Nicht Tee Kugel, Dos

8 03 2011

This week I am testing an additional medium for the The Energy Rant; the cartoon.  Click here to try it out.  Send email comments with your thoughts regarding this mechanism to me at jli@michaelsenergy.com.

Major barriers to EE for large commercial and industrial end users include;

  • Lack of time
  • Lack of expertise
  • Lack of capital
  • Risk aversion

If you don’t think end users are short on availability, just ask them.  Most end users don’t have time to commit to energy efficiency projects and most of the rest think they don’t have time.  The ones who really don’t have time get seven paid holidays and two-three weeks vacation while the latter group gets eleven paid holidays and six weeks vacation, if you know what I mean.

Most commercial building owner/occupants think of lighting retrofit, adding roof insulation and replacing windows or maybe replacing a boiler they think is 60% efficient.  Lighting may be ok but the rest of this stuff is almost always going to have a negligible impact on energy consumption.  Efficiency to most industrial end users means, just keep it rolling – widgets per shift, less maintenance.  Many times increasing widgets per shift and reducing maintenance is accompanied by energy efficiency, especially when EE is the primary reason to do project.  However, there are bails of cash on fire in many places that are invisible to folks who focus solely on keeping things going.  In other cases, we’ve seen industrial end users think they’re going to meet their 10% reduction goals by turning lights off.  Pssst.  Your lights only consume 4% of your energy bills.

Not enough money.  I’ve investigated commercial real estate from both an owner’s and leaser’s perspective.  The owner makes the tenant pay the utility bills in many/most cases, so there is little incentive for the owner to do anything.  The tenant’s perspective is “I have a three-year lease, this isn’t my building, and I don’t even know if I’ll be here after three years.”  For industrial end-users, capital is very precious and can take force majeure to get.

Then there is a real risk that savings won’t transpire as indicated.  Lighting is about the only measure customer’s can count on with high probability.  This is unfortunate because it doesn’t need to be that way.  It’s just that there are a lot of schlocks who make assumptions like an old boiler is 60% efficient.  As my boss says, if a boiler is really 60% efficient, turn and run as fast as you can because it may be about to blow.  We’ve seen schlock estimates indicating over one therm per square foot savings by adding insulation.  You might achieve these savings if one of the walls on your facility was missing prior to implementation.

Now we arrive at the subject of this week’s rant: efficiency bid programs.  We see a lot of efficiency bid programs, some of which are delivered by clients of ours.  They are typically an alternative to conventional custom efficiency incentive programs provided side by side.  They work like this: develop a project with cost and savings estimates and submit a proposal to the utility for an incentive.  The incentive is always greater than the standard custom efficiency incentive or why bother with the development and bid?  The program is purportedly competitive – i.e., a “free market” for incentives to maximize bang for the program buck.  If it’s competitive, somebody must lose.  This isn’t tee ball.

I cannot see how these programs don’t get slaughtered in a net to gross analysis.  Net savings are actual savings attributable to the program.  Gross savings are actual savings, period.  What’s the difference?  Net includes the effects of the program.  Did the program influence the customer’s decision to move forward with an EE project?

Let’s get back to the barriers now.  Time.  It takes just as much time for a customer and a contractor and/or consultant to develop the project for bid as it does to develop the project for a standard incentive.  And it takes more time to shepherd the thing trough the bid process.  Efficiency bid takes MORE time.  Which leads me to…

Risk.  As mentioned, there is risk the project won’t generate savings because the energy analyst is a schlock.  But for efficiency bid, there is risk, presumably, that there won’t even be an incentive after thousands of dollars are spent developing the project.  Remember, if this program is competitive, somebody loses.  Who is going to spend gobs of time not knowing whether they will get an incentive?  If the standard custom efficiency incentive is the consolation prize and it’s enough for a “go”, then why would the program waste money on a premium efficiency-bid incentive?

True story, last week we considered pursuing one of these bids for an industrial customer for which we had done a study.  We decided against it because (1) we only had a month to get it submitted and in that month you need to get the customer on board and a month is a nanosecond for a capital intensive corporation to allocate (2) extremely scarce capital, and therefore, (3) it was too big a risk for even us, the consultant, to get the whole thing pulled together in a month, at the mercy of the corporate bean counters.  There is far too little upside for our risk of getting something we have almost no control over to happen.

Somebody has to lose if this is competitive.  Most likely only the biggest customers are going to pursue these projects.  A major customer spends a bunch of time to put a bid together and then is told, sorry, you lose.  Now the utility is faced with a colossal PR disaster with a major customer that will raise Cain all the way to PSC’s office.  OR, the customer takes the standard custom incentive as a consolation prize, in which case the whole bid thing was a ruse to get extra program money – a free rider.

These efficiency bid programs probably look great on the surface but if one really understands market barriers and how large end-users allocate and budget capital, it seems like a big free rider program to me.  They take more time, not less.  They add risk rather than decrease risk.  They potentially provide more capital assistance, but at what I see is a disproportional addition of risk.

