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How Energy Profiles Make You Smarter

Energy Use Profile
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Energy Use ProfileThere are many ways to look at how energy is consumed in a building and but it is best to understand how much energy is used in total for the entire building for all fuels.  Next, it is absolutely critical that the building owner is able to drill down into all of the details by fuel type, cost, usage by building service and usage by equipment type. Using energy profiles is a good way to gain a better understanding how energy is consumed while being able to compare and contrast charts, graphs and consumption data for each building.

Energy Use Index (EUI)

Energy Use Index (EUI) is a unit of measurement that describes the total energy consumption for each building. EUI represents the energy consumed by a building relative to its size, and is expressed in BTUs per square foot per year.  It can also be used to compare energy consumption relative to the number of building types or to track consumption from year to year in the same building.

This is a measure of total energy use normalized for floor area, and is used to compare the energy consumption for different buildings. For example, whole-building energy use is measured in kBtu (1000 British thermal units) per square foot, per year, to standardize units between fuels, while electricity use is often expressed as annual KWH per square foot per year.

How is EUI Calculated?

A building’s EUI is calculated by converting annual consumption of all fuels consumed in one year (measured in kBtu) and dividing it by the total square footage of the building. For example, if a 50,000-square-foot school consumed 7,500,000 kBtu of energy last year, its EUI would be 150. A similarly sized school that consumed 9,000,000 kBtu of energy last year would have a higher EUI (180) to reflect its higher energy use. Generally, a low EUI signifies good energy performance.

Building owners and property managers are extremely busy and just want to understand the big picture and understand what it is going to take for them to start saving money.  Energy Consumption charts for each calendar day along with energy profile graphs are the best way to summarize where and how energy is being used.

The following examples are energy “Profile” charts that can easily be provided by an energy management software solution.

Energy Use Profiles calculate the overall amount and percentage of energy used by the fuel type:

Sample Energy Use Profile

Energy Cost Profiles calculate the overall cost and percentage of energy used by fuel type.

Sample Energy Cost Profile

 

Energy Distribution Profiles calculate how much energy is being consumed by each building service and highlights major areas of energy consumption.

Sample Energy Cost Profile

Energy Equipment Profiles calculate how much energy is being consumed by each individual piece of equipment used in the building.

Sample Energy Equipment Profile

Get Going

If not now, when?Once you understand how your facility’s electricity use is metered and billed, a good next step is to subscribe to a SaaS (Software as a Service) Energy Management System which would allow you to inquire into a variety of energy consumption graphs and energy use profiles.  Being able to visualize operating inefficiencies highlights the areas where you can begin to attack potential savings.

Options for energy conservation and energy efficiency measures can be assessed and prioritized to deliver maximum benefit, ROI and cash flow improvements.  Once the projects have been evaluated and prioritized, project tasks can be assigned to your facilities team.

  • Implement a “software as a Service” Energy Management Solution that enables online web access to your utility bills, your energy consumption by fuel type and specific operational processes.
  • Evaluate and implement energy conservation measures.

Evaluate and implement energy efficiency measures.

[i] Al Thuman, William Younger, Terry Niehaus, Handbook of Energy Audits, Fairmont Press, pages 33 & 34, 8th Edition, 2010

Four Easy Steps to Save Money With Energy Deregulation

1) Scan/email/fax your utility bills to your broker.

The broker will provide this information to qualified suppliers who need historical usage information to price the various competitive supply contracts they will offer you. Most information is obtained from your most recent bills. The suppliers may also request a signed LOA (letter of authorization) granting them permission to pull historical usage data directly from the utility. Either way, providing this information simply allows the suppliers to price the products and never locks you into any product.

2) Review pricing proposals, terms and contract length.

You should receive quotes from different suppliers for different products. Pay close attention to the pricing and the term of the contract. Also, make sure you understand the difference between fixed and variable priced products. The lowest current rate may not always be the best product for your specific situation. You must determine your risk tolerance and then evaluate the proper product to meet your needs.  A qualified broker can help you navigate this process by explaining the different products and negotiating with the suppliers on your behalf.

3) Choose the supplier with the best price and product to suit your specific needs.

After fully evaluating the different options, choose the right product for your situation. You will be presented with a supplier agreement. Read the agreement carefully and make sure it is consistent with the terms and conditions you have agreed to.

4) Monitor your utility bills to evaluate year-over-year savings and returns.

