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Why Energy Efficiency? Steve Baab, Manager Business Programs June 22 nd, 2010.

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Presentation on theme: "Why Energy Efficiency? Steve Baab, Manager Business Programs June 22 nd, 2010."— Presentation transcript:

1 Why Energy Efficiency? Steve Baab, Manager Business Programs June 22 nd, 2010

2 ComEd Profile Energy delivery company 3.8 Million Customers 11,400-square-mile territory Northern 1/3 of Illinois including Chicago Metro Area 90,000 miles of power lines

3 Agenda Overview of Energy Efficiency Smart Ideas for Your Business Types of Projects Barriers / Benefits of Energy Efficiency How to get started

4 National Energy Efficiency Potential McKinsey & Company Study-Unlocking Energy Efficiency in the U.S. Economy* –A $520 Billion investment in efficiency measures would yield $1.2 trillion in gross energy savings by 2020 Lawrence Berkeley National Lab - U.S. Building-Sector Energy Efficiency Potential* –1/3 of Business as usual electric consumption can be saved at a cost of $02.7/kWh –2.5 year simple payback –Savings at 3.5 times larger than the investment required *McKinsey & Company. Unlocking Energy Efficiency in the U.S. Economy. July 2009 *U.S Building Sector Energy Efficiency Potential. Lawrence Berkeley National Laboratory. University of California. Berkeley, California 94720U.S. For the Environmental Protection Agency, Climate Protection Partnerships Division, Office of Air and Radiation, under U.S. Department of Energy Contract No. DE-AC02-05CH11231. Overview

5 Ratepayer energy efficiency programs continue to expand throughout the States, adding funds annually. Source: The 2008 State Energy Efficiency Scorecard - ACEEE Overview

6 Smart Ideas for Your Business

7 What is the Smart Ideas Program? Provides incentives for energy efficiency upgrades and equipment Part of Illinois energy legislation passed in 2007 Program implemented by ComEd, Ameren Illinois, and the Illinois Department of Commerce and Economic Opportunity ComEd Goal: Reduce energy consumption by 1.2 million MWh (over 3 years) Smart Ideas * Estimated based on planning projections

8 Funding for Energy Efficiency as a Percent of Utility Revenues Source: American Council for an Energy-Efficient Economy, September 2007 Smart Ideas

9 Residential Solutions Business Solutions Public and Low- Income Solutions ComEdDCEO ComEd and DCEO manage different portions of the energy efficiency portfolio –Funding Split: 75% for ComEd programs and 25% for DCEO programs. –Sector Split: ComEd – Private Sector; DCEO- Public Sector and Low- Income. Smart Ideas

10 What Does Smart Ideas Include? Incentives Prescriptive Custom Retro-commissioning (Low Cost / Operational) Commercial Building Compressed Air New Construction Retro-commissioning Data Services Energy Insights Online ENERGYSTAR benchmarking Fuel switching Solar / Wind projects (other incentives available) Residential applications (other incentives available) Onsite Generation Peak Shifting Ineligible Measures Smart Ideas

11 Prescriptive and Custom Incentives Incentives for popular prescriptive projects: –Exit signs $20 per sign –T5/T8 fixture with ballast30¢ per watt reduced –Occupancy sensor lighting9¢ per connected watt controlled –Motors$7 for 1 HP to $450 for 200 HP Incentives for custom projects: 3-7¢ per kWh saved –Motors larger than 200 HP –VFDs on process motors –New compressed air systems, compressed air sequencing –Combine process chilled water systems –Free-cooling for process chilled water –Ground-loop heat pump for process cooling Smart Ideas

12 Think about Motors and Drives Over half of the electric energy consumed in the US is used by electric motors. Electric motors systems account for almost 70% of manufacturing sector electricity consumption. A heavily-used motor may cost six to ten times its purchase price to operate per year. NEMA Premium-efficiency motors operate at 1% to 4% higher efficiency than EPACT motors NEMA Premium becomes the federal standard Dec. 19 th, 2010 Smart Ideas

13 Consider Retro-Commissioning for Compressed Air Two system-size tracks –500 HP and larger – traditional retro- commissioning –100-499 HP Rebate-based approach to study and implementation Begins in June Low- and no-cost measures – detailed analysis –Controls optimization Scheduling Sequencing –End-use analysis –Leak identification Capital improvements – opportunity identification Visit Smart Ideas

