent of the hospital was unaffectedof the hospital was unaffected

““We were fully generating and really didn’t miss a We were fully generating and really didn’t miss a beat”beat” – – Steven M. Safyer, M.D. Senior Vice President and CMOSteven M. Safyer, M.D. Senior Vice President and CMO


Critical Access Hospital ScenarioCritical Access Hospital Scenario

25 bed, Critical Access Hospital, 25 bed, Critical Access Hospital, Somewhere, TexasSomewhere, Texas

AssumptionsAssumptions– 62,500 sq. ft. 62,500 sq. ft. – 284 tons of cooling284 tons of cooling– 1.875 MMBtu of heating1.875 MMBtu of heating– 187 kW of electrical load187 kW of electrical load– Hot Day (ARI, 95Hot Day (ARI, 95º F)º F)


Critical Access Hospital Prototype SolutionCritical Access Hospital Prototype Solution

UTC PureComfort Microturbine Packaged SystemUTC PureComfort Microturbine Packaged System– 139 Tons of “free” cooling output during hot days139 Tons of “free” cooling output during hot days

– 252 kW of on-site power generation252 kW of on-site power generation

– 175175º F hot water during cold daysº F hot water during cold days

Grid connect or dual modeGrid connect or dual mode Inlet silencers for noise reductionInlet silencers for noise reduction Ultra-low emissions at less than 9 ppm NOxUltra-low emissions at less than 9 ppm NOx Emergency stand-by generator versus on-site CHP Emergency stand-by generator versus on-site CHP

generation with heat recovery generation with heat recovery


Dell Children’s Case Study – Project OverviewDell Children’s Case Study – Project Overview 32.2 acre brownfield site in the 709 acre Robert 32.2 acre brownfield site in the 709 acre Robert

Mueller Municipal Airport Redevelopment in Austin Mueller Municipal Airport Redevelopment in Austin 169 Bed Children’s Replacement Hospital169 Bed Children’s Replacement Hospital

– 470,000 Building Gross Square Foot (BGSF)470,000 Building Gross Square Foot (BGSF)

– $110M Construction Cost; $200M Capital Budget$110M Construction Cost; $200M Capital Budget

157,000 BGSF $21M Medical Professional Office 157,000 BGSF $21M Medical Professional Office Building with $9M, 900 Car GarageBuilding with $9M, 900 Car Garage

25,300 BGSF, $18M, CHP District Energy Plant 25,300 BGSF, $18M, CHP District Energy Plant


Dell Children’s Case StudyDell Children’s Case Study

Local Power Utility, Austin Energy, provided Local Power Utility, Austin Energy, provided $18M in capital to construct the CHP Plant. $18M in capital to construct the CHP Plant.

$7M Capital Savings$7M Capital Savings accrued to the Hospital accrued to the Hospital from not building its own Central Plantfrom not building its own Central Plant

Hospital has long term contracts to purchase Hospital has long term contracts to purchase power, chilled water and steam from CHP Plantpower, chilled water and steam from CHP Plant

Plant expandable to for future growth of HospitalPlant expandable to for future growth of Hospital Plant will also serve the “Urban Campus” of the Plant will also serve the “Urban Campus” of the

709 Acre RMMA Development709 Acre RMMA Development


Dell Children’s Case StudyDell Children’s Case Study

Power is generated on site by natural gas fired Power is generated on site by natural gas fired turbines which supply 100% of hospital’s energyturbines which supply 100% of hospital’s energy

Hospital has two, 100% redundant backups from Hospital has two, 100% redundant backups from two independent substation feeds off the Gridtwo independent substation feeds off the Grid

Life Safety Systems back up by diesel generatorLife Safety Systems back up by diesel generator Absorption Chillers produce Chilled WaterAbsorption Chillers produce Chilled Water Chilled Water Storage Tank allows peak shavingChilled Water Storage Tank allows peak shaving Heat Recovery Equipment produces SteamHeat Recovery Equipment produces Steam


Texas Tech Medical School and Lubbock General Texas Tech Medical School and Lubbock General Hospital on the 1,839 acre Texas Tech Health Hospital on the 1,839 acre Texas Tech Health Science Center (TTHSC) campus in LubbockScience Center (TTHSC) campus in Lubbock

$14M, CHP Electrical Generating Plant $14M, CHP Electrical Generating Plant 47 MW gas turbine coupled with 22 MW steam 47 MW gas turbine coupled with 22 MW steam

turbine (with 2turbine (with 2ndnd steam turbine on standby), steam turbine on standby), produces up to 290 lb/sec of steamproduces up to 290 lb/sec of steam

Local Power Utility, Lubbock Power and light, Local Power Utility, Lubbock Power and light, provided the capital to construct the CHP Plant in provided the capital to construct the CHP Plant in 1990.1990.

