beyond the mandates does green pave the way delivering energy services mapping pathways to recovery...
TRANSCRIPT
Beyond The Mandates
Does Green Pave The Way
Delivering Energy Services
Beyond The Mandates
Does Green Pave The Way
Delivering Energy Services
Mapping Pathways To Recovery
Marketing Executives’ ConferenceSan Antonio, TXOctober 18, 2009
Mapping Pathways To Recovery
Marketing Executives’ ConferenceSan Antonio, TXOctober 18, 2009
Presented by
Thomas Philbin, CEO
NXEGEN LLC
INTRODUCTIONINTRODUCTION
Delivering Energy Services
1. What Are The Services: Scope & Delivery Model
2. Traditional ESCO Services
3. New “Smart Meter” Service
4. Utilities vs Third Parties: Advantages & Disadvantages
5. Observations And Conclusions
Delivering Energy ServicesDelivering Energy Services
Goal: Save Energy by Cutting Consumption
Sectors: Residential/Industrial/Commercial
Measures: Lighting/HVAC/Refrigeration/ Process Improvements/etc.
Incentives:
Rebates/Incentives in proportion to savings/ Financing Assistance/kW vs kWh/
Goal: Save Energy by Cutting Consumption
Sectors: Residential/Industrial/Commercial
Measures: Lighting/HVAC/Refrigeration/ Process Improvements/etc.
Incentives:
Rebates/Incentives in proportion to savings/ Financing Assistance/kW vs kWh/
What Are The Services: Scope & Delivery ModelTraditional ESCO Services
What Are The Services: Scope & Delivery ModelTraditional ESCO Services
Delivering Energy ServicesDelivering Energy Services
Millions Of “Smart Meters” Being Installed A Deluge Of Information Will Be Generated
(One Minute Measurements in Real Time)
How Much Of The Purported Benefit Is Hype Can This Data Be Used To The Benefit
Of Customers And Utilities?
Millions Of “Smart Meters” Being Installed A Deluge Of Information Will Be Generated
(One Minute Measurements in Real Time)
How Much Of The Purported Benefit Is Hype Can This Data Be Used To The Benefit
Of Customers And Utilities?
New “Smart Meter” ServicesNew “Smart Meter” Services
CUSTOMER BENEFITSCUSTOMER BENEFITS Energy Savings: Peak Reduction, Load Startup
Scheduling Consumption control/reduction e.g Light
Dimming Monitoring & Verification re. Performance
Contracts TOU Cost Avoidance Actions Aggregation For Supply Bids Alarm Of Approach To New Peak Demand Budgeting
Energy Savings: Peak Reduction, Load Startup Scheduling
Consumption control/reduction e.g Light Dimming
Monitoring & Verification re. Performance Contracts
TOU Cost Avoidance Actions Aggregation For Supply Bids Alarm Of Approach To New Peak Demand Budgeting
Delivering Energy Services
Smart Meter Services
CUSTOMER BENEFITS (Cont.)CUSTOMER BENEFITS (Cont.)
Demand Response Revenue Building Automation System Optimization Sub-Metering In Multi Unit Complexes Load Analysis-Breakdown of usage by
area or use Relating Energy Consumption To
Manufacturing Process Steps
Demand Response Revenue Building Automation System Optimization Sub-Metering In Multi Unit Complexes Load Analysis-Breakdown of usage by
area or use Relating Energy Consumption To
Manufacturing Process Steps
Delivering Energy Services Smart Meter Services
CUSTOMER BENEFITS (Cont.)CUSTOMER BENEFITS (Cont.)
