Phoenix Convention Center • Phoenix, Arizona

Life-Cycle Cost for Budget Prioritization

Agency Energy Manager Life-Cycle Cost Methodology

Patricia Donohue, P.E., PMP, CEM, CBCP, LEED AP US Army Corps of Engineers, North Atlantic Division

August 12, 2015

Energy Exchange: Federal Sustainability for the Next Decade2

Agenda

• USACE Sustainable Project Budget process– Smaller projects form $3,000 to $300,000

• Common challenges

• Best practices

Energy Exchange: Federal Sustainability for the Next Decade3

USACE LCCA for Energy Efficiency Implementation

• USACE has over 700 facilities that it needs to sustain, repair and maintain. Building types include:– Administration Offices – Dams with Recreation facilities (comfort stations and camps sites)– Marine facilities and maintenance shops for our navigation

mission– Locks and dams and Canals– Warehouses– Industrial (dam in take tower with large HP pumps)

• Energy Conservation Solutions:– Promote energy efficiency projects such as new LED lighting– Offset industrial power with renewable energy– Use LCCA to prioritize budget packages for annual selection– Allow for innovative solutions

Energy Exchange: Federal Sustainability for the Next Decade4

Follow normal engineering economics

• Simple Payback is the first cut; payback of <10 year is preferable, up to 20 years is okay.

• Calculate energy savings, GHG emission reductions, water savings and commensurate cost savings due to decreased utility bills. Project selection depends on your agency metrics focus areas.

• Biggest challenge is calculating/estimating energy savings and cost of sustainable improvement. Typically need an energy manager or mechanical engineer to perform these calculation.

• Because LCCA is being used as a screening and prioritizing tool – no need for salvage value, time value of money, discount factors or overly intensive calculation. Just need consistency for comparison purposes.

• Can include maintenance savings (labor) beyond the utility savings.

Energy Exchange: Federal Sustainability for the Next Decade5

LCCA common challenges

• Estimating the life of equipment- Life cycle• Estimating the potential cost of the proposed

improvement – if the bid is high, need to re evaluate LCCA, higher market rate may change LCC effectiveness

• Estimating the savings of the proposed project• Measurement and verification- limited building meters• Not accounting for both water and heating savings• Not accounting for maintenance/labor savings• Not looking at bigger picture for synergistic

improvements• Selecting and Communicating the tradeoffs to prioritize

with limited funds

Energy Exchange: Federal Sustainability for the Next Decade6

Energy Conservation Measure

Estimated Cost $

Annual Energy /waterKbtu/gal

LC Total LCC Energy/water savingsKbtu or gal

Annual Energy/Water Savings$/yr

Total Life cost savings ($)

SIR Payback (yrs)

HVAC 1: Re-commissioning HVAC; particularly controls to incorporate occupancy schedules and repair leaking dampers and valves

$45,000 83,940 20 1,678,800 6421 128,420* 2.85 7

HVAC 2A: Retrofit to wireless pneumatic DDC controls

$175,000 174,900 20 3,498,000 13,380 267,600 1.5 13

Lighting 1: Replace T12 (40W)-T8 lights 32W (1200 fixtures)

$120,000 212,160 kw-hr total/ 127,000 for remaining fixtures

6.4 9,738 62,323 0.5 12.5

Lighting 3: LED exit signs

$3120 2,102 kw-hr 25 52,550 730 $18,250 6 4.25

Lighting 4: repair ext light sensor

$500 1,664 KW-hr per fixture

7 11,648 127.30 $891 1.7 4

EISA Energy Audit data used in Budget requestRecommended ECMs

Energy Exchange: Federal Sustainability for the Next Decade7

Energy Conservation Measure

Estimated Cost $

Annual Energy /waterKbtu or gal

LC Total LCC Energy/water savingsKbtu or gal

Annual Energy/Water Savings$/yr

Total Life cost savings ($)

SIR Payback (yrs)

BE 1: thermal imaging to look for thermal bridges of steel structure

$20,000 0 NA 0 NA 0 NA

LI 2: daylight sensors on perimeter (400 fixtures)

