NewEnergyNews: TODAY’S STUDY: HOW TO GREEN SCHOOLS

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    Tuesday, April 09, 2013

    TODAY’S STUDY: HOW TO GREEN SCHOOLS

    K-12 Schools Advanced Energy Retrofit Guide; Practical Ways to Improve Energy Performance

    February 2013 (National Renewable Energy Laboratory)

    Introduction

    The U.S. Department of Energy (DOE) developed the Advanced Energy Retrofit Guides (AERGs) to provide specific methodologies, information, and guidance to help energy managers and other stakeholders plan and execute energy efficiency improvements. Detailed technical discussion is fairly limited. Instead, we emphasize actionable information, practical methodologies, diverse case studies, and unbiased evaluations of the most promising retrofit energy efficiency measures (EEMs) for each building type . A series of AERGs is under development, addressing key segments of the commercial building stock . K-12 schools were selected as one of the highest priority building sectors, because schools affect the lives of most Americans . They also represent approximately 8% of the energy use and 10% of the floor area in commercial buildings nationwide (see Figure 1–1 and Figure 1–2) .

    U .S . K-12 school districts spend more than $8 billion each year on energy—more than they spend on computers and textbooks combined (EPA 2009) . Most occupy older buildings that often have poor operational performance—more than 30% of schools were built before 1960 (DOE 2003) . The average age of a school is about 42 years—which is nearly the expected serviceable lifespan of the building (McGraw Hill 2011). K-12 schools offer unique opportunities for deep, cost-effective energy efficiency improvements, and this guide provides convenient and practical guidance for exploiting these opportunities in the context of public, private, and parochial schools .

    Section 2 of this guide provides an overview of important steps to help energy managers identify energy efficiency improvement opportunities and to successfully plan, implement, and evaluate any level of energy upgrade project. We then address specific planning stages in subsections about performance assessment through benchmarking, identifying cost-effective EEMs (see sidebar) through energy auditing, and financing mechanisms. Section 3 provides a detailed discussion of existing building commissioning (EBCx) EEMs that should be considered as the first step in almost any school upgrade project. The descriptions cover energy and cost savings, special opportunities and challenges, and climate-dependent considerations. Section 4 provides recommendations for going further with specific retrofit EEMs, addressing the strengths and weaknesses of each, and providing energy savings and cash flow analyses for recommended packages.

    Sections 5 and 6 provide guidance for verifying and sustaining energy savings through measurement and verification (M&V) and operations and maintenance (O&M). The purpose of M&V is to make sure the improvements were implemented properly, and achieve the expected level of energy savings . M&V is usually performed by examining utility bills and making direct measurements of energy use for important subsystems. O&M is a process for managing the operation of improved systems to ensure that the initial energy savings are not undermined over time through improper use or inadequate maintenance. We also include case studies that show how other schools have implemented energy upgrades, the savings they have achieved, and the challenges they faced . These case studies are distributed throughout the guide to illustrate the application of key points.

    Why do we need another retrofit guide when a great deal of information is already available? Our goal is to address one of the biggest gaps in the literature: reliable and actionable cost- and energy-saving methods and data in the context of K-12 schools. This guide helps to fill that gap by providing comprehensive analytical methods for evaluating the cost effectiveness of potential retrofit EEMs. In the context of this guide, the term cost effective is synonymous with positive net present value (NPV) based on incremental cash flows over a 20-year analysis period, whether referring to a single EEM or to an EEM package . NPV analysis assumptions are discussed in greater detail in Section 2 .6 and Appendix A .These analytical methods are supplemented with a comprehensive and detailed example using the Pre-1980s Secondary School Commercial Reference Building (CRB) developed by DOE (Deru et al. 2011). The example represents a relatively old elementary school, with equipment that has been replaced at least once since the school was built. The optimal packages for other schools would vary significantly, but the example illustrates the application of EEMs and methodologies described in the guide .

    Because of the wide variation in school building conditions and financial constraints, we address three types of building upgrades in this guide: (1) low-cost and no-cost EBCx measures; (2) whole-building retrofits where a comprehensive package of measures is implemented in a short span of time using an integrated design approach (see sidebar); and (3) staged retrofit projects that leverage energy savings from each stage and more opportune timing of retrofits to achieve similar savings in an incremental fashion .

    This approach broadens the applicability of the guide to a diverse set of situations, and each section builds on the recommendations of the previous one to create a logical progression. The guide addresses specific retrofit options and packages, along with the more general topics of project planning, financing mechanisms, investment analysis, O&M, and M&Vwithin the framework of K-12 schools…

    Business Case

    Among the investments a school district may consider, energy efficiency upgrades are likely to offer some of the highest returns with the lowest risks . The direct cost eductions provided through reduced energy use are complemented by valuable nonenergy benefits. The primary drivers for most school districts to invest in energy efficiency are to realize the direct benefits of reduced utility costs, while improving the learning environment for students. Nonenergy benefits may in fact be dominant project drivers in situations where energy costs are less important to the bottom line. For example, daylighting can improve student performance, and providing sufficient ventilation with demand control may reduce absenteeism (NRC 2006). These benefits are hard to quantify and are often omitted from financial analysis, but should be considered in the business case because they support the overall educational mission .

