Appendix 2
Comparison of Savings in Each Facility
NORTH BATTLEFORD ENERGY MANAGEMENT PROJECT
The North Battleford Energy Management Project was a three-year innovative financing project in the City of North Battleford, Saskatchewan. The project targeted electricity and natural gas use in 10 municipal buildings, and also included training of facility managers and other employees and evaluation of employee awareness of energy conservation.
The Saskatchewan
Environmental Society (SES) managed and monitored the project on behalf of the
City and other stakeholders. SES also
provided the “in-service” training in energy conservation. Five other stakeholders: SaskPower, SaskEnergy, Saskatchewan Energy
and Mines, the Saskatchewan Energy Conservation and Development Authority, and
Natural Resources Canada – provided funding for building audits and project
evaluation.
The project used an
innovative “savings reinvestment” approach to financing. Starting with low cost measures the first year,
60% of the savings generated from each year’s energy conservation measures were
reinvested in new retrofits the next year.
Of the remaining 40% of savings, the City, the other 10% going to SES,
retained 30%, for other uses.
Year 1 of the project ran
from January 1, 1995 to December 31, 1995.
Savings measures consisted mostly of low cost/no cost measures such as
de-lamping and improvements in building management. Savings achieved were $18,000 for an investment of $6700.
Year 2 ran from July 1, 1996
to June 30, 1997. An additional $23,000
was invested, increasing the savings for the 12 month period to $44,000. Measures in Year 2 included major lighting
retrofits, upgrading of electric motor and pump/fan efficiency, replacement and
upgrading of heating systems, and addition of insulation and heating control
systems. A six month delay in starting
Year 2 was provided to allow major retrofits and the measures remaining from
Year 1 to be undertaken.
Year 3 began on September 1,
1997 and included additional lighting retrofits and building improvements. Investment costs in Year 3 were $23,000,
which increased the annual savings to approximately $50,000 per year. The final savings represented a reduction of
18.4% in electricity costs and 19.6 in natural gas costs. Savings remaining in the project’s
“retrofit” fund at the end of Year 3 were also used to finance additional
retrofit measures after the end of the project.
While the savings achieved
were not quite as high as could have been obtained using a performance
contracting approach, and the retrofits were spread over a three and a half
year period, the final costs were much lower.
A cost/benefit analysis of
the project showed that the rate of return for the City of North Battleford was
over 100%. If the cost of the energy
audit, employee training, and project management were also included, the rate
of return for the City would have been positive by the second year of the
project.
The savings in gas and
electricity by the City are equivalent to a permanent reduction of 560 tonnes
per year of greenhouse gases, and smaller reductions in sulfur and nitrogen
oxides and particulates.
City staff responsible for
maintenance of each facility participated actively in the project, and helped
to identify many of the changes in facility operations and events which
affected gas and electricity use throughout the four years of the program. By the end of the project there was also an
improved attitude toward energy efficiency among City employees and energy
conserving behavior appeared to be well established at home.
The project provided City
Council and managers with a new positive perspective on energy management. City Council has approved the investment of
all of the remaining savings from the retrofit fund in additional retrofits,
and approved retrofit work on other facilities such as street lighting and
water pumping facilities that were not included in the original project.
The project showed that the savings reinvestment/education approach used in the City of North Battleford could be applied in any public or private facility where:
·
Several buildings are involved and there is more than one type of
facility.
·
Energy management project costs are too low to attract energy service
companies, i.e.; < $250,000.
·
There is adequate technical or custodial staff to coordinate and manage
retrofits, and assess savings and costs.
·
Annual budgets for energy can be kept reasonably constant for the 3 to
4 year period required for the project.
·
There is effective “buy-in” by senior management or councils.
Examples include small
municipalities, health care facilities, educational institutions and colleges,
industrial parks, condominiums, etc.
Some modifications to the
savings reinvestment model are suggested, including a retrofit plan matched to
facility schedules, budget cycle, and staff allocation; and a better method for tracking costs and
savings as the project processes to allow more frequent decisions on retrofits. It would also be useful to have annual
refresher courses for maintenance and operating staff, energy management guides
for new employees, and annual sessions to review the project progress with all
staff.
The North Battleford Energy Management project grew out of the successful Destination Conservation (DC) Project for schools run in Saskatchewan by the Saskatchewan Environmental Society (SES). The DC program combines education, practical energy savings measures, and innovative financing. Savings from one year’s investment in energy management are re-invested in further retrofits. Limiting the first year measures to low cost/no cost measures, and running the program for three years acheive significant savings achieved without any capital investment.
In 1994, the City of North
Battleford approached SES to see if they would be interested in applying the
concept to municipal facilities. North
Battleford has several large multi-purpose buildings, but its energy budget is
not large enough to consider the use of energy performance contracting. The savings retirement concept appeared to
be ideally suited to the City and would also have lower transaction costs.
Several other stakeholders
who saw the project as a pilot demonstration of the reinvestment concept joined
SES and the City. These stakeholders
included SaskPower, SaskEnergy, Saskatchewan Energy and Mines, the Saskatchewan
Energy Conservation and Development Authority, and Natural Resources Canada.
From the start of the
project, City Council in North Battleford were in full support of the project,
and agreed to the transfer of operational savings from one year to the capital
investment budget of the subsequent year.
This “buy-in” by Council was crucial to the success of the project.
