PART 4

A n a l y s i s a n d Im p l e m e n t a t i o n

Copyright 2003 by The Fairmont Press.

Section IX
Integrated Approach to Energy Resource Optimization Projects

Copyright 2003 by The Fairmont Press.

Thousand Dollars

70 60 50 40 30 20 10

C H A P T E R F O RT Y
INTEGRATED APPROACH TO ENERGY RESOURCE OPTIMIZATION PROJECTS

n integrated approach to developing and implementing an energy resource optimization project involves evaluation of the entire facility rather than one specific application. The process is based on an interactive analysis of end-use, distribution system, central plant, and resource supply-side opportunities to find an optimal solution that takes advantage of the synergies between them. It includes, at a minimum, evaluation of electrical and thermal energy, water, solid waste and wastewater, and operations, maintenance, and repair (OM&R) activity. All results must also be tested against the facilitys environmental, operational, strategic, and financial objectives. With the integrated approach, a facilitys resource use is viewed as both dynamic and interactive. Therefore, when considering energy supply, central plant, and distribution system improvement options, one must simultaneously consider the loads being served, such as comfort conditioning or process end-uses. The analysis must also consider upgrades based on the loads that would be prudently anticipated once cost-effective end-use improvements are implemented. Supply-side options, such as energy source switching, energy supplier switching, utility negotiations, load management, or on-site power generation, must also be considered interactively with respect to the anticipated central plant, distribution system, and end-use modifications. Finally, careful consideration must be given to the facilitys overall thermal energy (heat) balance so that potential changes in one area are considered along with their impact on other areas. For example, when lighting systems, envelope components, air handling systems, or process applications are upgraded, or compressed air use is optimized, then steam, hot water, chilled water, and compressed air requirements can be significantly altered. If peak loads for any of these end-uses change, then central plant systems of different capacities may be required and the economic performance of upgrading those central systems may be changed. Even if the peak loads remain the same, the load profile (i.e., the timing and duration of the end-use load events) may alter central plant performance. Conversely, when the central plant systems are upgraded, the incremental cost of steam, hot water, chilled water, and compressed air may be reduced, thereby reducing the savings potential of end-use

improvements and sometimes eliminating certain measures that would have been cost-effective with the old, less efficient central plant systems. Supply-side improvements have a similar effect. If fuel or electricity can be purchased at a lower price, or if heat and power can be provided less expensively through an on-site cogeneration system, the economic performance of central plant and end-use upgrade programs will often be significantly altered. The technical engineering analysis evaluates what will happen when systems are installed and/or operated in a different manner that will change resource use. The analysis is a creative, logical process involving accurate, careful characterization of actual operating thermal and electrical loads and other resource uses, both on a facility-wide and system-specific basis. In addition to implementation cost and savings evaluation, all other factors that will affect the installation and operation of various systems are considered. Systems and components are selected that exhibit the flexibility, efficiency, durability, and performance to meet all loads and satisfy the facility's mission requirements and goals. This selection is often an iterative approach as alternatives are tested against various (and often competing) constraints until an optimal solution is reached. Typically, the process is repeated at increasing levels of detail as more data is gathered and the accuracy of the cost and savings estimates increases. This avoids wasted time doing detailed evaluation of opportunities that do not meet the facilitys technical or financial criteria. While analytical in nature, a successful evaluation study involves a hands-on approach with extensive fieldwork, comprehensive direct system metering, and rigorous technical and financial analysis. While computer modeling is commonly used, its function is to compliment and support, not to replace, the primary hands-on fieldwork and direct metering activities. Qualifying the viability of technology applications begins with careful physical inspection of facilities, equipment, and systems. This involves not only observation and metering of centralized equipment, such as boilers, chillers, and air compressors, but also confirming field conditions in distribution systems and spaces. For example, the site survey often includes crawling through tunnels to inspect distribution piping size and condition and examining ceiling space to

Copyright 2003 by The Fairmont Press.

Combined Heating, Cooling & Power Handbook: Technologies & Applications

inspect air-side distribution systems, confirming as-built drawings, and determining if there is adequate space and access for modifications. The analysis of potential energy and resource use optimization projects determines the cost to provide the same end-use products and services with and without a series of system improvements. This is based on an analytical framework that constructs a baseline against which the new systems can be compared. The baseline can be either current or recent average utility billing history, or it can be an adjusted baseline to account for changes that would have occurred in the absence of the energy cost reduction program. For example, a facility expansion, change in usage, or change in operation may be planned, which may justify an adjusted baseline to give a realistic prediction of true avoided energy and operating costs. The analysis is then re-run with appropriate changes to the model that affect all of the recommend changes. The difference between baseline and this predicted usage is the incremental effect resulting from the new system(s). Given the interactive effects between systems, all potentially beneficial project application options must be identified during the study process. Options are then mixed and matched and considered interactively until the optimal portfolio of measures is selected. The purpose of an integrated incremental analysis is, therefore, to determine the incremental change in usage and cost of all affected resources with the implementation of a system improvement. In addition to the direct energy usage of a given system, resulting changes in usage and cost of associated energy systems and non-energy resources must be considered. This change in facility operating cost must then be weighed against the capital investment requirement in a time-valued life-cycle analysis that extends over the full term of the project life. The financial analysis evaluates operating economics against current systems and/or all possible competitive alternatives aimed at the selection of the optimum program portfolio. This is performed within the context of all available project funding options and the host facilitys investment criteria. It also includes sensitivity analyses whereby the robustness of the economic performance is tested against likely variation in system variables, such as energy cost and operation schedules. Project investment decisions are based primarily on whether the expected cost savings, reduced OM&R, or increased economic performance resulting from the project meet or exceed an acceptable threshold level or produce sufficient cash-flows to justify the financial commitment.

The financial analysis translates the technical analysis into time-sensitive dollar values. The capital and operating costs of existing systems are compared to those of the new systems. Should a project be required due to ongoing or planned facility or process expansion or imminent equipment failure, the lowest cost option which will satisfy the project requirement becomes the base case upon which each improvement option is tested for incremental cost and savings. The threshold level and evaluation methodology employed will vary among investors. However, all financial analyses should include consideration of tax treatment, financing, ongoing OM&R costs, and other time-valued costs in a life cycle economic format. In addition to viewing all resources used by a facility, an integrated approach requires a big-picture view of the physical environment surrounding the facility and the legal and economic environment impacting the facility. One must therefore look beyond the confines of the facility, at neighboring resources, such as bodies of water that could provide cooling, and at neighboring facilities that could provide a source for either selling or purchasing chilled water, steam, electricity, or by-products. Additionally, groups of facilities that could be aggregated to purchase energy resources more cost-effectively should be considered. Finally, consideration is given to prudently anticipated changes in legal, regulatory, and economic factors. These may include changes in environmental regulations and changes being brought about by the wide-scale restructuring of the utility industry. Restructuring is changing not only the cost of buying and selling energy resources, but also the load shapes and rate structures under which they are purchased and sold. This impacts the economic performance of various technology applications as well as the types of technologies and applications that should be considered. While it is not possible to accurately predict all future events and market changes, these factors should be carefully considered in the sensitivity analysis. Moreover, given the risk of change and market volatility, as well as the fast pace of technological developments, programs should be developed that have the flexibility to be adapted to a wide range of potential future conditions. Once the facility has decided to proceed with an energy resource optimization project, the next step is project implementation. This begins with the selection and execution of implementation contract(s) and financing arrangements. Work may be executed under one master contract that includes all phases of implementation and may include

762

Copyright 2003 by The Fairmont Press.