This optional fourth step will help you close the loop to ensure that your firm is actually receiving the benefits and savings from your deregulated energy supplier.  Monitoring can be as simple as using an Internet browser to view your energy bills. You will be able to view energy consumption data in aggregate and by fuel type for a single building or for all of the buildings in your portfolio.

Energy Savings ROI in Functional Business Terms

rising business performance
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rising business performanceThere are many options for evaluating energy savings ROI (return on investment).  “Payback” is still the most widely used measure of value and describes the number of years it takes for the cost of an investment to be recovered through the annual savings that it provides.

Many industry corporate managers are often not impressed by proposed energy savings.  Yet the same results may be enthusiastically received when impacts are related to Key Performance Indicators (KPIs) of the client’s business operations.  This means expressing a reduction in energy use (or cost) per unit that the business uses to measure output and productivity on a daily basis:  tons of product, barrels of product, gallons per revenue passenger mile, energy costs per square foot, energy cost per meal served in a restaurant, BTUs per employee, or the total annual energy spent as a percentage of net income.

Defining your energy costs of production is an essential step to understanding how energy affects your productivity and profit margin.  Businesses are best served by making the additional effort to carry the efficiency project ROI, Payback and Savings calculations out one step further and applying the energy costs/ savings to the functional business KPIs that represent the strategic purpose of the business.

Once the energy efficiency projects are brought back full circle and get measured in day-to-day operational terms the company will achieve true synergistic reductions in energy use.

Get Going

Armed with total energy usage data, meter data, Energy Star rankings and a prioritized list of Key Performance Indicators (KPIs), a Facilities Manager is prepared to establish a list of operational units of output that can be directly tied to energy consumed.  Conversely, all energy conservation measures and energy efficiency measures can now be expressed in operational business terms

  • Define your organizational business metrics or production measurements.
  • Redefine your current energy efficiency project in terms of Business KPIs.
  • Create company, employee and/or tenant awareness with lobby and cafeteria based energy reporting kiosks.
  • Establish an on-going measurement, monitoring and tracking program for these newly established KPIs.

Advantages of Energy Deregulation

Gas pipeline
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In this article, we discuss 11 different advantages of energy deregulation.

Gas pipeline

Find the “Right” Product

Purchasing energy through the utility is only offered as an indexed product. The utility either generates or purchases the supply and charges a fee and the price fluctuates with the market. For instance, natural gas demand is much higher in the winter in the Northeast and prices typically rise with demand. Purchasing energy from a competitive supplier allows the end-user to manage rate fluctuation exposure and choose a product that fits savings goals and risk tolerance.

Lower Energy Costs

Many professionals are able to lower overall energy costs for their facilities by finding the right product and purchasing competitive supply. In some cases, the savings are significant and can make a direct positive bottom-line impact for the customer. Typical supply side savings are in the 10-20% range (based on utility rates at the time end-user enters into a competitive supply contract).

Price Certainty

Fixed price products decrease rate volatility and hedge against future pricing increases. The supply rate charged by the utility is a variable rate and can fluctuate based on many factors that affect the supply cost. Customers electing a fixed price product will eliminate rate fluctuations during the contract term.

Flexibility

Deregulation has created products of all shapes and sizes depending on the unique needs for a particular facility. Unlike purchasing supply from the utility in a one size fits all product, competitive purchasing allows the end-user to create a forward thinking energy purchasing strategy.

Reliability

The reliability of your electricity does not change because you take advantage of deregulation. The infrastructure that transmits and distributes the energy is still handled and guaranteed by the regulated utility regardless of where you purchase the supply. You still contact the utility if the power goes out in a storm or if you have questions about your bill.

Products and Contract Terms

Prior to deregulation, utilities charged a monthly rate and the customer paid whatever the utility charges (usually determined by costs plus a fee). Deregulation has delivered a wide range of products and terms for the customer to choose from. The influx of new products also creates risk for the end-user because you could potentially choose a product that costs rather than saves money depending on unique energy needs. Many end-users enlist a broker to find the best product, term and pricing. Such options include:

Fixed Pricing

The rate is fixed for the duration of the contract. The options for fixed pricing include “all-in” or “energy only” contracts. Fixed pricing requires forward-looking intelligence to determine where the energy market is today and where it is expected to go throughout the term of the contract.

Index Pricing

An index pricing structure is essentially how the utility charges customers for supply. The pricing is an index price plus a supplier adder. Customers can typically purchase an index product through competitive markets at a rate lower than the rate charged by the utility.

