Top 10 Sup

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Energy Background

• Rising Costs Price Volatility
• Fuel Supplies Less Reliable
• Weather Concerns
• Instability in Oil Producing Nations
• High Demand
• Greenhouse Gas Issues

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Managing Your (Rising) Energy Costs

• Energy Costs have risen dramatically over the
  past couple of years
• Commodity Pricing (without transmission charges)
• Crude Oil NYMEX Crude Futures around 67/bbl
  for January 2006 delivery. Average prices for
  2001 were around 22/bbl
• Natural Gas NYMEX Futures around 12.50/MMBtu
  (1.25 per therm) for October delivery. Average
  industrial user pricing for 2001 was 5.1/ MMBtu
  (0.51/therm) and 3.91/MMBtu (0.39/therm) for
  2002.
• Electricity New Jersey Industrial User Average
  Pricing for June 2005 - 0.987/kWh, June 2004 -
  0.836

Source Energy Information Administration
Website (www.eia.doe.gov)
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Future Energy Pricing Uncertain

• Forecasts for the near term future are trending
  upward
• Tight refinery capacity makes it difficult to
  predict the next event that could impact pricing
• Rising energy costs erode profits for companies

Crude Oil Spot Prices
Natural Gas Futures
Source Energy Information Administration
Website (www.eia.doe.gov)
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Where does our energy come from?

• Understanding the risks associated with fuel
  supply requires and understanding of where fuel
  comes from.

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Top 10 Suppliers of U.S. Crude Oil Imports for
2004
Source Energy Information Administration
Website (www.eia.doe.gov)
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Risks to Crude Supply

• Approximately 2.4 million Barrels per day or 24
  of imported crude oil comes from the Persian Gulf
• Venezuela and Nigeria produced approximately 2.4
  million barrels per day or 24 of imported crude
• Nearly 48 of imported crude comes from regions
  of risk due to political instability

Source Energy Information Administration
Website (www.eia.doe.gov)
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Refinery Capacity

• World Demand is at an all-time high due to
  economic growth over the past couple of decades
• US demand is at all time high. Lack of
  investment in new refinery capacity has caused
  production bottleneck
• Hurricanes - Katrina Rita have highlighted the
  risks to Gulf of Mexico Production and Refining
  Facilities

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Natural Gas Imports/Exports

• In 2004, approximately 15 of US gas consumption
  was from imports, mostly from Canada.
• Demand for natural gas is increasing beyond North
  American production rates, so LNG imports are
  growing. Trinidad, Algeria, Qatar and Nigeria
  provided 95 of LNG imports from 2000-2004.
• Continued increases in demand will tax the
  capacity of transcontinental pipelines, requiring
  increased LNG imports to meet demand in
  northeastern US.

Source Energy Information Administration
Website (www.eia.doe.gov)
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US Electric Generation Fuel Sources
Source Energy Information Agency Quickstats
(http//www.eia.doe.gov/neic/quickfacts/quickelctr
ic.htm)
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So here we are

• Todays energy crisis is different than that of
  the mid 1970s, which turned out to be a short
  term event.
• Increased demand for crude oil and natural gas
  will be met by foreign sources
• US continues to lack a comprehensive energy
  strategy to reduce dependence on foreign
  supplies, therefore
• Reliability and pricing concerns of our energy
  supply will likely be with us for the long haul
• So what can you do about it?

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Before you get started

• Get upper management involved. You cannot
  succeed without senior management support for an
  energy reduction program (formal program that has
  targets in senior management objectives
  Novartis recently signed off on Kyoto Protocol
  5 reduction in greenhouse gases from 1990 levels
  by 2008 2012)
• Collaborate with others in your industry. This
  will allow you to take advantage of the ideas and
  lessons learned by others. (PMON, NJPFEUG,
  NJLEUC, NJAEE)
• Engage different user groups (maintenance,
  manufacturing, environmental, others) on site to
  brainstorm opportunities. This is especially
  important for sites where manufacturing
  operations are energy intensive.

