The reason is simple economics. According to the Environmental Protection Agency (EPA), the nation's educational institutions spend almost $14 billion annually on energy. Saving even a small percentage of this amount could result in savings in the millions of dollars- money that could be spent on student programs and services, college initiatives, instruction, scholarships, infrastructure improvements, etc. It can also improve the campus brand and, in the competitive recruiting process, attract students who with increasing frequency are looking for schools that take seriously their commitment to sustainability.
The time to act is now. Energy rates continue to climb, as do demand charges. Renewable technologies are more affordable than they were even five years ago. Data is more readily available to identify inefficiencies and failures. And, the practice of deferred maintenance is catching up to facility managers, who now must consider costly repairs or new and expensive equipment purchases.
Energy Storage Avoids Peak Demand Charges
Fortunately, private universities and colleges looking to improve energy efficiency and reduce greenhouse gas emissions have options that go well beyond equipment repair and replacement. Energy storage-either thermal or battery-is an example. Cold water thermal energy storage is the process of cooling water at night during off-peak hours and piping it to a large water tank for storage until it can be used to feed chillers during the day, when energy prices are highest. Similarly, a battery storage system draws energy during the night, again when energy prices are lowest, stores it and uses that energy during the day to power mechanical equipment and avoid peak demand energy pricing. Another energy-saving option uses heat recovery chillers to capture heat exhausted by the chiller. The recovered heat can be redirected for various heating applications, which saves energy while maintaining comfort conditions.
VFDs and Sensors Play Key Roles in Energy Efficiency
Variable frequency drives (VFDs) are also becoming popular as a means of saving energy. A VFD has the ability to save the user money by consuming only the power that's needed. Much like the throttle in a car, a VFD adjusts the speed of a heating, ventilation and air-conditioning (HVAC) fan or pump motor, based on demand, to save energy and prolong motor and mechanical component life. A VFD conserves energy when an HVAC control system senses that a fan or pump motor can meet heating or cooling needs by running at less than 100 percent power. Sensors, too, can support an energy efficiency program. A combination of motion, occupancy and photo sensors can be used to turn lights on and off and adjust the airflow of an HVAC system, saving energy in the process.
Microgrids Control Energy Generation and Distribution
Universities and colleges are also turning their attention to microgrids as they consider ways to improve campus energy efficiency. Think of a microgrid as a local energy grid that operates within the confines of a campus, giving it the ability to control the generation, transmission and distribution of energy. The microgrid is actually a small-scale version of a traditional power grid that can draw energy from a variety of conventional and renewable technologies. It can be connected to a larger electric grid, but can also work independently.
In addition to saving energy, microgrids mitigate the risk of prolonged blackouts caused by natural disasters. The renewable technologies that power some of these microgrids represent yet another option private universities and colleges can consider as they design a path to energy independence. Anytime a university can generate energy on-site, either from solar photovoltaic systems, wind power systems and/or co-generation facilities, they enhance service reliability and reduce energy costs and their carbon footprint.
Predictive Optimization Uses Future to Save in Present
Another new technology that is gaining traction among those looking to better control their energy usage is predictive optimization, which enables facility managers to predict and anticipate where campus energy needs will be. A predictive control software system has the ability to optimize cost and energy use based on the weather forecast and future grid electricity prices. The software can also predict hourly campus heating and cooling needs, and then determine how to best run the heating and cooling equipment to meet those needs efficiently and with as little waste as possible.
Stanford Combines Energy-saving Solutions
As universities consider these and other energy-saving solutions, it's important to note that they are not stand-alone options. As Stanford University demonstrates, they can be used in combination to achieve dramatic results. Stanford's new energy plant combines heat recovery chillers, hot and cold water thermal energy storage and a patented smart technology system that uses 10-day weather forecasts and electricity pricing forecasts to optimize its central energy plant. The university is also committed to providing the majority of its campus electricity from renewable sources within California.
The university's custom-engineered heat-recovery process is 70 percent more efficient than the cogeneration process Stanford used since 1987. The heat-recovery chillers will meet more than 90 percent of campus heating demands by capturing almost two-thirds of the waste heat generated by the campus cooling system to produce hot water for the heating system. Stanford officials predict the new energy system will save the school $420 million over 35 years. It will reduce greenhouse gas emissions by 68 percent initially and enable them to save 90 percent in the future. Additionally, the school has reduced its water use by 15 percent.
Multiple Ways to Fund Energy-saving Projects
An investment like the one Stanford has made will save money in the long term. But how do universities fund an investment like this in the short term? In addition to traditional debt financing, several other funding mechanisms are available, including direct funding, in which a utility lends money to a private campus for improvements, and the debt appears on the utility bill. The university makes one payment each billing cycle that covers current usage and the debt payment.
Another option, public-private partnerships (P3), is a government service or private business venture funded and operated through a partnership of government and one or more private sector companies. If a university does not want to or cannot increase its direct levels of borrowing, a P3 enables the school to develop projects on an "off-balance sheet" basis, allowing the university to maintain its credit rating and debt capacity.
Performance contracting is also gaining traction among private universities as a way to finance campus improvements. In this program, energy and operational savings over a specified time period are used to fund infrastructure improvements through a financial arrangement provided by a third-party financial institution or an energy services company (ESCO). The projects are designed so that the annual energy and operational savings are greater than or equal to the required payments over the term of the contract, leaving a net neutral impact on a customer's budget. In a performance contract, some or all of the energy and operational savings are guaranteed by the ESCO over the term of the contract. If the guaranteed savings are not realized, the ESCO pays the customer the difference between what is saved and the guaranteed savings amount. With performance contracting, the risk of performance belongs to the ESCO, which takes complete turn-key responsibility for the project, including performance measurement and verification.
Whatever the funding mechanism, whatever the means to achieve energy savings, the goals are usually the same-improved energy efficiency, reduced greenhouse gas emissions and lower utility costs. Additionally, energy-saving projects can attract students and staff who are serious about environmental issues, improve learning environments for instructors and students and encourage energy-saving behaviors among the entire campus community.
, MBA, is the Director for Higher Education North America for Johnson Controls. He will be completing his Ed.D in Transformational Leadership at Brandman University in 2017. He is PCF Certified in Performance Contracting and Funding.