Discount

A discount rate floats with the utility, but is discounted a certain percentage. Other pricing mechanisms that are advantageous to particular customers based on usage profile: “block and index”, “caps” and “collars”.

Terms

The contract term is a key component for any deregulated supply contract. Customers should carefully analyze forward-looking energy pricing estimates before locking into a long-term contract. All supplier quotes should provide pricing for multiple terms: 6 months, 12 months, 24 months, 36 months etc. Pricing for multiple term lengths will also provide insight into how the utilities view future energy pricing forecasts.

Options

An option contract gives customers the ability to lock into a fixed price per KWH contract to reflect current pricing at any time during a variable price contract.

75 Energy Efficiency Measures to Lower Your Utility Bill

Idea
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IdeaThis list of energy efficiency measures and projects is a great place to start in determining which activity will have the greatest impact on your building, with your tenants and on your operational cash flow:

  • Building envelope improvement
    • Weather/infiltration sealing
    • Increased insulation
    • High performance window replacement
    • Low emissivity reflective window film (to reduce unwanted solar gain in the summer and increase the R-value of windows in the winter)
  • Lighting
    • “Delamping,” i.e. permanently turning off/disconnecting unneeded light fixtures
    • “Relamping,” i.e. replacing inefficient light fixtures or lamps with high efficiency fixtures/lamps
      • Convert T-12 fixtures/lamps to T-8 or T-5
      • Relamp 32 watt T-8 lamps with 28 watt T-8
      • Eliminate incandescent bulbs
      • Convert all exit lighting to LEDs or switch to photoluminescent signs that require no electricity
      • Beware of retrofitting with indirect lighting – while classy looking it may require more fixtures and more wattage
    • Increase reliance on task lighting in order to decrease general illumination without adversely affecting productivity
    • Improve lighting controls
      • Occupancy sensors
      • Timers (stand alone or energy management system or EMS-interfaced)
      • Daylight harvesting sensors and controls including simple photocells
    • Convert outdoor lighting to high pressure sodium
    • Eliminate/reduce outdoor decorative lighting
    • Consider LEDs for general indoor and outdoor illumination (the technology is almost there)
    • Consider outdoor solar powered-LED light fixtures (this technology is also almost there)
    • Require white or off-white wall paints for maximum light reflectivity so adequate lighting levels can be achieved with minimum lighting wattage
    • When renovating spaces, design new lighting for less than 1.0 watts per square foot
  • Boilers
    • Replace old boilers with new high efficiency boilers
    • Do not oversize replacement boilers
    • Retrofit boilers with variable flame burners
    • Consider multiple high efficiency modular boilers to improve efficiency by better matching hot water heating loads
    • Consider replacing boilers with cogenerators (which also produce electricity)
    • Control boiler output water temperature with outside air temp reset so boiler does not need to heat water hotter than necessary
    • Retrofit boilers with flue gas/stack heat recovery
  • Chillers
    • Replace old chillers with new high efficiency chillers whose efficiency curve best matches your load profile
    • Do not oversize replacement chillers
    • Operate at peak efficiency (by adjusting water flow, load, condenser/evaporator water temps, etc.)
    • Replace old cooling towers with new high efficiency towers
  • Air conditioning
    • Replace older AC equipment with maximum efficiency models
    • Discontinue use of inefficient window units
    • Reduce AC operating hours
    • Turn off reheats and stop controlling humidity levels during the cooling season
    • Clean cooling coils on a regular basis
    • Maximize use of “free cooling” with economizer cycle
    • Use open windows and passive cooling when mechanical air conditioning is not needed
    • Close windows when air conditioning is in operation
    • In dry climates consider evaporative cooling
    • In humid areas consider desiccant cooling
  • Temperature control
    • Reduce temperature settings in winter
    • Increase temperature settings in summer
    • Maximize night, weekend and holiday temperature setbacks
    • Install tamper proof or remote thermostats
    • Control space temp remotely by EMS
    • If occupant controlled thermostats are required, then limit range of adjustment to ensure campus temperature policy compliance
  • Motors, fans and pumps
    • Adjust operating schedule to minimize run hours (review and update periodically)
    • Replace old motors, pumps, and air handling units with high efficiency
    • Control motors serving fans and pumps with variable speed drives (VSDs)
    • Operate VSDs at maximum acceptable turn-down; vary by time of day and occupancy; also vary by season
    • Convert constant volume fan system to variable air volume
    • Reduce outside air volume during morning warm-up cycle and where/whenever possible through damper settings and demand control ventilation
    • Reduce needless pumping by eliminating three-way by-pass valves
  • Laboratory Ventilation and Fume Hoods
    • Switch to a “green chemistry” teaching program that doesn’t require fume hoods
    • Turn off 100% outside air ventilating systems whenever possible, e.g. in teaching labs whenever classes are not in session; shut down or slow down related supply fans
    • Decommission/remove unneeded fume hoods and reduce fan system outside air volume
    • Eliminate unneeded fume hoods by using ventilated storage cabinets instead of hoods for chemical storage
    • Retrofit constant volume fume hood ventilation systems to variable air volume
    • Retrofit conventional fume hoods with low-flow hoods and reduce outside air volumes
    • Retrofit these systems with heat recovery
  • Heat recovery
    • Run around loops
    • Heat wheels
    • Heat pipes
    • Desiccant wheels
    • Air-to-air heat exchangers
    • Install heat recovery
  • Energy Management Systems (EMS)
    • Switch to direct digital control (DDC) systems
    • Purchase EMS systems which are easy to program (so programming capabilities will be fully utilized by facilities staff)
    • Utilize and optimize use of EMS energy conservation programs, e.g.
      • Optimal start/stop
      • Night setback
      • Demand shedding
      • Remote programmed lighting control
  • Fuel Switching
    • Consider converting electric space and water heating to natural gas
  • Energy Intelligence & feedback systems
    • Accessible display units that show energy use and savings can have dramatic results in energy use behaviors