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Before you get started

• There are many resources to help you develop your
  plan. Two good resources are
• Energy Star (www.energystar.gov)
• US Department of Energy Energy Efficiency and
  Renewable Energy (http//www.eere.energy.gov/)
• Both websites have good information on strategies
  and case studies to learn from
• If you lack the resources, time or expertise,
  consider engaging a consultant with expertise in
  energy reduction programs

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Energy Star Steps for Energy Reduction Program

• Make a Commitment - Organizations seeing the
  financial returns from superior energy management
  continuously strive to improve their energy
  performance. Their success is based on regularly
  assessing energy performance and implementing
  steps to increase energy efficiency.
• Assess Performance - Understanding current and
  past energy use is how many organizations
  identify opportunities to improve energy
  performance and gain financial benefits.

Source Energy Star Website (http//energystar.go
v/index.cfm?cguidelines.guidelines_index)
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Energy Star Steps for Energy Reduction Program
cont..

• Set Goals - Performance goals drive energy
  management activities and promote continuous
  improvement. Setting clear and measurable goals
  is critical for understanding intended results,
  developing effective strategies, and reaping
  financial gains.
• Create Action Plan - With goals in place, your
  organization is now poised to develop a roadmap
  to improve energy performance.

Source Energy Star Website (http//energystar.go
v/index.cfm?cguidelines.guidelines_index)
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Energy Star Steps for Energy Reduction Program
cont..

• Implement Action Plan - People can make or break
  an energy program. Gaining the support and
  cooperation of key people at different levels
  within the organization is an important factor
  for successful implementation of the action plan
  in many organizations.
• Evaluate Progress - Evaluating progress includes
  formal review of both energy use data and the
  activities carried out as part of the action plan
  as compared to your performance goals.

Source Energy Star Website (http//energystar.go
v/index.cfm?cguidelines.guidelines_index)
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Energy Star Steps for Energy Reduction Program
cont..

• Recognize Achievement - Providing and seeking
  recognition for energy management achievements is
  a proven step for sustaining momentum and support
  for your program. (Novartis uses HSE success
  stories and Energy Awards.)
• Reassess As you move forward with your plan,
  changes in your site or the energy marketplace
  should be considered, and adjustments made to
  your plan to keep it appropriate.

Source Energy Star Website (http//energystar.go
v/index.cfm?cguidelines.guidelines_index)
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Strategies
start with how your facilities are currently
operating

• Collect data on consumption utility company
  bills, internal distribution metering. Look at
  the past couple of years to determine trends and
  identify areas of opportunity. Tracking will be
  important to identify opportunities, establish a
  base case for financial analysis of energy
  opportunities and verify savings, identify
  metering deficiencies early and how information
  should be presented early on.
• Many facilities have sophisticated Building
  Management Systems that could be better utilized
  to reduce energy consumption. System integrators
  are typically not tasked to provide optimal
  operating programming up front, and, over time
  individuals may have altered programming for
  convenience. Take a systematic approach, as each
  opportunity arises, see where else it can be
  applied in a campus environment.

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Strategies
start with how your facilities are currently
operating

• Maintenance of systems properly maintained
  systems utilize less energy to perform the same
  work.
• Look at your Building Management Systems
• Check space temperature setpoints. Verify that
  they are acceptable. Adjust as required to
  reduce energy consumption while maintaining
  comfort.
• Check calibration of key parameters like outside
  and interior temperature sensors. Also check
  flow meters and differential pressure sensors
  where a central chiller plant is supplying
  multiple
• Verify that time of day/week occupied/unoccupied
  settings are correct and functional
• Optimize start/stop of systems

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Strategies
start with how your facilities are currently
operating

• Make sure that you change HVAC filters regularly
  added pressure drop increase to fan energy.
  Novartis has standardized on an extended bag
  filter that fits most air handlers, reducing
  change-out frequency and pressure drop
• Perform vibration analysis on all equipment 5 HP
  and above (less for critical systems). Novartis
  performs this as part of commissioning to avoid
  inheriting problems, and routinely so as to shift
  from preventative to predictive maintenance.
  Before / after repair testing demonstrates energy
  savings.
• Evaluate chiller plants, compressed air systems
  and boilers using third parties specializing in
  these systems.

