Archive for July 2011
For years large ESCO’s (Johnson Controls, Siemens, Honeywell, etc.) have been performing Level Three Investment Grade Audits (IGAs), which are required for MUSH/Federal performance contracts. Their audits produce a detailed energy savings spreadsheet which makes it possible for a tax-exempt entity to issue bonds which pay for the retrofits, all leveraging the ESCO’s “guarantee” for the projected savings.
But while the corporate world is moving toward real-time management of energy consumption, traditional Level Two energy audits, producing 100+ page reports with graphs, spreadsheets and efficiency recommendations, remain a throwback to a time before the Internet. In our experience they rarely have a big impact.
Because from the moment the inch-thick document hits a facility manager’s desk it’s outdated. Read by just a few managers, the analysis is normally used only during next year’s corporate budgeting process, allocating capital for select projects to be implemented a year or more later. By then the company’s operating patterns, energy rates and utility incentives have changed, plus they’ve lost the savings during this 18-24 month span. Not exactly real-time energy management.
Obviously the approach is broken.
Instead of a snapshot audit, organizations should approach energy efficiency as a perpetual process, like they do with quality management. ISO9000, Six Sigma and TQM don’t look for product defects once a year. Quality is a management process and companies are always trying to get better - it’s the same with energy efficiency. Last month ISO published it’s 50001 energy management standard which provides a framework for the energy management process.
As part of the process, we recommend that all energy efficiency recommendations be posted to a corporate energy site, where a broader number of employees can review, offer suggestions and act on them. No-capital cost behavior change is a huge opportunity, so this site should also track and report current energy usage for each of the company’s facilities, with sub-metering for all major systems. This usage reporting establishes a public baseline and can be coupled with tracking efficiency projects. What better way to have a system for tracking future progress?
Start-ups like Retroficiency and IBlogix can even provide no truck roll Level 0 “pre-assessments” for sites where no initial on-site analysis has been performed. Their data analytics applications provide energy assessments using only utility bill information, weather patterns, the age of building and some basic building information – that can definitely jump-start the process.
For project capital companies should implement an energy efficiency “fund,” which sits outside the normal capital budgeting process. This would allow the company more rapid response to new utility incentive program or for projects with a 6 to 12 month simple payback. Harvard University uses something like this with its Green Campus Loan Fund. The fund should also include equipment that is nearing end of life where savings can pay for proactive replacement.
When asked by our customers, yes, our team will still deliver old fashioned energy audits - but we’re doing our best to convince them instead to take this new process based approach.
And since even the word audit makes people cringe, we’ve got to come up with a better name for it as well.
As this heat bubble hovers over New England many folks are heading home on a Friday night to turn on two things – the Red Sox and their air conditioners.
As they collapse into their couches, is it a big deal if they set their thermostat to 72 versus 73 degrees?
Let’s do some back of the envelope math:
So if we all got used to setting our thermostats to 73 instead of 72 (a savings of @ 1-3%) we would reduce our annual energy cost by somewhere between $160 million and $480 million dollars a year.
Does 72 feel THAT much better?
Of course the conventional view is that the smart grid market will be “huge” – and the target for smart grid today is squarely on the residential market. So it shouldn’t be missed that within days of each other both Google and Microsoft killed their initial home energy software applications.
First came Microsoft, shutting down their Hohm effort, saying “due to the slow overall market adoption of the service” they would focus instead on the commercial market. Then came Google announcing it was stopping support for PowerMeter, their consumer home energy visibility tool, saying it had “not scaled as quickly as we would like.”
This is not the first time a high tech company has overestimated the adoption rate for home networking and software applications. And the reason for the overestimate is similar to earlier miscues.
Home networking is hard.
When a consumer needs to plug hardware from one company into software from another, things get tricky. It’s the reason why most homeowners still don’t have their home printers hooked up to Ethernet. It’s why Apple’s Airport Express is mostly used for a single application; rebroadcasting iTunes.
Unless it works out of box with a plug, home networking system integration projects are only for serious DIYers. Not to say there hasn’t been progress with early smart meter rollouts to the home, but the facts are today it’s still very early.
Even a programmable thermostat is too hard for the consumer, so Comverge has found a way to turn this into a utility DR delivery business. Unless the utility pays for and implements early home networking apps on the backs of their initial smart meter rollouts, adoption in the home will continue to move very slowly.
At least Microsoft says they’re focusing now more on commercial market applications, a practical shift for them. Businesses have IT and facility managers. They can deal with hardware and software integration projects – directly or by using outside service providers as they do already.
And the bulk $ savings for energy application networking in businesses is more significant – which makes the pain of figuring out which plug goes into which box more worthwhile.