The savings reinvestment concept applied in the North Battleford project was as follows:
·
At the start of the project, a series of low cost/no cost measures were
implemented costing less than the estimated annual savings (payback < 1
year).
·
At the end of Year 1, the net savings from Year 1 were allocated as
follows: 60% to a “retrofit fund” to be
carried over for capital investment, for Year 2; 10% to the Saskatchewan Environmental Society, with the remaining
30% providing a cost reduction to the City.
·
In Year 2, the savings allocated to the retrofit fund from Year 1 were
invested in a more capital-intensive series of retrofits. At the end of Year 2, the savings were
allocated as in Year 1.
·
In Year 3, a final series of retrofits were financed from the retrofit
fund. At the end of Year 3, the savings
were allocated as in Years 1 and 2.
·
The funds remaining in the retrofit fund at the end of the project were
used by the City for additional retrofits, thus reinvesting 60% of all three
years of savings in energy savings measures.
Using this concept, the City achieved some immediate savings (30% of annual savings), and after the three year project was completed, enjoyed a significant drop in electricity and gas costs. By reinvesting the savings from year to year, energy savings measures with more than a three year payback could be included in the overall retrofit plan. This significantly increased the possible savings compared to a conventional project in which there is a low payback limit. The reinvestment concept also directly involves building operator and maintenance staff, and also improves employee awareness and operator management skills.
The roles and contributions
of the Stakeholders in the North Battleford Energy Management Project were as
follows:
City of North Battleford: City Council endorsed the project in 1994,
contributing $8,400.00 seed money for project administration and audit of the
facilities, and assigning responsibility for project management to city staff.
Saskatchewan Energy
Conservation and Development Authority: SECDA designed the employee questionnaire, contributed $1,000.00
towards the cost of project administration, and until 1996, provided services
to monitor annual savings, evaluate project progress, and produced an annual
monitoring report.
SaskPower and SaskEnergy: Contributed $9,200.00 and $5,000.00
respectively towards the cost of the audit of City facilities.
Natural Resource Canada: Contributed $2,000.00 towards the cost of
project administration.
The project’s overall schedule is shown in Table 1. The original intention had been to implement the measures planned for a given year at the beginning that year. It was found, however, that facility retrofits often had to be coordinated with the varying uses of each facility, and most retrofits had to be implemented over a period of up to six months. For this reason, the project “years” for savings reinvestment purposes were as follows:
Year 1: January 1995 – December 1995
Year 2: July 1996 – June 1997
Year 3: September 1997 – August 1998
The City of North Battleford chose the following 10 buildings for the project:
1.
City Hall
2.
The Civic Centre-a multi-purpose arena complex.
3.
The Don Ross Centre-a multi-purpose education/office complex.
4.
The Agriplex
5.
The Allan Sapp Gallery
6.
The RCMP Station
7.
The Municipal Swimming Pool
8.
The Lions Club Building[1]
9.
A Greenhouse facility
10. A Parks Workshop
Kelln Consulting of Lumsden,
Saskatchewan carried out energy audits of these facilities. The audit covered lighting, heating and
cooling equipment, control systems, and facility building shell improvements
that would reduce energy use. Measures
with potential to reduce energy costs were divided into three categories:
·
No-cost measures such as operating procedures and de-lamping.
·
Low cost measures with less than one year payback.
·
Measures which provided significant electricity or gas savings with
paybacks between 2 and 5 years.
Using these measures, a
three-year retrofit investment plan was developed by the audit contractor that
would allow the agreed savings allocation and reinvestment formula to be
applied. Sixty percent of savings would
be assigned to a “retrofit fund” at the end of each year of the investment
program, and the investment each year would not be greater than the retrofit
fund plus the savings expected in that year.
This would maintain a positive cash flow at all times for the City.
The results of the energy
audit and the original retrofit plan are given in Appendix 1. The total cost of the audit and retrofit
plan was $17,550.00, plus $2,800.00 for travel and accommodation for a total of
$20,350.00.
Early 1994 |
City decided which
municipal facilities should be included in the project |
|
April
1994 |
Audit of electricity and
gas using equipment carried out in each facility |
|
August
1994 |
Completion of 3-year energy
management plan, including operational improvements, retrofits, and equipment
replacement. Under the plan, the
investment cost in each year would be paid out of the savings in that year,
plus any savings remaining from previous years. |
|
August
1994 to December
1994 |
Implementation of Year 1
measures, primarily “low cost/no cost” measures such as de-lamping and
improvements in building management. |
|
September
1994 |
Questionnaire administered
to City employees to assess awareness of energy conservation before the
project started. |
|
October
1994 |
Full day workshop with
personnel involved in facilities management to introduce energy management,
the specifics of the proposed project and the role of the facilities staff in
the project. Half day workshop with all
other City staff to orient them to energy conservation and the objectives of
the project. |
|
January
1995 to December 1995 |
Year 1 of the project. |
|
February
1996 |
Completion of Year 1
savings calculation and allocation. |
|
March
1996 to June 1996 |
Year 2 retrofit measures
implemented – major lighting retrofits, upgrading of electric motor and
pump/fan efficiency, replacement and upgrading of heating systems, and
addition of insulation and heating control systems. |
|
July
1996 to June
1997 |
Year 2 of the project. |
|
October
1996 |
Follow-up workshop with
maintenance staff to review Year 1
results and present Year 2 retrofit projects. |
|
October
1997 |
Completion of Year 2
savings calculation and allocation. |
|
July
1997 to December
1997 |
Year 3 retrofit measures
implemented – additional lighting retrofits, replacement of larger electric
motors, and more extensive heating system upgrades. |
|
September
1997 to August 1998 |
Year 3 of the project. |
|
December
1998 |
Year 3 savings calculation
and allocation. |
|
September
1998 |
Re-administration of
employee questionnaire. |
|
September
1998 to December 1998 |
Investment of some of the
remaining retrofit fund to pay for outstanding measures and new measures
identified by the City. |
Throughout the project,
logbooks were kept of the actual building improvements, retrofits, and
equipment replacements carried out in each building or facility. The date and cost of each measure was
recorded along with a record of who carried out the retrofit (contractor or
City staff). The investments in these
retrofit measures in each “project” year are summarized in Table 2. These costs include all purchased equipment
and contracted labour, but exclude city staff time spent in supervision,
de-lamping and smaller retrofits. All
of the original measures contained in the Retrofit Plan were carried out except
for a small number of minor upgrades.
