As discussed in ?Energy Saving Performance Contracts: Cash Flows for Water Sustainability [UIM November/December 2010, pp. 30-33],? sustainable infrastructure provides the quantity and quality of water necessary to meet present needs without affecting the needs of future generations. The water needs for future generations are in peril and cash flow to sustain water and wastewater infrastructure is imperative.
Without the infrastructure to support future water needs, communities, cities and possibly state populations will become unsustainable.
Part 2 of this article will explain the Energy Services Company (ESCO) Energy Savings Performance Contract (ESPC) process in detail. In addition, Energy Conservation Measures (ECMs) that can be utilized in the water and wastewater market will be introduced. Detailed discussions of renewable energy opportunities and specialized situations for water and wastewater vs. other markets will be discussed.
ESCO ESPC Process
As discussed in Part 1, a municipality must be committed to energy efficiency and sustainability before engaging in an ESPC. The commitment should include an energy or sustainability action team. Because looking at operational efficiency to include energy, process, water and carbon efficiency are most of the major components for a sustainable infrastructure, the team really should be a sustainability action team. The team should be represented by key decision-makers for a municipality with the following suggested members:
- Municipal Executive
- Facility Operations/Engineering
- Purchasing
- Finance/Business Management
- Dedicated Sustainability Manager
- Third-Party Sustainability Expert (Optional)
The dedicated sustainability manager is a key individual for the municipality and should have the authority to implement sustainable measures that balance the triple bottom line ? environmental stewardship, social responsibility and economic prosperity. The third-party sustainability expert could be a trusted consulting engineering firm along with a trusted third-party energy company that focuses on municipal sustainability. The municipal executive typically is the decision-maker that presents information to the board or the legislative branch for the municipality. The operations/engineering manager may be one or two individuals that make key decisions concerning plant design and operations. Purchasing leadership is needed to ensure compliance with municipal purchasing procedures and local and state laws. Finance/business leadership brings the finance validation, necessary financial information or decisions to the team.
As discussed in Part 1, a workshop may need to be conducted with an ESCO so all team members can understand the ESPC process and any local or state laws regarding ESPCs. The next step in the process will be to qualify and/or choose an ESCO for potential work with the municipality. This could result in a Request for Qualification (RFQ) or a Request for Proposal (RFP) advertised to promote competition and to find the most qualified ESCO. The choosing of the most qualified ESCO should be completed by the sustainability action team. However, the third-party representative may be excluded in this part of the process.
When the qualified ESCO is chosen, an initial meeting should be conducted by the team with the ESCO. During the initial meeting all should develop the analysis schedule and deliverables, discuss areas and processes to be included/excluded if any, and create action items and the completion schedule. The next step is to conduct a preliminary audit of facilities to be covered with the ESPC and interview key personnel in operations to obtain information and data concerning day-to-day operational expenses and operation of processes. Once this audit is completed, it will be necessary to meet with the sustainability action team to discuss results and prepare for the more detailed investment grade audit.
The investment grade audit (IGA) is a detailed engineering analysis including design that will look at the full potential of any sustainability savings that can be funded by the ESPC and meet the payback schedule for any loan obtained for the complete project. Upon commencement of the IGA, the municipality commits to pursuing the ESPC and guarantees payback of the ESCO?s engineering investment if the ESPC does not proceed. In addition, the monitoring and verification (M&V) for the life of the ESPC is established and the guaranteed savings verified. The ESCO will then meet with the sustainability action team to finalize details of the ESPC. The ESPC is then signed and implementation of the contract begins.
With implementation of the ESPC, the ESCO assumes all responsibility of the project to include finance arrangements, design, construction, subcontracts and total construction management. The ESCO is responsible for the turn-key project and guarantees a maximum fixed price with no change orders. This approach allows for one source of responsibility of the project to the municipality. All project costs are funded by energy, process, water and carbon efficiency performance. Further, all project risks are assumed by the ESCO. Upon completion of the project, the monitoring and verification phase begins.
