Unlocking the benefits of Energy Efficiency
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Transcript of Unlocking the benefits of Energy Efficiency
Unlocking the Benefits of Energy Efficiency
John W. Conover IV Senior Vice President, Ingersoll Rand
President, Security Technologies Sector
Green Building Focus Conference
Charlotte, NC
Wednesday, April 20, 2011
Green Building Focus Conference 2011 2
We are a world leader in creating and sustaining safe, comfortable and efficient environments
Helps Satisfy
Critical Needs
• Enhancing the human environment
• Improving quality of life
• Promoting energy efficiency and
sustainability
• Increasing customer productivity
Unifying Strategy — Guides Our Actions and Leads Our Growth
Growing Urbanization
Feed Growing
Population Comfortable, Safe, Efficient Environments
Drive for Competitiveness
Resource Conservation
Ingersoll Rand Mission
Green Building Focus Conference 2011 3
• Satisfy customers
• Reduce accidents and injuries
• Reduce costs through eco-efficiency
• Avoid fees and fines
• Increase shareholder value
• Enable entry into new markets
• Create new products
• Establish partnerships to innovate and grow
• Stay competitive + Differentiate
• Enhance brand
• Stay in compliance
• Avoid supply chain risk
• Avoid negative press
• Maintain license to operate
• Satisfy investors
A company’s vision and strategic goals
Avoiding Risks
Compliance and
Reducing Costs
Creating Options
and Adding Value
Conventional wisdom on sustainability continues to evolve
Sustainability is Becoming a Differentiator
Green Building Focus Conference 2011 4
Regulatory Compliance
Urbanization
Drive for Competitiveness
An unprecedented global energy and operating environment
World energy consumption
projected to grow 60% by 2030
Source: Energy Information Administration
Global Energy Environment is Dynamic
Green Building Focus Conference 2011 5
79%
30%
% of carbon emissions
attributed to existing buildings
New York U.S.
30%
<30% But still
significant
World
Buildings are the single largest contributor to global warming
Buildings Have a Huge Carbon Footprint
Green Building Focus Conference 2011 6
Compared to other energy resources, energy efficiency measures are:
Energy efficiency is clean, secure (homegrown)
and quicker to develop than other sources of energy
52
1
2
4
8
22
24
37
0 10 20 30 40 50 60
Geothermal, Solar and Wind
Conventional Hydroelectric
Biomass
Nuclear Electric Power
Coal
Natural Gas
Petroleum
Energy Efficiency and Conservation
Quads
Energy Efficiency and Conservation Improvements Since 1973 Have Reduced Annual Energy Consumption by 52 Quads in 2008
Energy Efficiency and Conservation 2008 Domestic Production Net Imports
Alliance to Save Energy, June 2009
Why Energy Efficiency as an Energy Resource?
Green Building Focus Conference 2011 7
• Partnership with Economist Intelligence
Unit
• Focus on C-level and senior execs
‒ 278 execs surveyed, wide range of industries, worldwide
• Included online surveys and interviews with leading organizations including:
‒General Electric
‒Tata Motors
‒Carbon Trust Standard Co.
‒World Resources Institute
Because energy efficiency programs require C-suite leadership, funding and commitment – their perceptions are important
Executive Survey Uncovers Issues with Implementing Energy Efficiency Programs
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• Nearly 80% of executives say energy efficiency will be more important to
their business in 5 years yet only 26% have ever done an energy audit
• 61% of non C-level execs said their organization does not do enough to
integrate energy efficiency into its strategy
Companies see value but struggle with implementation
Dilemma: Energy Efficiency and Strategy
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• Energy efficiency still perceived to be
the CEO’s job
• Companies must appoint a respected
owner and drive accountability
throughout the organization
• Successful initiatives often have
senior leaders driving the campaign –
not necessarily the CEO ‒ Only 20% say an energy efficiency
manager or EHS manager is
responsible for energy efficiency
Few have dedicated sustainability staff or energy management experts
Responsibility Must be Assigned Across Organization
Green Building Focus Conference 2011 10
• Measurement helps monitor usage
and equipment efficiency, identify
cost savings
‒ Only 26% of organizations have
conducted an energy audit
‒ 15% audited by a third party
‒ 22% do no measurement at all
• With a proactive maintenance
approach – including energy
audits – companies can better
gauge energy usage and track the
efficiency of their equipment
Lack of expertise may hinder companies’ progress Lack of in-house expertise hinders many companies’ progress
Companies Lack Measurement, Expertise
Green Building Focus Conference 2011 11
• Business leaders generally see
benefit of regulations ‒ Large companies believe they
level the playing field and create
new markets
• 69% believe companies are only
meeting the “minimum” required
by policy – room for improvement
exists
• Almost 75% believe taxpayers
need to bear some of the cost of
energy efficiency strategies
Building owners welcome policy and incentives that
enhance ROI of efficiency initiatives Companies welcome policies that enhance ROI of
efficiency measures
Companies View Regulation Positively
Green Building Focus Conference 2011 12
• Only a fraction of respondents
are working with their suppliers ‒ 8% said energy efficiency is a
priority for suppliers
‒ 4% are working with their
suppliers on energy efficiency
• However, this is changing ‒ Wal-Mart said it will require
suppliers to disclose their
environmental impact
“In the present model of
manufacturing automobile units,
70-80% is outsourced.
