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HomeMy WebLinkAboutPLN 12-14 Carl 00 `: Report to Executive Committee PICKERING Report Number: PLN 12-14 Date: June 9, 2014 From: Thomas Melymuk Director, City Development • Subject: Corporate Energy Management Plan - File: D-1240-014 Recommendation: • 1. That Report PLN 12-14 of the Director, City Development regarding the Corporate Energy Management Plan be received; and 2. That Council receive the Corporate Energy Management Plan for the City of Pickering prepared by IndEco Strategic Consulting as set out in the Executive Summary Excerpt in Appendix Ito Report PLN 12-14; and direct staff to use this Plan as a basis for making future corporate energy management decisions, recommendations and budget submissions. Executive Summary: The purpose of this report is to present the Corporate Energy Management Plan (CEMP) prepared by IndEco Strategic Consulting for the City's facilities, street lights and traffic signals. The CEMP is the result of a five month study that included data collection and analysis, interviews, a capacity building workshop, and CEMP preparation. The City's CEMP is designed to comply with Ontario Regulation 397/11 under the Green Energy Act, 2009, which requires the public sector to prepare and complete CEMPs by July 1, 2014. The CEMP describes the energy management activities that the City can implement over the next five years (2014 — 2019) to improve energy efficiency and reduce greenhouse gas (GHG) emissions. Further, there are priority actions for each year that are to be completed. These actions are based on their importance and ease of implementation (short, medium and long-term) that will assist the City in moving towards operating existing and new facilities as efficiently and sustainably as financially possible. Financial Implications: The CEMP does not impose specific financial commitments on the City. Rather, the CEMP provides a roadmap for actions over the next five years that ultimately reduce energy (and water) use and associated costs. Due to the nature of resources and factors beyond the City's control, the CEMP is a fluid document, reactive to changes in the City's financial state. To put it simply, the CEMP recommends that the City invest $640,700 over the next five years and this investment has to compete with other City capital projects in order to maximize its investment returns. In return, it is expected that the City will experience $1,582,050 in cumulative cost savings over the next decade. 75 Report PLN 12-14 June 9, 2014 Subject: Corporate Energy Management Plan Page 2 1. Background 1.1 The City has been proactive in implementing its local action plan prepared . in 2007, which included GHG baseline inventory and energy use and greenhouse gas reduction targets In 2007, the City completed the first three (of five) milestones under the Partners for Climate Protection (PCP) program for both the corporation and the community, which included establishing a GHG baseline inventory, setting reduction targets and developing a local action plan. The PCP program is a joint partnership between the Federation of Canadian Municipalities (FCM) and the Council for Local Environmental Initiatives. In late 2013, the City, through its consultant Durham Sustain Ability, provided an update to the community and corporate GHG emissions inventories from 2007 through to 2011. The update also described the measures in the local action plan that have been implemented as well as the City's progress towards meeting its 2016 GHG emission reduction target. This update will be forwarded to FCM in 2014 for consideration for fulfilling the requirements of Milestones 4 and 5 of the PCP program. 1.2 The City has been exploring and implementing corporate energy conservation projects identified in the Five Year Corporate Emissions Reduction Strategy Between late 2007 and the end of 2013, the City has been exploring corporate energy conservation opportunities along with taking advantage of appropriate energy incentives to implement some of the projects identified in the Council endorsed Five Year Corporate Emissions Reduction Strategy. Over 46 significant energy-efficiency initiatives have been implemented, such as: • retrofitting facility lighting to more efficient lights in the Recreation and Civic Complex • upgrading energy management systems for the Petticoat Creek Community Centre, Claremont Community Centre, East Shore Community Facility and Don Beer Arena • retrofitting underground parking lighting at the Civic Complex • upgrading the Recreation Complex banquet hall lighting • converting traffic signals to high efficiency LED lights • replacing older vehicles with eight hybrid vehicles • completing energy audits or walkthrough assessments on all City facilities Collectively, these initiatives have provided the City with an estimated 11.3% savings in energy consumption compared to 2007, with an average payback of 4.1 years. 