Integrated Approach to Energy Resource Optimization Projects

the evaluation and study phase as well. A turnkey contract such as this is typically executed with an energy services company (ESCo) that is responsible for all aspects of project coordination and management. Alternatively, the project can be done through a series of contracts, each developed and signed prior to subsequent phases of implementation. Facilities may finance project implementation internally through capital budgeting or through the use of external funding, or a combination of both. Alternatively, projects may be implemented and then owned and operated by a third party. The major implementation phases are design and construction. The design and construction approach will vary, based on the contractual approach. However, the end result should be the same regardless of the approach events a functional project that meets the intent of the development documents. The design process and resulting documents will vary depending on whether work is to be performed under a traditional plan and specification format or a more flexible design-build type approach. Milestones for design review (e.g., 30% complete, 50% complete, etc.) should be mutually agreed upon in advance. The overall construction phase may be further divided into three main elements: procurement, installation, and commissioning. Following commissioning, when all systems have been tested for performance and conformance with the design intent, the project is closed out. Punch lists are completed and as-built documents and OM&R manuals are delivered, training of operations and maintenance staff is conducted, and the project is accepted by the facility. At this point, the operational phase begins. During the operational phase, all systems must be effectively operated and maintained in order to ensure that the facility remains fully and safely operational, and that project economic performance is realized throughout the life of the installed systems. Ongoing observation, data acquisition, and analysis should serve as a basis for preventative or predictive maintenance programming, continual system optimization efforts, and identifying future cost reduction project opportunities. Post-installation activities may also include either one-time or ongoing savings metering and verification (M&V) processes. There are numerous phases involved in the full process of identifying, developing, implementing, operating, and maintaining an integrated energy resource optimization project. This chapter provides an overview of the process, while subsequent chapters within this section describe these elements in detail.

OF AN INTEGRATED PROGRAM Figure 40-1 is a process flow chart of the major steps involved in developing and implementing an integrated energy resource optimization project. This flow chart is based on using a performance-based design-build approach where the contractor develops a program, proposes it to a client facility, and then enters into a contract to execute the entire scope of work. This is one of several methods of development and implementation of such a program. In other cases, the process could be broken into several parts, where the client facility contracts for an independent engineering study, then for engineering design and implementation, each separately. Regardless of the approach, the process will include the same essential elements. Figure 40-2 provides a representative timeline of several central elements of the entire process in the form of a Gantt chart. The operational phase is not shown, since this is an ongoing effort for the duration of the project life. Expanded versions of this chart, showing critical path tasks, are provided below along the overview discussions of the development and implementation processes.

ELEMENTS

PROJECT DEVELOPMENT PHASES

All integrated energy resource optimization projects must begin with some type of study that identifies the opportunities and quantifies them in such a manner that a scope of work can be developed and financial decisions made. The multi-phased integrated approach involves a multidisciplinary team effort designed to process a large quantity and variety of information. The team should consist of technical experts from analysis, design, construction, OM&R, and M&V disciplines. These technical disciplines are supplemented by financial, contractual, energy source procurement, and risk management expertise. The process requires this cross-functional team because the nature of the projects involves all of these disciplines and requires their specialization and the volume of information requires a team effort to process. Moreover, risk management dictates extensive cross-checking and internal quality control. Energy efficiency opportunities may be categorized by their location in the energy conversion flow, e.g., end-use measures, distribution system measures, central plant measures, and utility supply-side options. Specialists are assigned by technical discipline, such as lighting, HVAC, pumping systems, and central chillers/boilers, though in many cases, an individual may be assigned multiple tasks, depending on the skill sets possessed.

763

Copyright 2003 by The Fairmont Press.

Combined Heating, Cooling & Power Handbook: Technologies & Applications

and load management techniques that will enhance these options. Enough Scoping The development approach should No Potential to Audit Proceed? intentionally be split into multiple phases to allow early high-level screenYes ing of opportunities to streamline subRevisions sequent efforts. During the early Phase I phases, the project scope and potential Initial Facility Preliminary No STOP measures are reviewed by representaProposal Approval? Feasibility Study tives of each discipline and/or experiYes enced senior managers with crossdisciplinary expertise. This ensures Revisions practical and efficient review of all critPhase II Final Facility Detailed ical success factors early in the process. No Proposal Approval? Feasibility In most cases, a formal two-phased Study Yes study approach should be undertaken. Prior to this, an additional stage, or Design/Build Scoping Audit, should be added to the Detailed Notice Contract Accepted? Engineering to Yes process to initially verify if there is Executed Proceed Design viable project potential. It can also serve No to determine an overall plan of action. With the Scoping Audit (for early screening and master plan developStart-up, Ongoing ment) and the phased feasibility Punchlist, Operations and Construction approach, the development team Commissioning, Savings Training Verification should make effective use of its professional resources and not waste the client facility managements time. As Savings As-Built O&M Verification the process proceeds, results are carried Manuals Drawings Reports forward, additional information is gathered, and the team consults reguFig. 40-1 Flow Chart of Design-Build Process. larly (internally and with facility repreAll utilities are evaluated, as well as energy-related sentatives at key milestones) to continuously screen operating costs, such as water usage, waste water, emis- measures in increasing detail and refine them to match site sions, and solid waste. The utility supply scenario is conditions and facility needs. Interaction between measreviewed in the context of the facility master plan and ures (both physical effects and analytical impact) is given future opportunities that are prudently anticipated to arise increasing attention so that an optimal package of from deregulation. Alternative supply and purchasing measures is developed. The phased approach also affords options are explored along with supply risk management the opportunity for multiple quality control review
ID 1 2 6 17 Task Name
Facility Audits & Report Submittal Scoping Audit Preliminary Feasibility Study Detailed Feasibility Study Month 2 Month 4 Month 6 Month 8 Month 10 Month 12 Month 14 Month 16 Month 18 Month 20 Month 22

32 Engineering Design 46 Pre-construction Activities 61 Installation 69 Post-Installation 80 Ongoing OM&R and Savings Verification

Fig. 40-2 Summary of Key Program Elements Shown in Gantt Chart Format.

764

Copyright 2003 by The Fairmont Press.