Tidbits

  • Ameren Missouri says they will pare back EE programs because they are costing shareholders return on investment.   Wow – although I consider it unfortunate, it’s understandable and refreshing to some degree to get straight talk from a utility that actually believes this.  I think a good portion of utilities really think this way but lead on as though they are saving the universe.   Do what it takes to look good to the regulators but with minimal real impact.  Come to think of it, these utilities may be like The Firm.  Once a partner in the EE programs and made aware of the scam, you’re stuck unless you want your car to accidently explode when you leave for home.  BTW, programs can be developed for utilities to make money on EE.  Just call 608.785.1900.
  • Don’t look now, the Chevy Volt has even less than the advertised 40 mile battery range – like about 40% less during cold weather as batteries don’t work well in cold weather.   Not only that, as mentioned in “A Frivolous Novelty” it takes about 5 kW to heat the cabin of the vehicle.  I “mistakenly” thought this was a big deal.  Not really.  At about 0.5 mile/kWh, the battery juice is consumed in less than a half hour.  That’s 50 kWh for 25 miles of driving but only 2.5 kWh for heating.  Who is going to pay $40,000 to be limited to 25 miles between charging?  Raise your hand.  Not all at once, it may make the planet wobble.
  • In one last bit of refreshing honesty, this guy provides a good assessment of plusses and minuses of the ban on the standard incandescent lamp:   Good assessment – far above average for that matter.

written by Jeffrey L. Ihnen, P.E., LEED AP

Advertisements




EE Ignorance

11 05 2010

A few years ago I was on a marketing visit to a hospital for non-energy related services and of course I had to work energy efficiency into the conversation.  “So, have you done any energy efficiency upgrades in recent years?”  “Yes we replaced windows in the old section of the facility and installed new boilers.  We’re all set with energy efficiency.”

Palm, meet forehead.

I could be a lousy salesman but that conversation ended with a pregnant pause.  This was a hospital, probably the most energy intensive type of commercial facility there is, and replacing windows might reduce consumption by 0.01%.  New boilers could do anything from saving some energy to using more depending on how they are controlled.

One of the major obstacles to capturing real and substantial savings in commercial buildings is overcoming ignorance of how these facilities use energy.  They use energy far differently than homes but Joe in the maintenance department or Sally the executive think the way to 10% savings is new windows, new boilers and more roof insulation.  Good luck with that.

When I talk about energy efficiency in commercial and industrial facilities I talk about controls, systems and processes, NOT pieces of equipment and components.  At the end of the presentation I say all boilers are 80% efficient.  All chillers use 0.6 kW/ton.  All lighting fixtures produce 80 lumens per Watt.  Of course this isn’t literally accurate, but the point is, the building can be operating very poorly as a system, such that plus or minus 20% on these performance metrics is dwarfed by poor operation.  The control programming is awful.  The system could use some additional control points and maybe a few components need to be added.  When added up,  the waste generated by these controls and system operations dwarf the few percentage points for the boiler efficiency or one or two tenths of a kW per ton for the chiller.  See The More You Spend The More You Save.

I was reminded of this once again this week as I read this article on the Empire State Building.  The owner says windows are “a key to efficiency”.  Even including the daylighting controls he is talking about, this won’t amount to a peanut of the 38% energy savings they plan to achieve.

Columbia University research declares green and white roofs in NYC “help prevent energy losses”.   That may be factually incorrect but the more arguable thing is, it has a tiny effect on heat transfer through the roof.  Green roofs include plants which require dirt and moisture to grow.  Moist soil has lousy insulating qualities.  The benefits of a green roof include reduced runoff into rivers, lakes, and oceans, transpiration which reduces temperature on the roof’s surface and thus reduces heat island effect, roof life extension, and possibly energy savings if building cooling system equipment is located on the roof.  A white roof will save some cooling energy but costs you some extra heating energy in winter.  See  our Energy Brief “Cool Roofs in Cold Climates“.  I’m not bashing green and white roofs.  I would use one or both on my building, but for reasons other than energy efficiency.  These other benefits pile up.

We surveyed 150 buildings in NYC about 16 months ago and believe me, there is huge potential in the city but it isn’t going to be realized with windows, boilers, and green and white roofs.  Like the Empire State Building probably was prior to this $20 million retrofit, buildings have 1960s and 1970s technologies and crappy old pneumatic controls.  There are steam-turbine-driven chillers, which have to have horrible efficiency because the steam pressure is so low.  The heat rejection would be massive.  According to my calculations, with a perfectly efficient turbine and an efficient chiller, the cost to operate a steam driven chiller would be twice that of an electric chiller at the same efficiency.  Why?  Because of the relatively very low steam pressure (compared to power plants) the steam-driven chiller uses.  If I were to use real numbers, this could easily balloon to 6x the cost.  E.g., these old chillers are probably half as efficient as a new one- tops, and the turbines won’t be perfect like I assumed.

So what is the solution to widespread ignorance of commercial and industrial facility operation, systems, processes, controls, and how to reduce energy consumption?  Send me an email and I will tell you.  jli@michaelsengineering.com.  It works really well.

written by Jeffrey L. Ihnen, P.E., LEED AP