THE ENERGY INNOVATORS
IT’S 7:15 ON MONDAY morning. Bryan Beazer, director of physical plant at Ottawa’s Carleton University, stands in front of some 50 students and faculty gathered at the university gymnasium. Suddenly a thumping beat fills the air and Beazer begins to move rhythmically with the music. His class follows as they begin an energetic 45-minute aerobic session under his guidance. Two hours later, the 50-yearold Beazer is in his office on the fifth floor of the university’s administration building presiding over a multimillion dollar physical plant operation that in recent years has drawn international attention for its innovative approach to energy management.
For a man who expends energy with extravagance, Beazer is unusually skilled at trimming the university’s energy budget to the bone.
“If you consider even conservative increases for the cost of electricity, natural gas and water over the next 20 years, our $5.5 million annual utility costs will double to $11 million if we do nothing,” he says.
So Carleton has done something. Take, for instance, the groundwater project. Faced with the need to replace a large, aging air conditioner in one building, Beazer and his staff discovered that it was possible to use an innovative, energy-efficient approach instead: water in an aquifer below the Carleton campus could be
used to heat and cool all of their buildings year-round.
Groundwater heating and cooling has the advantage not only of saving money and energy, but also of being environmentally friendly: heating and cooling will use less fossil fuel resources, resulting in significant reductions in harmful emissions that contribute to greenhouse gases.
The first phase of Carleton’s groundwater project services nine of the university’s 26 buildings. This $3 million project, which was made possible by a contribution from the federal energy department’s Canada Centre for Mineral and Energy Technology (CANMET), has cut the university’s annual energy bill by $400,000. And that is only one of the many energy programs Carleton has undertaken.
Last year Beazer’s department replaced all of the 29,000 traditional T12 fluorescent light fixtures at Carleton with the more energy-efficient T8 fluorescent lights. The $1.6 million investment resulted in an annual saving of $260,000 in electricity costs.
Like many institutions and businesses, Carleton did not have the up-front money to finance these energy-efficiency projects. So the university went to the bank and borrowed $1.6 million. After an Ontario Hydro rebate of $750,000 under the utility’s Energy Efficient Lighting program, Carleton was left with monthly
For us, it was an excellent economic decision to borrow money for energysavings projects and then pay for those projects out of the savings. ”
“...PPG hoped to achieve three principal objectives : a greater productivity, a greater energy efficiency, and greater protection for the environment. ”
bank payments of $18,000. The monthly saving in electrical energy of $22,000 not only covered the loan payments, but also gave the university a net monthly profit of $4,000.
“For us, it was an excellent economic decision to borrow money for energy-savings projects and then pay for those projects out of the savings,” says Beazer. “But a lot of people aren’t doing it. They are afraid of going into debt even though the investment has significant short-term and long-term advantages.”
The federal government, through the Department of Energy, Mines and Resources (EMR), points to Carleton as an example of what Canadian companies and institutions can achieve. Through its Energy Innovator Ventures initiative, EMR Canada is encouraging Canadian corporations, cities and towns to adopt energy efficiency as a means of cutting costs and preventing pollution.
Energy efficiency has its rewards. In a fiercely competitive global marketplace, Canadian companies can best compete by decreasing production and operating costs. And one of the best ways to achieve that goal is to reduce the energy cost component of producing goods and the cost of operating their facilities.
A significant reduction in the product unit cost is one of the four objectives 3M Canada has adopted as part of the 3P+ program, the corporation’s
international strategy to remain competitive. 3M Canada produces a wide range of products for business, industry, government and the consumer, including Scotch-brand tapes and abrasives.
“To stay competitive in the world marketplace, we have to reduce our cost of manufacturing,” says Peter Torbet, 3M’s manager of facilities engineering. “To do that, we have reduction targets for unit cost, waste, cycle time and. energy consumption. We plan a 20 per cent reduction in energy consumption per unit by 1995.”