Integrated Approach to Energy Resource Optimization Projects

milestones. Internal review and sign-off are integrated with the project development work plan. Figure 40-3 provides a representative timeline in the form of a Gantt chart, showing critical path tasks of the development process. The development tasks are organized under three major categories Scoping Audit, Preliminary Feasibility Study, and Detailed Feasibility Study. The timeline shows about 9 months for the development process (ID 1-28) and an additional month (ID 29-31) for technical and financial review, and contract and finance negotiation and execution. This timeline allows for an extensive process, suitable for a large, complex project. This can be condensed considerably for smaller projects or where all parties agree to fast-track the process. Chapter 41 provides a description of the Scoping Audit and Project Development Plan, followed by a detailed step-by-step description of a two-phased preliminary and detailed feasibility study approach. These components are summarized below.
ID Task Name 1 Facility Audits & Report Submittal 2 Scoping Audit 3 ID facility goals and special needs 4 First Level Measure Screening 5 Set Scope of Investigation 6 Preliminary Feasibility Study 7 Advance Data Collection 8 Preparation of Screening Tools 9 Site Visit & Follow-up 10 Energy Savings Analysis 11 Draft M&V Plan 12 Design, Construction, Review 13 Financial Review, Sensitivity Analysis 14 Site Survey Report 15 Facilty Review 16 Facility Approval (Letter of Intent) 17 Detailed Feasibility Study 18 Load Profiles, Energy Baseline 19 Energy Savings Analysis 20 Design Walkthrough & Review 21 Construction, O&M Review 22 Interactive Analysis 23 M&V, Baseline Adjustment Methods 24 Select Equipment Contractor/Vendor Quotes 25 26 LCC Analysis & Financial Review 27 Detailed Energy Study Report 28 Internal QC 29 Facility Review and approval 30 Contract Negotiations 31 Contract Executed
Month 2 Month 3

Scoping Audit
To identify the work required and properly allocate resources to the initiative, a project scope must be developed. Therefore, a multi-phased approach often initiates the process with a facility Scoping Audit, which is a lowcost, brief review to define the energy and resource savings potential and system infrastructure upgrade requirements. The Scoping Audit includes a broad review of the major energy and resource consuming systems in the facility, without a lot of detail. It is developed based on a preliminary review of resource usage and cost records, a walk-through of the buildings, and review of the mechanical, electrical, and controls systems. The walk-through may take one or two days and will include interviews with key operating personnel, general observation of site conditions and major systems, and identification of known problems for which solutions should be sought. Potential project measures are identified and rough estimates of installed costs and savings for major technology categories
Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10

Fig. 40-3 Representative Critical Path Tasks of the Development Process in Gantt Chart Format.

765

Copyright 2003 by The Fairmont Press.

Combined Heating, Cooling & Power Handbook: Technologies & Applications

are prepared as an early indication of project potential. Another key element of the Scoping Audit is the identification of facility goals and objectives. These are critical factors that must be identified early in the process. They become important screening criteria for review throughout the project development process. Based on the results of the Scoping Audit, a brief report is developed to indicate the likely areas of focus, establish an overall order of magnitude of the project opportunities, and identify particular areas of expertise and time/effort required. At this point, an assigned management team reviews the results and determines whether to recommend that the facility proceed with a formal study. Feedback from the management team will be synthesized in making the final determination if there is sufficient benefit to be achieved through further pursuit of the project.

Preliminary Feasibility Study

When the Scoping Audit is complete, a more clearly defined group of measures has been established, and the commitment to proceed has been made, the study team conducts an initial site survey to refine the scope of the project and enhance the Project Development Plan, and then focus on the development of the initial integrated project. The study team will develop a full understanding of the existing conditions and begin to refine measures for inclusion in the project. During the Preliminary Feasibility Study, the team continues to compile detailed information on the energy and other resource usage of equipment targeted for potential improvements. The team should construct a simple model of the facility's primary energy, distribution, and end-use systems, as well as the loads being served. They will gather data for a preliminary analysis of measure potential, locate metering and monitoring points, and identify areas of focus for subsequent phases. Long-term facility master planning objectives are incorporated, including utility supply optimization, capital equipment upgrade, and efficiency improvements. A list of potential measures is identified and screened, yielding a refined list of technically and economically feasible project opportunities. While this study phase represents only the preliminary phase of the process, quality work performed during this phase enables reliable preliminary decision making and will improve the accuracy and efficiency of the subsequent analytical and design phases. The deliverable for this phase is a report that will include an economic summary of measures and alternatives recommended for further consideration and the key assumptions that must be confirmed. The report will be presented to facility management for their review to serve as a basis for discussion of further steps toward implementation. Key success factors will be identified during the site visits to eliminate wasted effort in subsequent phases and to expedite the entire process. This effort is far more robust than the Scoping Audit, but less than the detailed study to come. It may require several team members to spend a couple of weeks on site in total, and may take one to two months to complete.

Project Development Plan

Following a positive recommendation to proceed, all project planning information, beginning with the Scoping Audit results, should be documented in a Project Development Plan. The plan is initiated during the Scoping Audit and is continually updated throughout the study phase to incorporate new information as it is compiled and as the scope of work and measure concepts evolve accordingly. The plan will identify the areas of the facility to be investigated, project objectives, goals, deliverables, and key global assumptions and constraints. It also establishes the project team, including representation from all necessary disciplines. Additionally, the plan will identify the scope, objectives, and rationale behind the plan. In large facilities, for example, it is common to target only certain locations or types of systems initially as part of a multiple-project, long-term master plan. This allows for a timely, focused effort and a systematic approach to developing subsequent projects. It is still necessary to scope the entire facility to develop the master plan and make logical selections for each project effort. In smaller facilities, the entire facility is usually addressed from the onset. The project plan will also identify the schedule and requirements of the host facility. Subject to feedback from facility management and subsequent modifications to the plan and its final acceptance, the study team will proceed with the next phase of the process, which is the Preliminary Feasibility (Phase I) Study. This same iterative process of recommendation, feedback, modification, proposal, and acceptance should be followed for this study phase and each subsequent phase to follow.

Detailed Feasibility Study

At this point, the potentially viable measures have been selected during the Preliminary Feasibility Study and facility management has agreed to pursue those measures that withstand rigorous feasibility and cost-effectiveness screening. Upon receiving authorization to proceed with the target list of measures, the team can commence a

766

Copyright 2003 by The Fairmont Press.

Integrated Approach to Energy Resource Optimization Projects

comprehensive Detailed Feasibility Study. Much of the required data will have been gathered and analyzed using preliminary screening tools. During the study, which involves thorough site investigation, all remaining data will be identified and obtained. For each energy- and resourceusing subsystem, the team will review all relevant facility documentation and establish all operating conditions. This phase involves accurate, careful characterization of actual thermal and electrical loads. Qualifying the viability of a potential measure starts with a more thorough physical inspection of facilities, equipment, and systems. This involves more than observing equipment and collecting nameplate data. The team should inspect distribution systems to determine their capacity and condition, confirm as-built drawings, and determine if there is space and access for installing the new equipment. The team will select systems and components with the flexibility, efficiency, durability, and performance to meet individual or concurrent loads, and evaluate operating economics against current systems and/or possible competitive alternatives. Technology application concepts are also refined with sufficient design detail for investment grade construction cost estimates. The final result is a package of measures with reliable savings and accurate firm cost estimates incorporated into a life-cycle financial model and ready for implementation. Deliverables include firm energy (and other resource) and operational savings, an optional savings verification plan, conceptual design of each measure, final construction costs, and results from a financial model that shows the rate of return or cash flows for the life of the project. The Detailed Feasibility Study is sometimes referred to as an investment-grade audit, as it serves as the basis for overall project investment decisions.