76 Report PLN 12-14 June 9, 2014 Subject: Corporate Energy Management Plan Page 3 1.3 The Province passed Regulation 397/11 under the Green Energy and Green Economy Act(2009) The Province has been allocating funds to energy conservation and demand management programs by providing energy consumers with significant incentives to update their facilities and equipment. In its commitment to greening public sector buildings, the Province passed Regulation 397/11 under the Green Energy and Green Economy Act(2009). Under the Regulation, all public agencies are required to report their energy consumption and GHG emissions on an annual basis starting in 2013, and are required to submit a five-year energy conservation and demand management plan (CDM) by July 1, 2014. 2. Discussion • 2.1 The City reported its energy consumption in 2013 For its part, the City met its obligations under the Regulation and reported its energy consumption and GHG emissions in 2013. The data submitted covered the calendar year 2011 and included all heated and/or cooled facilities owned or operated by the City of Pickering. 2011 is now our baseline from which changes in energy consumption and GHG emissions can be calculated and compared. To assist City staff in completing the five-year CEMP by the Province's deadline, IndEco Strategic Consulting (IndEco), an energy and environmental consulting firm, was retained. 2.2 The completion of the City's CEMP was a five month planning process Over the last five months, IndEco and City staff have undertaken the following tasks: • review of annual energy consumption and GHG emissions • review existing policies and plans • review previous energy efficiency projects • conduct and review energy audits/assessment for all City facilities • conduct a strategic planning workshop with key City staff on energy management • prepare a draft and final CEMP 2.3 The CEMP provides a roadmap for energy management for the City's facilities, street lights and traffic signals The CEMP provides a five-year roadmap for energy management in the City. It focuses on the use of electricity, natural gas and fuel oil for heating and cooling in City facilities. Additionally, actions are identified to address City owned street lighting and traffic signals. It covers the period from July 2014 to July 2019, and is designed to comply with the CDM requirements of Regulation 397/11 (see Executive Summary—Appendix i). 77 Report PLN 12-14 June 9, 2014 Subject: Corporate Energy Management Plan Page 4 The primary objectives of the CEMP are to: • promote efficient energy management in City facilities • include energy efficient considerations in the'budget process • integrate energy efficient practices in staff's day-to-day work activities • incorporate an integrated systems approach to managing energy 2.4 The CEMP contains priority, medium and long-term actions for three time periods to support the City's energy management targets Priority actions are divided into two types: organizational and technical. (a) Organizational actions, which relate to corporate processes, were identified through interviews and a strategic planning workshop. The actions are grouped in the CEMP according to the following categories: • Organizational commitment— measures related to policies, targets, and resources required to enable energy management and the other actions • Existing buildings and equipment— measures, both technical and policy based, that impact existing buildings and equipment • New buildings and equipment— measures, both technical and policy based, that impact new buildings and equipment • Monitoring and tracking — measures related to evaluating, monitoring, and verifying energy data • Communication and engagement— measures related to encouraging behavioural modifications to save energy • Procurement and renewables— measures related to the procurement of energy and renewable technologies; and • Streetlights and traffic signals— measures