Energy Savings through Performance Contracting

at Wastewater Treatment Plants Tom Appleman, Brian Owsenek: Upper Occoquan Service Authority • Dennis Clough: ConEdison Solutions
Mike Hanna, Steve Tarallo: Black & Veatch Corporation

the problem Benchmarking Wastewater Treatment Plant Energy Costs are Significant case study: upper occoquan Estimated 13.4-year-average SPB for 11 ECMs at UOSA
Electricity Use Intensity (AwwaRF, 2007) Expenditure for U.S.
Annual Electricity Consumption at U.S.
Treatment Trickling Activated Advanced Advanced Wastewater Utilities service authority (va) ECM Description

Construction Avg. Annual Simple Payback
Price Savings (Avg. Savings)
WWTPs is Expected to Reach 26 billion Plant Filter Sludge WWT w/o WWT with 2-W Jockey pumps with Variable Frequency Drives $380,315 $31,118 12.2 years
n Preliminary treatment
kWh in 2020; 30 billion in 2050 Capacity (kW-hr/MG) (kW-hr/MG) Nitrification Nitrification
Percent of 80 survey respondents

32 (kW-hr/MG) (kW-hr/MG) Percentage of annual n Primary treatment Lighting Improvements (all buildings) $1,495,533 $167,319 8.9 years
budget that is
1 MGD 1,811 2.236 2.596 2.951 energy-related
n MLE activated sludge Push-button control of unit heaters (all buildings) $81,293 $12,105 6.7 years
30 21% 11%
5 MGD 978 1,369 1,573 1,926 >30% Reduction in Airflow in selected rooms when
28
n High-lime process unoccupied (all buildings) $1,101,085 $129,644 8.5 years
10 MGD 852 1,203 1,408 1,791
billion kWh/yr

21% 20-30%
16% n Chemical clarifiers Add CO2 based demand control ventilation for
26
20 MGD 750 1,114 1,303 1,676 10-20% administration areas $19,331 $8,386 2.3 years
n Recarbonation
24
50 MGD 687 1,051 1,216 1,588 5-10% Filter effluent piping improvements $138,719 $21,358 6.5 years
Baseline Projection
100 MGD 673 1,028 1,188 1,558 31% n Sand filtration
22
<5% Humidity-based ventilation control $68,039 $23,053 3.0 years
Unit Electricity +5% n Activated carbon filtration Filter effluent rather than W-2 for chiller cooling $316,203 $13,727 2.0 years
20

18
Source: EPRI, 2002 Unit Electricity +2.5%
the opportunity: 1/3 of respondents > 20% of annual budget n Chlorination (hypo) Condensate use for building heating $740,790 $49,507 15.0 years

energy performance contracting

2000 2010 2020 2030 2040 2050 n DAF Turbo blower and aeration system (building V/1) $1,486,689 $167,278 8.9 years
n Anaerobic digestion Digester gas-driven cogeneration $4,327,370 $282,082 15.3 years
Wastewater Utilities’ 54 MGD Advanced Water
What is Energy Performance Typical Systems Targeted for Energy Reduction at Reclamation Plant for n Centrifuge dewatering Other project fees $1,968,867
Electrical Energy Costs Increased
Contracting? Wastewater Treatment Plants Indirect Potable Reuse n Heat drying/pelletization Total Project Estimate $12,124,234 $905,577 13.4 years
> 8% Per Year from 2004 to 2007
$0.18
n A contract for the implementation n Pumping systems n Process optimization
$0.16
of energy conservation measures n Motors n Building energy management
and facility, technology, and n Aeration system (blowers,
Cost per kWh Used

$0.14 n HVAC
$0.12 infrastructure improvements. n Lighting systems diffusers, controls)
n Single contract with an Energy n Utility rate options n Digesters (mixing, biogas
the results conclusion
$0.10

$0.08 Service Company (ESCO) n Power generation and production)

n Energy performance guarantee Estimated Annual Cash Flow Savings
$0.06
distribution (cogener- n Chilled/hot/domestic water Advantages of Energy Performance
$0.04
from ESCO ation, renewables) distribution systems
UOSA Annual Energy Costs – Before and Would Add $16.9M in Additional Cash
$0.02
2007
n Some or all of the project costs are After Energy Performance Contract Flow to UOSA Over Next 20 Years Contracting
Source: The 2008 NACWA Financial Survey 2004
funded from energy cost savings
$0.00
Where Do the Savings Come From? Positive attributes of performance-based design-build
$18
0 10 20 30 40 50 60 70 80 90 100 $9,000,000
$16.9M in n
Percent of Agencies Below Value n Post-installation Measurement and
Capital Facility Upgrades Additional Cashflow
n Funds capital improvements without capital dollars

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$16
$8,000,000

Verification of savings (M&V) Annual Energy Expense Before Project n Provides financing alternatives
Rising Electrical Energy Cost Trend is
Guaranteed Cost Savings (Energy & O&M)

Leverages existing capital funds, combining

$14
$7,000,000
n
Expected to Continue Well into the Future Other
Costs
Operational $6,000,000
Annual Energy Expense After Project
$12 with energy savings to enhance planned projects
$0.20
Projected nominal retail price of
Costs
n Optimizes energy use
n Bottom-line focused
$10
$0.18 $5,000,000

$0.16
electricity in Commercial sector, Water
Systems
Mechanical
Systems
Electrical
Systems
Building
Systems
Wasted $
From Operation
Loan Payment and O&M

U.S. average, 2008-2035

Cost per kWh Used

Inefficiencies
The Energy Performance
$8

$0.14
$4,000,000

Annual Savings What are the pitfalls?

$0.12
Contracting Process Utility ESCO $6

Some loss of owner control over project delivery

$3,000,000

$0.10 Net Savings n

$0.08
Phase 1 Phase 2 Phase 3 Phase 4
$2,000,000
$4
n Turnkey, but still takes staff time
Annual Cash Flow
$0.06
Selection Process Investment Grade Audit Construction Performance Management $2 n Need to understand roles and responsibilities.
Must have a clear understanding of
$0.04 $1,000,000

The utility reviews audit and The utility approves final The utility approves The utility witnesses on-site n
$0.02 decides to move forward project specifics, signs substantial and final M&V to verify savings and
$0.00
Source: Annual Energy Outlook 2010, with Projections to 2035 (U.S. Energy Information Administration, 2010)
with detailed investigation performance contract, and completion of all works with ESCO towards $0
$0
measurement and verification
provides “Notice to Proceed” construction continuous improvement
2005 2011 2017 2023 2029 2035 ($2) n May or may not impact utility’s debt limit.