At the end of the project,
the City of North Battleford approved the expenditure of all funds remaining in
the retrofit fund on additional retrofits.
The actual and planned cost, of these additional retrofits, are shown in
Table 2.
Because of the changing use
of many of the facilities and the annual maintenance schedules, several months
were allowed between each project year to complete the next set of retrofits. Even so, it was not always possible to carry
out all of the retrofits for a given project year at one time, and some
retrofits were carried out during the project year.
Two of the facilities
underwent renovation or changes in use during the project. New change rooms were added to the Civic
Centre in 1996. The Don Ross Centre was
used as a school during the base year and Year 1 (1995). In 1996 the school was closed. In 1997, however, part of the building was
renovated, the provincial social services department moved into the building,
and some other city staff were relocated.
Retrofit Period |
Investment |
Type
of Retrofit |
|
Prior to Project Year 1 |
$6,720 |
Low cost measures including
thermostats, delamping, weather-stripping/ caulking, etc. |
|
Prior to and During Project
Year 2 |
$23,030 |
Major lighting retrofits,
upgrading of electric motor and pump/fan efficiency, replacement and
upgrading of heating systems, and addition of insulation and heating control
systems. |
|
Prior to and During Project
Year 3 |
$23,140 |
Additional lighting
retrofits and greenhouse glazing. |
|
Sub-total |
$52,890 |
|
|
After Year 3 |
$17,000 |
Additional lighting
retrofits implemented between October and December 1998, plus others planned
for 1999 |
|
Total Reinvestment of
Savings |
$69,890 |
|
The underlying assumption of educational component of the project was that an informed and aware staff would support the project and help to ensure its success. Learning occurred in both formal and informal settings. General attitudes of all City staff towards energy management were obtained using a survey questionnaire before and after the project.
·
October 1994: Full day workshop
with personnel involved in facilities management to introduce energy
management, the specifics of the proposed project and the role of the
facilities staff in the project.
Half-day workshop with all other City staff to orient them to energy
conservation and the objectives of the project.
·
October 1996: Follow-up
workshop with maintenance staff to review Year 1 results and present Year 2
retrofit projects.
·
Regular meetings with key personnel to review past project progress and
to assess future strategies. These
meetings regularly included analysis of savings data, which provided
opportunities to scrutinizing the dynamics of the energy conservation measures.
·
Ongoing contact between the key personnel and other staff involved in
maintenance issues regarding energy efficiency implementation and operational
issues.
·
Ongoing contact between the key personnel and all staff regarding
changes related to the project being made in the workplace.
·
Hands-on learning by key personnel and maintenance staff gained through
the implementation of energy efficiency measures.
·
Information about the project and other “Energy Tips” provided through
existing staff communication vehicles.
City staff responsible for
maintenance of each facility participated actively in the project, and helped
to identify many of the changes in facility operations and events which
affected gas and electricity use throughout the four years of the program. These staff also undertook many of the
retrofits. Interest in energy
management and the program itself peaked at the end of Year 2 when the
significant savings first became recognized.
There was some drop in interest and day to day attention to energy use
by the end of Year 3.
The Saskatchewan Energy Conservation and Development Authority (SECDA) designed the original survey that was distributed to North Battleford City staff at the beginning of the project. The purposes of the survey were to:
1.
Determine attitudes toward energy efficiency,
2.
Establish baseline measures of employee awareness and practice of
energy savings activities, and
3.
Determine preferences for the type and sources of information, training
and other tools and techniques to encourage and build awareness of energy
savings options.
The result of the first
questionnaire formed the basis of comparison for employee awareness, practices,
and attitudes against which the results of the second questionnaire,
distributed toward the end of the project, were compared.
The second questionnaire was
a slightly simplified version of the first questionnaire, so that the main
focus would be on comparing employee attitudes, awareness and practices in
regards to energy conservation. It was
felt that it would be redundant to reassess preferences for types and sources
of information and training at the end of the project.
The first self-administered
questionnaire, which was distributed in August 1994, was responded to by 48 of
50 possible respondents. This
represents a 95% return rate. 21 respondents
returned the second questionnaire.
Although the difference between the two sample sizes may be of some
concern, it does appear that despite the smaller sample size, a good
cross-section of employees was represented on the second questionnaire.
