EFFICIENCY ASPECTS OF PROJECTS Projects for energy efficiency

  • Slides: 43
Download presentation
EFFICIENCY ASPECTS OF PROJECTS Projects for energy efficiency improvement and the use of renewable

EFFICIENCY ASPECTS OF PROJECTS Projects for energy efficiency improvement and the use of renewable energy sources Dr Zdravko Genchev, architect En. Effect, Bulgaria www. eneffect. bg zgenchev@eneffect. bg

AIM OF THIS LECTURE To discuss: DEFINITIONS of the efficiency of projects, related to

AIM OF THIS LECTURE To discuss: DEFINITIONS of the efficiency of projects, related to improvement of energy efficiency and the use of renewable energy sources PROJECT BASELINE influence on the efficiency of EE / RES projects STRATEGIES / EXAMPLES for project implementation under various circumstances

DEFINITIONS

DEFINITIONS

DEFINITIONS EFFICIENT are projects that lead to positive results Depending on the types of

DEFINITIONS EFFICIENT are projects that lead to positive results Depending on the types of results achieved we recognize various types of PROJECT EFFICIENCY: Social impact / Technical improvements Environmental impact / Cost-effectiveness or combinations of the above

DEFINITIONS SOCIALLY EFFECTIVE are projects that produce social impact: - Improvement of the general

DEFINITIONS SOCIALLY EFFECTIVE are projects that produce social impact: - Improvement of the general quality of services provided - Improvement of hygienic conditions in buildings - Assistance for the most vulnerable strata of the lowincome inhabitants to cover increasing energy bills - Achievement of high aesthetical standards, etc.

DEFINITIONS SOCIALLY EFFECTIVE projects that include EE measures and especially the use of RES

DEFINITIONS SOCIALLY EFFECTIVE projects that include EE measures and especially the use of RES sometimes introduce unusual aesthetical solutions that are often debated This might be the result of: - Poor experience and inability to integrate new technical solutions into already established aesthetical concepts and values - Attempt to introduce new aesthetival principles that are still unusual for society and thus difficult to accept

DEFINITIONS TECHNICALLY EFFECTIVE are projects that achieve technical improvements of buildings, which generate energy

DEFINITIONS TECHNICALLY EFFECTIVE are projects that achieve technical improvements of buildings, which generate energy savings and/or decrease O&M costs: - General improvement of the building structure and building envelope - Improvement of the technical infrastructure (various types of installations) of buildings - Improvement of the technical equipment of buildings, incl. various types of appliances in use

DEFINITIONS ENVIRONMENTALLY EFFECTIVE are projects that have positive environmental impact: - Reduction of GHG

DEFINITIONS ENVIRONMENTALLY EFFECTIVE are projects that have positive environmental impact: - Reduction of GHG emissions that have global effect on the environment - Reduction of emissions that cause local pollution or other threat to the environment

DEFINITIONS ECONOMICALLY EFFECTIVE are projects that have positive economic impact (cost-effective projects): - Reduce

DEFINITIONS ECONOMICALLY EFFECTIVE are projects that have positive economic impact (cost-effective projects): - Reduce energy expenses and O&M costs, thus generating real monetary savings - Significantly improve the service/comfort at comparable expenses

PROJECT BASELINE

PROJECT BASELINE

PROJECT BASELINE When determining the achieved project results, we usually compare the situation after

PROJECT BASELINE When determining the achieved project results, we usually compare the situation after project implementation with the overall status before the project The status before project implementation we call INITIAL STATUS The initial status is a fixed picture of the situation before project implementation

PROJECT BASELINE The overall status before project implementation, which we use to compare with

PROJECT BASELINE The overall status before project implementation, which we use to compare with the situation after project implementation, is not just a picture of the state-ofaffairs at a given point of time It is a dynamic description of the development of the initial status (before project implementation) for the time of the entire project duration in case no project was implemented We call this description PROJECT BASELINE SCENARIO

