Monthly Archives: May 2021

Energy Efficiency – A Very Controllable Operating Expense

I was looking at some old articles and found one about energy efficiency from 2014. The principles are still true – even more true than then – given we are getting out of the pandemic and businesses want to return to normal. For many businesses, revenues may not return to pre-pandemic levels for some time. Therefore, a critical way to continue to survive is to reduce expenses. Energy costs are sometimes thought of as uncontrollable. One gets one’s utility bill and pay it and that’s it. No, energy is quite controllable and, if done smartly, can result in major savings in operating costs, while making staff and customers comfortable.

Why is doing something about energy efficiency a great financial investment?

1. $$$$ or, in other words, the return. If done right, an energy efficiency project often leads to returns of 20%, 30% or more per year. The reduction of your payments of energy bills is just like having more revenue. Investing money upfront to get such savings – year after year after year, from one such project – is worth it.

2. Others will pay for it. Reducing energy use is not just good for your company, but also for other entities, such as utilities who need to delay major infrastructure projects by reducing peak demand and cities and states who wish to make certain carbon goals. So very healthy incentive programs and tax breaks exist for qualifying energy efficiency projects. Just one example is the re- and permanent- authorization of Part 179D of the federal tax code which provides tax incentives to those who actually implement energy efficiency projects. Now, incentives will not pay the full cost of a project, but can subsidize a significant portion. What other program that you have to do is subsidized by others in such a way?

3. Lack of risk. Energy efficiency projects, using upgraded technologies are not risky. They are warrantied and guaranteed to work and meet certain criteria. The manufacturer takes the risk. And there is reliability. If you replace a 60-watt light bulb with a 30 watt bulb, you are saving 30 watts or 50% – period! There is no variability that the light won’t work or not be 30 watts. Your projects will work.

4. Borrow the money needed. Given what’s written above – the high return, the support by utilities and government, and the low risk – and the current historic low interest rates, you can get the energy efficiency upgrade and not pay a cent upfront. There are institutions that only give loans for energy efficiency projects. And even for those bigger lenders, they love to lend funds for projects with known high returns and low risk; so lenders will fight to lend for projects like this – to your benefit, in terms of lower interest rates.

5. Greater reliability, reduced maintenance. In general, upgraded products and technologies make your whole system more reliable which means fewer disruptions to tenants or customers, which is better for business. And these products almost always result in reduced maintenance. One example is LED lights replacing fluorescent lights. Fluorescent tube lights often burn out and have to be replaced every couple of years. LED equivalents are warrantied for 7 or more years, meaning less work for your Maintenance staff to stop important projects to replace bulbs elsewhere, pleasing tenants. And that also means fewer trips up and down your ladders, reducing falls and related risks.

6. Positive cash flow. Unlike some projects where one must wait around before beginning to get the financial benefits, energy efficiency projects begin to benefit the bottom line right when it is installed and “turned on.” Quite literally during the first utility bill, ones sees cost reduction and financial benefits.

With all of these reasons and given the fact that many businesses will have a slow go to return to pre-pandemic revenue, reducing costs is critical and doing so in energy with smart energy efficiency projects is so reliable and beneficial.

CCES has the technical experts to allow you to plan and implement a smart and effective energy efficiency project to maximize the cost benefits for your business with the least disruption. Contact us today at karell@CCESworld.com or at 914-584-6720.

USEPA Moves To Phase Out HFCs

On May 3, 2021, the USEPA released a notice of proposed rulemaking to institute a major phasedown in production and consumption of hydrofluorocarbons (HFCs), used in refrigeration and air conditioning systems. The USEPA estimates the phasedown will yield total climate-related economic benefits of $283.9 billion through 2050.

HFCs were encouraged to replace chlorofluorocarbons (CFCs) which are listed as ozone-depleting substances, and ultimately banned globally for that purpose. However, research determined that HFCs are powerful greenhouse gases (GHGs), with global warming potentials (GWPs) thousands of times greater than CO2. While HFCs are not as ubiquitous as CO2, their potency represents a major global climate change risk.

The USEPA’s proposed rule’s goal is to achieve an 85% overall reduction in HFC production and consumption in 15 years. The USEPA would administer an allowance allocation and trading program, assigning GWP values to individual HFCs and allocating production (producers), consumption (importers), and application-specific allowances. Six HFC use types would qualify for application-specific allowances:

• propellants in metered-dose inhalers,
• defense sprays, such as bear spray,
• structural composite preformed polyurethane foam for marine use and trailer use,
• etching of semiconductor material or wafers and the cleaning of chemical vapor deposition chambers within the semiconductor manufacturing sector,
• mission-critical military end uses, and
• on-board aerospace fire suppression.

The USEPA has not yet listed the specific number of allowances in each application-specific use, but proposed overall numbers of allowances, including for production and consumption (million metric tons, CO2 equivalents; percents are of baseline), as follows:

• 2022-2023: 90% (296.1 consumption, 337.5 production)
• 2024-2028: 60% (179.4 consumption, 225.0 production)
• 2029-2033: 30% (89.7 consumption, 112.5 production)
• 2034-2035: 20% (59.8 consumption, 75 production)
• 2036: 15% (44.9 consumption, 56.3 production)

The USEPA intends to revisit its allowance allocation procedures before 2024.

What is a plant manager to do to replace HFCs? For refrigerant systems, one can use “natural” refrigerants, such as propane, isobutane, ammonia, and CO2. CO2? Yes, it is a GHG, but its GWP is 1, much lower than HFCs, whose GWPs are in the thousands, so thus, beneficial. For air conditioning, viable alternatives include installing heat pumps, which transfer heat to or from a large reservoir (ground or air), or systems that use less refrigerant, such as those with variable refrigerant flow systems. Some of these use the same refrigerants as above and many can function well using water to transfer heat.