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Start with the biggest users of energy
your buildings

• Determine where your buildings are operating
  relative to similar buildings. Energy Star
  Portfolio Manager can help, however labs and
  manufacturing buildings have not been
  benchmarked. Labs 21 (http//www.labs21century.go
  v/toolkit/benchmarking.htm) can help with
  laboratories and clean rooms
• Use auditing tools to identify opportunities to
  improve energy performance
• Take care not to delay starting obvious
  initiatives (maintenance, BMS system adjustment)
  while waiting for a comprehensive review, which
  may take up to a year depending on the size of
  your facility.

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Look at your Building Management Systems

• Check space temperature setpoints. Verify that
  they are acceptable. Adjust as required to
  reduce energy consumption while maintaining
  comfort.
• Verify that time of day/week occupied/unoccupied
  settings are correct and functional. Utilize
  intelligent programs to start/stop and sequence
  systems

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Facility Renovations, Expansions and Contraction

• In the past, projects were performed only
  considering the additional energy needs of the
  project
• Where it makes sense, larger projects can provide
  a good opportunity to increase the energy
  effectiveness of a facility. Increases to
  on-site energy generation can be considered to
  meet capacity and increase efficiency.
• Architectural Masterplans should be complemented
  with an Energy Master Plan. The Energy
  Masterplan should maximize the return on
  investment of systems utilizing energy.
  Lifecycle costing of systems should be performed
  to verify the true low cost system. Novartis is
  performing energy modeling of new facilities.
• Some sites are reducing the number of buildings
  or changing from manufacturing to office,
  lowering energy demand. This can lead to
  oversized and potentially inefficient on site
  energy plants. Novartis recently reduced energy
  consumption by converting old labs and
  manufacturing space to office space.

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Energy Reduction Program

• Take advantage of rebates to buy more efficient
  equipment in your construction projects.
• Replace older, less efficient equipment.
• Look at replacement options like for like
  replacement may not improve efficiency as much as
  technology change.
• Upgrade controls and sequence of operations
• Take advantage of incentive s for renovation
  and new projects NJ Smart Start Program

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NJ Smart Start Program

• Incentive program for utilizing equipment meeting
  efficiency requirements see NJ Smart Start
  website for details (http//www.njsmartstartbuildi
  ngs.com).
• Design Support
• Design Incentive s
• Brainstorming Session (Up to 1000)
• Energy Simulation Incentive (0.10/sq.ft. up to
  50,000 sq.ft., 0.03/sq.ft. for area over 50K
  sq.ft.)
• Measure Design Incentives for incremental cost of
  design of more complicated energy saving measure
  for Lighting (Max 2,000), HVAC and Envelope (Max
  2500), and Motors and Other (Max 500)
• Electric Chillers Water-cooled chillers (12 -
  170 per ton), Air-cooled chillers (8 - 52 per
  ton)
• Gas Cooling Gas absorption chillers (185-450
  per ton), Gas Engine-Driven Chillers (Calculated
  through Custom Measure Path)

Source New Jersey Smart Start Program Website
(www.njsmartstartbuildings.com)
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NJ Smart Start Program cont

• Desiccant Systems (1.00 per cfm - gas or
  electric)
• Electric Unitary HVAC
• Unitary AC and split systems (73 - 92 per ton)
• Air-to-air heat pumps (73 - 92 per ton)
• Water-source heat pumps (81 per ton)
• Packaged terminal AC HP (65 per ton)
• Central DX AC Systems (40 - 72 per ton)
• Dual Enthalpy Economizer Controls (250)
• Ground Source Heat Pumps Closed Loop Open Loop
  (370 per ton)
• Gas Heating Gas-fired boilers 4000 MBH (1.00
  - 2.00 per MBH), Gas-fired boilers 4000 MBH
  (Calculated through Custom Measure Path), Gas
  Furnaces (300 per unit)