The first questionnaire found that there was quite high awareness of and positive attitude toward energy efficiency. The first questionnaire also found that energy conserving behavior was well established at home. The findings of the second questionnaire suggest that this high awareness, positive attitude, and active engagement has been modestly improved upon during the course of the project.
Alternatively, the first
questionnaire found that City employees were hard pressed to identify previous
energy efficiency initiatives and few felt that the City had done all it could
to conserve energy. The second
questionnaire has found that this is no longer the case. Employees were able to identify many more
energy efficiency initiatives, and many felt the City was doing all it could to
conserve energy.
A detailed analysis of both
questionnaires is provided in Appendix 2.
Electricity savings were estimated by comparing monthly electricity consumption in kWhs and demand in kVa between the year in question and a base year, which was agreed to be the average of 1993 and 1994. The billing period was first corrected so that consumption and demand was by calendar month in each year. The savings in each month were then calculated by subtracting the adjusted consumption and demand from the base year values. Finally the dollar savings for each month was estimated using the current marginal[2] price paid for electricity and demand kVa.
Gas savings were estimated
in the same way except that monthly gas consumption was also adjusted for the
differences in degree-days between that month in the base year (1994) and the
year in question.
If there was an increase or
decrease in the way a facility was used during the project, then adjustments
were made to the base year consumption of electricity and gas in all years
following the change. The addition of
change rooms in the Civic Centre were estimated to have increased the heating
load by 5%. The base year electricity
and gas consumption were increased by this amount in project years 2 and 3 to
allow for this. In the Don Ross Centre,
base year electricity and gas use was decreased by 2% in project year 2 to
reflect the closure of the school facilities, and increased by 12% project year
3 to reflect the increased usage for offices.
If there was a major special
event that increased the electricity or gas use (e.g. a curling bonspiel that
required harder ice for two weeks), then adjustments were made for that time
period. If a facility showed unusual or
irregular increases in electricity or gas use throughout the project which
could not be explained, then the savings were assumed to be zero for that
facility. Gas savings in the Don Ross
Centre and electricity savings at the RCMP station were assumed zero for this
reason.
In summary, therefore, the
savings estimated were those that would have been achieved in an average
(weather) year if the facilities were used as in the base year, but with
current electricity and gas prices.
The City of North Battleford and the Saskatchewan Environmental Society (SES) managed the project. SES also provided the in-service training, administered the employee questionnaires, and produced annual savings reports for savings allocation and reinvestment decisions. Total SES administrative, training, survey and monitoring costs, excluding final project evaluation and reporting, were as follows:
Project administration $1,560.00
Coordination & education $5,550.00
Savings monitoring $5,850.00
Significant savings were achieved in most of the facilities included in the project. By the end of Year 3, annual electricity costs had been reduced by $34,000.00 or 18.4% and natural gas costs by $17,000.00 or 19.6%. The largest savings in electricity were achieved at the Civic Centre where electricity costs in the building and ice plant were reduced by nearly $10,000.00 per year. Electricity costs at City Hall and the Don Ross Centre were also reduced by $6,000.00 and $9,000.00 per year respectively. The highest natural gas savings were achieved at the Agriplex and the City Pool.
Details for each facility
are given in Appendix 3.
Total savings have been
summarized by calendar year and project year in Tables 3 and 4 respectively.
Table 3 shows the actual
total savings in each of the four calendar years since the project started in
1995, including the savings obtained during the “down time” between project years. Savings have been calculated from the differences
in annual bills without adjustment for billing period, building usage, tariffs,
or degree-days. Gas savings for the Don
Ross Centre and electricity savings for the RCMP building have been omitted. Table 3 also shows the estimated annual
savings that are expected to be achieved over the life of the retrofit
equipment (assumed to be 10 years), including the savings that will be achieved
as a result of the additional retrofit fund reinvestments carried out after the
project was completed. The results in
Table 3 are used in the financial analysis of the project (see on next page).
Table 4 shows the savings
for the three designated “project” years that were used to allocate savings
between the retrofit fund, SES and immediate cost reduction for the City.
Comparing Tables 3 and 4
shows that actual gas savings were higher than those adjusted for degree days,
tariffs, and building usage. This is
mainly because of the colder winters in 1995 and 1996. Actual electricity savings were lower than
adjusted, however, mainly due to adjustments made to allow for changes in usage
of the facilities which increased during the project period.
Table 5 shows how the
savings in each project year were allocated between the retrofit fund, SES, and
the City. Table 6 shows how the savings
attributed to each project year were carried over for reinvestment in the
“retrofit fund”.