related to installing more energy efficient lighting technologies (b) Technical actions, which are based on the City's inventory data, energy audits and walk through assessments, were developed for implementation for Year 1, Years 2-3 and Years 4-5. These actions were selected for their shorter payback as well as their impact on future energy conservation measures. The actions have been grouped together by type in order to facilitate the City issuing a single tender for similar measures in all applicable buildings. The following technical actions highlight some of the recommended initiatives over the five year period: • Priority actions (Year 1, January 2015 — January 2016): Phase 1 lighting retrofits, electric heater replacements with natural gas, thermostat upgrades, ductless heat pumps 78 Report PLN 12-14 June 9, 2014 Subject: Corporate Energy Management Plan Page 5 • Medium actions (Years 2-3, January 2016 -January 2018): Phase 2 lighting retrofits, vending machine power misers, automatic controls for pools, dual flush toilets • Long-term actions (Years 4-5, January 2018 - July 2019): Phase 3 lighting retrofits, hot water pipe insulation, refrigerator replacements, HVAC upgrades including balancing, demand control ventilation, building envelope upgrades, insulation These time periods were selected to ensure compliance with the regulation and to align with the City's budget process. Based on facility audit results and the recommended energy efficiency actions noted above, the following energy management targets are achievable: • 12.3% improvement in energy intensity • 13.8% reduction in GHG emissions 2.5 The CEMP is recommending an annual capital budget of approximately $130,000 for energy measures To implement all of the selected technical measures identified in the CEMP, the cost is approximately $640,700. The total estimated cumulative energy cost savings for the City will be $596,050. The table below provides a breakdown of these costs. Year Capital Cost Cumulative Cost including incentives Savings 1 $133,000 $48,300 2 $125,000 $129,400 3 $125,000 $243,300 4 $128,850 $398,850 5 $128,850 $596,050 6 $0 $793,250 7 $0 $990,450 8 $0 $1,187,650 9 $0 $1,384,850 10 $0 $1,582,050 Total $640,700 $1,582,050 Notes: The energy cost savings are based on current energy prices and do not reflect estimated price increases. The energy cost savings shown are only for the next decade. However, these savings will persist for the lifetime of the measures independent of additional capital investments after year 5. For every dollar the City invests in energy measures, the City receives a return of$2.47. 79 Report PLN 12-14 June 9, 2014 Subject: Corporate Energy Management Plan Page 6 2.6 City staff will be prioritizing the recommended energy management actions identified in the CEMP City staff will be evaluating and prioritizing the recommended energy management actions identified in the CEMP for three time periods based on the following criteria: • Cost-effectiveness: the action must be cost-effective over its lifetime, based on payback • Contribution to day-to-day energy efficiency: the action makes energy management visible at City facilities, changes the behaviour of staff, helps the City to publicize its successes, and contributes to the City's reputation • Leadership: actions which help the City become a community champion in energy management • Annual energy savings: the City should prioritize actions with the highest . annual energy savings • Ease of implementation: Projects may be accelerated (or decelerated) based on ease of implementation • Occupant comfort and regulatory requirements: Projects that increase comfort, address occupant concerns, increase program participation and revenue, or address regulatory requirements will improve the overall experience of City staff, enhance the City's reputation, or contribute to the culture of effective energy use • Availability of incentives: the City should also accelerate implementation of projects that are eligible for funding from electric and gas utilities, or from provincial or federal governments 3. Recommendations The CEMP has identified significant opportunities to reduce utility costs, energy consumption and to minimize its environmental footprint. From 2014 to 2019, the CEMP shows how the City could reduce its absolute energy intensity by 12.3% and reduce greenhouse gas emissions by 13.8%. Through the City's strategic investments in energy