The monitoring and verification phase of the project verifies and monitors performance of the ESPC per the guaranteed performance, efficiency savings and operation of the plant. The performance is typically verified annually; however, verification can be set as desired during the negotiation of the ESPC. Please note that the terms need to be clearly established to set the annual M&V costs. Because the M&V phase will require detailed engineering analysis, any reviews more frequent than annual will cost more. In addition, third-party M&V may be required or desired to be completed by firms other than the ESCO. Again, this will typically create an additional M&V expense. A typical term for M&V is 10 to 25 years. During that time the ESCO tracks, measures, and guarantees performance, the municipality gains a trusted sustainability partner, and ongoing support for services.
Energy Conservation Measures for Water and Wastewater
There are a number of common energy conservation measures that can be implemented in both water and wastewater treatment facilities under an ESPC. For example, changing out motors with more energy efficient motors and managing HVAC and lighting loads are common ECMs. In addition, implementation or upgrading an existing SCADA system to monitor and control energy usage is common to both types of facilities. Power monitoring at process levels as well as pump system and operational efficiency are common. Further, demand monitoring, load shedding and cogeneration are additional measures.
Water Treatment
Water treatment plant energy usage will depend on the type of water used, surface or ground, the quality of the incoming water, the pumping requirements, and the processes used to treat the water. ESPC ECMs for water treatment plants are usually centered on pumping applications. Influent pumping stations for surface water, well pumps for ground water, high service pumps for effluent and booster pumps are examples of water treatment pump applications. A sample water treatment distribution of energy usage is as shown in Exhibit 1. Pumping is by far the largest consumer of energy for a water treatment facility. It has been reported that 87 percent of the energy consumed is for pumping. Other reports such as produced by the AWWA, estimate pump usage even higher. The opportunity and need also exists for management of energy consumption for specific processes and systems as well in water treatment plants.
National Electrical Manufacturers Association (NEMA) Premium or Energy Policy Act (EPAct) high-efficiency motors and variable frequency drive (VFD) applications are low-hanging fruit to review for pumping. Pump optimization with supervisory control and data acquisition (SCADA) systems or specific pump optimization software are additional items to consider with pumps. Further, proper maintenance and operation of the pumps will assist in maintaining the nameplate efficiencies of the motor, pump and overall pump system.
Additional opportunities for energy management with a smaller return are heating, ventilation and air conditioning (HVAC); high efficiency fixtures and lamps; and lighting monitoring and control. Supplying energy-efficient ballasts for plant fluorescent fixtures and ultraviolet (UV) disinfection or pretreatment systems is an opportunity to reduce energy. Further, water treatment plants have chemical feed systems that need to be properly controlled and monitored to maintain efficient operation of the plant. Providing storage to allow for pumping during low energy demand times for electric utilities and distributing the water by gravity during high demand times could assist with obtaining incentives or reduced rates.
Wastewater Treatment
The most opportunistic ESPC ECMs for wastewater treatment plants are primarily aeration and pumping applications. This includes aeration for activated sludge and aerobic digestion as well as return and waste activated sludge pumping. Further, lift and influent pump stations and any effluent pumping requirements can provide energy savings. A sample wastewater treatment distribution of energy usage is as shown in Exhibit 2. Aeration for activated sludge and nitrification processes is the largest consumer of energy for wastewater treatment facilities with pumping a distant second. It is estimated that 70 percent of the energy consumed is for processes and 16 percent is for pumping.
As with water treatment, NEMA Premium or EPAct high-efficiency motors and variable frequency drives are low-hanging fruit for better efficiency. Dissolved oxygen (DO) monitoring and control are critical for energy efficiency. The control of an aeration system includes adequately spaced and maintained DO sensors with properly sized blowers. The type of blower must also be evaluated for the application. For example, is the best blower a positive displacement, centrifugal with variable speed or single-speed centrifugal controlled with vanes, valves or VFDs?