So it’s not enough for us to measure
our carbon footprint. We need to
also measure the carbon footprint of
our suppliers.”
-A.S. Puri, Vice President , Tata Motors
Pressure mounts for vendor participation in energy initiatives
Energy Efficiency Seen as an Internal Issue
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Practices • Make energy efficiency and sustainability
part of business strategy
• Assign responsibility across the organization
• Look to vendors to capture carbon footprint
Policies
• Change standards and codes to drive
minimums up
• Develop incentives to encourage
incremental investment that meets all
stakeholders’ needs
“For a long time, people thought it was all about technology. But what
we’re learning is that, really, it’s all about people. How do you get people
to do something differently?”
Gwen Ruta
Director & Vice President for Corporate Partnerships
Environmental Defense Fund
Practices and Policies Drive Changed
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• Buildings account for one-
third of world energy use,
GHG emissions
• GHG emissions from
buildings will double by 2030
• Poorly designed buildings
lock in inefficiencies for
decades
• Small investments cut energy
use 30-50%
Current and Projected Building Sector Emissions by World
Region 180
0 150
0
900
120
0
600
300
0 North America,
Western Europe,
and Pacific OECD
Central and
Eastern Europe,
Former Soviet
Union
Asia Latin
America
Africa
CO
2 E
mis
sio
ns
(M
tC)
2010 Emissions
2030 Emissions
6
5
3
4
2
1
0
Energy
Supply Transport Building
s
Industry Agricultur
e
GtCO2-eq/yr
Non-OECD/EIT*
EIT
OECD
World total
7
Forestry Waste
Issues argue for change in how we build, operate, imagine buildings
Buildings Offer Promising Global Opportunity
Green Building Focus Conference 2011 15
High performance buildings:
• Are safe, comfortable and efficient
• Help owners and occupants achieve their business
mission
• Use design and operating standards that are created,
measured and continually validated to deliver
established outcomes within specified tolerances
• Are created using a unique methodology – combining
financial, operating and energy analysis with
specialized service offers and available financing
• Meet specific standards for energy and water use,
system reliability and uptime, environmental
compliance, occupant comfort and safety and other
factors
Enhanced security, comfort, and building efficiency enables growth and helps management deliver the business mission
High Performance Building Solutions Exist Today
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• Typical buildings have occupied lives of
50-75 years or even longer
• Operating costs account for 60-85% of building
lifecycle costs – compared to 5-10% for design
and construction costs
• High performance buildings reduce lifecycle
costs so organizations can invest in other
priorities
• Standards are created, measured &
validated continually to deliver desired
outcomes
• Standards are typically set for:
– Energy and water consumption
– System reliability
– Environmental compliance
– Occupant health, safety and comfort
Huge opportunities exist to improve building performance
A Whole Building, Whole Lifecycle Approach
Green Building Focus Conference 2011 17
Major ECM Category ECM Type Technology/ECM Name Rating
Controls General/Special Upgrade to Direct Digital Control 100%
Industrial Compressed Air Implement Compressed Air Utility Management 100%
Water Reduce Use Install Low Flow/Use Fixtures 96%
Controls General/Special Retro/Recommission Controls for Optimizing Savings 94%
Controls General/Special Install Lab Hoods Control - Flow Safe Lab Hoods 94%
Supply Side Management Manage Energy Supply Change Regulated Utility Rate/Tariff 94%
Water Smart Metering Install Smart Meters & software -- for Billing & Accuracy 94%
Electrical Lighting Install Lighting Controls 92%
Electrical Lighting Replace T-8s for HiBays with T5s 92%