Source New Jersey Smart Start Program Website
(www.njsmartstartbuildings.com)
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NJ Smart Start Program cont

• Variable Frequency Drives Variable air volume
  (65 - 155 per hp), Chilled-water pumps (60 per
  hp)
• Natural Gas Water Heating Gas water heaters 50
  gallons (50 per unit), Gas-fired booster water
  heaters 50 gallons (1.00 - 2.00 per MBH),
  Gas-fired booster water heaters (17 - 35 per
  MBH)
• Premium Motors Three-phase motors (45 - 700
  per motor)
• Prescriptive Lighting
• T-5 and T-8 lamps with electronic ballast in
  existing facilities (10 - 20 per fixture)
• Hard-wired compact fluorescent (25 - 30 per
  fixture)
• Metal halide w/pulse start (45 per fixture)
• LED Exit signs (20 per fixture)
• T-5 and T-8 High Bay Fixtures (New Fixtures
  meeting requirement 8.1 on application)50 per
  fixture
• T-5 and T-8 High Bay Fixtures (New Fixtures
  meeting requirement 8.2 on application) 75 per
  fixture

Source New Jersey Smart Start Program Website
(www.njsmartstartbuildings.com)
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NJ Smart Start Program cont

• LED Traffic Signal Lamps
• Lighting Controls
• Occupancy Sensors Wall mounted (20 per
  control), Remote mounted (35 per control),
  Daylight dimmers (25 per fixture controlled),
  Occupancy controlled hi-low fluorescent controls
  (25 per fixture controlled)
• HID or Fluorescent Hi-Bay Controls Occupancy
  hi-low (75 per fixture controlled), Daylight
  dimming (75 per fixture controlled)

Source New Jersey Smart Start Program Website
(www.njsmartstartbuildings.com)
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NJ Smart Start Program cont

• Other Equipment Incentives
• Performance Lighting (1.00 per watt per square
  foot below program incentive threshold, currently
  20 more energy efficient than ASHRAE 90.1-1999
  for New Construction and Major Renovation and 10
  more energy efficient than ASHRAE 90.1-1999 for
  Existing Facilities.)
• Custom electric and gas equipment incentives (not
  prescriptive)
• Equipment is based on type, efficiency, size,
  and application and is evaluated on a
  case-by-case basis. Contact your utility for
  details.

Source New Jersey Smart Start Program Website
(www.njsmartstartbuildings.com)
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Manufacturing

• Manufacturing processes tend to be very energy
  intensive. There may be an opportunity to shift
  work to have more energy intensive operations on
  off-hours with lower electric rate
• Work with representatives of manufacturing to
  identify opportunities to reduce energy usage.
  They will resist, so be prepared to encourage
  them with potential energy savings
• Minimize air exchange rates. Novartis has been
  able to reduce air exchange rates in pilot plants
  and lab buildings by carefully considering
  requirements and working with all stakeholders
  well in advance.

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Site Energy Generation

• Once you have look at your buildings, focus on
  your on site energy generation
• Boiler Plant
• Chiller Plant
• Compressed Air Plant
• Cogeneration
• Tools for Maximizing Plant Efficiency

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Boiler Plants

• Regularly test boiler efficiency tune and
  adjust to maximize efficiency
• Tune boilers to specified excess air levels.
  Utilize O2 trim control where possible
• Consider back pressure turbines for reducing
  pressures for larger quantities of steam
• Evaluate flue gas economizer and blowdown heat
  recovery
• Evaluate water treatment program bad water
  treatment reduces heat transfer efficiency
• Load matching operate at best efficiency point
• Replace oversized equipment with appropriate
  boiler sizing to avoid unnecessary cycling and
  low load operation
• Multi-fuel capability also consider alternate
  renewable fuels (like biofuels)
• Steam Trap Maintenance
• Verify that steam traps are operating properly,
  repair or replace malfunctioning traps.
• Consider remote monitoring capability
• Novartis commissioned a steam trap survey which
  identified 5 of traps at the East Hanover site
  were plugged or passing steam (industry average
  is around 10). The energy savings more than
  offset the repairs and the cost of the survey

