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Six Sigma Project “EnergyEdge” Energy Conservation Management Program Six Sigma projects presentation guide V 2 January 2004 1 Business Background Schneider Electric North Andover Ma. USA Facility NAOD 36 Converse TAC TAC 37 14 5E AGP Cafe 7 TAC5W 6 Six Sigma projects presentation guide V 2 January 2004 2 Business Background • Site Summary •Schneider Building Complex •USA, North Andover Ma. Building Total Area Number of Occupied Hours Usage (square feet) Floors (Monday-Friday) B5&6 59,000 1 to 3 6:00am to 7pm Cafeteria, Office (TAC) B7 76,000 3 6:00am to 7pm Office (SE) B14 96,000 5 6:00am to 7pm Office (Tenant / SE) B36 58,000 2 6:00am to 7pm Warehouse,Office (Tenant / SE) B37 80,000 1 1st: 6am to 2pm Light manufacturing and testing of 2nd: 2pm to 10pm electronics. Processes include (low occupancy) manual assembly, testing and PCB 3rd: 10pm to 6am soldering applications. TAC, SE) (low occupancy) Six Sigma projects presentation guide V 2 January 2004 3 Business Background Site Summary: • Multiple Occupants – AGP (American Global Products) – TAS (Telemecanique Automation Services) – TAC (Tour Andover Controls) – Converse (tenant) • Multiple Usages – Warehouse – Office – Light manufacturing (PCB mfg. and electrical assembly) Six Sigma projects presentation guide V 2 January 2004 4 Team Make up Six Sigma Team: • Steve Laham (AGP Finance, Project Sponsor) • Scott Fairbanks (AGP Facilities, Project Leader) • Fred Doherty (TAC, Sales Engineer) • Dan Nault (AGP Facilities) • Mark Luckes (TAC Facilities) • Alex Stevens (DMI, Demand Management Institute, Consultant Energy Engineer) • Allen Reed (AGP Quality, Black Belt) • Bob Bibeau (AGP Quality, Green Belt) Six Sigma projects presentation guide V 2 January 2004 5 Define The Business Problem D M A I C Energy cost to heat, cool, light and run machinery in our facilities continues to rise Six Sigma projects presentation guide V 2 January 2004 6 Define D M A I C Project Charter: • Decrease the energy usage and promote conservation of energy within the One High Street complex – Potential savings: reduce our $1.2Mill. current energy cost) – Reduction of hazardous environmental emissions – Added comfort to visiting customers and employees Six Sigma projects presentation guide V 2 January 2004 7 Define D M A I C • Perform an “energy audit”: • To clearly identify the types and costs of energy use • To understand how the energy is being used - and possibly wasted • To identify and analyze various ECM (Energy Conservation Measures) alternatives such as improved operational techniques and/or new equipment that could substantially reduce energy costs • To perform an economic analysis on those alternatives and determine which ones are cost effective for the business or industry involved Six Sigma projects presentation guide V 2 January 2004 8 Define SIPOC Map Supplier Input Process Output Customer •Supplier: Energy provider •Input: Electricity, Equipment •Process: Reduce the usage of electricity needed to provide building heat, light and cooling •Output: Lower energy cost to provide a work environment for SE employees. Lower operating cost = higher profits •Customer: Schneider Electric stock holders Six Sigma projects presentation guide V 2 January 2004 9 Measure D M A I C • Audit the energy consumption of selected buildings to determine which types of energy are used and the amount of each. • Analyze which operations/processes consume extensive amounts of energy in each building • Plan measures by which individual building can conserve energy used in their high-energy using operations/processes • Assess potential energy savings opportunities in each facility, including building envelope as well as mechanical and engineering systems based on energy audit results by means of a “walk-through audit.” • Inventory mechanical and electrical systems and their operating schedules. Six Sigma projects presentation guide V 2 January 2004 10 Measure D M A I C • Identify existing monitoring and metering equipment. • Interview facilities’ users about operating and comfort needs. • Evaluate the facility