Pump and blower optimization are also a consideration in wastewater applications. Knowing which pumps or blowers to use at what time and maintaining control over the requirement is extremely important.
Equalization basins could also be used to assist with pumping energy requirements. This is accomplished by shifting treatment to low energy demand times to save costs. Pump and blower systems should also be evaluated to determine the best efficiency and utilization of the information to load the most efficient system at the optimum time.
Another good opportunity for energy management in wastewater is solids handling and removal. Finding applications that can dewater sludge more efficiently will reduce sludge handling costs. Also, there are many different types of systems developed or being developed to use the sludge as a biofuel for cogeneration or peak shaving of demand. The methane produced by anaerobic digestion of the sludge can be used for cogeneration or heating requirements to save energy. Flaming or flaring off the excess gas after the sludge heating process typically wastes any methane gas that could be used to produce electricity. However, when generation of electricity or heating use is not utilized, flaring off the excess gas reduces GHGs.
Opportunities exist for wastewater treatment as with water treatment for low return investments. Low return investments include lighting and lighting control as well as HVAC applications. However, a greater opportunity exists for UV energy saving ballasts in wastewater because of the larger quantity and usage.
Two trends in wastewater that increase the consumption of energy are friction in piping increasing due to age of systems and more rigorous treatment requirements that cause tertiary treatment processes. Evaluation of both of these trends can gain energy-efficiency opportunities.
Renewable Energy Opportunities
Renewable energy opportunities can be implemented into an ESPC. Not only will renewable energy options reduce operational expenditures, it will also reduce carbon emissions. Utilizing solar power, micro hydro turbines, wind turbines and energy producing pressure reducing valves are some typical renewable energy opportunities available to both water and wastewater facilities. Gas turbines using methane and sludge burning processes can be additional opportunities for renewable energy in wastewater facilities. A very detailed study will need to be conducted during the IGA to determine if the life-cycle cost for any renewable energy option can be applied to the ESPC. Typically, with enough savings and available incentives, grants and loans, renewable energy options are more favorable.
Market Differences
According to the EPA, water and wastewater treatment utilizes 3 to 4 percent of the energy produced in the United States. With this amount of energy usage, there is a large amount of performance savings available. The other differences in the water/wastewater market are the aging infrastructures that influence U.S. sustainability. Without a sustainable water supply, U.S. cities will struggle to survive. Therefore, it is imperative to maintain our water and wastewater treatment facilities. In today?s financial environment, funds for capital improvement are smaller than needed as reported by the EPA gap analysis. ESPCs are good resources for infrastructure upgrades along with helping municipalities become more operationally efficient.
The successful history of ESPCs in the buildings, school and federal government sectors give credibility to the contract process. Buildings and schools typically utilize ESPCs to gain performance in lighting and HVAC systems. ESPCs for building and schools also cover complex boiler and chiller systems as well as building automation and controls. The experience with traditional ESPC markets could easily be transferred to water/wastewater. Further, active existing ESPCs could be expanded from municipal buildings to their water and wastewater facilities. Combining all of a municipality?s building assets with water and wastewater could also make the needed infrastructure upgrades a better investment. For example, using savings from lighting on a major building could fund better DO control for a wastewater plant to include higher efficiency blower implementation.
Conclusion
ESPCs are a good fit for the water and wastewater market. Commitment by the municipality to performance improvement and choosing the right ESCO are keys to successful implementation of an ESPC. Water and wastewater operations have many savings opportunities with the amount of energy used. To gain those savings, an investment must be made. Water and wastewater infrastructure age and the need for investment funds can be obtained with operational efficiencies. As stated before, to keep the cash flowing for water sustainability, implementing ESPCs with the right ESCO is critical for water needs for future generations.
Lee E. Ferrell, P.E., is a water and wastewater energy and process consultant for Schneider Electric. Ferrell has more than 25 years of industry experience and currently serves as the Vice Chairman for the AWWA Energy Management Committee. He has a bachelor of science degree in electrical engineering and a master of science degree in environmental engineering from Clemson University.
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