electric utility incentive programs · 5. get utility ok to implement project 6. ensure clarity...
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Electric Utility Incentive ProgramsMarcus Wilcox, President – Cascade Energy, Inc.
• Why do utilities offer incentive program?
• Energy vs. Demand vs. Demand Response
• Influence of Rates – No Brainers?
• New Construction, Retrofit, O&M, Prescriptive
• Typical Energy Efficiency Incentives
• Typical Demand Incentives
• Discussion of Demand Response
• Do’s and Don’ts
Agenda
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• GCCA Service Partner – Energy Efficiency• We don’t sell equipment, we have no vendor preferences• Offices in Oregon, Utah, and Washington – 75 people• Industrial energy efficiency consulting
– Food processing, pulp & paper, petrochemical, manufacturing, etc.– Refrigeration, compressed air, pumping, fans, controls, process upgrades– Worked on 700 to 800 ammonia refrigeration systems
• Services include:– Traditional retrofit or new construction efficiency projects– Tune-ups (i.e., kaizen blitzes or retro-commissioning)– Energy management tools and software– Design and management of utility energy efficiency programs
• Corporate energy management– e.g. Americold, etc.– e.g. Sysco, SuperValu, Ben E. Keith, etc.
• Approximately 300 DCs and PRWs
Cascade Energy, Inc.
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National Spending on Efficiency
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1. Because someone makes them– Integrated Resource Plans
– State Utility Commissions
– State Initiatives
2. Because they need to– Need to add resources
– Energy efficiency is the lowest-cost resource
3. Because they want to– Good customer service
– Healthy customers = healthy utility!
– Can sell excess power to neighbors for a profit
Why Utilities Offer Incentives
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Conservation is Lowest-Cost
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PNW Plan for Conservation
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New Wind
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EnergyEfficiency
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1. Energy Efficiency Incentives– kWh targeted
– Easiest to do
2. Demand Incentives– Peak kW targeted
– Harder to do
3. Demand Response (DR) Initiatives– On call to shed load during times of system distress
– This is a contract relationship, often voluntary participation
Energy vs. Demand vs. DR
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• Retrofit projects– Replace or upgrade existing equipment
• New construction or expansion projects– Incremental cost for more efficient technology
– Also applies when equipment is at end of life/failed
• O&M programs– Making low or no-cost improvements
• Strategic Energy Management programs– Implementing facility or company-wide programs
– ISO 50001 is emerging
Types of Programs
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• Energy rates vary from 1¢ to 16+¢/kWh
• Incentives vary from 0% to 100% of project cost
• Northern vs. southern climates
• Humid vs. dry climates
• Long vs. short operating hours
• Systems at fully vs. lightly loaded
• New technology & reduced cost– LED was $1500/fixture 2 years ago
• Every project and every site can have radically different economics!
Never Say “No Brainer” or “Never”
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• Typically X¢/kWh, up to Y% of project cost– Commonly 5 to 30¢/kWh
– Commonly 50% to 70% of project cost
– May have a minimum allowable simple payback
– May vary by technology or retrofit vs. new construction
• Also prescriptive rebates– $X/light fixture
– $Y/hp for variable frequency drives
• O&M or energy management programs– Co-funding of O&M measures
– Watch performance for 1 to 5 years
– Pay for performance
Energy-Oriented Incentive Programs
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Sample #1 Energy Incentives
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Sample #2 Energy Incentives
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Sample #3 Energy Incentives
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Sample #4 Energy Incentives
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Sample #5 Energy Incentives
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• Targeting reduction in peak draw
• May specify time of day, day of week, and/or month of year
• Much more difficult to do– Must guarantee that peak is being reduced
– May not allow controls projects• Must be hard-wired, constant loads
Peak Demand Incentive Programs
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Intro to Peak Demand vs. EnergySample Distribution Center Weekly Power Profile
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Energy (kWh) = Area Under Curve
Demand (kW or kVA) = Peak 15 Minute Reading
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Targeted Time PeriodsSample Distribution Center Daily Power Profile
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Demand ShiftingSample Distribution Center Daily Power Profile
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Sample #1 Demand Incentives
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• May be offered by utility or 3rd-party aggregator
• May receive payments simply for signing up
• Receive payments for responding to an “event call”
• Response is usually optional
• Response may be locally or remotely controlled
• Can shed some or all load– May be able to utilize backup generators
Demand Response Initiatives
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Sample Demand Response Event
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19:12 0:00 4:48 9:36 14:24 19:12 0:00
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Time of Day
Refrigerated Warehouse DR Event
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1. Contact utility & sign necessary paperwork
2. Identify efficiency opportunities
3. Have required energy analysis & reporting complete
4. Ensure clarity on end-game process & deliverables
5. Get utility OK to implement project
6. Ensure clarity with implementation team on roles and responsibilities
7. Implement project
8. Commission or fine-tune project
9. Follow process for Measurement & Verification (M&V)
10. Gather invoices, document internal costs
11. Submit final report to utility program
Typical Incentive Program Flow
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• Engage utility program early– Coming to them late will fail
• Let utility program know if the project scope or timeline has changed
• Always include contingency in budgets
• Ensure clarity on whether internal costs (labor) count toward project cost
• Ensure contractors and vendors track and document costs per needs of program
• Be careful with Demand Response regarding your insurance policies
• Be careful with Demand Response regarding customer expectations for temperature
Sage Advice
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Where is the Opportunity?