substitute comparisons, and more complex tools, such as IRR and other cash analysis tools as well as price earnings (PE) and other net income-oriented ratio analysis tools. Each method has its strengths and weaknesses. A good investor will use all of these analytical tools, but will rely most heavily on previous investment experience in making a decision. Life-cycle analyses evaluate the sum total of project incremental costs and benefits over the life of the project. In each year, different situations will occur, such as a significant expenditure for overhaul in a certain year. Also, energy and other resource costs are projected to change over time. Given a stream of expected annual cash flows, present value (PV) analysis is a means of equating an amount received or paid in the future in today's dollar. Virtually all sophisticated economic analyses use the basic concepts of PV to account for the time value of money over the life of a project. The value of a dollar saved in one year must be differentiated from a dollar saved in another based on the time value of money. Thus, all cash flows in every year of a project, whether costs, savings, or net cash flows, must be related to each other in a way that accounts for when they occur. In performing time-valued project economic analyses, numerous factors must be considered on an annual basis. These factors include capital and interest, energy and other resource operating cost savings, OM&R costs, inflation, salvage value, replacement costs, disposal costs, property tax, insurance, deprecation, and other tax deductions. These factors, along with detail on the various financial analysis techniques, are presented in Chapter 42.

Contracting for Project Implementation

Once a determination to proceed with a project is made, the work must be contracted for. Under a designbuild arrangement, such as that detailed in Figure 40-1, the contract would be executed after the detailed study phase and prior to the design stage. With other approaches, there may be a series of contracts issued for various stages of the work, such as with an engineering firm to perform the initial study, an A&E firm to perform the design engineering, and then a construction firm who is the winning bidder on the scope of work that was put out to bid. In all cases, the purpose of a contract is to detail the responsibilities of both the owner and contractor, including their rights and liabilities, throughout the execution of a project. A properly drawn contract, in which the scope of work and expectations of the owner and contractor are clearly defined, will minimize the risk to all

Financial Analysis
As a final step in the development phase, rigorous financial analysis must be performed to evaluate potential capital commitments. There are a variety of capital budget analysis and presentation tools that may be employed. These include techniques such as: Simple payback Simple rate of return Discounted payback period Net present value (NPV) Internal rate of return (IRR) Savings investment ratio (SIR) Prospective investors often expend great effort to properly evaluate capital investments. Often times, they will use a mixture of simple analytics, such as payback or

767

Copyright 2003 by The Fairmont Press.

Combined Heating, Cooling & Power Handbook: Technologies & Applications

parties of trouble during project execution. The same is true between a contractor and its subcontractors. There are many contracting methods available to an owner, including cost plus, lump sum, unit price, turnkey, and performance-based, among others. Each method has its own benefits and liabilities that must be considered prior to selecting one for a project. Once selected, it is common to utilize prepared standard contracts for professional services that have been developed by the American Institute of Architects (AIA), which has been time-tested throughout the architecture, engineering, and construction industries. With certain performance-based contracting methods or energy services agreements involving third-party ownership, non-standard customized contracts may be used. While careful contract execution greatly reduces risks, it is still necessary to anticipate and deal with contract issues that may arise during the execution period. Chapter 43 provides detail on contract method options and key issues for consideration.

Project Funding
Facilities may choose to finance project implementation internally, through a capital budgeting process, through the use of external funding, or a combination of both. The options for funding capital projects range from unsecured balance sheet financing to complex collateralized structured project financing. Key factors that will influence the choice of options are the credit strength of the user/host and the distribution of risk between the owner and the source of capital funds. The stronger the credit profile of the user/host, the greater the financing options. The objective is to capture the cash flow generated by a project in a secure, segregated financial structure that is bankruptcy-proof and directs cash flow to the exclusive use of the projects. Chapter 43 provides detail on the various financing options that relate to the economics of the assets being acquired. It includes a review of the determinants of available financing options and the advantages and disadvantages of each. It also includes a step-by-step approach that leads to the selection of a financing format and compares and contrasts sample financial offerings.

by the host facility, it enters into the operations or service phase in which long-term OM&R activities and, in some cases, savings verification activities are carried out. Figure 40-4 provides a representative timeline in the form of a Gantt chart showing critical path tasks of the implementation process. The tasks are organized under four major categories Engineering Design (ID 32-45), PreConstruction (ID 46-60), Installation (ID 61-68), and Post-Installation (ID 69-79). Facility review and contract negotiation and execution (shown as ID 29-31 in Figure 40-3) may be considered as either development or implementation tasks, or as individual tasks falling between the two processes. Ongoing savings verification (ID 80, shown in the project summary timeline in Figure 40-2) is an optional step that may be considered part of the on-going service phase activities. This sample implementation timeline shows about a year for the process. This would allow for the implementation of a sizable, multi-measure, integrated project of up to about $10 million. For considerably larger projects, a longer timeline of up to two years may be expected. For smaller projects, a condensed timeline of as few as six months may be practical. Chapter 44 provides a description of the various implementation stages. It begins with a detailed description of the engineering design phase, including the preparation of design documents (drawings, specifications, and submittals) and development of an implementation plan for construction. It then proceeds with a discussion of the various construction phase elements. This includes detail on material procurement, the installation, startup, and commissioning components, and the site safety and quality assurance plans developed and implemented during the construction phase. This is followed by descriptions of the development and execution of training, long-term OM&R, and savings verification programs.

Design Phase
Once a project has been approved, it is necessary to develop a comprehensive design that will serve as the basis of project implementation. This is so, whether contracted for separately, as in the case of a standard plan and specification arrangement, or as part of a turn-key design-build initiative. During this phase, the preliminary designs that were used as a basis of project cost estimating and other feasibility analyses are brought to completion over a series of phases. Final engineering analysis, such as zoning and sizing calculations, are performed and equipment selections are finalized. A design document package is produced that contains, at a minimum, all procedures, drawings, specifications, design analyses, cost estimates,

IMPLEMENTATION PHASES
Once a determination has been made to proceed with a project and contracting formats have been selected and capital funding has been approved, the focus turns from development to implementation. Implementation begins with the engineering design phase and proceeds with construction. Once the project is commissioned and accepted

768

Copyright 2003 by The Fairmont Press.

Integrated Approach to Energy Resource Optimization Projects

ID Task Name 32 Engineering Design 33 Kick-off Meeting 34 Design Calculations 35 1-line Diagrams 36 Equipment Selection 37 Value Engineering 38 Design Reviews 39 30% Completion 40 For "Buildability" 41 For Consistency w/Analysis 42 90% Completion 43 For "Buildability" 44 For Consistency w/Analysis 45 Final Design Documents/Bid Packages 46 Pre-construction Activities 47 Arrange Project Financing 48 Subcontractor prequalifications 49 Select Subs & Execute Subcontracts 50 Permits & Licenses 51 Construction 52 Environmental 53 Review Submittals 54 Commissioning Plan 55 QA/QC program 56 Site Safety Plan 57 Equipment Acquisition 58 Main Equipment 59 Auxiliaries & Materials 60 Mobilization 61 Installation 62 Kickoff Meeting 63 Structural 64 Mechanical 65 Plumbing & Pipefitting 66 Electrical 67 Controls 68 Metering Equipment 69 Post-Installation 70 Clean Up 71 HazMat Removal 72 Startup & Testing 73 Punch List Items 74 Commissioning 75 Final Inspection & Approval 76 Post Installation Submittals, O&M Manuals 77 Emergency Procedures 78 Preventative Maintenance Program 79 Training

M11

M12

M13

M14

M15

M16

M17

M18

M19

M20

M21

M22

M23

M24

Fig. 40-4 Representative Critical Path Tasks of the Implementation Process in Gantt Chart Format.

and other documentation required to fully describe the proposed work to the facility for its review and ultimate sanctioning of project implementation. During this phase, a design-builder will also finalize the implementation plan for construction.