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Existing Chiller Plants

• Utilize controls system to optimize operation of
  chillers
• Base load most efficient units
• Consider replacement of older, less efficient
  equipment
• Consider diversification of fuels, with a mix of
  electric, steam (absorption or turbine) and gas
  fired to hedge against changes in fuel costs and
  to avoid time of day and demand charges
• Employ some metrics to determine if chiller plant
  is running optimally throughout the cooling
  season, and to direct maintenance activities in
  the winter months. GE Betz offers a program
  called Chiller Check for a fee.

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New Chiller Plants

• Do not oversize the plant unnecessarily.
  Operating chillers at partial load can reduce
  efficiency. Select module sizes to maximize
  loading based on anticipated load profiles, while
  also considering redundancy
• Consider diversification of fuels, with a mix of
  electric, steam (absorption or turbine) and/or
  gas fired absorption to hedge against changes in
  fuel costs and to avoid time of day and demand
  charges
• Consider the use of heat machines, or comparable
  equipment, to take waste heat from the condenser
  and utilize it for free heating in reheat or
  other lower temperature systems
• Consider the use of thermal storage systems to
  reduce plant size. This strategy will minimize
  time of day and demand charges.
• Optimize your chilled water distribution system
  to minimize pumping costs
• Utilize VFD control for chillers, pumps and
  cooling tower fans
• Utilize controls system to optimize operation of
  chillers
• Base load most efficient units

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Compressed Air Systems

• Compressed air systems - Assess the efficiency of
  the compressed air plant. Older plants that have
  been incrementally enlarged may operate
  inefficiently. Consider strategies to address
• Compressors controlled from a central controller
  to maximize efficiency
• Enlarging the compressed air receiver to reduce
  run time for compressors
• Pressure and demand matching
• Perform regular inspections of system to verify
  the leakage is minimized. When possible, add
  manual and/or automated valves to shut off air
  flow when user equipment is shut-off. This is
  particularly important with packaging equipment
• Interconnecting separated systems, where
  possible, to minimize the number of compressors
  required to operate
• As with all other systems good maintenance will
  go a long way to improving performance of the
  system

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Optimize Utilization of On Site Generation Assets

• Model each on-site utility generation system to
  develop operating scenarios that maximize plant
  efficiency
• Know the implications of changes to fuel prices
  on selection of generation equipment to run
• Weather plays a part non-process HVAC loads are
  typically proportional to outside temperature.
  This may allow you to model your systems as a
  function of outdoor conditions giving operators
  the most efficient operating configuration in
  advance

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Buying Your Energy

• Strategies Buy your energy smarter
• Bid energy contracts beware of entering into
  long-term contracts at peak price points
• Take advantage of buying power. Aggregate your
  facilities to buy energy in larger quantities to
  reduce price.
• Be part of an energy buying consortium to buy
  energy with others, particularly if you dont
  have an energy manager tracking the market
• Consider longer term buying horizon to gain some
  surety of pricing. Novartis is working toward a
  24 month rolling buying horizon.

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Requirements

• Provide sufficient capacity (electric / thermal)
• Assure reliability (normal grid / outages)
• Achieve Cost savings
• Minimize Cost volatility
• Meet or exceed emission standards
• Earn LEED credits

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Key Particulars

• Baseload Cogeneration Sized to the Thermal
• Peak Power Purchase from Grid Conventional/
  Renewable Electric Energy Blend
• Demand Response / Standby Generation
• On-Site Renewable supply where feasible and
  economical

• Hybrid (Multi-Fuel) Cooling/ Heating Systems

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Integrated Electric Supply Approach

• 1 Wholesale generators
• 2-4 Transmission owners
• 5-6 LDC
• 7 Consumer
• On-site generator
• Energy Services
• Provider

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Facility Audits and Benchmarking

