Retrofitting Mahindra Towers How an Innovative ESCO model

Retrofitting Mahindra Towers: How an Innovative ESCO model Lowers Energy Bills with no Upfront Cost Rajkiran V Bilolikar Associate Professor Energy Area Administrative Staff College of India, Hyderabad

Energy Efficiency in Buildings – Role of ESCO “It was the first time that we could get buy-in from people in the company to show that energy efficiency pays. For us, the ESCO was an enabler to validate our claim and show that energy efficiency is a good business case. We changed the mindset at the company through this retrofit and we would recommend it [the ESCO model] to other companies. ” - Ms Beroz Gazdar, Sr Vice President – Group Sustainability, Mahindra & Mahindra Administrative Staff College of India 2 2

Mahindra Towers ESCO Model - Key Findings q Mahindra Towers worked with an ESCO to implement energy efficiency measures, resulting in a payback period of less than half a year, without making any upfront payments q The building reduced its power consumption by 14 percent in the first 12 months of the retrofit. q Key energy conservation measures included lighting and cooling systems q ESCO model enabled the company to make payments over time through the energy savings. Administrative Staff College of India 3 3

ESCO Agreement BUILDING BASICS Location Worli, Mumbai, India Climate Zone Hot and Humid Building Area 18430 sq m (198, 277 sq ft) Occupancy 1380 Number of wings 2 Number of Floors 6 (A Wing) & 7 (B wing) Building Use Commercial Constructed 1985 Retrofit Started March 2009 Retrofit Completed July 2009 Building Owner Mahindra & Mahindra Retrofit Financing Provided by ESCO ENCON energy management services Pvt Limited Pre-retrofit Annual Energy Consumption 3, 836, 910 k. Wh/Year • Duration of the Contract and Billing Period • Savings • Sharing of savings • 36 Months (Mar 2009 – Feb 2012) • Savings were calculated monthly on the basis of a pre-determined baseline • Monthly savings were shared 50/50 between Mahindra and ENCON throughout the duration • Upfront Costs • Upfront retrofitting costs were borne entirely by ENCON – No initial capital expenditure by Mahindra • Measurement and Verification • It was mutually determined which allowed any variations in normal electrical load or operating conditions to be accounted for in final measurement of savings Administrative Staff College of India 4 4

Role of ESCO • Investment Grade Energy Audit • Technical Report and Proposed ECMs • Investment and associated risk • Implementation • Payment to suppliers / contractors by Mahindra and deduction of 50% from savings profit of ENCON Administrative Staff College of India 5 • Training and Monitoring • ENCON was entitled to receive a professional fee at the rate of 50% of the savings in a particular month 5

Establishing the Baseline and Energy Audit Before Retrofit After Retrofit • Lighting • Lights were normally operated for 250 hrs per month with a connected load of 250 k. W • Were ceiling mounted luminaries with two 36 W FTL • The utility areas – one 36 W FTL • 150 W – Security lights • FTLs accounted for 78% of total lighting • CFLs accounted for 10% of the load • Replaced with T-5 high efficiency tube rods with high frequency, low harmonic electronic ballasts • Over 500 lamps were changed resulting in savings of 5, 551 k. Wh per month • HVAC • 22 air handling units (AHUs) • AHUs consume an average of 30, 500 k. Wh • Motors were loaded below 50% • Electrical rooms with AHUs were poorly insulated • Two screw chillers with a capacity of 350 tons using 75000 k. Wh per month • Cooling tower used 60 cubic meters of water a day and a 15 HP motor using 29060 k. Wh • The Air conditioning system was optimized while maintaining pre-retrofit air-temperatures • The AHU motors were replaced with appropriately sized high efficiency motors, reducing wasted energy and capacity • The chiller system’s pump’s capacity was reduced to 15 cubic meters per hour with 7. 5 HP motor • Electrical System • Energy audit revealed that the building did not require a retrofit in electrical system Administrative Staff College of India • By working with ESCO, Mahindra was able to modify their electrical system with no additional cost 6 6

Cost and Savings Average Monthly Saving k. Wh Yearly Consumption k. Wh Administrative Staff College of India 7 7

Energy Efficient Retrofit: Motivations • Mahind ra & Mahindra • ENCON - ESCO • Saving Cost and Energy • Client’s Reputation • No upfront investment needed from Mahindra • Fair work agreement • Simplicity and transparency of the ESCO Model • Flexible work agreement Administrative Staff College of India 8 8

Overcoming Four Common Barriers to ESCOs Administrative Staff College of India 9 9

Thank You Rajkiran V. Bilolikar, Associate Professor, Energy Area, Administrative Staff College of India, Bella Vista, Raj Bhavan Road, Hyderabad – 500082 www. asci. org. in T: +91 40 6653 4390 F: +91 40 6653 4356 M: +91 9704087888 rajkiran@asci. org. in Administrative Staff College of India, Hyderabad