Schneider Electric: Energy Performance Contracting Puts Green On the Line

Schneider Electric is another one of those very big companies you've probably never heard of, though they do make the APC Uninterruptible Power Supplies that many of us have our PCs plugged into. They are involved in all aspects of electrical generation, distribution and control both in manufacturing and energy management services with 2010 revenues in in excess of $25 billion. I spoke with Shon Anderson, their VP of Energy Solutions about their work in building energy management, particularly in the performance contracting area, since I thought it would be a good fit for our “Visioning Green Buildings” series. Their involvement with energy management extends from construction to operation and maintenance, all the way through end of life. Anderson was particularly enthusiastic about the company's work in new construction where they serve as peers to the architect and have an opportunity to influence the design in a way that will optimize a building's energy efficiency. Performance contracting at this stage can be a tricky business since they stake their revenue on the promise of future energy savings to the building owner. This, as you can imagine, could lead to a great deal of finger pointing as we saw in a previous story about a LEED certified building in Charlotte, NC, that ended up using considerably more energy than predicted, because, as it turned out after an independent audit, the building was actually utilized a good deal more than had originally been predicted. This kind of thing could prove thorny for a performance contractor, but, as Anderson says, “that's why we have to be careful when we draw up the contracts.” The big advantage of this type of contracting, is the fact that by taking on the risk, the contractor eases the way for the building owner to make the additional capital investment required for a more efficient building. That is a key facet of their work, says Anderson, who points out that 70-75% of a building's life cycle cost is devoted to operation and maintenance as compared to 25-30% for construction. What often happens is that as a well-intentioned project often comes to a point where “reality sets in” where, due to delays and cost overruns, something has to be sacrificed in order to stay within the budget. Often that something is the extra money that had been planned for energy efficiency which is viewed as expendable when compared with, say, the roof, or the walls. Part of Schneider's job is to make sure that doesn't happen. Since these are generally commercial buildings, the owners generally get the message about total life cycle cost. But what if the money just isn't there. Isn't that a little like approaching a Bowery bum with a hot stock tip? Fortunately, says Anderson, we're starting to see some innovation in the financial sector in this area as well. Why not invest in guaranteed energy savings? Think about it. If you put your money into a fund that invests in marginally financed energy saving projects, you should be able to get a pretty good return by participating in those energy savings with little risk, especially if those savings are guaranteed by an energy performance contractor. Plus, you'd get the satisfaction of knowing that by investing you could be making the difference between seeing those energy-saving features kept in or taken out. When I asked Anderson his thoughts about LEED, he said. “LEED is like having your doctor tell you what is good for you in terms of diet and exercise. Of course that's important, but if it was as easy as that we wouldn't have nearly the number of health problems that we see out there.” A big part of Schneider's job in this capacity is the behavioral piece of the equation. Building control technology is growing by leaps and bounds. We've come a long way since the first high rise buildings were put up with windows that didn't open and antiquated HVAC systems that left people either too hot or too cold most of the time. But a fully automatic building is still a ways off. In the mean time we have to continue to train and motivate builder operators and occupants as well. This goes back to some of the comments we've heard about LEED: that it's a good snapshot of the building when construction is completed, but what happens after that? Certainly with a performance contract in place, one can be sure that the energy performance will continue to be tracked over time and the performance maintained in the optimal zone. I asked Anderson for some examples of projects they've been involved with and he gave me several in which they've seen energy savings of up to 45% in new buildings. The first was with the City of Houston in which a 15-year, $23 million contract guarantees $1.8 million in annual energy savings. The program will impact 19 city buildings encompassing over 1.6 million square feet. Improvements include, “adding or updating building management systems, installing new and upgraded heating ventilating and air-conditioning (HVAC) equipment, retrofitting existing lighting fixtures to new, efficient fixtures, adding lighting controls, and installing new, water-saving plumbing fixtures.” Another impressive project is the Genzyme Coroporate Headquarters (pictured above) in Cambridge, MA. This building utilizes an impressive building control system from Schneider's T.A.C. subsidiary, which manages some 40,000 control points including lighting, temperature and fire alarms. Light levels are automatically controlled. Stainless steel window blinds are automatically moved into position to reflect excessive sunlight away. And when temperatures are comfortable outside, windows are opened to flush the building with fresh air. The building earned a LEED platinum rating. RP Siegel is the co-author of the eco-thriller Vapor Trails. Like airplanes, we all leave behind vapor trails. And while it is often easy to see others' it is not so easy to see our own. Follow RP Siegel on Twitter.