1. Introduction to Energy Savings Performance Contracting Juan C. Patino Peralta, PE, MBA,PMP,CEM,LEED AP

2. Objetivos del Seminario Discutir algunos conceptos importantes sobre la industria y la energía. Discutir algunos conceptos importantes sobre la industria y la energía. Discutir el concepto de Energy Savings Performance Contracting (ESPC). Discutir el concepto de Energy Savings Performance Contracting (ESPC). Entender los potenciales beneficios de un proyecto de este tipo. Entender los potenciales beneficios de un proyecto de este tipo. Ver a fondo un proyecto real y discutir sus resultados. Ver a fondo un proyecto real y discutir sus resultados.

3. Energía y el Futuro

4. Energia A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market. It is fungible, i.e. equivalent no matter who produces it. Examples are petroleum, notebook paper, milk or copper. A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market. It is fungible, i.e. equivalent no matter who produces it. Examples are petroleum, notebook paper, milk or copper.good qualitativedifferentiationmarket fungiblegood qualitativedifferentiationmarket fungible

5. Energia Se ha convertido en un riesgo por el aumento y la variación en el precio.

6. Energía y el Futuro The Future of Corporate Energy Management Global Business Network (GBN), a member of the Monitor Group, in cooperation with the U.S. Environmental Protection Agency (EPA), gathered senior executives from twenty major U.S. companies to consider the potential energy impacts that U.S. businesses may face over the next decade. Based on four plausible scenarios of the world in 2020, the report Energy Strategy for the Road Ahead identifies a set of strategies that will help businesses act now to prepare for future energy-related risks. Global Business Network (GBN), a member of the Monitor Group, in cooperation with the U.S. Environmental Protection Agency (EPA), gathered senior executives from twenty major U.S. companies to consider the potential energy impacts that U.S. businesses may face over the next decade. Based on four plausible scenarios of the world in 2020, the report Energy Strategy for the Road Ahead identifies a set of strategies that will help businesses act now to prepare for future energy-related risks.

7. Energía y el Futuro “As business leaders, it is essential that we plan for the future. Energy Strategy for the Road Ahead provides guidance to help companies prepare for future energy-related risks. Acting now just makes good business sense.” “As business leaders, it is essential that we plan for the future. Energy Strategy for the Road Ahead provides guidance to help companies prepare for future energy-related risks. Acting now just makes good business sense.” — Willie Deese, President, Merck Manufacturing Division, Merck & Co., Inc.

8. Energía y el Futuro Considering changes in global economic patterns and shifts in U.S. policy and regulation towards climate change as key factors that would affect the shape of the future ahead, the following four scenarios were created by the corporate executives who participated in the GBN workshops Considering changes in global economic patterns and shifts in U.S. policy and regulation towards climate change as key factors that would affect the shape of the future ahead, the following four scenarios were created by the corporate executives who participated in the GBN workshops

9. Escenarios para Planificar el Futuro The Same Road — where the world continues much in the same direction it appears to be going now in regard to energy and environmental concerns around climate change. The Long Road — where the world undergoes a significant shift in the economic, geopolitical and energy centers of gravity. The Broken Road — where the world continues much in the direction of today, but is then hit by a severe event that overturns established systems and rules. The Fast Road — where reasoned decisions and investments about energy and climate risk are made early enough to make a difference. Source: http://www.energystar.gov/index.cfm?c=business.bus_energy_strategy_future

10. Businesses leaders involved in the workshops were asked to explore the impacts of these four “road” scenarios on energy strategy and management in their companies. They identified five robust steps that companies should take to prepare for the future Businesses leaders involved in the workshops were asked to explore the impacts of these four “road” scenarios on energy strategy and management in their companies. They identified five robust steps that companies should take to prepare for the future

11. Plan para el Futuro  Master the fundamentals of energy efficiency.  Take both a longer and a broader view of investments and strategic decisions about energy.  Search out business transformation opportunities in the way the company manages, procures, and uses energy.  Prepare contingent strategies for emergent future scenarios.  Take personal action.   Source: http://www.energystar.gov/index.cfm?c=business.bus_energy_strategy_future

12. Energy Conservation Vs. Energy Efficiency

13. Energy conservation is any behavior that results in the use of less energy – behavioral change. Energy efficiency is the use of technology that requires less energy to perform the same function – technological change.