While this phase is led by engineering design, it is still a multidisciplinary effort to ensure smooth transfer of information. Assumptions and concepts are carried forward from the analysis phases to the design team, and later to the construction team. A sound design team will

769

Copyright 2003 by The Fairmont Press.

Combined Heating, Cooling & Power Handbook: Technologies & Applications

include individuals familiar with the original feasibility study to ensure that the design is consistent with all energy saving assumptions. Construction experts will also participate in design development, monitoring the design for value engineering opportunities and looking for more cost-effective equipment selections and layouts. In the case of a design-build arrangement, the construction group may also pre-order long lead-time items as needed to meet project timelines. Operations experts will lend their perspective on the OM&R aspects of the proposed measures during this phase.

verified savings becomes the engine that drives this construction process. The risk of a flawed design or substandard construction no longer lies primarily with the owner, but with the performance contractor.

Training and OM&R

Planning for short- and long-term OM&R and replacement activities should commence concurrent with the construction phase. For these tasks, an OM&R team can be formulated either by the host facility or the contractor who is to be responsible for providing such services. The primary responsibilities of the team leader are: development and execution of the routine operating and maintenance systems; definition and management of the repair and emergency response resources; sustaining a trained and supported OM&R site staff; collecting and analyzing performance data; and responding to client concerns. The OM&R supervisor should develop manuals that cover the total operation of each measure being installed. The manuals will contain step-by-step methods and illustrations for operating systems and their components. They will detail the location, function, characteristics, and component arrangements and relationships. Decisions should be made as to the intended long-term OM&R approach (i.e., as needed, preventative, or predictive) and who will be responsible (contractor or host facility) for each component. Ideally, an optimally planned program should be developed for each installed measure that will clearly prescribe the recommended maintenance schedule and expected frequency. Emergency maintenance procedures and parts inventory requirements should also be included. The OM&R supervisor will provide, or arrange for, comprehensive training on the operation, troubleshooting, maintenance, and repair of equipment and systems modified or installed under each measure. Instruction may include a classroom phase, as well as practical hands-on field training. For each measure, the OM&R manuals and supplemental materials should be included in the training program.

Construction Phase
Common to all types of implementation and contractual approaches is the need for a construction methodology that incorporates standard industry practices for assuring proper coordination, communications, materials quality, construction methods, budget controls, code compliance, and safety practices. Appropriate measures must be taken to ensure that the measures are installed on time and within budget and are consistent with all previous analysis and design concepts. These planning, oversight, tracking, and control measures are the responsibility of the construction management team. They include: Pre-construction activities, such as planning, constructability review, and value engineering Cost estimating and document control at various stages of development Final equipment selection and material acquisition Scheduling and coordination of construction trades and activities, materials delivery, etc. Start-up and commissioning planning and oversight Site safety program development and management Quality assurance program development and management The construction management team uses various control systems and tracking tools and checks to ensure that all subcontracted work is performed in a timely manner and meets high standards of quality. All construction team members work must be closely coordinated. Projects should be delivered on time, within budget, and with a minimal amount of scope and cost changes. With a standard plan and specification approach, risks and responsibilities are more spread out between the facility owner, the design firm, and the construction firm. In the case of performance-based design-build type arrangements, many of the risks of project performance are shifted away from the owner and onto the contractor. With performance-based contracts, the achievement of actual

Baseline and Performance Measurement

An optional additional step in the implementation process is the development of a savings verification program. This can serve to document the success of the project over time in generating projected savings or meeting anticipated operational goals. In various types of performancebased contracts, savings verification programs establish the basis of payments made by the host to the project financier

770

Copyright 2003 by The Fairmont Press.

Integrated Approach to Energy Resource Optimization Projects

or prime contractor. Even when not a contract requirement, savings verification programs provide much meaningful data to the analyst and operators, and ultimately to the host/owner. They also provide feedback on the accuracy of the study originally used to justify the investment. Moreover, the system performance data gathered can also provide collateral benefit as part of preventative or predictive maintenance programs. Generally, verification plans set up resource use evaluation procedures, typically using direct metering of energy and other resource input to the affected process or building area. Sometimes, the metering and data collection system is linked to the overall energy management control system and provides operating data that is used to optimize system performance and indicate when service is required. The type of verification process used will vary widely. Savings verification programs are designed with specific M&V protocols. Protocol selection will depend on several factors, including project complexity, metering complexity, magnitude of costs and savings, the level of interactivity with other measures, and contractual allocation of risk associated with performance factors not controlled by the contractor. Also considered is the collateral value of the M&V installation with respect to other uses for the data and metering systems.

UNIVERSITY OF MASSACHUSETTS MEDICAL CENTER PROJECT

The University of Massachusetts (UMass) Medical Center, Hospital, and Research Laboratory recently implemented a $30 million integrated energy and resource efficiency and cost reduction program at its 2 million ft2 (186,000 m2) facility in Worcester, Massachusetts. The program was implemented under a 10-year energy services agreement that served to reduce energy usage and cost, while modernizing the facilitys energy infrastructure and providing reliable standby electric service. The completed integrated project included major upgrades to the facilitys combined heat, power, and cooling plant. It also provided for new lighting and electric motors throughout the facility, upgrades to air handling equipment, and expansion and modernization of the facilitys energy management control system (EMCS). The facilitys objectives were to reduce operating costs and generate annual savings sufficient to leverage numerous important energy infrastructure upgrades. These included the following: Upgrade and expand the 25-year old electric cogeneration system Secure the ability to reliably operate the facility under the emergency power system Expand chilled water system capacity Install new low air emission central boilers Modernize and expand the EMCS Optimize energy cost savings Implement the project without interrupting facility operations The existing central plant housed three steam watertube boilers that provided steam for heat, power, and cooling. Their original full capacity rating was 115,000 lbm/h (52,000 kg/h), but they were operated at up to 90,000 lbm/h (41,000 kg/h) at 250 psig/500F (18 bar/260C) and had limited environmental controls. The plant also included a cogeneration system consisting of two extraction/condensing turbine generators. The 250 psig (18 bar) header also supplied three 2,500 ton (8,790 kWr ) steam turbine-driven centrifugal chillers. Steam turbines were also used to drive boiler feed pumps and draft fans. There was insufficient on-site electric generation capacity to support the entire facility in the event of a utility outage. There was also a deficiency in chilled water capacity, given the load growth experienced over the past decade,

Facility Goals and Objectives

CASE STUDIES
Following are two case studies of integrated energy and resource usage and cost reduction projects. Both were developed and implemented by an energy services company specializing in performance contracting and energy infrastructure services. In both cases, the host facility had a critical need for major energy infrastructure improvements. Hence, while the energy usage and cost reductions in and of themselves were important objectives, the cost savings produced a revenue stream sufficient to pay for all of the needed capital improvements. In the first case, the university medical center desired expanded emergency electric generation and chilled water production capacity. The solution was found by leveraging a series of cost-effective energy efficiency measures and by optimizing the thermal balance of the central steam system. In the second case, the industrial-type laboratory facility desired a complete renovation of virtually all of its major energy systems and the ability to meet its air conditioning capacity requirements. The solution was found through energy source switching and a complete redesign of its air handling system, including the effective use of new control technology and energy recovery systems.