Bill Analysis and Verification Comparison of Monitoring Results With
Utility Bills Power Quality Monitoring Automatic Updating Of EPA Portfolio
Manager Automation Of Load Shedding For ISO
Bill Analysis and Verification Comparison of Monitoring Results With
Utility Bills Power Quality Monitoring Automatic Updating Of EPA Portfolio
Manager Automation Of Load Shedding For ISO
Delivering Energy Services Smart Meter Services
Delivering Energy ServicesDelivering Energy Services
Enormous Cost Many Utilities Have Just Finished AMR Hardware Is Not Yet Up To The Task Software needs To Be Developed Most Situations Will Fail Cost/Benefit
Test Benefits Are Not Yet Clear
Enormous Cost Many Utilities Have Just Finished AMR Hardware Is Not Yet Up To The Task Software needs To Be Developed Most Situations Will Fail Cost/Benefit
Test Benefits Are Not Yet Clear
New “Smart Meter” Services
Downsides
Delivering Energy ServicesDelivering Energy Services
WHO SHOULD BE
Delivering Energy Services
Utility
or
Third Party ESCO
WHO SHOULD BE
Delivering Energy Services
Utility
or
Third Party ESCO
Delivering Energy ServicesDelivering Energy Services
The Utility As Energy Service Provider
Pros: - The Utility Has:
- A LT Relationship With The Customer
- Deep Pockets & Stable Over Long Term
- Can Provide Benefits Of Large Integrated Organization
Cons: - High Overhead
- Management Swings In Commitment
- Finds It Hard To Understand Market Swings
- Subject To Complaints Of Unfair Competition
Delivering Energy ServicesDelivering Energy Services
The ESCO As Energy Service Provider
Pros: - The Independent ESCO Has:
- Ability To Respond Faster – Low Overhead
- Higher Level Staff With Multi-Disciplinary Skills
- Ability To Sell Services Over Broader Geographic Area
- Ability To Specialize And Adapt to Market Changes
Cons: - Less Able To Weather Economic Swings
- Frequent Management Changes
- Hard To Keep Technical Staff Over Long Periods
- Unethical Companies
Delivering Energy ServicesDelivering Energy Services
1. In The Northeast, Utilities And ESCO’S Cooperate To Various Degrees To Deliver Energy Services
2. Local ESCO’S Are Dependent On This Relationship For Their Survival
3. National ESCO’S With Diverse Service Portfolios And Geographic Coverage Are Less Dependent
4. Only A Small Number Of The Approximate Thirty Utility ESCO’S Of The 90’s Are Still In The Market
5. Utility ESCO’S Tend To Under Appreciate The Problem Of Generating Consistent Revenues
1. In The Northeast, Utilities And ESCO’S Cooperate To Various Degrees To Deliver Energy Services
2. Local ESCO’S Are Dependent On This Relationship For Their Survival
3. National ESCO’S With Diverse Service Portfolios And Geographic Coverage Are Less Dependent
4. Only A Small Number Of The Approximate Thirty Utility ESCO’S Of The 90’s Are Still In The Market
5. Utility ESCO’S Tend To Under Appreciate The Problem Of Generating Consistent Revenues
Observations Observations
Delivering Energy ServicesDelivering Energy Services
8. Utility OH Structures Make The Typical ESCO
Non-Competitive
7. Most Of The Successful Utility Related ESCO’S Acquired An Independent ESCO As A Market Entry Vehicle
8. ESCO’S Will Almost Never Over Time Be Able To Match The Regulated Return Of A Utility
9. ESCO’S Will Almost Never Be A Major Contributor To Utility Revenues And Profits
8. Utility OH Structures Make The Typical ESCO
Non-Competitive
7. Most Of The Successful Utility Related ESCO’S Acquired An Independent ESCO As A Market Entry Vehicle
8. ESCO’S Will Almost Never Over Time Be Able To Match The Regulated Return Of A Utility
9. ESCO’S Will Almost Never Be A Major Contributor To Utility Revenues And Profits
Observations (Cont.)
Delivering Energy ServicesDelivering Energy Services
Conclusions
1. Programs That Have Utilities Working In Partnership With ESCO’S Tend To Do Better Than When They Compete
2. Programs Run By Utilities Who Have Appropriate Expertise On Staff Tend To Be The Most Successful
3. Utilities With ESCO’S Need To Maintain An Arm’s Length Relationship And Treat Them Like Any Other ESCO.
PROPRIETARY & CONFIDENTIAL - Page 15