14. Energy efficiency is defined as using less energy to provide the same level of service. Some examples of energy efficiency are better insulation of buildings, using energy saving light bulbs, buying cars with better gas mileage. Energy efficiency is achieved primarily by means of a more efficient technology or processes rather than by radical changes in individual behavior.

15. Energy Savings Performance Contract

16. ¿What is an Energy Savings Performance Contract? An ESPC is a partnership between a Federal agency and an energy service company (ESCO). The ESCO conducts a comprehensive energy audit for the Federal facility and identifies improvements to save energy. In consultation with the Federal agency, the ESCO designs and constructs a project that meets the agency's needs and arranges the necessary financing.. An ESPC is a partnership between a Federal agency and an energy service company (ESCO). The ESCO conducts a comprehensive energy audit for the Federal facility and identifies improvements to save energy. In consultation with the Federal agency, the ESCO designs and constructs a project that meets the agency's needs and arranges the necessary financing.. Source: http://www1.eere.energy.gov/femp/financing/espcs.html

17. What is an Energy Savings Performance Contract? Energy Savings Performance Contracting (ESPC) is a method for developing and implementing a comprehensive project, which may include energy efficiency, renewable energy, distributed generation, cogeneration or combined heat and power, and/or water efficiency measures. Energy Savings Performance Contracting (ESPC) is a method for developing and implementing a comprehensive project, which may include energy efficiency, renewable energy, distributed generation, cogeneration or combined heat and power, and/or water efficiency measures.http://www1.eere.energy.gov/wip/solutioncenter/financialproducts/ESPC.html

18. What is an Energy Savings Performance Contract? A performance-based procurement method and financial mechanism for building renewal whereby utility bill savings that result from the installation of new building systems (reducing energy use) pay for the cost of the building renewal project. A performance-based procurement method and financial mechanism for building renewal whereby utility bill savings that result from the installation of new building systems (reducing energy use) pay for the cost of the building renewal project. Source: http://energyperformancecontracting.org/

19. ¿Como funciona? A planning agreement is signed A planning agreement is signed An IGA is performed An IGA is performed Owners approves measures Owners approves measures An ESA is signed An ESA is signed The project is implemented The project is implemented M&V Verification are performed M&V Verification are performed Payments are made to financier Payments are made to financier Annual reconciliation Annual reconciliation Source: Performance Contracting Expanding Horizons, Shirley J. Hansen

20. Métodos para manejar los ahorros Ahorros Compartidos Vs. Ahorros Garantizados

21. Flujo de Efectivo CLIENTE ESCO BANCO Ahorros Compartidos Source: Performance Contracting Expanding Horizons, Shirley J. Hansen Loan PaymentFinancing Share of Savings Contracted Services

22. Ahorros Compartidos Customer and Esco share a predetermined % split of the energy cost savings Customer and Esco share a predetermined % split of the energy cost savings ESCO carry the financing risk ESCO carry the financing risk Financing for the customer is often off balance sheet Financing for the customer is often off balance sheet Equipment is owned by the ESCO Equipment is owned by the ESCO ESCO carry performance and credit risk ESCO carry performance and credit risk The economic feasibility rests on the price of energy The economic feasibility rests on the price of energy Source: Performance Contracting Expanding Horizons, Shirley J. Hansen

23. Flujo de Efectivo Ahorros Garantizados BANCOESCO CLIENTE Source: Performance Contracting Expanding Horizons, Shirley J. Hansen Contracted Services Savings Guaranteed Loan Payment Financing

24. Ahorros Garantizados The amount of energy saved is guaranteed. The amount of energy saved is guaranteed. Value of energy saved is guaranteed to meet debt service obligations down to a stipulated floor price. Value of energy saved is guaranteed to meet debt service obligations down to a stipulated floor price. Owner carry the credit risk. Owner carry the credit risk. Risks to owners and ESCOs are less than with shared savings. Risks to owners and ESCOs are less than with shared savings. Source: Performance Contracting Expanding Horizons, Shirley J. Hansen

25. Presupuesto Anual

26. Flujo de efectivo Before ESPC During ESPC Energy + O&M Energy + O&M ESCO Payment Savings Total Energy + O&M Cost Savings Agency Cash flow ($)