Baseline Conditions

771

Copyright 2003 by The Fairmont Press.

Combined Heating, Cooling & Power Handbook: Technologies & Applications

including the addition of a new research facility. There was an old central pneumatic and partially upgraded DDC EMCS that provided some measure of control over the HVAC system. However, it required both upgrade and expansion. The central plant was largely dependent on manual or equipment-specific automated controls. There were about 5,000 hp (3,728 kWm ) of standardefficiency motors, none of which operated under variable speed. The lighting system was old and inefficient, with over-lighting in some locations and inadequate lighting in others.

Project Measures
To improve thermal efficiency, the steam system was upgraded to operate at a much higher initial pressure and temperature. Two of the three original boilers were targeted for decommissioning and two new dual-fuel 115,000 lbm/h (52,000 kg/h) Babcock and Wilcox watertube boilers with low-NOX burners and flue gas recirculation were installed. The new units generate steam at 1,100 psig/850F (77 bar/454C) that is used to power a new Dresser-Rand 5 MW back-pressure steam turbine generator. The new turbine generator produces electricity at a voltage of 13.8 kV to match the plants existing normal and emergency electrical distribution systems, thereby avoiding the additional expense of a new step-down transformer. The plant has black-start capability and can operate isolated from the grid if necessary. As an additional redundancy measure, a new Caterpillar 1,250 kW reciprocating Diesel engine generator was installed. Also installed was a boiler plant master control (BPMC) system to oversee operation of the new boilers, turbine generator set, chiller, water treatment, condensate, etc. Header pressure controllers and other off skid items are controlled directly through the BPMC, as well as the supervisory and data sharing with the other controllers. The system serves to reduce operating and repair costs related to pressure problems and the amount of employee time required to monitor the systems. The BPMC system works in conjunction with the individual control system on the existing boilers, turbines, and chillers. A newly installed medium-pressure steam header, which cross-connects to the existing header, delivers 250 psig/500F (18 bar/260C) steam, exhausted from the new turbine, to the two existing extraction/condensing turbine generators, three steam turbine-driven chillers, and turbinedriven boiler feed pumps and draft fans. Extraction steam at 50 psig (4.4 bar) is then used to power a new 5,000 ton

(17,580 kWr ) turbine-driven York centrifugal chiller designed for reasonably efficient operation at this relatively low operating pressure. Instead of replacing the entire system with a larger turbine generator operating with one larger pressure drop, the retrofit design optimized capital costs by keeping the existing steam turbine generators in operation. The new unit captures the enthalpy drop (extra ability to do work) at the now higher work availability level resulting from the generation of higher temperature/pressure steam by the new boilers. In addition to the major combined heat, power, and cooling project, the other six implemented measures provided a combination of infrastructure improvements and operating cost savings. Five of the six measures, described as follows, offered simple paybacks of less than five years. Lighting System Upgrade: The lighting system upgrade involved the installation of about 27,000 new fixtures. Significant savings were achieved as a result of the new fixtures, as well as the reduction in the total number of lamps and ballasts needed to provide proper light levels. The reduced electric demand and cooling requirement and the added heating requirement resulting from this measure were interactively considered in the savings analysis, heat balance, and capacity selection of the boilers, turbine-driven generator, and chillers. EMCS Upgrade: This measure involved the replacement of the old imprecise controls with state-of-theart technology. This was achieved by overlaying the existing pneumatic system with direct digital controls (DDC) and expanding the number of control points at the facility by 65%. The reduced electric, heating, and cooling loads and altered load profiles were considered interactively with the other measures. Electric Motor Upgrade: This upgrade included the replacement of 134 motors with high-efficiency models. Due to the relatively large average capacity of the motors that were replaced, the total of which was 5,000 hp (3,728 kWm), the simple payback for this measure was extremely low at 1.6 years. Small Chilled Water System Upgrade: This measure produced a good payback while providing for some air handling system improvements. Domestic and Process Water Improvements: This measure provided for new bathroom fixtures, a new reverse osmosis demineralized water system, and the redesign of cooling water flow for the refrigeration system.

772

Copyright 2003 by The Fairmont Press.

Integrated Approach to Energy Resource Optimization Projects

The sixth measure involved the conversion to a variable air volume (VAV) system with the use of VFD technology for variable speed HVAC fan operation. The measure improved the indoor air quality and comfort conditions at the facility, but provided a modest economic return with a simple payback of 11 years. Implementation of the overall project required careful planning to minimize and, in many cases, eliminate interruptions to facility operations. Boilers, turbines, and chillers were brought into the plant, staged, and installed while the existing plant was fully operational. Equipment cut-overs were carefully scheduled during off-peak periods to minimize the impact on the facility's critical care and emergency operations.

Results
Table 40-1 summarizes the capital costs, annual savings, and simple paybacks for the portfolio of measures installed as part of the program. It reflects the ability to implement a major facility upgrade by leveraging longer payback measures with shorter ones in developing an overall project with acceptable financial returns. The new combined heat, power, and cooling plant has enabled UMass Medical Center to achieve its energy operating cost and infrastructure improvement objectives. Because of the critical nature of services provided to the campus, the primary and backup systems have been designed to provide uncompromised power reliability. The electric cogeneration plant now produces about 75% of the facilitys annual electricity. The upgrade also improved system reliability and now enables the facility to provide emergency power sufficient to fully support the Hospital and Medical Center. The new chiller, along with

the HVAC upgrades, improved the capacity, efficiency, and reliability of the central chilled water system. Overall, the increased capacity and improved system thermal efficiency of the cogeneration system produced energy savings of $2.3 million per year. The five short payback measures reduced energy consumption and provided several operational benefits. Combined, they generated $1.17 million in annual savings at a cost of $4.76 million, yielding a simple payback of 4.1 years. The robust economic performance of these measures was leveraged to balance the longer paybacks of two major infrastructure upgrades, i.e., the combined heat, power, and cooling measure, and an air handling system measure, both of which had simple paybacks in excess of 10 years. Like the cogeneration measure, the air handling measure provided important operational benefits. Where it might not have been judged economical and funded on its own, the leveraging effect of bundling a portfolio of longer and shorter payback measures into one integrated project allowed the facility to achieve their objective of providing the maximum energy savings and infrastructure benefits within a financeable framework.