operating schedule and the operating and maintenance practices of current operation and maintenance staff. • Develop a “potential energy savings opportunity checklist” for each facility. Consider such measures: (1) Computerized energy management systems for automated equipment operation and monitoring and performance and energy consumption; (2) Additional monitoring and metering equipment; (3) Integration of innovative technologies. Six Sigma projects presentation guide V 2 January 2004 11 Measure D M A I C Actual Results Analysis Summary: • 863k kWh annual electrical savings possible – Annual electrical savings $106k – Reduction in gas emissions to the environment as a result of the electrical savings: • Emissions Reductions – Type of gas Tons/yr. reduced – CO2 (Carbon dioxide) 863 – SOx (Sulfur oxides) 7 – NOx (Nitrogen oxides) 4 Six Sigma projects presentation guide V 2 January 2004 12 Measure Actual Results D M A I C Total Program Savings Summary:Phase one • Cost to implement:____________$446k • Less utility incentives :_________-$163 ====== $283k (net cost) • Savings per year:__________$106k (2005 $) • $283k(nc) / $106k(s/y) = 2.7 Net payback yrs. Six Sigma projects presentation guide V 2 January 2004 13 Measure D M A I C Potential Savings Pareto of ECM savings 400,000 $60,000 350,000 $50,000 300,000 $40,000 Savings 250,000 200,000 $30,000 150,000 $20,000 100,000 $10,000 50,000 0 $- op ls ns s 7 e at op /3 ro id lo .. fa he .. p. 36 er nt p. lo p er cu ov -B d co m n p w ar oc io pu m fit to ith g bo at pu in on tro at g w ul se ht in He at rc re ls d ba ig ol he Estimated Savings se ro ci g rl co ric in nt ba op e ri o nc (kWh / yr) ht on co ct lo AC te ig la le g SD Ex p rl ba fe HV in m rio lV lo ht pu to 37 lig te Estimated Savings al ro Ds at lB In st nt ex he VS In ($/yr) ro Co pl e nt m e cl Us Co Co Cy ECM description Six Sigma projects presentation guide V 2 January 2004 14 Measure D M A I C Potential Savings Pareto of Phase 2 ECM savings 400,000 $60,000 350,000 $50,000 300,000 $40,000 250,000 Savings 200,000 $30,000 150,000 $20,000 100,000 $10,000 50,000 0 $- y 7 e nc /3 id 36 er pa ov -B cu fit oc ith tro w on re ls d ro Estimated Savings g se in nt ba ht co (kWh / yr) ig AC g rl in HV rio ht lig te 37 Estimated Savings In lB ex ($/yr) pl ro m nt Co Co ECM description Six Sigma projects presentation guide V 2 January 2004 15 Analysis D M A I C The cause & effect diagram above helped the team identify a common cause that was the leading influencer of high energy costs. Six Sigma projects presentation guide V 2 January 2004 16 Analysis D M A I C Results from fish bone analysis: • A common waster of energy is having lights, heat, cooling and pumps on and running when there is no or little occupancy in a building. • Adding controls to HVAC systems (Heating Ventilation Air Conditioning) and lighting is needed to lower our energy costs in the future. Six Sigma projects presentation guide V 2 January 2004 17 Analysis D M A I C Detailed Process Map Perform Develop a list of Energy Gather nameplate date Start walkthrough of off motors / equipment Conservation Measures facility (ECMs) Determine previous year Estimate pay-back Substantial No energy Stop bill for each ECM identified period of each ECM savings potential Yes Energy Engineering Financial Engineering Select ECMs Determine financial objectives Negotiate contract for engineering audit to implement Determine expected cash flows Perform audit focused on each ECM Develop financing plan Determine energy savings potential of each ECM Execution Obtain financing approval Validate savings Design and implement ECMs Track annual energy savings End Perform testing and performance Substantiate environmental compliance Verification Energy Conservation Measures ECMs: An ECM is a discreet measure you The process map was used to identify what steps needed to be can take to conserve energy performed in order to identify viable ECM for the team to evaluate. Example: Install variable speed fan motor with a payback of 1.9 years Six Sigma projects presentation guide V 2 January 2004 18 Improve D M A I C Actual results of the