27. Flujo de Efectivo Ajustado Before ESPC During ESPC Energy + O&M Agency Cash flow ($) weather, energy prices, etc. Savings + Equip performance, model assumptions, etc. Energy + O&M = ESCO Payment + Typically fixed Energy + O&M ESCO Payment =

28. Comparación de Métodos

31. Case Study

32. Doctors’ Center Hospital Inc. Carretera #2 Km 47.7 Manati, PR 00674

33. Metas del Proyecto Reduced energy consumption and operating costs Reduced energy consumption and operating costs Provide a healthy, safe and comfortable environment Provide a healthy, safe and comfortable environment Improve hospital patient and guest comfort Improve hospital patient and guest comfort Provide a long term plan for preventive and repair maintenance Provide a long term plan for preventive and repair maintenance Enhance personnel development and training Enhance personnel development and training Provide financial solutions with guaranteed results Provide financial solutions with guaranteed results Provide 25% extra cooling capacity for future expansion Provide 25% extra cooling capacity for future expansion Provide over $301 thousand dollars of positive yearly cash flow Provide over $301 thousand dollars of positive yearly cash flow

34. Perfil del Hospital 220 Camas 220 Camas 250,000 pies cuadrados 250,000 pies cuadrados 11,416,680 Kwhrs por año 11,416,680 Kwhrs por año Total de galones anuales-8,459,558 Total de galones anuales-8,459,558 Empleados 990 Empleados 990 Visitantes Diarios 525 Visitantes Diarios 525 365 Dias 365 Dias

35. Perfil del Hospital Tarifas Electricas 1er Bloque $0.028/kwh 1er Bloque $0.028/kwh 2do Bloque $0.024/kwh 2do Bloque $0.024/kwh Carga Contratada 1,100 Kva Carga Contratada 1,100 Kva Costo Carga Contratada $7.70/Kva Costo Carga Contratada $7.70/Kva Costo Exceso $9.60/Kva Costo Exceso $9.60/Kva Costo de Energia$0.035/kwh Costo de Energia$0.035/kwh Costo de combustible$0.124/kwh Costo de combustible$0.124/kwh

36. Perfil del Hospital Costos de Agua Potable Fijo$274.96 Fijo$274.96 Bloque 1$2.80/mc Bloque 1$2.80/mc Bloque 2$2.93/mc Bloque 2$2.93/mc Bloque 3$3.50/mc Bloque 3$3.50/mc

37. Technical Solution ECM 1: HVAC Improvements ECM 1: HVAC Improvements ECM 2: Lighting Retrofit ECM 2: Lighting Retrofit ECM 3: Domestic Water Retrofit ECM 3: Domestic Water Retrofit ECM 4: Energy Management System ECM 4: Energy Management System

38. ECM 1: HVAC Improvements

41. 1.1Replace Air-Cooled Chiller with Energy Efficient Chiller The air-cooled chillers currently serving the Main Hospital, Emergency Center and Dialysis Center are not energy efficient. The units serving the Emergency Center and the ICU area are past their expected useful lives. Although the units serving the surgical units and portions of the main hospital are only 10 years old, the measured energy efficiency of these units is poor. The air-cooled chillers currently serving the Main Hospital, Emergency Center and Dialysis Center are not energy efficient. The units serving the Emergency Center and the ICU area are past their expected useful lives. Although the units serving the surgical units and portions of the main hospital are only 10 years old, the measured energy efficiency of these units is poor.

42. ECM 1: HVACImprovements Demolish two (2) 50-ton air-cooled chillers, associated chill water pumps, and associated de- super heater units serving the ICU Area. These units were located on the roof the ICU center. Demolish two (2) 50-ton air-cooled chillers, associated chill water pumps, and associated de- super heater units serving the ICU Area. These units were located on the roof the ICU center.

43. ECM 1: HVACImprovements Demolish 80-ton air-cooled chiller, associated chilled water pumps, and associated de-super heater units serving the Emergency Center. This unit is located adjacent to the engineering building between the Emergency Center and the main hospital building. Demolish 80-ton air-cooled chiller, associated chilled water pumps, and associated de-super heater units serving the Emergency Center. This unit is located adjacent to the engineering building between the Emergency Center and the main hospital building.