efficiency, significant returns on energy savings should result. Many of the recommended capital expenditures can be funded from Federal Gas Tax funds (FGT). However, the dollar demand for FGT capital projects greatly exceeds the supply of FGT dollars during the budget cycle. In addition, the expanded FGT project criteria will now result in increasing the demand for FGT dollars without increasing the funding level. The recommended CEMP expenditures will have to be measured against other City priorities to ensure that the City receives the best value for its dollar. City staff therefore recommends that Council receive the Corporate Energy Management Plan for the City of Pickering prepared by IndEco Strategic Consulting as set out in the Executive Summary Excerpt in Appendix I to Report PLN 12-14, and direct staff to use this Plan as a basis for making future corporate energy management decisions, recommendations and budget submissions. 80 Report PLN 12-14 June 9, 2014 Subject: Corporate Energy Management Plan Page 7 Appendix: Appendix I City of Pickering Corporate Energy Management Plan, 2014-2019 Prepared By: Approved/Endorsed By: "0/7 -/Gilbert Boehm Thomas Melymu , MCIP, RPP Supervisor, Energy Management Director, City De elopment )(11 Brian Marisa C: •ino Manager, Facilities Operations Director, Culture & Recreation -N4fikt 7XL 'L edile Grant McGregor, MCIP, RPP :chard Holborn Manager, Sustainability & Economic Director, Engineering & Public Works Development Stan Karwowski Paul Bi(,io- Division Head, Finance & Treasurer Directo Corp. .te Services & City Sol itor GB:GM:Id Recommended for the consideration of Pickering City Council 6Pcal)a wc4 Tony Prevedel, P.Eng. Chief Administrative Officer 81 • Appendix I to Report Number PLN 12-14 City of Pickering Corporate Energy Management Plan 2014-2019 82 ... Cluj 00 ...—...! —, .... ,... At V" A /bah ■•• /N. ',....=.. . ,. ."1:4.• ••■..1...111 41-11. IL.:20215:11ii":4--.7...' 1 -•.' ---'--ely-",771FE ----,-m—u-7-Inrnr-Ell: 1 1 *Z.f:44,11,r;,,c, ,.._-- PI 4 RING ...1r...„(,. , : ........,.. il&-..-,,,..„ .....- Yo i. , .... ....._..,..A4 If 1 - \`• \- ' ' --_ 1 1 1 1 imili, _ 1 I isti, IL' "ILI:juIniiiiicillt: 4 pr..,.,,,,,,... ....,,,,,.„_,_„,,.ai...,..t• .,:-.•—-4,-rn 7--4-''Zt-::;'---- ,,,.....,,--'''"- t;,. "A r ,. 4,', „• -,;:,.. i •1 1 • C' r- ..1•71'. 4;111 74.7■7.....r '••‘,..t.' •''-**'.'"4-ekr14.•".1,' V -,. ,• ',,,,, 1 -...- .; ..4J.. WAs;' ..' ..t. • - ip,..tN& ••••;‘,.;1. ',ft**.* - nif .7. , k.. ,.... - rv-," • , •... 4'," 1WV * f.. • S'i" '`I'44'..w' '. - ,. .• >,„---.et.lk , ''''•-■.../7;"...1111 • ,'14r1. , '" 't.;11%.*:V ::.e- _....?„4,:' i le ''..* 1, ':'..." %-' ' .' . ' • . 4 A k. ' • , 11 iT ,.! t ,.-- -- _. -----------.-.' j i -,-..—---"-- _:.• ' -- 111460 ...... D INDEco ,....... 0"k•10 Sustainable EDGE Ltd. Strategic Solutions for a Changing World"' 83 Corporate energy management plan City of Pickering "of D INDECO G ''" Sustainable EDGE Ltd. 84 This document was prepared for the City of Pickering by IndEco Strategic Consulting Inc. For additional information about this document, please contact: IndEco Strategic Consulting Inc. 77 Mowat Avenue, Suite 412 Toronto, ON, Canada M6K3E3 Tel: 416 532-4333 E-mail: info @indeco.com ©2014 IndEco Strategic Consulting Inc. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the written permission of IndEco Strategic Consulting Inc. • IndEco report B3890 21 May 2014 85 Contents Executive summary v Context v Objectives and targets vi Scope and method vii Capital costs and savings ix Introduction 1 Planning horizon and scope 1 Planning process 2 Framework for planning 4 Objectives and targets 6 Objectives 6 Targets and key performance indicators 6 Updating and reporting on the plan 9 Priority actions (Year 1,January 2015 —January 2016) 10 Organizational actions 11 Technical actions 15 Medium-term actions (Years 2-3,January 2016—January 2018) 19 Organizational actions 19 Technical actions 25 Long-term actions (Years 4-5,January 2018—July 2019) 28 Organizational actions 0 28 Technical actions 0 32 Capital costs and net present values 37 Renewables and alternative energy 39 Energy management systems 40 Taking advantage of utility incentives 40 Communication and engagement 41 Overview and program management 41 Employee engagement 41 Staff training 42 Behaviour change and communication 44 Conclusion 46 Appendix A. Present state 47 2014-2019 iii 86 A.1. Utility data analysis 47 A.2. Description