14 Types of Projects

15 Who Is Implementing Energy Efficiency Projects? Types of Projects

16 Types of Energy Efficiency Projects Types of Projects

17 Armacell LLC Combined two distinct process chilled water systems Added heat exhanger Reduced number of pumps Added controls and VFDs 1,596,269 kWh projected annual energy savings $248,523 total project cost $100,000 Smart Ideas incentive Payback 1.7 years with incentive Visit Types of Projects

18 Conrad Hotel 311-guestroom luxury hotel HVAC Total project cost: $136,942 Projected annual energy savings: 465,138 kWh Incentives paid: $32,560 Payback period without incentive: About 3 years Payback period with incentive: 18 months Types of Projects

19 Chicago History Museum Building size: 235,000 square feet Measures implemented: Retro- commissioning Incentives paid: $89,436 Annual energy savings: 491,754 kWh Annual energy cost savings: $40,200 Total project cost: $11,400 Payback period Less than 4 months Types of Projects

20 Barriers to Energy Efficiency

21 What Holds Customers Back Availability of capital –Cost of capital –First cost –Credit and collateral issues Payback/ROI requirements –Payback period of less than three years typical Barriers

22 Benefits of Energy Efficiency

23 Energy Efficiency’s Triple Bottom Line Environment “Going Green” image boost Energy performance Stewardship Corporate sustainability initiatives LEED initiatives, both retrofit and new Benefits People Saving jobs Creating jobs Building environment Dollars Financial performance Capital expenditures Comfort Space conditioning Quality of work environment Savings Process improvements Deferred maintenance

24 Average ComEd Project Changing 400 watt MH lighting to linear fluorescent (6LT8HO) Changing 100 fixtures Total project cost (ComEd project data) = $1.10 per watt reduced or $26,070 Incentive = $7,110 Energy Savings is $11,376 per year Payback is 20 months with incentive (27.5 without) Types of Projects

25 Project Economics Over Time * Benefits Most people focus on the payback… …and ignore the potential long term savings! * Fixtures last over 10 years, while lamps need to be replaced after 5 years Replace lamps

26 A Look at the Numbers: (The red area) Lighting system upgrade:$26,070 Less Smart Ideas incentive:( 7,110) Net investment:$18,960 Monthly electric bill:$10,000 Savings achieved by upgrade:( 948) Net electricity bill with upgrade:$ 9,052 Return on investment analysis: $948 x 20 months of savings: $18,960 $948 x 20 monthly payments: $18,960 Net costs over investment period:$ 0 Benefits

27 How the Savings Continue (The green area) At a measure life of five years*, the monthly utility bill savings that continue from month 21 to month 60 represent an additional $37,920 $948 savings x 40 months = $37,920 Assuming 4,800 hours/annually 4800/year x 5 years = 24000 hours (average life for a 4-ft T8 lamp) A $18,960 investment made today pays for itself from savings in 20 months and yields an additional $37,920 in savings over the next 40 months. * Lamps would likely need replacing after five years Benefits

28 The Results The customer gets a new lighting system with better performance and lower maintenance costs. The $37,920 represents pure profit for the customer. How many “widgets” would they have to sell to achieve $37,920 in profit? Profit is realized from making the right decision about energy efficiency without having to make or sell any more product! Benefits

29 How to Get Started

30 Engage an energy specialist that will visit your business, conduct an assessment and provide a complete proposal showing return on investment and savings potential Contact your ComEd Account Manager Contact your trade ally or consultant Think about “high hours of use” processes that may mean additional, significant kilowatt reduction opportunities. Are you tracking energy-savings opportunities or measures you already completed at your facility? Where to Start Getting Started

31 What are Smart Ideas Trade Allies? –Contractors, engineers, energy service companies (ESCOs), or equipment vendors that sell and install energy efficient technology measures and have successfully completed training for program participation. Why work with a Smart Ideas Trade Ally? –Familiar with the process and forms –Committed to energy efficiency Find Trade Allies at Smart Ideas Trade Allies Getting Started

32 Technology Fact Sheets How to Apply Compressed Air Motors and Drives HVAC Food Service Lighting –LED Lighting –Outdoor –Calculating Savings Refrigeration Retro-commissioning Project suggestions Visit Getting Started

33 Program questions (888) 806-2273 Fax: 1-630-480-3436 Program information Application forms Policy and Procedures Manual DCEO information For Answers to Your Questions Getting Started

34 Questions

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