Energy Initial status PROJECT BASELINE Baseline scenario The baseline consists of: Initial status and

Energy Initial status PROJECT BASELINE Baseline scenario The baseline consists of: Initial status and Baseline scenario 2006 2007 2008 2009 Expected development of the initial status without project Time

PROJECT BASELINE The Project Baseline Scenario presents how the initial status would be changed

PROJECT BASELINE The Project Baseline Scenario presents how the initial status would be changed in case of keeping BUSINESS AS USUAL The difference between the Project Baseline Scenario and the overall situation after project implementation presents project results and the level of its effectiveness

2006 2007 2008 2009 Expected development of initial status Time Energy Baseline scenario Initial

2006 2007 2008 2009 Expected development of initial status Time Energy Baseline scenario Initial status Energy Initial status PROJECT BASELINE Saved energy 2006 2007 2008 2009 Expected energy savings Time

rio) a n e sc Energy Initial status PROJECT BASELINE line e s a

rio) a n e sc Energy Initial status PROJECT BASELINE line e s a (b s u t sta l a i t f ini o t en ion t m p p m u ion o l s t n a e t o v n c y De leme p m Energ i t ojec r p r e aft 2006 2007 2008 2009 Time

PROJECT BASELINE Measurable and non-measurable indicators could be used for evaluation of the Project

PROJECT BASELINE Measurable and non-measurable indicators could be used for evaluation of the Project Baseline and the overall situation after project implementation Although we often use only economic indicators to describe the Prolect Baseline and the situation after project implementation, the full descriptions consist of social / technical / environmental / economic characteristics

PROJECT BASELINE When forecasting the baseline development we may use: OPTIMISTIC (high) or PESSIMISTIC

PROJECT BASELINE When forecasting the baseline development we may use: OPTIMISTIC (high) or PESSIMISTIC (low) or REALISTIC (medium) Baseline Scenario

Energy Initial status PROJECT BASELINE nt e opm l e Dev us t a

Energy Initial status PROJECT BASELINE nt e opm l e Dev us t a st l a i init m High fro Medium Low 2006 2007 2008 2009 Time

PROJECT BASELINE The most important component of the initial status and the baseline scenario

PROJECT BASELINE The most important component of the initial status and the baseline scenario is energy consumption Calculated energy consumption is the amount of energy, which would be consumed by the total installed energy capacity for provision of heating and lighting in compliance with the norms and the typical use of the building Measured energy consumption is the amount of energy, which has been proven by measuring the actual consumption of heat and electricity, regardless of the quality of the services provided

PROJECT BASELINE Calculated energy consumption may correspond to the measured one, but in some

PROJECT BASELINE Calculated energy consumption may correspond to the measured one, but in some cases it might also be higher or lower When the calculated energy consumption is LOWER than the measured one, it might be the result of water leakage in the heating system, too high indoor temperatures, insufficient wall insulation, poor maintenance, etc.

PROJECT BASELINE Typical reason for lower calculated energy consumption in a school building (example

PROJECT BASELINE Typical reason for lower calculated energy consumption in a school building (example of Macedonia)

PROJECT BASELINE When the measured energy consumption is higher then the calculated one, there

PROJECT BASELINE When the measured energy consumption is higher then the calculated one, there is room for energy efficiency improvements This is the usual case in most buildings that need energy efficiency improvement The bigger the differences, the higher the potential for energy efficiency improvements

Energy consumption PROJECT BASELINE ed r u as y rg ene Me de e

Energy consumption PROJECT BASELINE ed r u as y rg ene Me de e t a l u Calc 2006 2007 tion p sum n o c n ptio A C sum n o yc erg n 2008 2009 Time

PROJECT BASELINE When the calculated energy consumption is HIGHER than the measured one, it

PROJECT BASELINE When the calculated energy consumption is HIGHER than the measured one, it might be an indication that some of the technical systems are turned off (e. g. the ventilation system), the indoor temperature is too low or the lighting is not sufficient, etc. In such cases we usually qualify the baseline as TOO LOW, which affects negatively the economic characteristics (cost-effectiveness) of EE / RES projects