|
Year |
Annual Electricity Savings |
Annual Gas Savings |
Total Savings |
Accumulated Savings |
|
1995 |
$7,500 |
$8,000 |
$15,500 |
$15,500 |
|
1996 |
$20,500 |
$21,000 |
$41,500 |
$57,000 |
|
1997 |
$22,400 |
$22,900 |
$43,300 |
$100,300 |
|
1998 |
$28,000 |
$22,000 |
$50,000 |
$150,300 |
|
1999-2006* |
$30,000 |
$22,000 |
$52,000 |
$566,300 |
*estimated
|
|
Year 1 Jan 1 to Dec 95 |
Year 2 July 96 to June 97 |
Year 3 Sep 97 to Aug 98 |
|
Electricity Savings |
$14,278 (7.4%) |
$30,723 (14.5%) |
$33,819 (18.4%) |
|
Gas Savings |
$3,664 (3.4%) |
$13,522 (14.5%) |
$16,540 (19.6%) |
|
Total Savings |
$17,895 |
$44,245 |
$50,359 |
|
Project Year |
Total Savings |
Savings Distributed |
Savings Allocation |
||
|
|
Retrofit Fund (60%) |
SES (10%) |
City of North Battleford |
||
|
Year 1 |
$18,000 |
$11,300[3] |
$6,770 |
$1,130 |
$3,400 |
|
Year 2 |
$44,000 |
$44,000 |
$26,400 |
$4,400 |
$13,200 |
|
Year 3 |
$50,000 |
$50,000 |
$30,000 |
$5,000 |
$15,000 |
|
Project Year |
Total Retrofit Expenditures Prior and During Year |
Total Savings |
Savings Distributed |
Savings Allocated to Retrofit Fund (60%) |
Retrofit Fund Balance at End of Year |
|
Year 1 |
$6,720 |
$18,000 |
$11,300 |
$6,770 |
$6,770 |
|
Year 2 |
$23,030 |
$44,000 |
$44,000 |
$26,400 |
$10,140 |
|
Year 3 |
$23,140 |
$50,000 |
$50,000 |
$30,000 |
$17,000[4] |
The financial viability of the project was assessed using the net present value of costs and benefits, the benefit/cost ratio and the internal rate of return.
· The Net Present Value or NPV is the total 1994 value of costs or benefits at a selected discount rate (e.g. 12%). It therefore provides estimates of all of the project costs and benefits as if they had been incurred in 1994.
· The Internal Rate of Return or IRR is the rate of return of benefits with respect to costs, and allows comparison of the project to other investment vehicles.
· The Benefit/Cost Ratio or B/C is simply the ratio of the NPV of benefits to the NPV of costs.
Project viability was assessed from two perspectives, i) assuming all costs were recovered from savings, and ii) assuming that audit and administrative costs were paid for by other stakeholders.
The financial benefits of project include:
· The cumulative savings over the three years and eight months of the project.
· The future savings that will be obtained by the City over the life of the new equipment (assumed on average to be until 2006).
The financial costs of the project include:
· The cost of the energy audit.
· Administrative and monitoring costs paid to SES.
· The initial investment in low cost measures at the start of the project.
· The portion of the retrofit fund reinvested in retrofits.
Table 7 shows the financial viability of the project to the City of North Battleford, allowing for stakeholder contributions to audit and administrative costs. The table shows the costs and benefits for each calendar year of the project and projected benefits forward to 2006. Table 7 also provides estimates of Net Present Value at a discount rate of 12% (NPV), Internal Rate of Return (IRR), and benefits/cost ratio (B/C) for the project. The City contributed $8,400 towards the cost of the audit, project management and training, the remaining $25,000 being provided by other stakeholders. In addition, 10% of the savings or $10,530 were shared with SES. Table 7 shows a rate of return to the City of 158% with a positive cash flow obtained by the end of Year 1.
The viability of the project, assuming that all costs were recovered from the savings (no stakeholder contributions) is shown in Table 8. The analysis shows that even with full cost recovery, the project would still have provided an excellent rate of return of 73%, and a positive cash flow after the initial cost of the audit and the first year low cost retrofit measures had been paid off. This shows that the savings reinvestment concept would be viable and provide a good investment for any other institution following the same model.
Retrofits measures, which lower natural gas use, will also reduce the direct emissions of greenhouse gas and other pollutants from the City of North Battleford boilers and heating systems over the lifetime of the retrofits. Electricity saving measures will lower coal and gas use in SaskPower’s generating plants, which will provide additional greenhouse gas emissions reduction.
By the end of Year 3, North Battleford was using 48,000 kWh per year less electricity and 126,000 cubic metres less natural gas. Table 9 also shows the annual reductions in emissions as a result of the project, and the expected cumulative total over the 10 year life of the retrofits. These are based on the average emissions of carbon dioxide, sulphur dioxide, nitrogen oxides, and particulates per kWh of electricity generated and cubic metre of gas burned in Saskatchewan, using average emissions factors for natural gas and assuming 70% of the provinces electricity is generated from coal.
