COSOPs'ppt

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Greater Murray Area Health Service
Energy Performance Contracting in WA NSW Case
Studies
AEPCA Seminar Perth, WA October 2003
Stephen Butt Manager, Asset Management Greater
Murray Area Health Service, NSW
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Presentation Introduction

• Brief overview of Greater Murray Area Health
  Service
• Quantify our energy consumption and costs
• Background to GMAHS energy initiatives and why
• Overview of EPC initiatives at WWBH/ABH GBH
• Discuss some of the items that require
  consideration, risk investigation and what we
  have learnt
• Summary and close
• Questions

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Greater Murray Area Health Service
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Greater Murray Area Health Service

• serves 260,000 people
• approx. 3000 FTE
• 300 m operating Budget
• 29 Hospitals
• 40 Community Health Buildings

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GMAHS Energy Consumption and Costs

• Approximately 160 physically metered sites
• Total consumption of 184,037 Gj (01/02)
• Total Cost of 2.914 m for 01/02
• Major costs associated with hospitals
• 3 Base hospitals consume significant portion of
  energy (60/40)

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GMAHS Energy Initiatives and WHY ?

• Initiatives
• EPCs at WWBH ABH in place for 2 years
• Current EPC at GBH nearing completion
• Energy Manager
• Small site GEEIP opportunities
• Every project (big or small) has an energy review
• Create a culture of treating every maintenance /
  building action as an energy opportunity

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GMAHS Energy Initiatives and WHY ?

• Why
• GEMP
• Ailing and failing plant
• Funding opportunities
• Professional responsibilities
• It makes financial sense
• Dont loose the opportunity

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HOW MUCH DO WE NEED TO SAVE TO MEET OUR TARGETS
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GMAHS GEMP
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Case Study 1 Facility Overviews

• Wagga Wagga Base Hospital
• Large regional referral base hospital (250 beds)
• Mixture of building stock
• Floor area of 24,000 m2
• Annual Energy spend of 475,000
• Mixture of old and new, efficient and inefficient
  energy plant
• Mixture of regional hospital services

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Case Study 1 Facility Overviews

• Albury Base Hospital
• Large regional base hospital (150 beds)
• Relative new building stock (1994) but DC
  Construction
• Floor area of 18,000 m2
• Annual Energy spend of 440,000
• BMS throughout
• Typically the same energy saving issues as at
  WWBH

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EPC Process

• signed EPC in late 1999 after over 2 years of
  negotiations (at WWBH
  ABH)
• Investment approximately 0.8 m
• IRR approximately 20
• CO2 reductions of 5,820 tonnes (20 of MJ
  target)
• 8 year agreement
• total savings in excess of 200,000 per annum
• currently reviewing performance of all ECMs

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WW AB Hospitals Project Cost Summary

• Project Summary

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Energy Conservation Measures Case Study 1

• Lighting (both sites) - (50 0f electricity
  savings)
• BMS Upgrades
• Plant re-commission and balancing (50 of gas
  savings)
• De-super heaters on chillers
• Space Heating control
• Water Management (flow restrictors etc)
• Power factor correction
• currently reviewing performance of all ECMs

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Case Study 2 - Griffith Base Hospital Overview

• Small regional base hospital (100 beds)
• Mixture of building stock
• Floor area of 16,000 m2
• Annual Energy spend of 280,000
• Scaled down service after centralisation of
  support services
• Significantly inefficient energy plant
• No major energy improvements made for 20 years

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Griffith Base Hospital Overview

• Specific Current Energy profile

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Griffith Base Hospital Cogeneration system

• To be delivered as part of a site EPC
• Small system (211 kVa) to provide base load
• Total project spend 940k
• IRR 12
• Funded from NSW Treasury loan
• EPC contract period is 7 years
• Provided best GHG reduction option (1,081 tonnes)

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Griffith Base Hospital Cogeneration system

• To provide 100 of domestic hot water load
• To provide significant of heating load
• We required 100 back up of heating services
• Have alternative diesel fired gen. set for whole
  site as emergency back up (and maintenance
  outages)

