By Susan Buchanan, LEED AP
From the March 2014 issue of Today’s Facility Manager
Facing growing budget constraints, many facility managers (fms) are being pushed to focus on energy savings opportunities as part of their organizations’ goals to reduce costs. But where does one start? How do fms cost-effectively obtain the data necessary to make good decisions and rise to this challenge?
Fms, along with energy and sustainability managers, can integrate energy investments into capital plans and budgets by: capturing energy data alongside facilities condition data; using energy modeling software to develop cost-effective energy audits; identifying how energy is used in a building; quantifying energy conversation measures with the most favorable payback periods; and benchmarking energy performance against similar buildings.
The focus on existing buildings is driven by the opportunity they present. According to the International Energy Agency, buildings consume approximately 40% of the world’s primary energy. Better decision-making around the built environment can result in real savings for an organization. In order to make sound decisions, fms should need to know the following:
- How do these investments impact facility operations and occupants?
- What impact do these investments have on the environment?
- What is the energy savings potential and ROI that results from making these investments?
- How are competing priorities balanced (deferred maintenance, capital renewal, sustainability, energy savings potential)?
It can be challenging to make informed decisions without the necessary data. Energy use for individual buildings may or may not be metered, and this makes it difficult to establish a baseline from which potential improvement impacts can be measured. Another challenge is that without an in-depth energy analysis, and with many of the low-hanging fruit projects already implemented, the next significant paybacks come from operational adjustments and longer-term capital equipment investments. Key performance data is needed in order to identify potential energy conservation measures and support strategic decisions about what to prioritize.
Facility Energy Assessments
A facility energy assessment should start by answering four basic questions.
- What is our current energy use?
- Where are my energy conservation opportunities in the short-, medium-and long-term?
- What are the paybacks and ROI for each measure?
- What energy conservation projects make sense to implement in the context of the overall facilities capital plan?
Multiple options exist for gathering information on existing buildings and identifying energy conservation measures. Energy assessments are most common, with different depths of analysis. For example, an ASHRAE Level 1 energy audit is a more general approach to identify basic energy use adequately and to identify the low-hanging fruit projects, while an ASHRAE Level 2 energy audit provides a much more in-depth assessment, including detailed performance analyses and long-term capital investments. A Level 3 audit enters into an investment-grade analysis of capital-intensive modifications.
Ideally, an energy audit is conducted alongside a facility condition assessment. Why? Because energy is no longer being viewed independently of the operations, maintenance, and systems life cycle replacements of the entire facility. Building type and use, how it fits into the organization’s business plan and mission, and where it stands in its life cycle all contribute to the decision-making process. By conducting these investigations simultaneously, fms gain a holistic understanding of a building’s current condition, amount and cost of deferred maintenance, upcoming end of life building components, and opportunities for energy savings.
Identifying Conservation Measures
With the results of both the energy and facility condition assessments, fms can then see and report on their options—either to replace “in kind” or choose a more energy efficient path. For example, a piece of equipment that is at the end of its useful life, such as a boiler, can be replaced either with a similar boiler of current technology as an “in kind” replacement, or with one of even higher efficiency, and/or dual-fueled models. An analysis of the incremental cost difference and payback on that difference might influence the solution chosen.
Another example of an integrated analysis is an aged and worn roof that can be replaced either in kind with its existing assembly (such as a built-up roof), or replaced with a green roof assembly with increased insulation, thereby reducing the heat island effect as well as energy use. Again, an analysis of the incremental cost difference, the potential payback, and the appropriateness of each solution is key to decision-making.
Other types of energy conservation measures identified may be operational, such as decreasing or increasing heating and cooling set points during occupied and unoccupied hours. Measures can also address occupant behavior, such as reducing plug loads through increased awareness targeting printers, copiers, fax machines, coffee makers, etc.