• Refrigeration (40% to 70%)• Warehouse Lighting (10% to 25%)• Battery Charging (5% to 15%)• Dock & Freezer Doors (Heaters & Blowers)• Exterior / Parking Lot Lighting• Freezer Floor Heating• Offices (Lighting, HVAC, Plug Loads)• Dry Warehouse HVAC• Truck/Maintenance/Storage Out Buildings
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Case Studies
• Retrofit Project
• Commissioning / Tune-Up
• Corporate Energy Management
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• Two -5°F warehouses, 200,000 ft2
Case Study #1: Warehouse Retrofit
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• Very high kWh/ft2
• Struggled to maintain temperature– Forced to run system inefficiently (3” suction)– Substantial non-energy benefit
• Served by a dedicated utility meter– Savings would be clear
• Utility incentives and state tax credits available– Allowed for aggressive measures
• Proven technologies– First energy efficiency project for customer
Project Background
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Energy Efficiency Upgrades• New evaporator coils
• Variable speed drive technology
– Evaporator fans
– Screw compressor
– Condenser fans
– Required new MCC and electrical room
• Refrigeration computer control
– Upgraded compressor microprocessor panels
• Premium efficiency compressor & condenser fan motors
• Energy savings: 50%
• Utility incentives and state tax credits: reduced to 1½ year payback 30
New Evaporator Coils
• Original coils performed poorly.
• Tests indicated they were providing half rated capacity.
• Large coils were mounted on stands at each end of main aisle.
• Fans powered with VFD control.
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Variable Frequency Drives
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Computer Control System
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Upgraded Compressor Microprocessors
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Utility History – Before Project
Warehouse 4 & 5 Energy Use - Before Project
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5,000
10,000
15,000
20,000
25,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMonth of Use
Ave
rage
kW
h/da
y
19981999200098-00 Avg.
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Utility History – After Project
Warehouse 4 & 5 Energy Use - After Project
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5,000
10,000
15,000
20,000
25,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMonth of Use
Ave
rage
kW
h/da
y
98-00 Avg.20012002
ProjectImplementationBegun Sept. 01
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• Energy savings: 2,600,000 kWh/yr
• Percent reduction: 50% of refrigeration
• Cost savings: $100,000/yr
• Implementation: $640,000
• Simple payback: 6.4 years(before incentives)
• Utility incentive: $312,000
• Tax credit (28% NPV): $179,000
• Final payback: 1.5 years(after incentives)
Economic Summary
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• Large distribution center
• Many zones, from ice cream to 50°F
• 1,060 hp of compressors– (2) 335 hp single-stage economized for freezer
– (3) high-stage totaling 350 hp
– (1) 40 hp booster for ice cream
• Focused on control system fine-tuning
Case Study #2: Distribution Center –Control System Fine-Tuning
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Facility Layout & Control Interface
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Evaporator Control Fine-Tuning
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Freezer Compressor Fine-TuningRaised from 3 psig to 5 psig
ImprovedStagingCriteria
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Compressor Stop & Force Unload
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Corrected Compressor Current Transformer Calibration Issues
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Condenser Fine-Tuning
Changed from PPP,FFF to P,F,P,F,P,F
Reduced from 160/150 to
125/115
Reduced from 170/160 to
125/115
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Calibrated Economizers to Take Lead from High-Stage Compressors
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Corrected Sensor Offsets
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Short-Term Results
Plantwide Impact of Commissioning: Before & After
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10/05 10/10 10/15 10/20 10/25 10/30 11/04 11/09 11/14
Date
kW
CommissioningChanges on 10/25
LowerAND
Smoother
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Long-Term Results
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Economic Summary
• Percent reduction: 40% of refrigeration30% of total plant
• Cost savings: $300,000/yr
• Capital cost: Zero
• Commissioning cost: $20,000
• Simple payback: <1 month
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• Largest food services company in North America– $37 billion in sales– Restaurants, healthcare, educational facilities, and lodging– 110 food distribution centers (DCs)– Freezers, coolers, dock, and dry warehouse space
• Rolled out program in March, 2006– Announced by #2 at Sysco
• Aggressive goals:– 10% after 1st year– 25% after 3rd year– Another 5% by 6th year
• Three-Prong approach– Develop energy management program & tools– Tune-ups at every DC in 18 months– Retrofits and high-efficiency new construction
Case Study #3: Sysco Corp EM
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Benchmarking Across Company
• Cubic feet weighted by freezer, cooler/dock, and dry as well as average wet bulb for a normalized “Efficiency Factor”
• Entire company can be benchmarked– Rank within company– Rank within benchmark group– Rank within region
• Top 25% is desirable– Bottom 25% is not!
• This report is seen across company.
• Requires monthly collection of 500+ utility bills
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Sysco in 2005Energy Use vs Facility Size - June Utility Bills
- 2,000 4,000 6,000 8,000 10,000 12,000
Weighted Cubic Feet
kWh/
day
2005
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Sysco in 2007Energy Use vs Facility Size - June Utility Bills
- 2,000 4,000 6,000 8,000 10,000 12,000
Weighted Cubic Feet
kWh/
day
2005
2007
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Sysco in 2010
Energy Use vs Facility Size - June Utility Bills
- 2,000 4,000 6,000 8,000 10,000 12,000
Weighted Cubic Feet
kWh/
day
2005
2007
2010
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Companywide Performance
Total Broadline Energy Intensity
Jan
FebMar Apr
May Jun Ju
lAug Sep Oct Nov Dec
kWh/
day/
1000
wei
ghte
d ft3
2004200520062007200820092010
CompanywidekWh/ft3
Reduced by1/3
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Questions or Feedback?
Marcus H. Wilcox, President, P.E.Cascade Energy, Inc.Marcus.Wilcox@CascadeEnergy.com
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