Plant Boilers Install Tankless/Instantanious Water Heaters 92%
Supply Side Management Manage Energy Supply Change to Interruptible Rates and Use Electric Generators 92%
Architectural Envelope Install Weather-Stripping 92%
Electrical Lighting Upgrade Fluorescent Fixtures w/ T8 or T5 Lamps and Electronic Ballasts 92%
Electrical Lighting Retrofit Incandescent Lamps w/ Compact Fluorescent Lamps 92%
Electrical Lighting Replace Exit Sign w/new LED Fixture 92%
Plant Boilers Adjust Burner as Regular Maintenance 92%
HVAC (Building/ Non-Plant) Unit Upgrade Convert CV to VAV 88%
HVAC (Building/ Non-Plant) Unit Upgrade Convert Dual Duct to VAV 88%
Electrical Lighting Replace HID HiBay fixtures with T5s or T8s 86%
Electrical Lighting Add LED night lights in halls 86%
Architectural Roof New Construction with Green Roofs (Plants) 85%
Plant
Water Source Heat Pump
Systems Install Water Source Heat Pump System 83%
Plant Motors/Pumping Install VFD/VSDs for Pumps 81%
Controls Resetting Reduce Outdoor Air To Design Level 78%
Controls Resetting CO2-Based Demand-Controlled Ventilation 78%
• Many, many Energy Conservation
Measure (ECM) technologies and
applications need a methodology to
assess and rate
• Methodology developed using Six Sigma
analysis processes and tools
• Evaluation process based on 5 key
customer “importance factors”
– Savings potential, Practicality, Commercial
viability, Risk management, Business
differentiation
• Score of 0-100% with 100% being the
best ranking
Use Six Sigma methods to choose best energy measures
Top 25 Energy Conservation Measures
Green Building Focus Conference 2011 18
• Link the building to its primary
business mission
• Determine the funding strategy
• Understand energy
conservation measures and
their payback
• Focus on total cost of
ownership over occupied life
• Conduct the financial analysis
– including cash flow
• Energy efficiency makes
more sense than ever
• Environmental performance
is becoming more critical
• Organizational performance
and employee productivity
drive value, ROI
• Effective service strategy
maintains lifecycle
performance
Moving the building sector toward High Performance Buildings
Compelling Case for Improving Lifecycle Performance
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TIAA-CREF Headquarters – New York
Solutions Applied:
• Analyze building systems, energy use, rate
structure and procurement methods
• Recommend mission-focused ECMs
• Design & install upgrades
– State-of-the-art chilled water system
– Rooftop thermal storage system
– Reprogrammed central automation control
system
Results: • Infrastructure upgrades will save an estimated $765,000 per year in energy
and operating costs and a 25% internal rate of return for TIAA-CREF.
• The efficiency improvements are avoiding 6.1 million pounds of carbon
dioxide emissions -- the equivalent of removing 560 cars from the road, or
planting 828 acres of trees.
HPB Based Success Story
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• DOE Save Energy Now LEADER
Initiative
– Over $4 million in energy cost
savings
– Program relies on skilled employee
volunteers
– Three tiers of energy audits
• Treasure Hunts
• Expanded Energy Audits
• System Specific Audits
Internal Ingersoll Rand Energy Audits
Green Building Focus Conference 2011 21
• Energy efficiency must become part of business strategy
• Success depends on leadership, accountability and expertise
• Climate change cannot be effectively addressed without including
commercial building sector
• Our growing populations will seek greater security, efficiency and
integrated approaches to increase quality of life.
• Technology exists today to create High Performance Buildings that
can mitigate GHG emissions while providing long term ROI for
building owners
High Performance Buildings help organizations
achieve their mission
Bottom Line for Addressing Energy Efficiency
Green Building Focus Conference 2011 22
Thank You