facilities “walk through” identified 10 potential ECMs (Energy Conservation Measures) for analysis where wasted energy could be saved. • ECM 1. Add a VFD (Variable Frequency Drive) to balance a heat pump loop bypass for the heat exchanger when not rejecting heat • ECM 2. Add a heat pump loop temperature reset • ECM 3. Add a Cycling control to the heat pump loop pump and supply fans to cycle both during unoccupied hours • ECM 4. Improve ventilation system and controls in heat pump room • ECM 5. Install VFD (Variable Frequency Drive) on cooling tower fans • ECM 6. Install interior lighting controls and replace inefficient light fixtures • ECM 7. Add controls to HVAC system in bldg.36/37 to run based on occupancy • ECM 8. Add controls to exterior lighting • ECM 9. Add controls to all electric base board heaters • ECM10. Add lighting controls with a telephone override in low usage areas Six Sigma projects presentation guide V 2 January 2004 19 Improve D M A I C Gross Potential Net Net Energy Concervation Measure Cost Estimated Savings Payback Incentive Cost Payback ECM # Description $ (kWh / yr) | ($/yr) (yrs) ($) *** $ (yrs) 1.1 Use VSDs to balance heat pump loops $ 50,884 119,605 $14,759 3.4 $21,367 $29,517 2.0 1.2 Bypass heat Exchangers 2 Heat pump loop $ 10,500 15,279 $1,885 5.6 $4,725 $5,775 3.1 3.1 Cycle heat pump loop circulation pumps $ 106,400 297,310 $ 36,688 2.9 $ 33,024 $ 73,376 2.0 3.2 Cycle heat pump supply fans * 4 Improve ventilation system and controls N/A N/A N/A N/A N/A N/A N/A 5 Install VSD on cooling tower fans $ 28,883 25,825 $ 3,187 9.1 $ 12,997 $ 15,886 5.0 6 Interior lighting retrofit -B36/37 $ 100,000 178,736 $ 22,056 4.5 $ 24,840 $ 75,160 3.4 7 Control B37 HVAC based on occupancy $ 51,500 243,410 $ 30,037 1.7 $ 51,500 1.7 8 Exterior lighting controls $ 15,500 16,891 $ 2,084 7.4 $ 15,500 7.4 9 Control of electric baseboard heat $ 22,747 59,836 $ 7,384 3.1 $ 7,979 $ 14,768 2.0 10.1 Complex lighting controls with overide $ 219,587 390,309 $ 48,164 4.6 $ 98,814 $ 120,773 2.5 10.2 Manufacturing & storage lighting controls 10.3 Cafeteria lighting controls Totals= $ 606,000 1,347,202 $ 166,245 3.6 $ 203,746 $ 402,254 2.4 = Phase 2 of EnergyEdge Program *** Incentives provided by Energy provider Six Sigma projects presentation guide V 2 January 2004 20 Improve D M A I C Benefits • Reduce your energy bill • Improve the productivity & comfort of customers and employees • Take advantage of energy incentive programs offered by your energy providers • Reduction of hazardous environmental emissions • Improve your bottom line - all at the same time! Six Sigma projects presentation guide V 2 January 2004 21 Control D M A I C Six Sigma projects presentation guide V 2 January 2004 22 Lessons Learned D M A I C Ensure that project leader has strong project management skills Test project implementation prior to role out Communicate to the organization being effected prior to role out Establish a strong working relationship with contractors Verify expected savings prior to implementation There are many energy conservation opportunities in a typical industrial building Heating , lighting and cooling represent the biggest opportunities for payback in energy conservation measures Manufacturing processes that are high energy users are more difficult to implement energy conservation Implement a reporting system to monitor actual savings Six Sigma projects presentation guide V 2 January 2004 23 Control D M A I C Savings per year:_Phase 2____$106,446 (2005 $) • Steps to insure yearly savings of $106,446 for the next four years – Regular meetings to review facility changes – Additions, renovations – Changes in building usage – Changes in utility service – Additions / modifications of existing equipment – Planned maintenance of facility / equipment – Regular inspections, cleanings, calibrations, adjustments and repairs to equipment – Review of monthly performance reports to insure actual savings verses estimated savings – Training of facilities personnel to understand energy savings concepts to improve facility operations Six Sigma projects presentation guide V 2 January 2004 24