In terms of more intensive capital improvements, typical measures include upgraded lighting; premium efficiency motors; variable frequency drives on equipment (e.g., chillers, cooling towers, pumps, air handlers); building automation systems, energy management systems, or other optimization software; upgraded cooling equipment; converted chilled water constant-flow to variable-flow system; boiler plants; domestic hot water; heat recovery systems; retrocommissioning and ongoing commissioning; window tinting or external shading; and roof insulation or “cool roof” products.
Once energy conservation measures are identified, in addition to looking at the potential for reduction in an individual facility it is valuable for fms to see how assets compare to one another. Depending upon the specific goals, one asset might be targeted for improvements over another. (See Figures 1a and 1b below.)
Energy modeling can identify how energy is used, quantify conservation measures, show which measures have the most viable payback periods, and benchmark against similar buildings. The approach is to develop an annual energy model (8,760 hours) of a facility based on system data gathered from the facility condition assessment, including age, type, use, and location as well as information on heating, cooling, ventilation, controls, domestic hot water, lighting, and building envelope. The model is then calibrated to actual energy use, based on occupancy patterns and building operations.
The model is used to estimate energy consumption and identify cost-effective energy conservation measures. Inferences are made and can be adjusted and modified based upon knowledge of the building. The more actual information input, the more accurate the model will be. The model can also be tuned by comparing modeled energy consumption with actual utility bills and local weather data drawn from the same time period.
As a result, fms see how a building is using energy, and can compare that with its proposed use after energy conservation measures take effect. Fms can also compare the total annual energy use by system (e.g., lighting, heating, cooling, hot water) and the reduction in spend by system after the proposed measures take effect (see Figure 2 below).
To decide their next step, fms need to determine what their payback thresholds are. A short-term package might have a payback of less than one year with all individual measures having paybacks of no more than two years, while a mid-term package might have a payback of less than five years with all individual measures having paybacks no more than 10 years. A long-term package might have a payback of more than five years but less than 15 years. Figure 3 (below) illustrates the cost of the measures, total annual savings, payback period, reduction in carbon emissions, and annual energy savings as a percentage of the total energy use.
Once information about capital needs has been collected, one or more prioritization strategies may be applied to determine which projects should be funded based on strategic business needs. One result of a facility condition assessment is the facility condition index (FCI), which is a measure of the ratio of deferred maintenance to a facility’s current replacement value. The higher the index, the worse the condition of the facility is.
The energy use index (EUI) is a measure of the total energy consumed by a facility annually per square foot. By mapping both the FCI and EUI of buildings in the portfolio, organizations can identify the facilities for which both metrics are high—candidates for a greater level of investment (see Figure 4 below).
Another approach to prioritizing requirements uses a ranking strategy which encompasses various factors for prioritizing facility needs, with specific weights assigned to each factor. The result is a ranked list of improvements for capital budgeting (see Figures 5a and 5b).
With a ranking strategy in place, it may be applied to the complete set of identified capital needs to generate a ranked list of needs, with funding applied based on established variables such as budget years, inflation rate, overhead costs, and assumptions about budget constraints (see Figure 6).
Based on the prioritized list of requirements, organizations can create multi-year budgets that reflect their priorities. Budgets can take into account all capital needs, including those related to energy, ensuring strategic and critical requirements are addressed, while integrating energy investments into the capital plan.
A Holistic View
Capturing energy data alongside facility condition data and using energy modeling to obtain a wealth of information allows fms to uncover energy savings potential and the ROI that results from making capital investments. By integrating energy conservation measures into facilities capital plans, organizations gain a holistic view that enables them to balance competing priorities like deferred maintenance requirements, capital renewal needs, and energy savings potential when making informed capital investment decisions.
Buchanan is vice president of sustainability services at VFA, Inc., a Boston, MA-based provider of facilities capital planning and asset management solutions. She has more than 30 years of experience in construction and project management, including extensive expertise in alternative construction methods and sustainable systems design.
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