44. ECM 1: HVACImprovements Demolish Existing Pumps serving 125-tons chillers located adjacent to new surgical building. Demolish Existing Pumps serving 125-tons chillers located adjacent to new surgical building.

45. ECM 1: HVACImprovements Demolish existing pumps serving 100-tons chillers located on roof of new patient rooms Demolish existing pumps serving 100-tons chillers located on roof of new patient rooms

46. ECM 1: HVACImprovements Install one (1) 270-ton air cooled high efficiency chiller with a variable frequency drive to be located in same area as existing 80 ton unit. Install one (1) 270-ton air cooled high efficiency chiller with a variable frequency drive to be located in same area as existing 80 ton unit.

47. ECM 1: HVACImprovements Replace Air Cooled Direct Expansion Coils with Chilled Water Coils Replace Air Cooled Direct Expansion Coils with Chilled Water Coils Several roof mounted air handlers have been removed from the chilled water system and have had direct expansion coils installed in their place. Additionally, as cooling requirements have increased at the facility, due to expansion, roof mounted direct expansion packaged units have been installed to serve the increased loads. In order to increase the energy efficiency of the cooling systems, the DX coils were replace in the roof mounted air handler units with chill water coils. Several roof mounted air handlers have been removed from the chilled water system and have had direct expansion coils installed in their place. Additionally, as cooling requirements have increased at the facility, due to expansion, roof mounted direct expansion packaged units have been installed to serve the increased loads. In order to increase the energy efficiency of the cooling systems, the DX coils were replace in the roof mounted air handler units with chill water coils. Replace existing DX coil in air handler AHU-82 serving the Admissions area. Replace existing DX coil in air handler AHU-82 serving the Admissions area. Replace existing DX coil in air handler AHU-84 serving the Admissions area. Replace existing DX coil in air handler AHU-84 serving the Admissions area. Replace existing DX coil in air handler AHU-31 serving the Old ER area. Replace existing DX coil in air handler AHU-31 serving the Old ER area. Replace existing DX coil in air handler AHU-49 serving the ER Lounge area. Replace existing DX coil in air handler AHU-49 serving the ER Lounge area. Replace existing DX coil in air handler AHU-73 serving the Laboratory area. Replace existing DX coil in air handler AHU-73 serving the Laboratory area. Replace existing DX coil in air handler AHU-42 serving the Nursery area. Replace existing DX coil in air handler AHU-42 serving the Nursery area. Replace existing DX coil in air handler AHU-48 serving the Pediatrics area. Replace existing DX coil in air handler AHU-48 serving the Pediatrics area.

48. ECM 1: HVACImprovements

49. Install Primary-Secondary Chill Water Pumping System Install Primary-Secondary Chill Water Pumping System The existing chilled water pumping system is a constant volume pumping system. The existing chilled water pumping system is a constant volume pumping system. In this type of arrangement, chilled water is bypassed around the chill water coils when chilled water loads are below design capacity. In this type of arrangement, chilled water is bypassed around the chill water coils when chilled water loads are below design capacity.

50. ECM 1: HVACImprovements Chilled water returning to the chiller is lower than design conditions in this arrangement. Chilled water returning to the chiller is lower than design conditions in this arrangement. This has a negative effect on the efficiency of the chilled water system. This has a negative effect on the efficiency of the chilled water system. Additionally, the energy consumed by the chilled water pumps is constant, regardless of the system cooling load. Additionally, the energy consumed by the chilled water pumps is constant, regardless of the system cooling load. A primary, secondary pumping system allows the power used in the chill water distribution to modulate with the system cooling load, resulting in reduced power consumption A primary, secondary pumping system allows the power used in the chill water distribution to modulate with the system cooling load, resulting in reduced power consumption

51. ECM 1: HVACImprovements Demolish all existing chilled water pumps serving the Main Hospital, Emergency Center and Dialysis Unit. Demolish all existing chilled water pumps serving the Main Hospital, Emergency Center and Dialysis Unit.