EPA NATIONAL VEHICLE & FUEL EMISSIONS LABORATORY PROJECT

The U.S. Environmental Protection Agency (EPA) recently completed construction of a $10 million energy savings performance contract (ESPC) at its National Vehicle & Fuel Emissions Laboratory (NVFEL) in Michigan. Under this arrangement, the competitively selected contractor developed and proposed a turnkey design/build project with a specified scope of work (SOW), a firm fixed price, and a guaranteed, verifiable
Capital Cost ($) 271,000 750,000 1,800,000 500,000 240,000 3,000,000 23,000,000 29,561,000 Annual Savings ($) 55,000 160,000 164,000 156,000 150,000 650,000 2,293,000 3,628,000

Measure Implemented Chilled Water System Improvements Energy Management Control System Upgrade Air Handling System Upgrade/VAV Conversion Domestic and Process Water Improvements Premium-Efficiency Motor Upgrade Lighting System Upgrades Combined Heat, Power, and Cooling Cogeneration Plant Total
Table 40-1 Cost, Savings, and Payback Summary of Integrated Program. Source: Energy User News

Payback (yr) 4.93 4.90 10.98 3.21 1.60 4.62 10.03 8.15

773

Copyright 2003 by The Fairmont Press.

Combined Heating, Cooling & Power Handbook: Technologies & Applications

annual cost savings stream. The guaranteed savings must be verified annually and provide sufficient funds to pay for all finance and service charges over the term of a contract, while providing some measure of positive cash flow (net savings) to the customer/host facility. The completed integrated project included all new HVAC equipment, including gas-fired absorption chiller/heaters, cooling towers, a steam to hydronic system conversion, custom-designed air handlers with enthalpy reclaim, a fuel cell, and computerized direct digital control (DDC) EMCS for facility systems control and continuous M&V. The contractor will now maintain the equipment and verify actual savings over a 24-year term.

of the total bill. Baseline water consumption was 31 million gallons (117 million liters) per year at an annual cost of about $125,000. An additional $350,000 in annual costs were incurred for OM&R of the 30-year old equipment, bringing the total energy/resource operating cost up to $10.74/ft2 ($115.60/m2). Baseline energy rates are summarized below in Table 40-2. In the savings analysis, these were adjusted annually at a rate of 2.4% to account for general inflation.

HVAC Distribution System

HVAC systems included 36 individual rooftop air handling units (AHU) located throughout the facility. Most of the HVAC units serving the test cell and preparation areas conditioned 100% outside air and included a steam preheat coil, chilled water cooling coil, steam reheat coil, steam humidifier, and supply fan. To reach their summer temperature and humidity set points, the units would overcool and over-dehumidify, then reheat and rehumidify their single-pass air. Other preparation and office areas had one AHU with a deficient VAV system and 11 AHUs that were constant volume reheat systems, with steam humidifiers and reheat coils located in the distribution ductwork.

Facility Goals
The goals that EPA outlined for this competitive ESPC solicitation were to reduce source emissions, energy consumption, and energy costs by: Exceeding Federal energy reduction mandates prescribed by the Energy Policy Act of 1992 and subsequent, more stringent Executive Orders Reducing power plant source emissions Optimizing energy cost savings Restoring aging and obsolete infrastructure Eliminating use of CFCs Drastically reducing annual water consumption Minimizing wasted energy and maximizing use of waste energy streams

Central Plant
The old central plant provided steam, chilled water, compressed air, and domestic hot water to the entire facility. The main heating plant, consisting of three 24,000 lbm/h (10,900 kg/h) boilers, provided steam to the HVAC heating and humidifying equipment, domestic water heaters, and office radiation convectors at 35 psig (3.4 bar). Chilled water was generated to serve HVAC equipment in the facility by three 1,000 ton (3,516 kWr ) electric chillers, estimated to operate at 0.775 kW/ton (0.227 kW e /kW r ). Prior to the project, two out of three chillers were out of operation, forcing the lab to ration cooling on hot days.

BASELINE CONDITIONS Facility Description

NVFEL is a 135,000 ft2 (12,542 m2) single-story building that includes a series of energy-intensive vehicle test cells used to determine fuel efficiency and emissions characteristics. The facility also includes test preparation areas, chemical laboratories, and office space. The structure is mainly filled concrete block with a built-up roof containing 2 in. (5 cm) insulation. Windows are primarily doublepane glass in aluminum frames. Ceiling heights average 20 ft (6 m) in all zones, except in the main office wing. Despite a recent energy efficiency lighting system upgrade, the NVFEL facility had the greatest energy use of all buildings operated by the EPA, with an energy utilization index (EUI) in excess of 600,000 Btu/ft2 (6,814 MJ/m2 or 1,895 kWh/m2). The average annual utility bill was just under $1.1 million per year, or more than $8/ft2 ($86/m2). The largest component of their utility cost was electric demand charges, which composed more than 40%

EMCS
The controls for airflow and temperature were pneumatic technology from the 1960s. Flow rates and differential pressures fluctuated greatly and were inefficiently
Electric Energy Electric Demand Natural Gas Fuel Oil (No. 2) Water $0.0285/kWh $19.20/kW $0.418/therm $0.88/gal $0.004/gal

Table 40-2 Baseline Energy Rates for NVFEL Facility.

774

Copyright 2003 by The Fairmont Press.

Integrated Approach to Energy Resource Optimization Projects

controlled in the test cells, causing significant energy waste and potentially unsafe levels of negative pressure. Control of the HVAC equipment in the building had been performed by manually adjusting dampers and heating and cooling set points to satisfy the space requirements and manually turning the equipment off at the end of the working shift. As a result, equipment remained in operation longer than necessary. Because of variations in building occupancy schedules, most HVAC systems ran excessively unless continuously adjusted.

PROJECT IMPLEMENTATION
The major measures implemented included: Redesign and replacement of air handling system Heating/cooling plant replacement and conversion from steam to hot water system EMCS upgrade Power factor correction Process water usage reduction program Fuel cell cogeneration system

PROJECT ANALYSIS

AND

DESIGN

The technical and financial analysis revealed that the high energy consumption was primarily due to NVFELs stringent environmental conditions and its corresponding high airflow rates (using 100% outside air) that exceeded 2 cfm/ft2 (0.6m3/m2). The test cells must be maintained at tight temperature and humidity tolerances while test engines force large changes in heat loads by speeding up and slowing down through prescribed test cycles. HVAC demands can be extreme, especially in the heavy-duty test cells, where heat loads from large truck engines require air conditioning capacity that is 50 times greater than that required in a typical office space. The heaviest loads occur only occasionally, but the capacity is required and the impact on the highly demand sensitive electric rate is great. Domestic water was used extensively throughout the facility, including its use for highly inefficient oncethrough process cooling of air compressors, vehicle sheds, process chillers, and engine radiators. Given the extensive opportunity for energy and water usage efficiency improvements, the greatest source of energy cost savings would come from reductions in peak electric demand, given the extremely high cost per unit of demand. These savings, along with water and energy commodity savings, would be used to leverage important infrastructure upgrades, notably the central plant, air handling system, and energy management system. A cornerstone of the program was a redesign of the HVAC system that involved the reduction of outside air requirements and use of energy recovery for the remaining portion of the air that would be exhausted. It would also require the installation of an extensive EMCS and an upgrade to the central heating/cooling plant to improve efficiency and expand capacity. The capacity requirement of the new central plant, however, would be dramatically reduced due to the new design and improved system control.