    Funding is often the primary barrier to the implementation of retrofit projects in K-12 schools. Reliable cost and energy savings data enable the financial decision maker to evaluate the cost effectiveness and risk of a project as part of a solid business case . Practical analysis techniques and meaningful data are not easily found in the literature, especially in the context of specific building types such as schools, but are essential tools for robust and accurate analysis of energy and cost tradeoffs . In contrast, this guide provides a “best practice” methodology for performing accurate economic analysis of building improvement options . It uses both NPV and simple payback period, supplemented with example calculations based on a typical high school building, and detailed case studies with welldocumented project cost and energy savings data.

    The guide provides detailed methods for accurately quantifying multiyear cash flows, including energy costs, demand reduction, replacement costs (including reduced energy savings if more efficient equipment would have been required by code), salvage value (if any), O&M costs, M&V costs, and tax implications. Techniques and references are also provided for capturing the effects of temporary financial incentives offered by government agencies or utilities (rebates, low-interest loans, tax credits, etc.) on multiyear cash flows. Indirect benefits such as productivity improvements and reduction in sick days are discussed qualitatively, but are not quantified in the cash flow analysis.

    Advice is provided for developing a comprehensive capital replacement plan, which is a necessary component of any multiyear cash flow analysis.

    This guide does not provide comprehensive instructions for developing an effective business case for a retrofit project. Instead, we focus on specific EEMs, methodologies, and examples that contribute to a strong business plan.

    ASHRAE (2009b) recently published an informative resource for business case development. It is the first of a series of three technical guides that describe best practices for planning and implementing successful energy retrofit projects. Other valuable tools and resources for developing a business case and analyzing the economics of a retrofit project are discussed in Section 2.6.

    Recommended Packages

    We developed EEM packages for EBCx and for whole-building retrofit projects in the context of an example high school. To be selected, EEMs had to have a positive NPV when cash flows were analyzed over a 20-year analysis period. A spreadsheet tool was created by NREL and Pacific Northwest National Laboratory (PNNL) to assist with the multiyear cash flow analysis needed for NPV and simple payback calculations. A public version of the tool with greater flexibility and a simpler interface is under development and will be made available on the DOE Commercial Building Initiative website in 2013 .

    A 20-year time horizon was selected because we encourage decision makers to take a long-term approach to energy efficiency improvements. Because most equipment improvements have lifetimes shorter than 20 years, this analysis period includes at least one replacement of each EEM except envelope improvements, resulting in a more stable projection of NPV than would result from a short-term analysis. Energy and maintenance savings often extend far beyond the simple payback period, which may be as short as 3–5 years . The same methodology can be used even if stricter financial return and payback criteria must be used, with minor changes to the input parameters. It can also be applied to staged retrofits, although we did not develop recommended packages for the staged approach because the analysis is more complex and is highly dependent on the age of existing equipment and the capital improvement plan.

    Packages range from low-cost/no-cost EBCx packages that are nearly always cost effective, to more capital-intensive standard retrofit packages with somewhat higher risks but larger life cycle returns, all the way to comprehensive retrofit packages that require an integrated design approach. These packages illustrate the analysis methodologies discussed in this guide, and provide some sense of the energy savings that are achievable in a typical school .

    Unlike the recommended packages for new construction in the Advanced Energy Design Guides (AEDGs), ours are not prescriptive and are not evaluated against a code-minimum building . Because of the diverse range of starting points for retrofit projects and the limited applicability of building energy codes, prescriptive recommendations based on cost effectiveness are not possible. A recommended package might provide excellent financial returns in one situation, but would not be optimal—or even appropriate—in all situations . Your cost and energy savings will differ from the example, and you need to analyze the cost effectiveness of a particular set of EEMs in the context of the actual building, financing method, labor rates, rebates and tax credits, vendor prices, and utility rates.

    Figure 1–6 illustrates the process used to narrow the original list of roughly 190 candidate EEMs to those included in the recommended packages . About 90 EEMs from the original list were deemed to save very little energy, or were considered unlikely to be cost effective, and are not included in this guide. Approximately 100 were considered high potential, and are addressed in Sections 3–4 and Appendices E–G . About 60 were considered for the recommended packages at one or more of the three levels of retrofit. The complete list of EEMs and their rankings is included in Appendix D.

    The reference building for our example analysis is the Pre-1980s Secondary School CRB (Deru et al . 2011), which is one of a series of reference buildings developed by DOE to help standardize the analysis of EEMs when applied to specific building sectors. Details of the envelope characteristics and equipment included in the example building are presented in Appendix B .