Texas Tech Case Study – Project OverviewTexas Tech Case Study – Project Overview


Texas Tech Case StudyTexas Tech Case Study TTU has long term contracts to purchase power TTU has long term contracts to purchase power

and steam from CHP Plantand steam from CHP Plant Originally constructed with a GE 21 MW Originally constructed with a GE 21 MW

LM2500 gas turbine, the plant has recently been LM2500 gas turbine, the plant has recently been upgradedupgraded

LP&L actually reduced LP&L actually reduced operations in response to operations in response to high gas prices, but was high gas prices, but was able to continue to provide able to continue to provide steam to the campussteam to the campus


Texas Tech Case StudyTexas Tech Case Study

A combined cycle gas turbine steam generation A combined cycle gas turbine steam generation plantplant

Hospital and academic campuses get electricity Hospital and academic campuses get electricity from the gridfrom the grid

Two 2.5 MW diesel generators provide backupTwo 2.5 MW diesel generators provide backup Steam turbine-driven Chillers produce Chilled Steam turbine-driven Chillers produce Chilled

WaterWater Heat Recovery Equipment produces Steam for Heat Recovery Equipment produces Steam for

both campusesboth campuses


Why Why ALLALL Hospitals should consider CHP Hospitals should consider CHP Hospitals with high dependence on Information SystemsHospitals with high dependence on Information Systems The largest facility in a CommunityThe largest facility in a Community Facilities with Level III Trauma CentersFacilities with Level III Trauma Centers Critical Access Hospitals which operate the only Emergency Critical Access Hospitals which operate the only Emergency

Department in a regionDepartment in a region Facilities contemplating major renovations/expansionsFacilities contemplating major renovations/expansions Hospitals considering replacement of their Physical Plant Hospitals considering replacement of their Physical Plant

EquipmentEquipment Those desiring Capital Infusion or Operating Cost SavingsThose desiring Capital Infusion or Operating Cost Savings Facilities in areas subject to frequent power disruptionsFacilities in areas subject to frequent power disruptions Hospitals serving disaster prone CommunitiesHospitals serving disaster prone Communities

-Terrorist-Terrorist -Natural-Natural -Technical-Technical


Who owns and pays for CHP at a Hospital?Who owns and pays for CHP at a Hospital? HospitalHospital

– Self FundingSelf Funding– Federal, State and Local GrantsFederal, State and Local Grants– Low Interest Loans for Publicly owned facilitiesLow Interest Loans for Publicly owned facilities– Hospital Authority BondsHospital Authority Bonds

Capital PartnersCapital Partners– Local Power Utility Local Power Utility – Local Natural Gas UtilityLocal Natural Gas Utility– Third Party InvestorsThird Party Investors– Energy Services Companies (ESCos)Energy Services Companies (ESCos)


Financing MechanismsFinancing Mechanisms

Off Balance Sheet FinancingOff Balance Sheet Financing– Protect the Balance Sheet of the Protect the Balance Sheet of the

Borrower/Lessee from underlying debtBorrower/Lessee from underlying debt Financing AlternativesFinancing Alternatives

– Operating leases – defined by Operating leases – defined by “FASB 13”“FASB 13”– Capital leases – Capital leases – “Note and Security”“Note and Security”– True lease – Hybrid offering True lease – Hybrid offering “purchase option”“purchase option”– Leverage lease – Bond equivalent with Leverage lease – Bond equivalent with “no “no

purchase option” purchase option” onlyonly “lease renewal” “lease renewal”


Outsourcing AlternativesOutsourcing Alternatives

Finance, design-build, own and operateFinance, design-build, own and operate– Local utility companyLocal utility company– Energy Services Company (ESCO)Energy Services Company (ESCO)