|
Year |
Retrofit Costs |
City Contribution |
Payments to SES |
Savings |
Cash Flow |
Accumulated Cash Flow |
|
1994 |
|
($8,400) |
|
$0 |
($8,400) |
($8,400) |
|
1995 |
($6,720) |
|
|
$15,500 |
$8,780 |
$380 |
|
1996 |
($23,030) |
|
($1,130) |
$41,500 |
$17,340 |
$17,720 |
|
1997 |
($11,000) |
|
($4,400) |
$43,300 |
$15,760 |
$33,480 |
|
1998 |
($6,000) |
|
($5,000) |
$50,000 |
$34,000 |
$67,480 |
|
1999 |
|
|
|
$52,000 |
$46,000 |
$113,480 |
|
2000 |
|
|
|
$52,000 |
$52,000 |
$165,480 |
|
2001 |
|
|
|
$52,000 |
$52,000 |
$217,480 |
|
2002 |
|
|
|
$52,000 |
$52,000 |
$269,480 |
|
2003 |
|
|
|
$52,000 |
$52,000 |
$321,480 |
|
2004 |
|
|
|
$52,000 |
$52,000 |
$373,480 |
|
2005 |
|
|
|
$52,000 |
$52,000 |
$425,480 |
|
2006 |
|
|
|
$52,000 |
$52,000 |
$477,480 |
|
NPV |
($51,225) |
($8,400) |
($7,210) |
$273,660 |
$206,830 |
|
|
IRR |
|
|
|
|
158% |
|
|
B/C |
|
|
|
|
4.09 |
|
|
Year |
Retrofit Costs |
City Contribution |
Payments to SES |
Savings |
Cash Flow |
Accumulated Cash Flow |
|
1994 |
|
($20,350) |
($4,000) |
$0 |
($24,350) |
($24,350) |
|
1995 |
($6,720) |
|
($2,000) |
$15,500 |
$6,780 |
($17,570) |
|
1996 |
($23,030) |
|
($2,000) |
$41,500 |
$16,470 |
($1,100) |
|
1997 |
($11,000) |
|
($2,000) |
$43,300 |
$18,160 |
$17,060 |
|
1998 |
($6,000) |
|
|
$50,000 |
$36,310 |
$53,370 |
|
1999 |
|
|
|
$52,000 |
$46,000 |
$99,370 |
|
2000 |
|
|
|
$52,000 |
$52,000 |
$151,370 |
|
2001 |
|
|
|
$52,000 |
$52,000 |
$203,370 |
|
2002 |
|
|
|
$52,000 |
$52,000 |
$255,370 |
|
2003 |
|
|
|
$52,000 |
$52,000 |
$307,370 |
|
2004 |
|
|
|
$52,000 |
$52,000 |
$359,370 |
|
2005 |
|
|
|
$52,000 |
$52,000 |
$411,370 |
|
2006 |
|
|
|
$52,000 |
$52,000 |
$463,370 |
|
NPV |
($51,225) |
($20,350) |
($10,513) |
$273,660 |
$191,570 |
|
|
IRR |
|
|
|
|
73% |
|
|
B/C |
|
|
|
|
3.33 |
|
|
Pollutant |
Electricity Emissions
Factor (kg/GWh) |
Natural Gas Emissions
Factor (kg/million cu. metres) |
Annual Reduction in
Emissions by End of Project (kg/yr) |
Cumulative Total
Reduction over 10 (tonnes) |
|
Carbon Dioxide |
911,000 |
1,861,000 |
549,000 |
5119 |
|
Sulphur Dioxide |
3750 |
22 |
2259 |
21.1 |
|
Nitrogen Oxides |
2101 |
2197 |
1266 |
11.8 |
|
Particulates |
6638 |
0 |
3999 |
37.3 |
|
Methane |
1917 |
3102 |
1155 |
10.8 |
|
All Greenhouse Gases |
930,000 |
1,892,000 |
560,000 |
5227 |
The following conclusions were drawn from the project:
The Savings
Reinvestment Model
· The savings reinvestment/education concept that was originally developed for the Destination Conservation schools energy conservation program works well for the retrofit of municipal facilities in a small city the size of North Battleford. The City was able to obtain significant savings of over $50,000 in gas and electricity, or nearly a 20% savings. This is higher than would have been obtained if the usual two year pay back limit had been applied.
· While the savings achieved were not as high as could have been obtained using a performance contracting approach, and the retrofits were
· Spread over a three and half year period, the final costs were much lower.
· The procedure used in the Destination Conservation Program, in which year 2 and year 3 retrofits are carried out over the summer when the facilities are not in use does not work as well for municipal facilities. Retrofits have to take account of varying facility operating schedules, and this results in several months of “downtime” between each stage of the project. A more streamlined approach needs to be developed in which retrofits can be carried out as soon as savings have been identified.
· The estimation of electricity savings from utility bills was found to be much easier than the estimation of gas savings. The expected savings from lighting retrofits and equipment replacement can be predicted with reasonable accuracy as a “reality check”, whereas the impact of building envelope and heating system improvements are both variable and hard to predict. In general, it was found that adjusting gas savings for degree days was not useful because of varying requirements of non-weather sensitive uses of gases such as hot water, and the impact of wind on gas use.
Benefits to
the City of North Battleford
· The project provided an excellent rate of return of over 100% to the City of North Battleford. Even if the full cost of administration, audits, and training are included in the cost (i.e. no stakeholder seed money had been provided), the rate of return would have been 73%, and the City would have had a positive cash flow by year 2.
· The gas and electricity savings from the project will permanently reduce the greenhouse gas emissions from City facilities. Because the project produced net financial benefits, these reductions have been achieved at no cost.
· The project provided City Council and managers with a new positive perspective on energy management. City Council has approved the investment of all of the remaining savings from the retrofit fund in additional retrofits, and approved retrofit work on other facilities such as street lighting and water pumping facilities that were not included in the original project.
Staff
Participation
· City staff responsible for maintenance of each facility participated actively in the project, and helped to identify many of the changes in facility operations and events which affected gas and electricity use throughout the four years of the program. Interest in energy management peaked at the end of year 2 when the significant savings first became recognized.
· There was some drop in interest and day to day attention to energy use by the end of year 3 due to staff turnover and passage of time. There is a need, therefore, to keep up staff interest and capability through annual courses and training, and to develop energy management guides for new employees.
