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									Performance Contracting A Case Study
Mount Wachusett Community College Energy Conservation & Conversion: A Cost Sharing Approach

Presenters
• David Lewis, Conservation Planner, Division of Capital Asset Management • Ed Terceiro, Executive Vice President, Mount Wachusett Community College

DCAM Energy Performance Contracting Program
• Maximize Operational Efficiency • Conserve Resources/Pollution Prevention • Demonstrate Renewable Energy Technology (where appropriate)

Mount Wachusett Community College – Project Overview
• Funded through Chapter 25A • RFP developed in cooperation with facility including specific ECMs (i.e. renewables, cogeneration, fuel switching) • Advertise and solicit proposals from certified energy performance contractors • Review proposals and interview prospective energy service companies • Selection based on evaluation criteria ( not necessarily lowest bid) • Develop technical facility energy audit • Draft Energy Services Agreement • Establish Tax Exempt Lease Finance Agreement

Agency Involvement
• Project Involvement and Funding Sources Department of Energy Resources U.S. Department of Energy Mass Technology Collaborative

Project ECMs
• Conversion of electric to biomass fuel • Energy efficient lighting (interior/exterior) • Install variable frequency drives and premium efficiency motors • Domestic water conservation (low GPF toilets/low GPM sinks) • Expansion of central chilled water system for cooling

Results (11/20/02 – 12/20/04)
• Electric Savings: Approximately 9.3M kwh • Water Savings: 6.6 M gals • Total dollar savings: Approximately $661,000

Environmental Benefits
• 5729 tons of CO2 saved to date • 34 tons of SO2 saved to date • 11.4 tons of NOx saved to date

Statement of Problem
•Due to its geographic location and its total dependency on electricity, MWCC utility bills exceeded $850,000 annually. •State support for the institution was at an all-time low •As with all institutions we were faced with a rapid proliferation of new and very costly technological applications

Overview of College
•280 acre site located in a snow belt at the highest elevation in north-central Massachusetts •465,000 s.f. of classrooms, laboratories, library, theater, gymnasium, etc. •The College utilized electricity as its sole source of climate control •Enrollment 5,000 day & evening students

Critical Issues
• The rising and disproportionate costs of energy in the Northeast • The Nation’s continued dependence on foreign oil & its impact on national security • The obligation to address the need for increased energy production in consort with environmental protection • The need to keep student cost as low as possible

COMPARISON OF UTILTITY COSTS/SF
$1.85
$2.00 $1.80 $1.60 $1.40

$0.94
$1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00

Mount Wachusett Community College

Massachusetts Comm. College Average

DISTRIBUTION OF UTILITY COSTS
Domestic Hot Water 4.7% Lighting & Equipment 27.6% Heating, Ventilating & Cooling 67.7%

REQUIRED RESOURCES
• • • • • Total Project Cost: DOE Grant: MassElectric Rebates: DCAM Deferred Maint: Additional Funds Needed: $4,130,213 ($1,000,000) ($ 173,914) ($ 344,999) $2,611,300

$2,611,300 Challenge!!!
• Massachusetts Technology Collaborative • Tax Exempt Lease Purchase (Funded by Guaranteed Energy Savings) $ 750,000 $1,861,300

Investment
9% 1% 10% 1% 1%
Lighting Water Conservation Infrastructure VFD BioMass DHW conversion

78%

Savings
DHW conversion 5%

Lighting 32%

Lighting Water Conservation Infrastructure VFD BioMass DHW conversion

BioMass 52% VFD 4%

Water Conservation 7% Infrastructure 0%

Investment and Cash Flow
Lifetime Project Cost and Funding

15% 2% 17% 39% 13% 46% 7%
Guaranteed Savings Net Cash Flow Utility Rebate DOE Grant MTC Grant Maintenance Savings

Performance Contracting Benefits
Project Costs are Paid from Existing Budgets
100% 80% 60% 40% 20% 0% Before Contract
Utilities

During Contract
Investment

After Contract
Savings

WHY BIOMASS??
By incorporating a biomass cogeneration process, the College will be utilizing a fuel source that is renewable, locally available, cost effective, environmentally friendly and publicly acceptable.

WHY BIOMASS??
• The principle economic advantage of biomass cogeneration is that the fuel is considerably less expensive than competing fuels. • In the Northeast, electricity generally costs eight to ten times more per unit of energy than wood chips; oil and natural gas cost roughly two to two and one-half times as much as wood chips.