52. ECM 1: HVACImprovements Install a new primary chilled water pumps for: Install a new primary chilled water pumps for: Existing (2) 125-tons chillers Existing (2) 125-tons chillers Existing (2) 100-tons chillers Existing (2) 100-tons chillers New (1) 270 tons chiller New (1) 270 tons chiller

53. ECM 1: HVACImprovements Install new, secondary pumps with variable frequency drives to serve existing chilled water distribution systems currently served independently by existing chillers. Install new, secondary pumps with variable frequency drives to serve existing chilled water distribution systems currently served independently by existing chillers.

54. ECM 1: HVACImprovements Install new, secondary piping loop for units currently being served by DX coils that are being changed to chilled water coils. Install new, secondary piping loop for units currently being served by DX coils that are being changed to chilled water coils.

55. ECM 1: HVACImprovements Replace all existing 3-way control valves on air handlers and fan coil units with new 2-way control valves. Replace all existing 3-way control valves on air handlers and fan coil units with new 2-way control valves.

56. ECM 2: Lighting Retrofit

57. Existing Lighting System

58. ECM 2: Lighting Retrofit Proposed Lighting Solutions

59. ECM 2: Lighting Retrofit Relamp- Reballast The existing lamps and ballasts inside the fixture will be replaced with new T8 lamps and high-efficiency instant-start electronic ballasts. The existing lamps and ballasts inside the fixture will be replaced with new T8 lamps and high-efficiency instant-start electronic ballasts.

60. ECM 2: Lighting Retrofit Delamp- Reballast with Reflector (for linear fluorescent recessed troffers) The existing lamps and ballasts in the fixture were replaced with new T8 lamps, high-efficiency instant- start electronic ballasts, and a high-reflectivity reflector. The existing lamps and ballasts in the fixture were replaced with new T8 lamps, high-efficiency instant- start electronic ballasts, and a high-reflectivity reflector. The fixture were de-lamped, typically from four to two lamps. The fixture were de-lamped, typically from four to two lamps. The existing fixture housing remained in place and were not relocated or replaced. The existing fixture housing remained in place and were not relocated or replaced.

61. ECM 2: Lighting Retrofit Conversion Kit (for linear fluorescent strips and hooded industrials) The existing fixture were stripped down to the C-Channel that contains the ballast. A new metal ballast cover with new sockets allow the use of 4’ T8 lamps. The existing fixture were stripped down to the C-Channel that contains the ballast. A new metal ballast cover with new sockets allow the use of 4’ T8 lamps. In some cases when overlighted conditions exist, the fixture were de-lamped to capture additional energy savings. In some cases when overlighted conditions exist, the fixture were de-lamped to capture additional energy savings. The new conversion kit retrofit may have an added reflector hood, depending on the specification. The new conversion kit retrofit may have an added reflector hood, depending on the specification. The existing fixture housing will remain in place and will not be relocated or replaced. The existing fixture housing will remain in place and will not be relocated or replaced.

62. ECM 2: Lighting Retrofit Compact Fluorescent: Screw-in The existing incandescent lamp were replaced with a self-ballasted compact fluorescent lamp that produces similar light levels using approximately ¼ the wattage. The existing incandescent lamp were replaced with a self-ballasted compact fluorescent lamp that produces similar light levels using approximately ¼ the wattage.

63. ECM 3: Domestic Water Retrofit Toilets: Toilets: Replace (18) existing inefficient model toilet bowls with exposed flush valves with new (or equivalent) 1.6 gpf china and new 1.6 gpf flushometer valves. Replace (18) existing inefficient model toilet bowls with exposed flush valves with new (or equivalent) 1.6 gpf china and new 1.6 gpf flushometer valves. Replace (16) existing inefficient model flush valves with new 1.6 gpf flushometer valves; (these units are presently installed on efficient 1.6 gpf model toilet bowls). Replace (16) existing inefficient model flush valves with new 1.6 gpf flushometer valves; (these units are presently installed on efficient 1.6 gpf model toilet bowls). Replace (13) existing inefficient model tank-toilets with (or equivalent) 1.6 gpf china tank/bowl combination units. Replace (13) existing inefficient model tank-toilets with (or equivalent) 1.6 gpf china tank/bowl combination units.

64. ECM 3: Domestic Water Retrofit Urinals: Replace (4) wash-out type exposed urinal flush valves with new 1.0 gpf flushometer valves. Replace (4) wash-out type exposed urinal flush valves with new 1.0 gpf flushometer valves.

