Breakthrough energy savings performance contract projects exemplify a way to unlock deep levels of energy savings. These so-called ESPC projects are financed through energy and water cost savings, allowing clients to reduce their overall energy and water consumption and save money with no upfront capital costs.

Because of this, ESPCs are particularly appealing to federal, state and local government bodies, which typically lack appropriated funding, have aggressive energy, water and carbon reduction goals and seek to save taxpayer money.

RMI studied a number of government ESPC projects and interviewed project team members, uncovering a number of best practices that should be widely used to encourage stronger projects that achieve deeper levels of savings while benefiting both the client and the contractor. These best practices include:

• Setting aggressive long-term goals
• Engaging and collaborating with diverse stakeholders
• Establishing a support system
• Starting with a clean sheet and a beginner’s mind
• Using an iterative, holistic design process
• Incorporating feedback and ongoing involvement

RMI and the U.S. General Services Administration, a leader in federal energy efficiency, have teamed up to tell these success stories. The case study featured below is part of the joint RMI-GSA report "Deep Energy Retrofits Using Energy Savings Performance Contracts: Success Stories" (PDF) (available at RMI’s "GSA Retrofits" web page) and RMI’s greater initiative to engage federal partners to enable deeper energy savings on their building retrofit projects.

These efforts have become increasingly relevant in the wake of two recent federal directives that emphasize energy efficiency’s crucial role in a sustainable U.S. energy landscape, Executive Order 13693 and the Energy Efficiency Improvement Act of 2015.

Betting big, saving bigger

The Naval Air Station (NAS) Oceana deep energy retrofit is a four-phase endeavor that is unprecedented in both size and scope.

The project — which kicked off in 2002 and is expected to be completed in 2017 — is projected to reduce energy use by over 40 percent across more than 100 retrofitted buildings, saving the naval base over $6 million in annual energy costs.

Key Energy Conservation Measures (ECM) include:

• Steam and chiller-plant decentralization
• High-efficiency HVAC equipment
• Renewables: solar thermal, ground-source heat pump (GSHP) with effluent heat rejection
• Digital controls: over 18,000 measurement points
• Lighting retrofits: over 40,000 fixtures
• Water conservation: over 10,000 fixtures

Phase 2 of the project (detailed below) earned the 2011 VSBN Green Innovation Award and the 2009 Presidential Award for Leadership in Federal Energy Management, and helped the Navy earn the 2009 Platts Green Energy Initiative of the Year award.

The energy anatomy of an air station

The project is centered on the decommissioning and decentralization of the base’s out-of-date and inefficient steam plant, which had deteriorated beyond repair from corrosion due to the plant’s location in a coastal environment.

This presented Navy and Trane personnel with an opportunity to leverage a major infrastructure investment as an enabler for deep energy savings.

Load reduction measures, such as lighting retrofits and the addition of high-efficiency HVAC equipment, together with system right-sizing, allowed the project team to downsize system components by up to 70 percent.

Additional measures, including an extensive GSHP system that used graywater effluent from a nearby water treatment plant for heat rejection — one of the first systems of its kind — transformed the base’s energy source from an outdated liability to a state-of-the-art example of efficiency.

Staging work across multiple phases allowed the Navy and Trane to capture easy, up-front savings while maintaining a long-term vision. Lessons learned during early phases were instrumental in shaping later work.

The steam plant decommissioning implemented at the Dam Neck Annex in Phase 2, for example, was so successful that the measure was implemented at the main base as the cornerstone of Phase 3 work. Phase 2’s successful lighting and water ECMs also were replicated and key systems purposely were oversized with future expansion in mind.

In addition, the project team’s long-term vision for the naval base was exemplified in operations and maintenance (O&M) procedures.

The Navy decided from the project outset that O&M work would be contracted to Trane, allowing for Trane’s O&M team to contribute to project development, thus avoiding a number of maintenance issues.

The Navy also elected to consider O&M savings as a value stream, a significant decision considering corrosion issues at this coastal site. Some existing outdoor systems required replacement or retrofit every three to four years, creating a maintenance headache that the project team was able to address by installing all new equipment and piping indoors or underground.

When adaptation meets opportunity

During a routine site-walk late in Phase 2 of the project, a Trane engineer noticed a six-foot pipe running through the base. The pipe, which previously had not been considered, was an effluent pipeline stemming from the nearby Hampton Roads Sanitation District (HRSD) disposing 50 million gallons of graywater per day.

Project team members moved quickly to capitalize on the discovery.

Navy and Trane quickly established a partnership with HRSD personnel, who allowed free use of their pipeline in exchange for a land easement to be used for future treatment plant expansion. The already-specified 450-ton ground-source heat pump and 4,400-ton condenser-cooling loop were redesigned to incorporate a heat-rejection loop using the effluent pipeline.

This allowed the project team to remove several cooling towers and other HVAC components from the original project scope. Using the massive effluent pipeline — where the internal temperature rises less than 1 degree Fahrenheit during use — was also significantly more efficient than traditional GSHP heat-rejection well fields (which generally reach 90–95 degrees F) at a lower installation cost.

This also significantly reduced the site’s potable water use and steam-plant emissions.

Project personnel credited their long-term vision and collaborative approach to trust between the Navy’s deputy public works officer and a Trane federal executive. This trust was exemplified when the naval officer fought on behalf of Trane to recognize project savings that were taken off the table near the end of the project.

“Building relationships in the right places is all about integrity," said Jody Wilkens, Trane director of federal contracting. “You don’t get anywhere without a level of trust.”

Conversely, when Trane completed Phase 3 of the project over four months ahead of schedule (due in part to the excellent communication structure between Trane and the Navy), they elected to funnel $1.2 million in savings back into the site, retrofitting ancillary systems that originally had been left out of the project scope.