For PPG Canada, a global producer of glass, chemicals, coatings and fiberglass, energy efficiency has reaped many rewards, including the Canadian Electrical Association’s national and Quebec regional Energy Efficient Industrial Awards.
As part of a $40 million reconstruction of its chemical plant in Beauharnois, Quebec, PPG Canada
switched to recently developed permionic membranecell electrolysis technology in the production of chlorine
and caustic soda.
“By using membrane technology, PPG hoped to achieve three principal objectives: a greater productivity, a greater energy efficiency, and greater protection for the environment,” says Michael Wolanyk, director of special projects.
The new technology, installed with the cooperation of Hydro-Quebec, has reduced the total process electrical consumption by one-third and reduced the plant’s operating costs by 18 per cent. At the same time, production levels have increased from 64,000 to 80,000 tons per year, translating into a 75 per cent increase in productivity and a 5 per cent improvement in product quality.
CANADA AS A COUNTRY also has a great deal to gain through energy efficiency, says former federal Energy Minister Jake Epp. Not only do we have the luxury of being energy selfsufficient, he says, but we are also a major exporter of energy.
“To be competitive, we must also give a value-added component to that export, and that’s energy-efficiency technology,” he says. “As we have become energy exporters, we have also become energy technology exporters. And to be in the marketplace, you have to be energy efficient.”
The result is that the federal government sees energy management as a major investment in Canada’s future as an exporter, as a world leader in energy conservation technology. It’s a message that is not lost on companies such as General Electric Canada.
“We believe that Canada is currently the most aggressive market in the world for energy efficiency,” says Niraj Bhargava,
GE Canada’s business development manager.
“We have taken that message back to our 13 businesses within GE, many of which are energy-related, and they are
beginning to realize that they should enhance their activities in Canada. Our Canadian operations could become a global centre of excellence in energy efficiency,” he says.
Last year, GE Canada announced a $144 million investment to bring Oakville, Ontario, a world mandate to manufacture energy-efficient lighting products. And GE hopes to follow that announcement with further Canadian research and development and production mandates in other areas such as energyefficient motors.
“As we have become energy exporters, we have also become energy technology exporters. And to be in the marketplace, you have to be energy efficient.”
"Some people think that when you undertake these projects, the payback will take forever, but even if you fund it yourself, it’s a very wise thing to do because you’re wasting money on energy otherwise.
“We are also finding that Canada is an excellent place to launch new ventures involving energy-efficient services such as the GE Energy Management business that could ultimately serve global market needs,” Bhargava says. GE Energy Management will provide full service, including financing, to specific Canadian markets in 1993.
Energy efficiency reaps for Canada a second very important reward: a cleaner environment. Traditional energy sources such as coal and oil are nonrenewable. And their use in energy production results in the release of greenhouse gases such as carbon dioxide, nitrogen oxide, and sulphur compounds.
Bell Canada, in a review of its energy management programs, calculated that an energy management program in one of its large office buildings could conserve about 1.5 million kWh of electricity per year, which requires more than 500 metric tons of coal to produce. Not burning that coal keeps 2.7 metric tons of nitrous oxide, 11 metric tons of sulphur dioxide, and 1,500 metric tons of carbon dioxide out of the air.
Since 1988, the federal government has been looking seriously at ways to encourage energy efficiency and the use of alternative energy in all sectors of the Canadian economy. To demonstrate its commitment to energy efficiency, the government will put its own house in order
through the Federal Buildings Initiative.
The initiative aims to reduce energy use in federal facilities without compromising the work environment of employees. This is expected to reduce spending on energy while addressing the harmful impact of energy use on the environment.
One of the major incentives in the Federal Buildings Initiative is an innovative financing mechanism that eliminates one of the major obstacles to the introduction of energy-efficiency technology and practices: front-end costs.
Through contractual arrangements called “savings financing agreements,” an energy management firm finds the investment capital for the energy-efficiency improvements in a given building. Once the improvements have been completed, the federal department or agency repays the energy management firm with the energy savings. When the cost of the improvements has been entirely repaid, the department retains the money saved on energy.