$150,000 33,488 kw-hr 10 334,888 2561 25,610 0.17 58

HVAC 2: Upgrade to DDC controls

$286,000 174,900 20 3,498,000 13,380 267,600 .90 21

W2 : Storm water re-use

200,000 300,000 20 6,000,000 1800 36,000 0.36 55

HVAC 5: Replace Chiller

NA NLCCE replaced in <5 years: salvage value of new system too great

NA

Renewable 1: Install photovoltaic solar panels on existing racks

$650,000 154,600 KW/hr

3,092,000 kw-hrs

11,827 $236,540 0.36 55

Not Recommended

Energy Exchange: Federal Sustainability for the Next Decade8

Solution Fluorescent-lighted exit signs (11W) can be replaced with a more efficient LED lamp (1W) .

Estimating Savings 10 watts per exit sign. An exit sign is illuminated continuously or 8760 hours per year. The LED type lamp has a life of over 10 years where the fluorescent lamp must be replaced approximately every 10 months. – The energy savings for a 24 fixture = 10 watts X 8760 hrs/yr = 87.6 kWh/yr X 6 per floor x 4 floors= = 2,102KW-hr/yr.

The electrical cost savings = 2102 kWh/yr * 0.0765 $/kWh = $160 for 24 exit signs– There is also a maintenance labor savings due to the longer lamp life. Straight annualized maintenance:

• A fluorescent replacement lamp will cost approximately $7.00 and the labor of this replacement is estimated to be ¼ hour. Fluorescent lamp replacement material and labor cost = ($7.0 +.25 X $60) X 8760 hrs/yr/ 7500 hrs bulb life = $25.70 /yr

• LED lamp replacement cost = ($70 +.25 X $60) X 8760 hrs/yr/ 100,000 hrs bulb life = $1.93/yr• Annual Replacement savings = $25.7 – $1.93 = $23.77/year/fixture. X 24 = $570 in labor saved per year

– ECM estimate $160 saved in electricity and $570 in labor = $730

Estimating Costs LED replacement kits are available at a cost of approximately $70 (from internet search). This kit has all the necessary hardware to convert a fluorescent exit sign to one lit by a LED. The labor to make this conversion is approximately one hour. 24 exit signs x $70 plus 1hr @$60 per hr labor = $1680 materials + $1440 labor = $3120

Payback The $3,120 investment will save $ 730 per year and pay back in 4.25 years. SIR 6Even without the labor savings $3120/ $160 electric savings +19.5 years. SIR1

If the exist sign is incandescent than the bulb is usually 40 watts so the savings would triple.

LED lights in 24 exit signs- Electric and Labor savingsECM is Recommended

Energy Exchange: Federal Sustainability for the Next Decade9

• Solution Changing standard Magnetic T12 F40 2 lamp per ballast that requires 96 watts with electronic ballasted F32T8 lamps which use 62 watts per two lamp one ballast retrofit. Results in a 34 watt savings or 35%.

• Total Savings = (2000 Fixtures X 34 watts saved ) *12 hrs of operation/day * 5 days/week * 52 wks = kWh/yr = 212,160 kw-hr per year @0.0765 cents = $16,230However, only 1200 fixtures remain (800 completed periodically as funds were available), so saving/costs now are 127,296 kw-hrs at a cost savings of $9738.

• Estimating Costs The installed cost to retrofit a single fixture runs between $100 and $150. Using the lower cost due to in-house labor, total cost of 2000 fixtures * $100 = $200,000. But only 1200 fixtures remain so the remaining costs is estimated at 1200*$100= $120,000.

• Payback The lamps have a life of 20,000 hours. At a use of 12 hours per day (6AM to 6PM) 5 days per week and 52 weeks, they are used 3120 hours per year making the expected life of the lamp to be 6.4 years at this facility. The savings are $9,738 per year. At the costs to upgrade the remaining fixtures of $120,000, it would take 12.5 years to payback the initial investment. Should add costs of 1 lamp replacement and recalculate payback~ 15 yrs.