· There was a positive attitude toward energy efficiency among City employees at the beginning of the project, and energy conserving behavior appeared to be well established at home. By the end of the project, this awareness, positive attitude, and active engagement, had been modestly improved. The level of knowledge and awareness of the staff involved in maintenance issues increased considerably more than that of other staff. By the end of the project, employees were also able to identify many more energy efficiency initiatives, and many felt the City was doing all it could to conserve energy.
The savings reinvestment approach could be used in any set of public or private facilities where:
· Several buildings are involved and there is more than one type of facility.
· Energy management project costs might be too low to attract energy service companies, i.e.< $250,000.
· There is adequate technical or custodial staff to coordinate and manage retrofits, and assess savings and costs.
· Annual budgets for energy can be kept reasonably constant for the 3 to 4 year period required for the project.
· There is effective “buy-in” by senior management or councils.
These types of facilities include small municipalities, health care facilities, educational institutions and colleges, industrial parks, condominiums, etc..
Some modifications to the original savings reinvestment model are required, including:
A Flexible
Retrofit Plan
Municipal and other institutional facilities have a wide variety of operating schedules. There is a need to have a retrofit plan that matches facility operating schedules, and also accounts for the institution’s budget cycle and staff allocation.
Continuous
Tracking of Savings
A method for tracing electricity and gas costs and savings on a monthly basis as the project progresses should be developed. As soon as sufficient credit is achieved in the retrofit fund to finance the next retrofit measure, the retrofit should go ahead, coordinated with staff and facility schedules. This would replace the year by year decisions on retrofit measures, and maximize the savings, while keeping cash flow positive.
Employee
Participation and Training
Interest in energy management among operating and maintenance staff tends to wane after the first year or two of a project. Staff turnover also leads to a loss of capability. Energy management guides should be developed for each facility for new employees, and there should be annual refresher courses and results review sessions with employees.
Annual review sessions or communication with all employees on the success of the ongoing program is also essential. This should stress the financial gain to the institution, and the consequences of this in improved service or saved jobs.
In both questionnaires, employees were asked to rate their level of interest in specific actions to conserve energy and the environment. The stated levels of interest in each questionnaire were then compared. The following chart identifies the percentage of respondents who indicated in the range of “somewhat interested “ to “ very interested” in the identified action.
|
Identified Issue |
Project start: % interest |
Project end: % interest |
|
Saving energy |
82% |
83% |
|
Protecting the environment |
82% |
95% |
|
Saving electricity |
89% |
85% |
|
Reducing monthly utility bills |
90% |
90% |
|
Installing energy efficient lighting |
58% |
72% |
|
Purchasing inexpensive energy saving equipment |
57% |
53% |
|
Carpooling to save energy |
14% |
19% |
|
Programs and initiatives offered by governments and utilities |
59% |
43% |
Overall, there was no significant increase in interest in pursuing these actions. One exception is the category of “installing energy efficient lighting”, where there was a notable increase in interest. This may be related to the success of some of the lighting retrofits undertaken as part of the project. Another notable exception is the category of “programs and initiatives offered by governments and utilities”, where interest reduced significantly. This may be due to, as one respondent put it, “little available in this area.”
In both questionnaires, employees were asked to indicate those initiatives they practiced routinely home. The stated levels of
activity in each questionnaire were then compared. The following chart identifies the percentage of respondents who practice selected energy saving measures:
|
Energy-Saving Measures |
Project start: % activity |
Project end: % activity |
|
Turn off lights in areas not in use |
100% |
100% |
|
Lower temperature in hot water tank |
58% |
48% |
|
Lower thermostat setting for heat |
83% |
95% |
|
Raise thermostat setting for air conditioner |
17% |
24% |
|
Restrict access to thermostat controls |
21% |
29% |
|
Install low flow shower head |
45% |
43% |
|
Install fluorescent lighting |
23% |
33% |
|
Install weather stripping / caulking |
85% |
90% |
|
Upgrade insulation |
53% |
33% |
|
Motion sensors on outdoor lights |
33% |
21% |
|
Install toilet dam |
21% |
N/A |
|
Triple pane windows |
n/a |
21% |
|
Other energy efficient lighting |
n/a |
21% |
Overall, the questionnaire findings indicate a modest increase in most activities, with some notable exceptions: lowering of hot water temperature, upgrading insulation, installing motion sensors on outdoor lights. Some of the variability in these items may be result of the different sample sizes of the two questionnaires.
Respondents to both questionnaires were asked to identify the extent to which certain barriers might play a role in preventing them from making energy efficient choices. Responses to this question can help to identify both real and perceived barriers. The following chart summarizes the percentage of respondents who identified the selected barriers as somewhat to strongly applicable:
|
Identified Barriers: |
Project start: % identified |
Project end: % identified |
|
High purchase price of energy efficient technology |
56% |
19% |
|
Insufficient cash flow |
39% |
19% |
|
Concern of reliability of energy efficiency devices |
27% |
5% |
|
Heavy debt |
27% |
10% |
|
Lack of information |
25% |
10% |
|
Required energy efficient technology does not exist |
24% |
0% |
|
Competition for investment dollar |
12% |
10% |
|
Fuel/energy type is unavailable |
11% |
5% |
|
Energy efficient technology is not available locally |
N/A |
10% |
In all cases, the questionnaire results indicate a significant decrease in identified barriers. While in some cases, these results may indicate a decrease in “real” barriers; it is also conceivable that these results represent a decrease in “perceived” barriers. In other words, increased access to information may bring about the realization that some energy efficiency options are not as inaccessible as generally assumed.