Terms and conditions will varyTerms and conditions will vary– Energy services agreementEnergy services agreement– Commodity sales agreementCommodity sales agreement

Public private partnershipsPublic private partnerships– Public and private entities partner to benefit the Public and private entities partner to benefit the

communitycommunity


Typical Outsourcing Business StructureTypical Outsourcing Business Structure

Hospital

FuelProcurement

Operations & Maintenance

Energy Conservation

Measures

CHP Design, Procurement & Installation

Performance Guarantees including: Cost, Schedule, CHP

Efficiency and Demand Side Energy Savings

Natural Gas and Grid Power (back up

and grid dispatch)

CHP and Existing Hospital Central Plant

(chillers, boilers, emergency generators,

transformers and switchgear)

CHPOn-Site Generation and Chilled Water and Steam

Operating LeaseorCommodity Sales (kW, Ton/Hrs, PPH)

Credit

Primary

LLCFinancingEntity


CHP at Existing Hospitals… CHP at Existing Hospitals…

May need to first consider current energy usage, May need to first consider current energy usage, efficiency, and age or condition of existing efficiency, and age or condition of existing equipmentequipment- chillers, boilers, HVAC, lighting, chillers, boilers, HVAC, lighting, controls, emergency generators, etc.controls, emergency generators, etc.

Energy conservation measures create savings that Energy conservation measures create savings that may offset the capital cost of implementing CHPmay offset the capital cost of implementing CHP

ESCo’s offer ESCo’s offer “performance contracting”“performance contracting” where where they will they will “guarantee”“guarantee” the annual energy savings the annual energy savings and incorporate CHP as part of the energy and incorporate CHP as part of the energy conservation measure programconservation measure program


Frequently Asked QuestionsFrequently Asked Questions Zoning RestrictionsZoning Restrictions Neighborhoods Neighborhoods

– Pro or ConPro or Con

– NoiseNoise

– Aesthetics/CostAesthetics/Cost

Size/Land RequirementsSize/Land Requirements ScalingScaling

– how big is too bighow big is too big

– how small is too smallhow small is too small

Who will Operate it?Who will Operate it?

VulnerablityVulnerablity– Natural Gas Flow in a disasterNatural Gas Flow in a disaster

– Underground PipingUnderground Piping

– On Site Combustible FuelOn Site Combustible Fuel

Perceptions of past Perceptions of past TechnologiesTechnologies– Co-GenCo-Gen

Who will buy the Fuel?Who will buy the Fuel?


How to get StartedHow to get Started Contact or visit a hospital that currently has a CHP Contact or visit a hospital that currently has a CHP

installation and installation and ““kick the tireskick the tires”” Form your teamForm your team

– CHP ConsultantCHP Consultant– Local Utility (Electric and possibly Natural Gas)Local Utility (Electric and possibly Natural Gas)– Internal StaffInternal Staff

Screening Analysis/Energy Conservation AuditScreening Analysis/Energy Conservation Audit– Current Energy UtilizationCurrent Energy Utilization– Possible Energy Conservation Measures in existing facilityPossible Energy Conservation Measures in existing facility– Preliminary Assessment of Value to the HospitalPreliminary Assessment of Value to the Hospital

““Go/No Go” Decision to continue to FeasibilityGo/No Go” Decision to continue to Feasibility


How to get Started (continued)How to get Started (continued)

Feasibility StudyFeasibility Study– EngineeringEngineering

– Business Business Structure/Capital Structure/Capital Source OptionsSource Options

Hospital Self FinanceHospital Self Finance 33rdrd Party Party Local Utility as Capital Local Utility as Capital

PartnerPartner

– Delivery System Delivery System OptionsOptions

Convention Convention Design/Bid/BuildDesign/Bid/Build

Design/BuildDesign/Build CombinationsCombinations

– Financial Proforma Financial Proforma ScenariosScenarios

Operating SavingsOperating Savings Capital SavingsCapital Savings

““Go/No Go” Decision to proceed to DesignGo/No Go” Decision to proceed to Design


4 WeeksPhase 2

Stakeholder Involvement Options

1. Self Fund Project

2. Outsource/Leaseback Project

3. Put the Project on the Shelf –

“GO/NO GO”