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Items for consideration

• Do nothing
• Capital investment requirements
• Weekend support and resource issues
• Increasing maintenance costs
• Miss matched plant

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Items for consideration

• Cogeneration
• Energy prices (sensitivity analysis)
• Gas contracts (competition)
• Engine maintenance (how much and who)
• Alternative supply during maintenance and failure
• Other ECMs and their effect on your load
• Protection issues, authority approval
• Know your alternative heat sources

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Items for consideration

• Demand charge risk for short off line experiences
• Electricity contract flexibility
• Our Particular installation
• Noise
• Fire Rating of installation
• Rural location and associated project management
• Engine maintenance

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Reduce your risk

• Through modelling worst case scenarios
• Catastrophic engine failure
• Energy price shifts
• Site characteristics changes
• Contract issues dependent on delivery method

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Griffith Base Hospital Project Cost Summary

• Project Summary

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Specific EPC Considerations

• Operating in a Rural / Regional environment
• youre in the country now
• increased travel costs / time
• resource issues
• supervision and timetables
• difficulties in integrating into, and understand
  the sites

Engineering in the Greater Murray
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Specific EPC Considerations

• Maintenance Savings
• great in theory !!
• however text book maintenance just doesnt
  happen in hospitals
• be careful maintenance savings arent used to
  boost the IRR
• ensure maintenance savings are fully explained
• in future provide the information and protocol
  for life cycle costing analysis that is
  realistic.

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Specific EPC Considerations

• Deferred Capital Investment
• great in theory !!
• do we all have TAM fully implemented ??
• Do we value our assets in a financial context,
  similar to private industry ??
• Specify how you want these issues handles. In
  some cases they are better excluded
• be mindful of the tender analysis process that
  is still to come

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Specific EPC Considerations

• Maintenance Procedures
• keep your options open
• be clear on what you want to achieve
• remember the long term nature of these contracts
• search for further benefits such as contract
  consolidation, coverage of extra equipment,
  training opportunities for staff, total business
  approach
• beware of hidden costs and agendas

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Specific EPC Considerations

• Design standards and plant redundancy
• EPCs dont follow typical building / plant
  procurement processes
• ensure your requirements are clear and fully
  explained
• beware of proprietary systems and inter company
  relationships
• ensure you have a fall back position (i.e.
  redundancy)

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Specific EPC Considerations

• Data, data, data . !
• Dont ever think you have enough data already to
  run an EPC
• you need to understand every single function of
  your sites energy use and its possible influences
• ensure consistency of message and documentation
• get it correct the first time otherwise you may
  pay in the long run

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Specific EPC Considerations

• Baselines
• keep them simple
• some variables will be out of your engineering
  control
• engage the facility executive staff, and hope
  they understand
• think energy impact in all your decisions

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Specific EPC Considerations

• Internal Rate of Return (IRR)
• beware of the bottom line
• dont miss out on the potential for maximising
  capital investment
• contractors need to be briefed correctly
• weight your evaluation criteria carefully

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Specific EPC Considerations

• Implementation timetables
• Year 0 issues
• building industry programming/ performance
  relevance
• slow implementation means lost opportunities
  which should be compensated
• the client is the one who has most to lose !!

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Further Benefits

• sharing the benefits to other sites
• standardisation
• become your own energy performance contractor at
  sites that warrant them
• use the EPC process and outcomes as a catalyst
  for change, particularly for Engineering staff.

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Summary

• We have lived through the development of EPCs
  and survived, and are soon to prosper.
• Its horses for courses and choose your projects
  and funding models wisely.
• Dont expect that the EPC Company will come in
  and do it all for you, be prepared for a lot of
  work and get your data organised which will help
  with returns.
• These are long term undertakings and be prepared
  to wait
• Good understanding of your site, its loads and
  consumptions will ensure business confidence in
  your choice.

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Questions ?
NSW Case Studies
AEPCA Seminar October 2003
Stephen Butt Manager, Asset Management Greater
Murray Area Health Service, NSW