Energy consumption PROJECT BASELINE te a l u Calc e sur a e M

Energy consumption PROJECT BASELINE te a l u Calc e sur a e M 2006 ne de r er d en 2007 ns o c gy gy ion t p um p sum n o c 2008 tion 2009 A C Time

PROJECT BASELINE Possible reasons for TOO LOW baseline: • The building owner has turned

PROJECT BASELINE Possible reasons for TOO LOW baseline: • The building owner has turned off or reduced the operation period or the capacity of some in-house subsystems • The heating system has been turned off in some sections of the building during the heating season • There has been breakdown in some in-house subsystems, which have not been repaired or replaced • The automatic control system and valves are not correctly tuned, so the room temperature is too low • Some hygienic requirements have not been achieved (low temperature, insufficient lighting etc. )

PROJECT BASELINE In cases of low baseline we may adjust (normalize) the baseline to

PROJECT BASELINE In cases of low baseline we may adjust (normalize) the baseline to the level of the calculated one THE ADJUSTED BASELINE is useful when calculating the project’s economic characteristics and determining the project’s efficiency The use of adjusted baseline improves the economic characteristics of projects

Energy consumption PROJECT BASELINE ns o c y g ner de te a l

Energy consumption PROJECT BASELINE ns o c y g ner de te a l u c Cal ed r u s ea rgy e n tio p m u mp u s n co tion M Calculated (adjusted) baseline scenario A A. Calculated energy consumption B C before project implementation B. Calculated energy consumption after project implementation Measured (real) baseline scenario D C. Measured energy consumption before project implementation D. Measured energy consumption after project implementation 2006 2007 2008 2009 Time

STRATEGIES / EXAMPLES

STRATEGIES / EXAMPLES

STRATEGIES / EXAMPLES Real and adjusted baseline could be used in different practical cases

STRATEGIES / EXAMPLES Real and adjusted baseline could be used in different practical cases REAL (CALCULATED) BASELINE is usually applicable for commercially financed projects (commercial banks, revolving funds, etc. ) ADJUSTED (CALCULATED) BASELINE is usually applicable for projects, financed on a grant basis or when parties explicitly agree upon that

STRATEGIES / EXAMPLES When the real baseline is lower than the calculated one, the

STRATEGIES / EXAMPLES When the real baseline is lower than the calculated one, the use of adjusted baseline improves the economic characteristics of EE / RES projects The following practical examples show different strategies (approaches) in determining the baseline scenarios to be used in each specific case

STRATEGIES / EXAMPLES Energy 6535 Calculated consumption according to the installed capacity (adjusted) Street

STRATEGIES / EXAMPLES Energy 6535 Calculated consumption according to the installed capacity (adjusted) Street lighting project in the city of Gabrovo, Bulgaria 2463 Real (measured) consumption 1617 620 Before After According to the installed capacity Possible policy target The same level of utilization Time

STRATEGIES / EXAMPLES During ESPC After ESPC Energy + O&M Cost Savings Before ESPC

STRATEGIES / EXAMPLES During ESPC After ESPC Energy + O&M Cost Savings Before ESPC Cash flow ($) Savings ESCO & Financial Debt service Energy + O&M Savings Energy + O&M Source: Satish Kumar, Ph. D, scientist, LBNL, USA, Technical coordinator of PIMVP Reflection of baseline scenarios in cases of energy saving performance contacts (ESPC)

STRATEGIES / EXAMPLES SCHOOLS IN MOLDOVA Source: ASE, Moldova Telecommunication College Before project implementation

STRATEGIES / EXAMPLES SCHOOLS IN MOLDOVA Source: ASE, Moldova Telecommunication College Before project implementation the amount of heat received was significantly below the necessary quantity Main benefits after project implementation: - Improvement of the heat distribution inside the building - Improved in-door comfort and reduced sickness rates Almost no energy savings registered

