icf.com Green Revolving Fund for Industry we are Taegeun Kang, PhD, CEM, PMP , Sr Tech Specialist, ICF 3 0 M a y 2 0 1 8 2 0 1 8 E n e r g y S u m m i t
ICF at a Glance Established in 1969 (Headquarter in Fairfax, Virginia, US) 5,000+ employees, 67 offices worldwide Revenue US $1.2 billion Offers advisory and implementation services to assist clients in strategy and policy analysis, program management, project evaluation, and other services. Our markets: Energy, Environment, Climate, Health, Transportation, etc. At ICF Canada we are focused on energy efficiency, providing support to government and utility programs, as well as industrial companies ICF proprietary and confidential. Do not copy, distribute, or disclose. 2
Contents Background Barriers to Industrial Energy Efficiency Current Energy Funding Model Green Revolving Fund (GRF) Expected Benefits from Industrial GRF Industry Survey Summary ICF proprietary and confidential. Do not copy, distribute, or disclose. 3
Barriers to Industrial Energy Efficiency Lack of senior Lack of project Lack of staff Lack of Lack of sub- Lack of site wide management funding time/expertise knowledge meter opportunities support Uncertainty Conflict of Lack of non- Lack of Lack of vendors Lack of energy regarding interest within energy benefits incentive info info plan company future the company Other priorities Lower priority to Risk of cost of Difficult to Long decision Shorter payback for capital energy production measure chain requirements investment management disruption savings Dept not Uncertainty Not enough Energy manager Weak public No energy accountable for about new incentive from lacks influence pressure policy energy costs technology Gov’t Management Energy cost Lack of case Difficult to Lack of market Lack of energy resistance to considered as training/education studies change culture demand change fixed cost ICF proprietary and confidential. Do not copy, distribute, or disclose. Sorrell et al, UNIDO report (2011) & Personal experience 4
Current energy funding model Same budget from previous year No energy budget Struggle to get the energy fund from Operations, Engineering, Maintenance, Capital budget, etc. ICF proprietary and confidential. Do not copy, distribute, or disclose. 5
What is Green Revolving Fund? A special account designated for energy efficiency projects The cost savings from these projects are then used to replenish the GRF Once the funds are replenished, they can be redeployed to finance new projects Green Revolving Fund To provide funding sources for sustainability projects Savings achieved Energy projects To improve energy performance continuously M&V To promote the environmental and financial value of avoided costs ICF proprietary and confidential. Do not copy, distribute, or disclose. Greening the Bottom Line, Sustainable Endowments Institute (2012) 6
GRF Stats First GRF at Western Michigan University in 1980. 5 GRFs at five institutions between 1980 & 2000. 16 GRFs by 2008. 63 GRFs (76 Universities) between 2008 & 2012. GRF Funds varies between $12K and $13M. 900 projects. Growth of GRFs: 1980-2012 28% ROI. Not all GRFs are the same. GRF has been well established in academics, but not in manufacturing industry ICF proprietary and confidential. Do not copy, distribute, or disclose. Greening the Bottom Line, Sustainable Endowments Institute (2012) 7
Adidas – Case Study BARRIER: Hurdles to investing in energy efficiency and renewable energy projects due to time, budget, and expertise constraints SOLUTION: Develop a greenENERGY Fund within the company that identifies investments in leased and owned stores, manages project risk, and monitors and verifies project savings OUTCOME: Invested $5.5 million in 49 projects between June 2012 and Nov 2015. Forecasted an internal rate of return of 33% across project portfolio. Avoided 118 GWh. ICF proprietary and confidential. Do not copy, distribute, or disclose. http://www.brandchannel.com/2016/05/06/adidas-sustainability-050616/ 8
Expected Benefits from Industrial GRF Faster track Power of energy manager Rigorous M&V Continuous monitoring and improvement Employee engagement Energy awareness Kats et al (1996), http://aceee.org/files/proceedings/1996/data/papers/SS96_Panel5_Paper15.pdf ICF proprietary and confidential. Do not copy, distribute, or disclose. 9
Survey from 17 Industry Participants Industry type Job title Province ICF proprietary and confidential. Do not copy, distribute, or disclose. Survey period: Mar 19 – April 4, 2018 10
Do you have an What is the biggest energy fund used barrier to energy only for energy projects? projects? ICF proprietary and confidential. Do not copy, distribute, or disclose. 11
Who can initiate a Is a GRF an effective GRF at your method to implement company? energy project? ICF proprietary and confidential. Do not copy, distribute, or disclose. 12
What would be a barrier to set up a GRF? ICF proprietary and confidential. Do not copy, distribute, or disclose. 13
Would you set up a GRF if Utilities/Gov’t incentives are available as seed fund? ICF proprietary and confidential. Do not copy, distribute, or disclose. 14
Summary 50% Barrier: Capital GRF can be set up 57% by senior management Effective 55% Barrier to GRF: Difficult to Solution 64% change culture & senior support GRF Faster track Power of energy manager Willing to set up GRF 87% Employee engagement/awareness with external help Rigorous M&V Continuous improvement ICF proprietary and confidential. Do not copy, distribute, or disclose. 15
Small steps to start a GRF Discuss initially with all parties. Start with a small GRF, e.g., Lighting GRF, Motor GRF, etc. GRF Seed fund from all (or part of) incentives. Pilot GRF program from Utilities/Gov’t ? GRF - Essential Part of Continuous Energy Improvement. ICF proprietary and confidential. Do not copy, distribute, or disclose. 16
Thank You Green Revolving Fund for Industry Taegeun Kang, ICF Canada (306) 206-0343 Taegeun.Kang@icf.com ICF proprietary and confidential. Do not copy, distribute, or disclose. 17
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