    The CRB and example packages are tailored to each of five important U.S. climate regions (see Figure 1–7), represented by the cities in parenthesis:

    • Hot-humid (Miami, Florida)

    • Hot-dry (Las Vegas, Nevada)

    • Marine (Seattle, Washington)

    • Cold (Chicago, Illinois)

    • Very cold (Duluth, Minnesota)

    The DOE CRBs are assumed to be well commissioned. The modeling inputs inherent in the CRBs are not consistent with suboptimal operating schedules, building controls that are no longer active, or degraded equipment performance caused by wear and tear . As a result, we did not try to model EBCx measures . Instead, the recommended EBCx packages were developed based on subjective estimates of the likely energy savings of each EEM considered. We estimated energy savings for the EBCx package based on data from actual projects, combined with the CRB physical characteristics and energy use . Further details of the process for selecting EBCx packages are provided in Appendix B .

    The EEMs included in the recommended retrofit packages were chosen based on the cost effectiveness of each EEM when applied to the CRB model, using typical equipment costs and actual utility rates. Each EEM was analyzed individually and in combination with other EEMs when system interactions were significant. This sequencing allowed for the possibility of downsizing heating, ventilation, and air-conditioning (HVAC) equipment when heating and cooling loads were reduced . EEMs were selected for the recommended packages if their individual NPVs were greater than zero. Additional discussion of the process used for selecting retrofit EEMs for the recommended packages is included in Appendix B…

    Conclusion

    K-12 schools consume 8% of all commercial building energy use in the United States, and spend more than $8 billion on energy costs . In addition, the average school is 42 years old, and 30% were built before 1960 . As a result, existing K-12 schools provide ample opportunity for energy efficiency improvements. This guide demonstrates that significant energy savings are relatively easy to achieve through EBCx, and that much greater savings can be accessible for energy managers and school districts that are willing to invest in holistic retrofit projects using a wholebuilding or staged approach. The rigorous financial analysis methods presented in this guide show that the long-term benefits from these retrofits considerably outweigh the costs. Rising energy costs, climate risks, regulatory risks, and growing community support for sustainability are other drivers moving building energy upgrades from a niche activity to an essential activity to control costs and create a healthy, comfortable learning environment for our children .

    When analyzed in the context of the example high school building, we were able to identify energy savings ranging from 12% for EBCx packages to more than 32% for whole-building retrofit packages (see Figure 7–1). Energy savings for retrofit packages are independent of EBCx, and the combined package will result in even higher energy savings, though less than the sum of the two separate packages because the benefit of certain EBCx EEMs would be consumed by retrofit EEMs for the same system (such as cleaning or delamping lighting systems before replacing them entirely) . For reference, the energy savings for the 50% AEDG new construction packages are also shown in the graph (ASHRAE 2011c). The modeling of retrofits was very conservative for our example building, because many EEMs appropriate for comprehensive renovations (such as major equipment replacements and enhanced daylighting) were not considered, and an integrated design approach that considered the interactions among EEMs was not applied. Additional savings opportunities are very likely when applied to an actual K-12 school, when all retrofit EEMs are considered, and when available financial incentives are included.

    Policymakers may be interested in the source (or primary) energy savings associated with the recommended packages. Source energy includes the energy used on site, along with the energy lost or consumed during the generation, transmission, and distribution processes . The source energy multiplier for electricity is about 3 .4, and the multiplier for natural gas is about 1 .1 (Deru and Torcellini 2007) . The energy savings expressed in terms of source energy are shown in Figure 7–2.

    Although most would agree that improving building performance is the right thing to do, and acknowledge the wide range of options, navigating those options and developing a profitable long-term strategy have been far from easy.

    This guide breaks down the myriad options into prioritized retrofit EEMs and recommended packages based on a typical high school, providing a strong start to energy managers responsible for any K-12 school . The guide also presents cost-effectiveness metrics for each package that recognize the complexity of a school board’s economic decisions.

    Even the most compelling business case might fall short of success without sound planning and implementation. Therefore, this guide describes proven approaches to project planning and execution. Decision makers can drive their schools toward higher performance by setting goals, creating a long-term plan, and carefully tracking progress . The roadmap presented in this guide can help lead energy managers from recognition of the opportunity through the full journey that leads to high performance.

    A wide array of resources is available to energy managers who seek to enhance building performance . This guide includes links to a host of other resources that energy managers may wish to consult . With the help of information and assistance offered by many government agencies, utility companies, and other organizations, nearly every energy manager, facility manager, or school board is within easy reach of an energy-saving project.

    We hope this guide will give school district decision makers the confidence to take aggressive actions to improve the energy efficiency of their school buildings, and will be a valuable reference as building improvement projects are implemented…

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