STRATEGIES / EXAMPLES SCHOOLS IN MOLDOVA Source: ASE, Moldova School 95 Before project implementation

STRATEGIES / EXAMPLES SCHOOLS IN MOLDOVA Source: ASE, Moldova School 95 Before project implementation the school received more heat than necessary Main benefits after project implementation: - Reduced heat consumption to about 50% for a standard year by the application of night setback algorithm - Improved heat distribution inside the building and indoor comfort Significant energy savings

STRATEGIES / EXAMPLES SCHOOLS IN MOLDOVA Source: ASE, Moldova School 83 Before project implementation

STRATEGIES / EXAMPLES SCHOOLS IN MOLDOVA Source: ASE, Moldova School 83 Before project implementation the school received heat close to the necessary Expected benefits: - Even heat distribution inside the building - Constant in-door comfort - Easier maintenance of the heating system In this particular case the savings have a greater level of confidence than in the previous two cases

STRATEGIES / EXAMPLES SCHOOL BUILDING PROJECT IN KIEV (WB) The baseline much below the

STRATEGIES / EXAMPLES SCHOOL BUILDING PROJECT IN KIEV (WB) The baseline much below the norms. The WB advised to use the adjusted baseline that corresponds to the norm As a result: Calculated savings of 26% Sufficient real savings to repay the ~$20 M loan from the WB over a 5 -year term The project is looked upon as a model to implement in other Ukrainian cities Source: Battelle, USA

STRATEGIES / EXAMPLES BUILDING IN BULGARIA Education complex in Kazanlak Low baseline – average

STRATEGIES / EXAMPLES BUILDING IN BULGARIA Education complex in Kazanlak Low baseline – average in-door temperature about 10 o C Used adjusted baseline that corresponds to the norm As a result: (for various sets of ES measures) - Calculated savings of 35 -57% - IRR: 13 – 48 % / Simple payback: 2, 3 – 5, 8 years - Improved in-door climate - Reduced GHG emissions Source: En. Effect

STRATEGIES / EXAMPLES BUILDING IN BULGARIA Kindergarten in Gradina Low baseline – part of

STRATEGIES / EXAMPLES BUILDING IN BULGARIA Kindergarten in Gradina Low baseline – part of premises not heated Used adjusted baseline that corresponds to the norm As a result: - Significant energy savings expected - Insufficient real financial savings due to the low baseline - Improved in-door climate - Reduced GHG emissions Source: En. Effect

STRATEGIES / EXAMPLES SOME OTHER LESSONS LEARNED Cream skimming From the standpoint of private

STRATEGIES / EXAMPLES SOME OTHER LESSONS LEARNED Cream skimming From the standpoint of private cost-bearing, using strictly commercial finance, cream skimming projects are viable, however those with a longerpayback/lower-ROI (return on investment) might become marginal Source: Battelle, USA

STRATEGIES / EXAMPLES SOME OTHER LESSONS LEARNED Social impact If the entire social cost

STRATEGIES / EXAMPLES SOME OTHER LESSONS LEARNED Social impact If the entire social cost is included (subsidies - direct to consumers and indirect ones on fuels), the loan can be easily repaid over a short term. The problem here has always been how to mobilize the myriad of state and local government organizations to recognize this factor - if that could be done, repaying these loans would be easy as a snap. Source: Battelle, USA

APPRECIATIONS This lecture was prepared with the kind assistance of: - Experts from the

APPRECIATIONS This lecture was prepared with the kind assistance of: - Experts from the Center for Energy Efficiency En. Effect (Bulgaria), ENSI International (Norway) and Battelle / PNNL (Pacific Northwest National Laboratories), USA - Experts from Bosnia and Herzegovina, Moldova, and Macedonia Publications of scientists of the LBNL (Lawrence Berekley National Laboratory) and the ASE (Alliance to Save Energy) of USA are also quoted