It may take several months to go through publication and public comment before it becomes the law, but expect this to be promulgated and, if you use HFCs, expect to deal with allowances and, therefore, restrictions and higher costs. Plan now to change your refrigeration or cooling systems to those that do not use HFCs.

CCES has the technical experts to help you manage your operations to minimize your environmental impacts. Contact us today at 914-584-6720 or karell@CCESworld.com.

Don’t Just Replace; ‘Right-Size’ Your Equipment

You have equipment that is old and perhaps no longer functioning well. It is time to replace it. It is common to make things easy and just procure and install the latest, even most energy-efficient model of the same equipment to take its place. That is good, but here is an idea that is better. Invest a little time to determine whether that equipment was right for the job. Take the time before buying new equipment (which presumably will be in place for many years) to determine what its right size should be for current applications or looking ahead into the future.

This is particularly true of HVAC and other equipment that uses a lot of energy. Many existing buildings are decades old and were designed when energy was rarely a consideration in design of equipment and when energy was cheap. Perhaps that HVAC firm calculated that a particular air conditioning system needed to produce 20 tons of cooling to properly cool a given space. It was common decades ago to include in the design a unit for 25, even 30 tons, to “ensure” that sufficient cooling would be achieved. There is an energy penalty for operating a larger system (more kWh of electricity must be used), but that was not a big deal decades ago, as energy costs were cheap. Well, now, decades later, perhaps that piece of equipment needs to be replaced. Electricity is not cheap anymore and will not be in the future; it is likely to grow in cost faster than inflation. Therefore, when planning to replace that air conditioning unit or boiler, it is important to re-assess and see if you still need that 25 or 30 tons of maximum cooling. Maybe you can still comfortably cool your tenants with 20 tons of cooling. This will reduce capital costs and monthly electricity costs, too, for many years to come.

This is not only true of HVAC, but other equipment, too. Pumps have historically been overdesigned “to be sure” it pumps the material necessary fast. But modern pumps can be designed with variable frequency drives (VFDs) to maintain the amount of movement that is needed, whether maximum or not. New motors with VFDs can significantly reduce energy costs, too.

And take the time to look into the future and estimate what your future needs will be and “right size” equipment for that. What new functions may occur? Perhaps the building has aged such that you need more heating or cooling. Or perhaps the tenant mix and needs have changed over time (especially, with the potential of fewer staff in a space generating heat). Invest in what is truly needed in the future.

Yes, you certainly don’t want to under-design equipment (you want your tenants to be happy and your operations to function reliably), but you also don’t want to needlessly overdesign either, as the costs for doing that could be great.

CCES has the technical experts to help you assess your equipment needs, particularly when it comes to energy efficiency and air emissions. Contact us today at 914-584-6720 or at karell@CCESworld.com.

It’s That Time of the Year – Begin Your Preventative Maintenance Program Now

The harsh winter is over or maybe summer slowdowns are starting or maybe you’re getting back into gear as demand rises in our pandemic “return to normal”. In any case, your viability as a company is dependent on the reliable operation of your equipment. So, don’t just turn them on and take them for granted. Perform the important steps of preventative maintenance and do them thoroughly and properly. Yes, if it costs money to do it, spend the money.

There are so many benefits:

• Increase the life of your equipment. This means not only peace of mind that your equipment will continue to operate successfully and reliably, but this also will reduce your capital outlays significantly in the long-term and reduce your disruptions from replacing equipment.

• Reduce the risk of breakdowns.  Properly maintained equipment will have a lower chance of breaking down, leaving you potentially unable to operate and produce product altogether. And fewer breakdowns means fewer desperate calls to fix equipment, which may take critical time and cost a lot of money.

• Save on energy costs.  Properly maintained equipment will not only operate satisfactorily, but will do so more efficiently, reducing energy usage as it is operating. This will save you costs now. With energy rates rising faster than inflation, this is something to seriously consider.

• Reduce environmental impacts. You very possibly operate your equipment under some sort of air and/or wastewater permit, limiting your discharges, based on normal operation. Equipment not well maintained may be operating sub-optimally, emitting pollutants in excess of your limits, which could result in a violation leading to fines, other punishments, and extra work and testing to prove to the agency that you are back in compliance. And lead to a bad reputation, too.

• Safety.  Equipment that is not operating as designed may be a potential safety hazard, leading to workplace injury or worse, leading to very high costs to resolve the problems and OSHA enforcement issues. It is certainly in your interest to have your workers operating in a safe environment.

• Reduced need of spare parts.  Well-maintained equipment requires fewer spare parts around compared to equipment at greater risk of breaking down. Needing to store fewer spare parts frees up space, which, in many instances, is very valuable, and enables better organization.

How do you do this? First, develop an inventory of your equipment. Then simply follow manufacturer’s directions for each. If you cannot find them, contact the manufacturer or dealer. They want your repeat business, so they should cooperate and let you know they’re on your side. Make sure procedures are accessible. Spend some quality time training staff on what needs to be done and how often. Make sure the right people have time to understand the procedures and are properly trained to do them properly. If nothing else, it is good to keep equipment clean, such as by changing filters regularly.

Good luck, establish a preventative maintenance program, and reap the benefits.

CCES has the technical experts to help you maintain and optimize equipment in different areas, including in being more energy efficient. Contact us today at 914-584-6720 or at karell@CCESworld.com.