• SIR= Saving x LC/cost= $9738 x 6.4 yr/ $120,000= 0.52 Not LCCE costs more than it saves.

Office Lighting - T8 replacement Example ECM is recommended, but not LCCA

Energy Exchange: Federal Sustainability for the Next Decade10

Solution Install light sensors that switch sets of interior, artificial lights off when the light levels are enough. Only fixtures that are near the windows on the perimeter would need to be dimmable. The number of fixtures is estimated to be 20% of the over 2000 fixtures. For purposes of life cycle analysis (LCCA) use 400 fixtures.

Estimating Savings Half of the fixtures have been changed to T8 and the other half are still T12 using 65 watts and 96 watts respectively. And average watts will be used (96+ 65)/2= 80.5 watts per 2 lamp fixture.

• Energy savings = 400 Fixtures * 80.5 Watts/Fixture * 8 hrs/day * 0.5 (% dimmable) *5 days * 52 wks /1000 watt/Kw = 33,488 kWh/yr

• Value of savings = 33,488 kWh * 0.0765/kWh = $2561/yr.

Estimating Costs• Light sensor plus timer, installed, functionality checked approximately $1,000. Estimate will need 30 light

sensors= $ 30,000• 400 fixtures requires addressable ballast and controls~ $200 = $80,000.• Wiring $2 /sf at 20,000 sf= $40,000• $150,000 for all of the above in total cost for a day lighting retrofit of 400 fixtures on perimeter. Payback• Costs of $150,000 with saving of $2561 provide a payback of 58 years. The limited number of areas close

enough to the windows and the required upgrade of the electronic ballast as well as labor for rewiring and small amount of saving make this ECM not Life cycle cost effective.

• A better approach may be to ensure that the Building Automation System (BAS) shuts off the lights on dedicated schedule for each space. This would be managed in the recommissioning efforts below.

Daylighting sensor example- not recommended

Energy Exchange: Federal Sustainability for the Next Decade11

LCCA best practices

• Level of effort dictated by purpose- don’t go into too much detail if it looks like it may not be cost effective. Use engineering judgment.

• Consider synergies and maintenance savings if it looks like a project may be borderline. LED are 10X more life than HID

• Perform an audit to prioritize LCCA and start discussion with leadership of priorities (save fuel, money, electricity or water)

• Bundling to shorten paybacks for more complex items like solar power with lighting projects.

• Find projects that can be replicated: Create a community of practice to share good ideas.

Energy Exchange: Federal Sustainability for the Next Decade12

• Purchase and install vendor miser controls in five vending machines, located at five buildings on the project. Infrared sensor detects movement.

• 5 vending machines were being cooled and lit 24/7 regardless of patterns of use. Motion sensors limited lighting and compressor use, saving electricity.

• SIR 2.6 ; • payback in 3.2 years; • KWH savings of 8,500/annum; cost

savings of $522/annum. • Cost Estimated $3,000 • Cost actual $2444• Cannot Measure energy savings• Use of vendor misers had no impact on

the quality of the refreshments obtained from these machines

• 1611 kWh per machine, per year• Utility rebates $30 to $115

EXAMPLE- Plug loads in Recreation area

Energy Exchange: Federal Sustainability for the Next Decade13

LED Lighting project for Canal illumination and navigation marker lights. Change HID white bulbs (lamp and ballast of ~ 225 Watts) for illumination of the channel toe to LED lights (25W light head for illumination). Work performed in-house and by contract. Expect 239,260 KWH reduction

• LESSONS LEARNED– Look beyond the light fixture change and take

advantage of energy savings by incorporating operational changes such as daylight controls and timers.

– We overestimated the actual lighting savings but with operational changes (timers) and electrical distribution savings we are very close to our proposed savings. Expect additional savings when project is complete.

– Will save maintenance labor. LED 100,000 hrs life: 10X more that metal halide lamp life.

– M&V difficult: Lights on shared meter with shore power, admin building and bridge lighting.

EXAMPLE NAVIGATION LIGHTING Upgrade 14 miles of Canal Lighting to LED