65. ECM 3: Domestic Water Retrofit Faucets: Replace (106) existing aerators installed on Common- Area Restroom sinks with new 0.5 gpm tamper resistant faucet restrictors and applicable adaptors. Replace (106) existing aerators installed on Common- Area Restroom sinks with new 0.5 gpm tamper resistant faucet restrictors and applicable adaptors. Replace (147) existing aerators installed on Patient-Area Restroom & Exam Room sinks with new 1.0 gpm tamper resistant faucet restrictors and applicable adaptors. Replace (147) existing aerators installed on Patient-Area Restroom & Exam Room sinks with new 1.0 gpm tamper resistant faucet restrictors and applicable adaptors. Replace (12) existing aerators installed on Kitchen sinks with new 1.5 gpm tamper resistant faucet restrictors and applicable adaptors. Replace (12) existing aerators installed on Kitchen sinks with new 1.5 gpm tamper resistant faucet restrictors and applicable adaptors.

66. ECM 3: Domestic Water Retrofit Showers: Replace (78) existing showerheads installed on threaded shower arm in Patient areas with new 2.0 gpm pressure-compensating showerheads and applicable adaptors. Replace (78) existing showerheads installed on threaded shower arm in Patient areas with new 2.0 gpm pressure-compensating showerheads and applicable adaptors. Install (10) inline flow controller, 2.0 gpm (brass body) into existing hand-held showerheads installed in Patient areas. The showerhead, hose and rail assembly were not replaced. Install (10) inline flow controller, 2.0 gpm (brass body) into existing hand-held showerheads installed in Patient areas. The showerhead, hose and rail assembly were not replaced.

67. ECM 4: Energy Management System Will furnish and install an automatic temperature control system Will furnish and install an automatic temperature control system

68. ECM 4: Energy Management System Occupancy scheduling Occupancy scheduling Many areas of the facility are not continuously occupied. The mechanical equipment serving these areas were put on schedules to allow the units to operate in an unoccupied mode. Many areas of the facility are not continuously occupied. The mechanical equipment serving these areas were put on schedules to allow the units to operate in an unoccupied mode. In this mode, the fans will be allowed to cycle on and off to maintain temperatures in the spaces. In this mode, the fans will be allowed to cycle on and off to maintain temperatures in the spaces. Energy savings is achieved through reduced fan motor run time, reduced chilled water demand and reduced heating requirements. Energy savings is achieved through reduced fan motor run time, reduced chilled water demand and reduced heating requirements.

69. ECM 4: Energy Management System Unoccupied temperature setback Unoccupied temperature setback During unoccupied periods, space temperatures do not need to be maintained at levels intended to achieve occupant comfort (as there are no occupants during these periods). During unoccupied periods, space temperatures do not need to be maintained at levels intended to achieve occupant comfort (as there are no occupants during these periods). The control system can automatically change the temperature set points during these periods to a setback level. The control system can automatically change the temperature set points during these periods to a setback level. Energy savings is achieved through reduced chilled water demand and reduced heating requirements. Energy savings is achieved through reduced chilled water demand and reduced heating requirements.

70. Resultados Finales Reduccion anual de electricidad-2,657,549 Kwh Reduccion anual de electricidad-2,657,549 Kwh Uso previo anual de electricidad-11,416,680 Kwh Uso previo anual de electricidad-11,416,680 Kwh Reducción annual-23% de consumo Reducción annual-23% de consumo

71. Resultados Finales Consumo anual de agua antes- 8,450,558 Consumo anual de agua antes- 8,450,558 Consumo anual de agua despues-4,888,134 Consumo anual de agua despues-4,888,134 Reducción en consumo de agua-3,575,424 galones Reducción en consumo de agua-3,575,424 galones Reduccion en consumo de agua-42.3% Reduccion en consumo de agua-42.3%

72. Resultados Finales Emisiones anuales de 365 vehiculos Emisiones anuales de 365 vehiculos 214,896 libras de CO2 provenientes de gasolina consumida 214,896 libras de CO2 provenientes de gasolina consumida

73. Resultados Financieros

74. Preguntas

75. Gracias!!

76. Información de Contacto Juan Carlos Patiño Peralta, MBA,PE,CEM,PMP,LEED AP juan.patino@honeywell.com787-247-1041