In effect, an energy efficiency program allows a department to turn overhead into profits since Treasury Board, the holder of the government’s purse strings, changed the way departmental energy budgets are handled. Managers are now empowered to keep the savings for other capital projects. They don’t simply disappear into the government’s central pot.
“We were intrigued by the concept of saving energy using someone else’s money without any risk for us,” says Subash Vohra, the director of engineering and maintenance at the National Research Council (NRC) of Canada, the government’s leading research, science and engineering agency.
NRC negotiated an energy performance contract with Rose Technology Group of Willowdale, Ontario, to improve the energy efficiency of four of its buildings on its east-end Ottawa campus.
“Energy service companies bring a unique combination of engineering, energy management and project management expertise to the table,” says Vohra. “By their very nature and because of the compensation agreement, recommendations from the service company tend to be practical. They’re also more hands-on because they have a vested interest in delivering results. This gives us a great deal of flexibility to do more with no up-front costs.”
The upgrading in the four NRC buildings involved lighting modifications, installation of computerized energy management control systems, retrofitting of air handling systems and the replacing of inefficient equipment. NRC negotiated an agreement with an energy management firm in which the service company claims 100 per cent of the $358,000 per year energy savings over five years to recover the $1.7 million cost
of the project.
Energy performance contracting has become a growth business. In 1988, there were only four such companies in Canada. Now there are more than 50, with a combined annual business of some $70 million. And, ironically, their revenues come with blessings from the utilities whose business it is to produce and sell energy.
The problems that utility companies seek to remedy with energy management are brief periods of high demand for energy. Demand varies throughout the day and the seasons, and utility companies must always be prepared for peaks in demand. Meeting these peaks is costly to the utility because the generating equipment required sits idle for most of the year. Moreover, the cost of building and maintaining that extra generating equipment makes it more difficult for a utility to price its product competitively.
“Demand-side management” offers a host of strategies as potential solutions. One is to lessen the demand for energy by helping companies use alternative energy sources or more energy-efficient products. Another is to shift energy demand from traditional “peak” times to off-peak hours through rate incentives.
An innovative approach to building cooling at Place Bell Canada in Ottawa is an example of demandside management at work. In 1991, Bell retrofitted its 26-storey, 1.1 million square foot office tower with an innovative thermal cool storage system. That system produces almost 150,000 kg of ice every night when the energy demand is minimal and the cost is low. The ice melts during the day and the chilled water is then circulated throughout the building as a coolant. In the
winter, a “free cooling” system uses cold outside air to offset heat buildup.
Bell has managed to reduce its peak demand on a typical high-demand day from 5.6 megawatts to 4.5 megawatts. The 1.1 megawatt reduction in energy use is equivalent to the daily consumption of 450 homes.
Stephen Quesnelle of Bell’s facilities management team says that other projects have also helped to cut energy consumption. “We’ve installed energy-efficient lighting and automated controls that turn all building lights off after normal office hours,” he says.
Electricity consumption in the commercial sector accounted for 25 per cent of total electricity use in Canada in 1990, with lighting being the major component. As a result, the large retail chains and the large property developers in Canada have focused their attention on making their lighting more energy efficient.
At Eaton’s, The Hudson’s Bay Company and Sears, for instance, lighting management has become a high priority in their stores across the country. Some stores
are cutting lighting costs by up to 50 per cent by removing half the lamps from fluorescent fixtures and installing reflectors to increase the light output from the remaining fixtures. Other stores are retrofitting with energy-saving display lighting that reduces power consumption by some 15 per cent, or with the new T8 lighting systems that can cut consumption by up to 40 per cent.
Eaton’s has recently retrofitted the main floor of its Halifax store with T8 lighting and electronic ballasts, with an energy saving of 40 kW and a noticeable improvement in the quality of lighting. Maintenance engineer Martin Lajoie expects to pay for the retrofit of each successive floor with the savings in energy costs.