of existing energy initiatives,policies,and plans 47 Appendix B. Criteria for prioritizing actions 52 Appendix C. Responsibilities 54 Appendix D. Utility incentives 63 D.1. Veridian/Ontario Power Authority saveONenergy Programs 63 D.2. Enbridge Gas Energy Management Programs 65 Appendix E. Additional recommended measures 66 E.1. No cost measures 66 E.2. High efficiency motors 66 Appendix F. List of acronyms 69 Iv INDECO STRATEGIC CONSULTING INC 87 Executive summary Context North American municipalities are increasingly focusing on energy as a strategic priority —to reduce operating costs, prepare for rising utility costs, and to demonstrate their commitment to long-term sustainability. In Ontario, the provincial government is allocating millions of dollars to energy conservation and demand management (CDM) programs, providing energy consumers with significant incentives to upgrade their facilities and equipment. The Government of Ontario has also expressed a commitment to greening public sector buildings, and developed Regulation 397/11 under the Green Energy and Green Economy Act (2009) to advance this goal. Under the regulation, all public agencies— including the City of Pickering— .4 are required to report their energy. consumption and greenhouse gas I`t (GHG) emissions on an annual . basis starting in 2013, and are required to submit 5-year energy . . conservation and demand management plans in 2014. The Corporate Energy ?: Management Plan (CEMP) provides a 5-year roadmap for energy management in the City of Pickering. It focuses on the use of tip electricity, natural gas, and fuel oil for heating and cooling in City ' facilities. It covers the period from July 2014 to July 2019, and is designed to help the City comply with the energy CDM planning er requirements of Ontario Regulation 397/11 under the Green Energy Act (2009). '°y" °" The CEMP addresses buildings, ' : ° ' technologies, and street and traffic signals — as well as people, Y z x processes, and information. 2014-2019 V 88 Objectives and targets Energy efficiency is a valuable opportunity to reduce or avoid future costs. Investing in energy management and implementing the actions identified in the CEMP will provide valuable opportunities for the City of Pickering. Not only will it result in energy intensity and GHG savings, but it will also provide opportunities for staff engagement, lower risk exposure, and demonstrated leadership by the City. The objectives of the City of Pickering's Corporate Energy Management Plan are to achieve the following: 1. The City of Pickering promotes the efficient management of energy in corporate facilities. 2. The efficient use of energy is to be a consideration for the City in corporate policy and budget decisions. 3. The efficient use of energy is to be a part of the day-to-day activities of City staff. 4. An integrated /systems approach is to be taken when managing energy. The CEMP establishes the following quantitative targets to guide the City's efforts on energy management from July 2014 to July 2019: Energy intensity (ekWh/sgft) � '14L:;4 �> x. GHG } qj emissions (kg) vl INDECO STRATEGIC CONSULTING INC. 89 1 1 l y t I •,►gip '4 .+a J g, xi •,°'�+ le :fig ;- t*.,.y.c,,,k. -�, 3; t -----___ psi :+ate = a . . Scope and method The CEMP addresses buildings, technologies, and street and traffic lights — as well as people, processes, and information. The plan draws on information from a number of sources: interviews, a strategic planning workshop, a review of existing walk-through and detailed facility audits, and a review of City policies, plans and programs. The first step in the process was to identify and define the preferred state/vision of energy management for the City. This was accomplished through five in-person interviews and a strategic planning workshop held with key City staff. The second step involved defining the present state of energy use in the City by reviewing the City's energy management practices. Information was obtained through interviews with key City staff and the review of the City's key policies, plans, programs, and reports related to energy. The third step involved developing technical and organizational actions to assist the City in moving from its present to its preferred state of energy management. Technical actions were identified from detailed audits that had been previously conducted at 10 of the City's largest energy consuming facilities and walk-through audits