WHY BIOMASS?
• Availability of Supply

• Predictability of Cost
• Environmental Impact

AVAILABILITY OF SUPPLY
• Biomass fuel comes from a renewable resource base • Biomass fuel is available in great quantity in every state in the northeast • The U.S. has enough agricultural and forest land available to produce enormous quantities of biomass in a sustainable way, enough for example, to replace half of our gasoline usage or our nuclear power twice over. This will allow us to keep part of the $70 billion a year we now spend on imported oil in this country

PREDICTABILITY
• Biomass fuel prices have historically been very stable and they are not directly linked to national or global energy markets • Biomass pricing is not subject to monopolistic control • Biomass fuel dollars stay in the local economy instead of going to other states or foreign countries (80% of every dollar spent on fossil fuel leaves the state while 100% of every dollar spent on biomass fuel remains in the state)

ENVIRONMENTAL ISSUES
• Biomass has negligible sulfur content, so its combustion does not contribute to acid rain • When biomass is linked to responsible sustainable forest practices, there is no net increase in greenhouse gases that cause global warming • Unlike fossil fuels like coal or oil, which simply release CO2 as they burn, biomass needs CO2 to grow, thus adding no net greenhouse gases to the atmosphere and creating a closed carbon loop • Certain forms of biomass are considered waste products; burning them for energy can reduce disposal costs

Biomass Conversion Project - Summary of ECMs
1. 2. 3. 4.
5. 6. 7. 8. 9.

Energy Efficient Lighting Domestic Water Conservation Variable Frequency Drives Convert Whole Campus to Wood Chip Plant with Oil-Fired Backup Replace/retrofit all Unit Ventilators Domestic Hot Water Heat Exchanger Consolidated Compressor Farm Exterior Lighting Power Plant Addition

Biomass Conversion – Phase I
Conversion of Electric Heat, Domestic Hot Water System to Closed Loop Hydronic Biomass System • 320 bhp wood chip gasifier with 300 bhp oil fired backup • Computer controlled facility • The system has been equipped with a 180 unit baghouse

Biomass Conversion – Phase I
• Expected Unit Savings Electricity (kWh) 3,382,518, annually ( 38.42% reduction , enough to serve approximately 1000 residential customers per year) Water (cf) 297,050, annually ( 52.52% reduction)

Biomass Conversion – Phase II
A 50 kW Combined Heat & Power (CHP) gasifier and co-gen set will be installed which will generate electricity to meet the total climate requirements of the College’s new Childcare Center
The downdraft gasification technology employed produces the lowest emissions of tars and complex hydrocarbons of any known wood combustion technology

Biomass Conversion
• This project has resulted in a state of the art energy facility that uses a renewable fuel to achieve predicable and impressive energy savings.

LESSONS LEARNED
• View project holistically • Identify all players needed to make the project happen! (Vendors, Federal, State & local agencies, permitting agencies, etc.) • Get all stakeholders to the table early and emphasize how they will benefit from project • Explore a variety of funding opportunities parlaying one success to leverage another • Explore alternative revenue streams • Use the experts!!! You don’t have to do it all!!! • Look at long-term & short term benefits i.e. impact on deferred maintenance, use of warranties, guarantees, etc

• Don’t Accept “No” for an answer!!!

SIGNIFICANCE OF PROJECT
• Project addresses the nation’s energy and security policies • Joint venture involving Federal, State and local agencies • Project is environmentally friendly • Project will stimulate local economy • Project will eliminate waste stream

SIGNIFICANCE OF PROJECT
• College students, faculty and staff have benefited from improved lighting, climate control, curriculum enhancements and training opportunities • Demand-side management will result in energy savings of over 3.3M KWH of electricity and 297K cf of water in Phase I • $4.2M project, that replaced the College’s entire mechanical infrastructure, was completed without any institutional funds!!!

Financial Impact of Energy Savings Performance Contract
• TELP Loan Annual Payment $264,306 • Less Guaranteed Energy Savings $272,826 • Positive Cash Flow $8,520, annually (Phase I) • Expected Energy Savings have been intentionally calculated conservatively and are expected to be considerably higher approaching $300K-$400K at close of contract

WIN

WIN

WIN

WIN

COLLEGE STUDENTS MASSACHUSETT S COUNTRY


								
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