Respondents to
both questionnaires were asked how much they agreed with certain leading
statements about energy and environmental issues. This type of question obtains data that may provide insight into
attitudinal barriers or opportunities that may prevent or enhance the adoption
of energy efficiency measures. The
following chart summarizes the percentage of respondents who identified the
statements with which they moderately to strongly agree:
|
Identified Attitudes |
Project start: % Identified Agreement |
Project end: % Identified Agreement |
|
I am willing to devote time & money to social &/or
environmental programs even though they may not directly benefit me. |
18% |
44% |
|
I am wiling to put up with some discomfort to save energy & help
the environment. |
39% |
53% |
|
Energy conservation is good for the environment. |
90% |
63% |
|
I don’t feel that any effort I make to conserve energy will have a
significant impact on energy costs or the environment. |
15% |
24% |
|
The local economy will benefit from energy conservation initiatives |
50% |
53% |
|
The City has done all it can reasonably do to reduce its energy
consumption/cost. |
7% |
53% |
|
The more advanced or new a technology, the less reliable it is. |
11% |
10% |
|
New energy efficient technology would be better than our conventional
equipment. |
39% |
57% |
|
Energy efficient lighting systems cost too much. |
25% |
15% |
|
It is possible to reduce the wattage of our lighting system without
affecting illumination levels. |
39% |
53% |
With the exception of two statements – “energy conservation is good for the environment” and “I don’t feel that any effort I make to conserve energy will have a significant impact,” the results of this question suggest that overall openness to energy issues has improved in City employees.
In both questionnaires, respondents were asked to check off energy initiatives that had been implemented in the workplace in the recent past. This question is intended to gain an understanding of staff awareness of energy practices in the workplace.
Since more than once answer was possible, the analysis is based on the number of times a initiative was selected in relation to the total number of mentions.
|
Identified Workplace Initiatives |
Project start: % Identified as ongoing |
Project end: % Identified as ongoing |
|
A formal energy efficiency/management policy is practiced through the
workplace |
4% |
16% |
|
Informal energy efficiency/management is practiced throughout the
workplace |
7% |
18% |
|
Informal energy efficiency/management is practiced selectively
throughout the workplace |
11% |
6% |
|
Informal energy efficiency/management seldom/occasionally practiced
in the workplace |
11% |
0% |
|
No energy efficiency/management system in place |
21% |
0% |
|
Energy management champion(s) promote/monitor energy efficient
practices |
0& |
9% |
|
Energy management is practiced routinely to improve system control |
9% |
12% |
|
Energy management is practiced routinely by turning off equipment
when not in use |
18% |
21% |
|
Energy management is practiced routinely during equipment maintenance |
11% |
12% |
|
Ongoing access to up-to-date technical/maintenance information |
7% |
6% |
The findings show that there is a notably higher awareness of energy efficiency initiatives and programs in the workplace.
Respondents were asked to identify actions that were routinely practiced in their buildings. This question is designed to identify awareness of energy efficiency practices in buildings.
|
Identified Workplace
Actions |
Project start: % positive responses |
Project end: % positive responses |
|
Turn off lights when not in
use |
18% |
95% |
|
Lower temperature in hot
water tank |
8% |
10% |
|
Lower thermostat setting
for heat |
13% |
52% |
|
Raise thermostat setting
for air conditioner |
7% |
38% |
|
Restrict access to
thermostat controls |
26% |
38% |
|
Others |
N/A |
14% |
Here, the results indicate a significantly increased awareness of energy efficiency practices in City buildings. It stands to reason that this increased awareness is directly related to the increased practice of these actions.
|
Identified Energy Topics: |
Project start:
% positive responses |
Project end:
|
||
|
|
Low Knowledge Level |
High Knowledge Level |
Low Knowledge Level |
High Knowledge Level |
|
• day-to-day
actions which can reduce energy consumption and costs |
18% |
28% |
43% |
48% |
|
• inexpensive
actions which can reduce energy consumption and costs |
41% |
21% |
44% |
39% |
|
• fuel switching
to reduce costs, for example switching from electricity to natural gas |
45% |
13% |
53% |
30% |
|
• energy
efficient lighting |
62% |
17% |
43% |
43% |
|
• energy
efficient heating, ventilation and air conditioning |
52% |
4% |
68% |
5% |
|
• the energy
costs associated with your building/place of work |
48% |
10% |
24% |
33% |
|
• the effect
that energy conservation could have on the environment |
40% |
27% |
63% |
20% |
|
• the effect
that energy conservation could have on the local economy |
75% |
15% |
52% |
24% |
|
• the effect
that energy conservation could have on the City's operating expenses |
41% |
17% |
43% |
39% |
|
• the savings
that a household could achieve through energy conservation |
31% |
25% |
52% |
19% |
[1] The Lions Club
building was dropped from the project after one year.
[2] Marginal price is the price paid for each additional kWh, kVa over 50
kVa, or cubic metre, i.e. not including basic charge.
[3] In Year 1, the cost of initial low cost retrofit measures was
subtracted from the savings before distribution.
[4] $11,000 of the
retrofit fund remaining at the end of Year 3 was invested in additional
lighting retrofits and other measures between October and December 1998. The remaining $6,000 will be invested
further retrofits in 1999.