efficiency aspects of projects dr zdravko genchev, architect eneffect, bulgaria ...
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EFFICIENCY ASPECTS OF PROJECTS
Dr Zdravko Genchev, architect
EnEffect, Bulgariawww.eneffect.bg
Projects for energy efficiency improvement and the use of renewable energy sources
To discuss:
DEFINITIONS
of the efficiency of projects, related to improvement of energy efficiency and the use of renewable energy sources
PROJECT BASELINEinfluence on the efficiency of EE / RES projects
STRATEGIES / EXAMPLES for project implementation under various
circumstances
AIM OF THIS LECTURE
DEFINITIONS
DEFINITIONS
EFFICIENTare projects that lead to positive results
Depending on the types of results achieved we recognize various types of
PROJECT EFFICIENCY:Social impact / Technical improvementsEnvironmental impact / Cost-effectiveness
or combinations of the above
DEFINITIONS
SOCIALLY EFFECTIVEare 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 low-income inhabitants to cover increasing energy
bills- Achievement of high aesthetical standards, etc.
DEFINITIONS
SOCIALLY EFFECTIVEprojects that include EE measures and especially the
use of RES sometimes introduce unusual aesthetical solutions that are often debatedThis 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 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 EFFECTIVEare 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 EFFECTIVEare 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
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 callINITIAL 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 the situation after project implementation, is not just a picture of
the state-of-affairs 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 descriptionPROJECT BASELINE SCENARIO
PROJECT BASELINE
Expected development of the initial status
without project
2006 2007 2008 2009 Time
Energ
y
Baseline scenario
PROJECT BASELINE
Init
ial st
atu
s
The baseline consists of:Initial statusand Baseline scenario
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
PROJECT BASELINE
Expected development
of initial status
2006 2007 2008 2009 Time
Energ
y
Baseline scenario
Expected energy savings
Saved energy
Time2006 2007 2008 2009
Energ
y
PROJECT BASELINE
Init
ial st
atu
s
Init
ial st
atu
s
PROJECT BASELINE
TimeTime
En
erg
yE
nerg
y
20020099200200882002007720020066
Development of initial status (baseline scenario)
Development of initial status (baseline scenario)
Init
ial st
atu
s
Energy consumption
Energy consumption
after project implementation
after project implementation
PROJECT BASELINE
Measurable and non-measurable indicatorscould 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 (low)or
REALISTIC (medium)Baseline Scenario
PROJECT BASELINE
TimeTime
En
erg
yE
nerg
y
20020099200200882002007720020066
Development
Development fromfrom initia
l status
initial status
Init
ial st
atu
s
High
Medium
Low
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 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 of Macedonia)
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
PROJECT BASELINE
PROJECT BASELINE
Time
Energ
y c
onsu
mpti
on
2009200820072006
A
CMeasured energy consumption
Calculated energy consumption
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
PROJECT BASELINE
PROJECT BASELINE
Time
Energ
y c
onsu
mpti
on
2009200820072006
A
C
Measured energy consumption Calculated energy consumption
PROJECT BASELINEPossible 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.)
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
PROJECT BASELINE
Time
Energ
y c
onsu
mpti
on
2009200820072006
D. Measured energy consumption after project implementation
C. Measured energy consumption before project implementation
A. Calculated energy consumption before project implementation
B. Calculated energy consumption after project implementation
A
C
B
D
Measured (real)baseline scenario
Calculated (adjusted) baseline scenario
Measured energy consumption Calculated energy consumption
PROJECT BASELINE
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 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
Street lighting project in the Street lighting project in the city of Gabrovo, Bulgariacity of Gabrovo, Bulgaria
AfterAfterBeforeBefore
Calculated consumption according to Calculated consumption according to the installed capacity (adjusted)the installed capacity (adjusted)
65356535
Possible policy targetPossible policy target16171617 According to the installed capacityAccording to the installed capacity
620The same level of utilizationThe same level of utilization
2463 Real (measured) consumptionReal (measured) consumption
Time
En
erg
y
STRATEGIES / EXAMPLES
STRATEGIES / EXAMPLESBefore ESPC During ESPC After ESPC
Energy+ O&M
Energy+ O&M
Energy+ O&M
Savings
SavingsESCO & Financial Debt
service
Cas
h flo
w (
$)
Source: Satish Kumar, PhD, scientist, LBNL, USA, Technical coordinator of PIMVP
Reflection of baseline scenarios in cases of energy saving performance contacts (ESPC)
En
erg
y +
O&
M
Cost
Savin
gs
STRATEGIES / EXAMPLES
SCHOOLS IN 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
Source: ASE, Moldova
STRATEGIES / EXAMPLES
SCHOOLS IN 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 in-door comfort
Significant energy savings
Source: ASE, Moldova
STRATEGIES / EXAMPLES
SCHOOLS IN 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
Source: ASE, Moldova
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 ~$20M 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 in-door temperature about 10o 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: EnEffect
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: EnEffect
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 longer-payback/lower-ROI (return on
investment) might become marginal
Source: Battelle, USA
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 Center for Energy Efficiency EnEffect (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