that had been previously conducted at 17 other City facilities. The organizational actions, which relate to corporate processes, were identified through interviews and a strategic planning workshop. The actions are grouped in the CEMP according to the following categories: 411 2014-2019 vii 90 • Organizational commitment— measures related to policies, targets, and resources required to enable energy management and the other actions; • Existing buildings and equipment— measures, both technical and policy based, that impact existing buildings and equipment; a New buildings and equipment— measures, both technical and policy based, that impact new buildings and equipment; • Monitoring and tracking— measures related to evaluating, monitoring, and verifying energy data; • Communication and engagement— measures related to encouraging behavioural modifications to save energy; • Procurement and renewables— measures related to the procurement of energy and renewable technologies; and • Streetlights and traffic signals — measures related to installing more energy efficient lighting technologies. Many of the priority actions are foundational and put in place the structures and practices that will facilitate on-going energy efficiency within the City. r osF' N • !:. �_R k w++msasarsm+'" emS.rsw.'WA,.. l f'..7Y_ — i INDECO STRATEGIC CONSULTING INC. 91 The technical actions identified through the facility audit reports are grouped according to facility type and were allocated across the five years of the plan in order to facilitate an annual net capital cost of approximately $130,000 in each year for budgeting purposes. These actions were prioritized based on their payback and net present value (NPV'). The actions are categorized into three time periods for implementation: 1. Priority actions —Year 1 (January 2015 —January 2016); 2. Medium-term actions — Years 2 and 3 (January 2016 — January 2018); and 3. Longer-term actions —Years 4 and 5 (January 2018 —July 2019). These time periods were selected to ensure compliance with the regulation and to create alignment budget cycle of the City. Capital costs and savings To implement the CEMP, the City will need to make significant capital investments in energy efficiency over the five-year period. However, these investments will yield significant returns. It will cost approximately $640,700 to implement the selected measures identified in the 27 detailed and walk-through audits, as well as measures that were extrapolated to other buildings. If implemented according to the schedule, it will cost the City approximately $130,000 each year over the next five years. The total cumulative net energy cost savings for the City over the next ten years will be $1,582,050. The table below provides a breakdown of the capital costs and cumulative energy savings over the next ten years. The City is committed to implementing these initiatives on a priority basis based on available funds. � zTi��ssM Capital cost, including Cumulative energy cost incentives savings' Year 1 $133,000 $48,300 Year2 $125,000 $81,100 ' The utility rates used to calculate the NPV were based on the average utility costs from the utility analysis in the audit reports.The electricity rate was adjusted based on the Industrial Price Forecast on page 8 of Ontario's Long-Term Energy Plan(http://www.energy.gov.on.ca/dots/LTEP_2013_English_WEB.pdf).The natural gas rate was adjusted based on the natural gas price reference projections in Natural Resource Canada's report on Canada's Energy Future:Energy Supply and Demand Projections to 2035 -Energy Market Assessment (http://www.neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/nrgyftr/2011/nrgsppldmndprjctn2035-eng.html).A discount rate of 12%was used in calculating the NPV. 2014-2019 ix 92 �4 � t Capital cost, including Cumulative energy cost incentives savings' Year3 $125,000 $113,900 Year 4 $128,850 $155,550 Year 5 $128,850 $197,200 Year 6 $0 $197,200 Year 7 $0 $197,200 Year 8 $0 $197,200 Year 9 $0 $197,200 Year 10 $0 $197,200 Total $640,700 $1,582,050 'NOTE:The cumulative energy cost savings are based on current energy prices and do not reflect estimated price increases. The energy cost savings are also expected to persist for the lifetimes of the measures. For every dollar invested in energy efficient projects, the City expects to receive $2.47 in anticipated energy cost savings over the next ten years. \ - - - \ 1 INDECO STRATEGIC CONSULTING INC. 93