• Strategies Audit and Benchmark Your Facilities
• Use auditing tools from Energy Star, DOE, AEE, or
  other reputable source.
• Start with big users of energy first.
• Involve manufacturing and environmental
  compliance representatives
• Make sure you find all big users of energy.
  Items like thermal oxidizers can use large
  quantities of energy

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Facility Audits and Benchmarking

• Once you know where you are develop goals for
  where you want to be, along with a road map for
  getting there.
• Goals should be achievable and in concert with
  corporate priorities. Timelines must be
  monitored and long term goals adjusted to reflect
  changes in energy use patterns, energy costs and
  changing corporate priorities.
• Many large companies already have corporate goals
  for energy conservation and emissions reductions.
• JJ - greenhouse gas emissions 4 reduction
  by 2005 and a 7 reduction by 2010, in absolute
  terms with 1990 as a base year.1
• Novartis The Group has adopted energy-
  efficiency targets for 200406, calling for each
  business unit to improve energy efficiency by 2
  a year. Half of this reduction, 1 of annual
  consumption, should come from concrete
  energy-saving projects.2 Novartis recently
  signed the Kyoto Protocol thereby committing to
  reducing the companys GHG emissions 5 below
  1990 levels in the time period 2008 - 2012

1 Source JJ Corporate Website Climate
Friendly Energy Policy 2 Source Novartis
Corporate Website Corporate Citizenship
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Recent Audit Project

• Example Audit of a 250,000 square foot
  pharmaceutical manufacturing facility with office
  and warehouse space
• Audited June 2005 Identified opportunities for
  energy savings
• Direct Fired Thermal Oxidizer - add heat
  recovery to extract waste heat from 1500oF exit
  gas temperature, recovering over 65 of input
  heat
• Add VFDs to chiller and pumps
• Revise operation of boiler plant
• Add 1.2 MW of photovoltaic electric on site
• Reduce electric consumption over 2,000 MWh per
  year
• Once changes are implemented, energy savings are
  estimated at approximately 750K per year at
  current utility rates, for an IRR of
  approximately 15
• Estimated 3,500 metric tons per year reduction in
  CO2 emissions

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HVAC Controls Systems Upgrades

• Examples
• VAV Laboratory Systems with Occupancy Sensors
  reduced airflow (as much as 60 over constant
  volume) reduced energy s
• VAV system optimization Allow control system to
  adjust AHU discharge temperature to minimize
  reheating
• Chiller Plant Optimization
• Monitoring of generation and usage parameters
  interpret trends and adjust operations to address
  changes

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Below Radar Screen Energy Savings

• Flywheel UPS vs. Battery UPS
• Must be combined with reliable backup power
  generator
• Very reliable link to standby generator
• Provides sufficient energy ride through time to
  initiate generator start online
• Environmentally Friendly - Battery free,
  therefore no battery chemicals
• Reduced maintenance, smaller footprint and much
  less weight
• Does not require dedicated air conditioning of
  room
• Saves Energy

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Efficiency Cost SavingsExample 300 kVA System

• Battery UPS (avg. 93 efficiency)
• 15,824 .08/kw X .07 efficiency loss X 300
  kva X 8760hrs/yr
• .93 efficiency
• Flywheel UPS (avg. 97 efficiency)
• 6,502 .08/kw X .03 efficiency loss X 300
  kva X 8760hrs
• .97 efficiency
• Energy Cost Savings 9,322 per year, not
  including savings from reduction of HVAC load

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EPRI Power Quality Study (USA)
2 Yr Study, 300 Sites, 24 Utilities

• 97.2 under 30 sec.
• 96.3 under 10 sec.
• 93.0 Under 2 sec

Yearly Events
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On Site Generation

• Disadvantages
• Increased maintenance
• Takes up real estate that may be more valuable
  when utilized for manufacturing space
• Emissions tagged to site
• Fuel cost not always linked. Cogen economics are
  dependent on relative cost of fuel burned to
  electric utility rates