Redesign and Replacement of Air Handling System

Under this project, 36 new custom-designed AHUs, designed for 80% return air, were installed. This allows the facility to operate using 22% less airflow and 60% less outside air, while still meeting all codes, indoor air quality, and comfort condition requirements. All of the new units include premium-efficiency electric motors and several areas now have enthalpy recovery wheels that recover both sensible and latent energy from the exhaust air stream. The test cell units were also built with special bypass dampers to minimize simultaneous heating and cooling. Five of the test cell units also include an auxiliary cooling system using indirect evaporative cooling and heat pipes. This effectively treats the high-temperature return air caused by heavy engine testing. As a result of this measure, heating and cooling system capacity and overall energy use for dehumidification and reheating during the cooling season, as well as heating, humidifying, and reheating during the heating season, has been minimized.

Central Heating/Cooling Plant Upgrade

In the heating and cooling plant, the three existing 1,000 ton (3,516 kW r ), CFC-based electric chillers, cooling towers, pumps, and ancillary equipment were all decommissioned. Designed to meet the reduced load requirements, the new central plant consists of two double-effect, dual-fuel chiller/heaters that provide a combined output of 994 tons (3,494 kWr ) of chilled water and 10 million Btu (2,950 kWh h ) of hot water. The cooling and heating capacity was selected after careful consideration of the baseline conditions, which were capacity constrained under peak temperature conditions, and the interactive effect of all of the other technology applications included in the project, most notably the reduced outside air requirement, which dramatically reduced peak capacity requirements. The existing cooling tower was dis-

775

Copyright 2003 by The Fairmont Press.

Combined Heating, Cooling & Power Handbook: Technologies & Applications

mantled and removed from the site and a new low-profile unit was installed on the roof. The steam distribution and end-use systems were converted to a hydronic system. The steam boilers were then removed and hot water is now generated by the absorption chiller/heaters and a small auxiliary boiler. The existing fuel oil tank was left intact outside the boiler room. The tank serves as a backup for the absorption chiller/heaters, which use natural gas as the primary fuel, and for the emergency generator.

heat recovery that is used to preheat the building hot water loop, which operates year-round to serve test cell reheat loads. The new fuel cell was installed outdoors, near the boiler room and new cooling tower.

Commissioning Process
System commissioning is commonly a one-time event to verify system operation and performance at completion of construction. Because of the complexity and tight control requirements of the NVFEL project, a staged commissioning process was required. Initial system commissioning was completed as each piece of equipment was brought on-line. Once operational, the equipment was tested to verify compliance with load ratings and contractual performance requirements.

EMCS
A new state-of-the-art EMCS was installed that controls building temperature, tracks energy usage, and controls HVAC equipment based on occupancy. The system ties all of the energy systems together and optimizes system performance. The computerized digital controls accurately control space pressurization and airflows in test cells to varying set points depending upon the mode of operation. While previously labor intensive, control of the AHUs is now under direct control of the test cell operators using a mode selector switch installed in each lab control room. Moreover, the new control system remotely monitors temperature, humidity, and other parameters. The EMCS monitor screen displays parameters and status on command. The system is also used for long-term M&V of the project.

M&V Process
As opposed to the more commonly used one-time or periodic M&V processes, continuous M&V was cost-justified because of the newly installed, extensive EMCS, which serves multiple purposes. In addition to controlling and optimizing equipment operation, it calculates energy savings continuously and tracks equipment performance. The contractor is employing a variety of M&V methods at NVFEL. Calculations are generally performed in local controllers for each piece of equipment, summed each day, and downloaded to the front-end PC at the end of each day and added to monthly totals. In addition to the M&V functions, the EMCS has been programmed with a number of system diagnostics. These calculations serve to monitor system performance and detect system failures, serving as an effective platform for the ongoing long-term OM&R.

Process Water Conservation

Prior to project implementation, NVFEL had two air compressors and two process chillers, which used city water for once-through cooling. This was a costly and wasteful practice. Under this measure, the system was redesigned to use the new chilled water loop for cooling. This approach is further benefited by the ability to take advantage of the free cooling heat exchanger in the winter.

RESULTS
One year into the new operation, NVFEL realized a reduction in electricity usage of 37%, from 9 million to 5.6 million kWh, and in peak demand of 67%, from 3 to 1 MW, with no power factor penalties incurred. Figures 40-5 and 40-6 compare the baseline and verified postimplementation electricity usage and cost, respectively, over the first year of operation. An additional 1.5 million kWh savings is projected once the fuel cell, which was the last improvement to be commissioned, is supplying maximum requirements. It is important to note that while the efficiency improvements dramatically reduced electric demand and usage, a sizable portion was achieved through energy sources switching from electricity to natural gas for chiller operation. Still, even with the increase in natural gas usage for the absorption machines, the extensive thermal

Power Factor Correction

Power is supplied to NVFEL by the regulated electric utility, Detroit Edison, under the Primary Supply Rate service classification. Part of this rate structure includes a reactive demand charge for each kVA of lagging demand. With this measure, new capacitors and controls were installed to increase the facility power factor from 72% to nearly 100%, thereby eliminating the substantial utility penalties.

Fuel Cell Cogeneration System

After completion of all other measures, a 200 kW natural gas-fueled phosphoric acid fuel cell (PAFC) was installed for on-site cogeneration operation and to serve as an emergency power source for the central energy plant in the event of a grid power outage. The fuel cell provides

776

Copyright 2003 by The Fairmont Press.

Integrated Approach to Energy Resource Optimization Projects

efficiency improvements resulted in an overall reduction of natural gas usage of some 40%. This conversion provided significant operating cost savings in that gas rates were relatively modest, while electric demand charges were quite high. Moreover, it allowed the EPA to meet its collateral objective of eliminating CFC usage. The goal of dramatically reducing water consumption was accomplished, as annual usage was cut in half, largely through the elimination of once-through cooling. This provided significant operating cost savings, while meeting this important environmental objective. As a result of the equipment upgrades and new control system, OM&R costs were also reduced, further increasing annual savings, while improving comfort conditions.

As a result of reducing and controlling loads and installing new central plant systems, heating and cooling capacity is now sufficient to properly meet all facility load requirements and mission reliability has been increased. In total, the annual operational cost savings were sufficient to pay for the annual finance and service phase OM&R payments to the contractor. Hence, the ESPC project allowed EPA to meet all of its objectives, including environmental, operational, and reliability improvements, and accomplish a complete overhaul of the 30-year old energy infrastructure, while paying for it exclusively out of annual cost savings, with no up-front investment required.

1400

90 80 70 60 50 40 30 20

1200

100

MWh

800

600

400

200

Thousand Dollars
J

10 0

Baseline

Most Recent 12 Mo.

Baseline

Most Recent 12 Mo.

Figure 40-5 Comparison of Baseline and Post-Implementation Electricity Usage. Source: Steve Dorer, EPA-NVFEL; Larry Good, Good Consulting; Philip Wirdzek, EPA; and Rick Levin, NORESCO

Figure 40-6 Comparison of Baseline and Post-Implementation Electricity Cost. Source: Steve Dorer, EPA-NVFEL; Larry Good, Good Consulting; Philip Wirdzek, EPA; and Rick Levin, NORESCO

777

Copyright 2003 by The Fairmont Press.