2 Weeks

Screening

Analysis

Report

Phase 1

6 to 9 MonthsPre-Purchase

Construction Phase Services

Final Design

Phase 4

Report

+ NPV Economic Analysis

+ Preliminary Lease AgreementFeasibility Study

3 Months

Pre-Construction Services

Environmental Permits

Report

+ GMP for Final Design & Construction

+ Lease Agreement

Phase 3

Preliminary Design

Typical CHP Project DevelopmentTypical CHP Project Development


Resources and ContactsResources and Contacts Gulf Coast Regional CHP Application CenterGulf Coast Regional CHP Application Center

– List of Hospitals using CHP in Texas and USList of Hospitals using CHP in Texas and US– Independent CHP assistance, resources, information and Independent CHP assistance, resources, information and

LinksLinks– List of Engineering Firms, Developers, Equipment List of Engineering Firms, Developers, Equipment

Suppliers, VendorsSuppliers, Vendors– www.gulfcoastchp.orgwww.gulfcoastchp.org

Green Guide for Health CareGreen Guide for Health Care– Copy of Green Guide for Health Care free downloadCopy of Green Guide for Health Care free download– www.GGHC.orgwww.GGHC.org

Hospitals for a Healthy Environment at Hospitals for a Healthy Environment at – www.h2e-online.orgwww.h2e-online.org


Resources and Contacts (continued)Resources and Contacts (continued) United States Combined Heat and Power United States Combined Heat and Power

Association at Association at http://uschpa.admgt.com http://uschpa.admgt.com US Department of Energy - Energy Efficiency and US Department of Energy - Energy Efficiency and

Renewable Energy: Distributed Energy Program at Renewable Energy: Distributed Energy Program at http://www.eere.energy.gov/de/http://www.eere.energy.gov/de/

US Environmental Protection Agency - Combined US Environmental Protection Agency - Combined Heat and Power Partnership at Heat and Power Partnership at http:// http://www.epa.gov/chp/www.epa.gov/chp/

NYS Research and Energy Development Authority NYS Research and Energy Development Authority at at www.nyserda.orgwww.nyserda.org

Contact the Panelists – last slides in your packageContact the Panelists – last slides in your package


Questions and AnswersQuestions and Answers


About the SpeakersAbout the Speakers

Daniel Bullock Daniel Bullock DirectorDirector

Gulf Coast CHP Applications Center Gulf Coast CHP Applications Center

4800 Research Forest Drive4800 Research Forest Drive

The Woodlands, TX 77381The Woodlands, TX 77381

[email protected]@HARC.Edu

281-364-6087281-364-6087



Ed Mardiat, DBIAEd Mardiat, DBIAPrincipal, Director of CHP Development Principal, Director of CHP Development

Burns and McDonnell EngineersBurns and McDonnell Engineers

9400 Ward Parkway9400 Ward Parkway

Kansas City, MO 64114Kansas City, MO 64114

[email protected]@BurnsMcD.Com

816-822-3344816-822-3344



Robert Moroz, AIA, LEED APRobert Moroz, AIA, LEED APPresidentPresident

Healthcare Facilities Consultation and PlanningHealthcare Facilities Consultation and Planning

3301 Texas Star Lane3301 Texas Star Lane

Austin, Texas 78746Austin, Texas 78746

[email protected]@SWBell.Net

512-327-1538512-327-1538



Kim Shinn, P.E., LEED APKim Shinn, P.E., LEED APDirector of Sustainable DesignDirector of Sustainable Design

TLC Engineering for ArchitectureTLC Engineering for Architecture

6 Cadillac Drive, Suite 200 6 Cadillac Drive, Suite 200

Brentwood, Tennessee 37027Brentwood, Tennessee 37027

[email protected]@TLC-Eng.Com

615-297-4554615-297-4554



Gail Vittori, LEED APGail Vittori, LEED APCo-DirectorCo-Director

Center for Maximum Potential Building SystemsCenter for Maximum Potential Building Systems

8604 FM 9698604 FM 969

Austin, TX 78724 Austin, TX 78724

[email protected]@CMPBS.Org

512-928-4786512-928-4786

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