• Advantages
• Base load power needs are provided on site
• Steam or hot water for facility heating and/or
  cooling provided from waste heat
• Improved reliability grid backs up on-site
  generator
• Emissions lower when compared to electricity
  generated by the utility company
• Economic payback can be achieved

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On Site Generation

• Site Electric and Thermal Loads Need to be
  Compatible
• Equipment typically sized to base load of
  electrical and thermal loads
• Heat recovered by HRSG is used to displace fuel
  for boiler operations resulting in energy savings
  and a reduction in plant emissions

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On Site Generation
Reproduced from NJ Clean Energy Program Website
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On Site Generation

• Example
• Take a 1.0 MW Gas Turbine Generator with Heat
  Recovery Steam Generator
• Assume Implementation Cost About 2.5 Million
• Level II Incentive 1.00/Watt to Max 30 of
  Project Cost, or 750,000 - Other NJ Smart Start
  Incentives for Balance of Plant
• Reducing project cost by 30 can take a 10 IRR
  project to 15

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Larger Scale Cogeneration

• Pharmaceutical Mfg. Campus 2004 Study Project
  Being Implemented 2005/2006
• 4.5 MW On-Site Generating Capacity
• 14,000 PPH Steam from HRSG
• Implementation Cost Estimate 8 million (Includes
  Ancillary Work Outside of Cogen)
• NJ Clean Energy CHP Program Rebate estimated at
  1 million
• Estimated Savings 1.4 million
• IRR around 15
• Estimated CO2 Reduction 6,200 Tons/year

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Small Scale Cogen Sterling Engine
Payback 55KW Stirling Engine Including
Installation, Tax Credit Incentives and OM Costs
Revenue with PPA at 0.05/kWh
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Renewable Fuel Sources

• Consider Renewable Fuel Sources
• Solar photovoltaic
• Biofuels
• Digester and Landfill Gas
• Wind Power
• Geothermal
• Waste Stream Recovery
• Many states have generous incentive programs for
  projects using renewable fuels New Jersey and
  California are leaders

60
Renewable Fuel Sources

• Solar Photovoltaic Power Generation
• True renewable fuel source
• Incentive program in NJ for installation (see
  Chart on next slide)
• Federal Incentive Tax Credit of 30 of
  implementation cost
• Generate Solar Renewable Energy Credits which can
  be sold, providing revenue
• Net Metering Provision in NJ - Systems capacity can reverse the electric meter when site
  demand is less than solar generation, effectively
  selling electricity at the price you pay!

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Solar Power Incentives
NJ Clean Energy Program Renewable Energy
Financial Incentives
Reproduced from NJ Clean Energy Program Website
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Solar Renewable Energy Credits (SREC)

• NJs Renewable Portfolio Standard (RPS) requires
  electricity suppliers provide a percentage of
  their electricity sales from solar generation.
• 1 SREC 1000 kWh of power generated by solar
  energy
• You can sell SRECs through NJ SREC Program
• Values have been averaging between 160 - 178
  per MWh since August 2004
• ex. 100kW system operating an average of 10
  hours per day for 250 days per year with SREC
  160/MWh (0.16/kWh) would generate SREC sales of
  40,000 per year

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Recent Solar Energy Study

• Recent Study for Solar Project in California
• Nominal 1200 kW Ground Mounted Tracking System
• Implementation Cost Approximately 8 Million
  Before Incentives, Tax Credits
• Incentives and Tax Credits Reduce Implementation
  Cost by Approximately 3.5 Million
• Estimated savings of 1.9 Million kWh per year
• Estimated IRR of Over 13, not including SRECS

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Summing Up

• You can improve your energy performance by
• Operating your existing facilities more
  effectively by maintaining and tuning existing
  systems
• Developing and Implementing and Energy Reduction
  Program
• Auditing and Benchmarking Your Facilities
• Taking Advantage of Incentive Programs to
  Implement Efficiency Upgrades
• Optimize Operation of On Site Generation Assets
• Educating Colleagues About Ways They Can Help
• Making Energy Efficient Operations Part of Your
  Job

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