How to Take Advantage of Energy Deregulation

interconnected groups
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First, you need to verify that your state is deregulated for the energy source you wish to purchase in a competitive market. Next you must determine whether you have the capability and expertise in-house to find the right supplier and products for your organization. Purchasing energy supply through a competitive supplier is risky if the purchaser in uninformed or unfamiliar with how energy markets work. Brokers and aggregators negotiate power purchase agreements on a daily basis and have a good real time feel for the market and where it’s heading. Oftentimes a broker and or aggregator can procure energy at much lower rates than an end-user could get on its own. Make sure to follow our energy deregulation checklist before determining the best way to purchase energy.

interconnected groupsEnergy Aggregators

Aggregation is the grouping of utility customers to purchase as a group. Pooling purchasing power could result in more favorable pricing compared to the individual members purchasing based solely on their unique usage. Developing the right energy purchasing strategy is a complex challenge for busy facilities managers or business owners wearing many different “hats” within an organization. A reputable and qualified energy aggregator or broker acting as an independent energy advisor can help guide the person responsible for energy costs. Outsourcing procurement often results in significantly higher savings for the end user while mitigating downside risk. Choosing the right partner is crucial to maximizing the advantages created through deregulated energy markets.

  Advantages:

  • You can reduce internal administrative expenses and maintain focus on your core business. The energy market is complicated and it may make sense for you and your business to outsource procurement services to a company specializes in energy procurement to save you money and time.
  • You can share fees with other entities in an aggregation group. This is an advantage for any entity because you can likely spread the aggregation/broker fees out with the other entities in the aggregation group. Lower fees combined with more purchasing power will result in further cost reductions.
  • Suppliers are more interested and pay more attention (more competition) with a larger purchasing block. Economies of scale come into play for aggregators. The more KWH combined in an aggregation pool lowers the fixed cost/KWH and results in lower rates for the users involved in the aggregation group.
  • -Lower rates result from combining dissimilar user profiles. Some businesses use more energy in the winter months and others in the summer. Irregular usage may result in higher rates from competitive markets because the suppliers can’t forecast usage throughout the year. Joining an aggregation comprised of end-users with dissimilar usage profiles may result in lower rates.

Factors to consider before joining an aggregation: 

  • Size of load – The amount of energy your building or business consumers during a period of time (Kwh or Btu).
  • Load profile – Your profile refers to how or when you use energy. Some businesses use approximately the same amount each month. Other businesses, for instance seasonal businesses, use more energy in some months and significantly less during other months. The inconsistent usage may increase pricing available to a particular customer.
  • Risk tolerance – Different products present different levels of risk. You should evaluate the appropriate level of risk for your firm before determining the best product.
  • Contract length flexibility – You should verify that the contract length for the aggregation group fits your particular risk profile and needs.

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