There have been formidable barriers to energy efficiency in the past, says EMR Canada’s Richard McKenzie, director of the Energy Ventures Division. Principal among them is money, but also important are having the right people with the knowledge of both energy management and innovative technologies. Also
critical to the success of any energy management project is a commitment from the chief executive officer and other senior officers in a corporation. EMR’s Energy Innovator Ventures was set up to address those barriers.
“If we all invest in energy efficiency, we can kick-start the economy and reduce our operating costs at the same time,” says McKenzie, “This is one of the few recession busters that pay for themselves.”
Similar to the Federal Buildings Initiative, the Energy Innovator Ventures program coordinates the efforts of manufacturers, energy service companies,
Participating in the Energy Innovator Ventures has many benefits, says EMR Canada. In addition to significant energy savings, participating companies will be contributing to a cleaner world. Employees benefit from an improved working environment. And energy efficiency demonstrates sound financial management that serves as a model to other Canadian organizations.
“A more efficient commercial sector will be a more prosperous and competitive one,” says Minister Epp. “Energy efficiency will not only help boost the competitiveness and prosperity of Canadian industry, but will also show the world that we are committed to protecting our planet for future generations.”
“If we all invest in energy efficiency, we can kick start the economy and redcuce
utilities and governments to offer a core package of services to Canadian organizations. It also provides information on savings financing, and on programs and incentives offered by Power Smart utilities that promote energy efficiency across Canada.
This supplement was written by Brian Berube, an Ottawa-based freelance writer.
Bill McKnight replaced Jake Epp as Minister of Energy, Mines and Resources Canada on January 4th, 1993.
TOWN OF JASPER, ALBERTA Tasper, a community whose power I consumption has doubled in the past 10 years, has accepted a challenge from Alberta Power Limited: show other Canadian towns and cities that it is possible to reduce peak electricity use by as much as 20 per cent by the end of 1993. When accepting that challenge, Jasper also became the first community to participate in EMR Canada’s Energy Innovator Ventures program.
“The project will cost Alberta Power $1.5 million - much of it in incentives to customers to promote the purchase of energy-efficient products -but the company considers it money well spent as it will defer the construction of a transmission line or adding to the power plant,” says Rod Carrothers, the Alberta Power area supervisor.
The Jasper Energy Efficiency Project is initially encouraging residents to reduce electrical consumption by using energy-efficient products in their homes, products such as compact fluorescent lights, powersaver cords that cycle power to vehicle block heaters as needed, timers that
operating costs the same time”
control Christmas lights, and natural gas water tanks. Two teams of energy consultants are going to door-to-door selling these products at greatly reduced prices, as well as offering energy efficiency tips. That initiative is expected to trim 400 kW off the current peak demand of 12,000 kW.
The focus of the program will then shift to commercial and industrial establishments when even greater reductions in demand are expected. The project has received widespread public support. “Alberta Power’s project fits right in with the goals of the Green Plan,” says Michel Audy, assistant superintendent of Jasper National Park.
FORD MOTOR COMPANY OF CANADA
In the mid 1980s, The Ford Motor Company challenged its plants throughout North America to reduce by 30 per cent their energy consumption by 1991. As a result, energy managers at the various facilities came up with a plethora of innovative strategies.
The Oakville assembly plant, for instance, spent more than $150,000, with CANMET, EMR’s R&D sector contributing an equal amount, to install Canada’s largest solar wall as part of its energy conservation drive. Using technology developed by Mississauga-based Conservai Engineering, the entire south wall of the plant became a solar collector that supplies heating throughout the plant. Energy savings have amounted to about $40,000 annually.
The St. Thomas assembly plant met the 1991 target by installing new building insulation, a solar wall and an automated energy management system. Engineers also planned to relamp the plant with energy-efficient fluorescent lights.
“They were looking at about 30 energy conservation projects and the relighting one didn’t meet the payback parameters,” says Ken Rossi, Ford’s plant and energy engineering manager.
“Then Ontario Hydro announced its grants for high-efficiency lights. That shortened the payback period sufficiently and the whole thing clicked. We could now do it.”