Total Facility Awareness

The Facility Heart Transplant

I am starting to wonder whether ESCOs should be getting so much business.  The whole concept of performance contracting has some fundamental flaws that need to be addressed.

If you were feeling heart palpitations, would you walk into your doctor and ask for a heart transplant?  Would he give it to you?  No, he would stick you on an EKG, do some blood work, take a CAT scan, and run a bunch of other tests.  So, why do customers let ESCOs/Performance Contractors come in and replace a whole bunch of equipment? 

Because ESCOs make it easy.  Because ESCOs know how to finance it.  Because no one has the data that really tells them how their current facility is performing, so owners speculate their is a better way and ESCOs are Johnny on the spot.

If your building had a 10 ton Chiller but really only need a 7 ton chiller, do you think the ESCO would point it out?  If your ESCO found a way to save you $400K with a 5 year return, and you had generally indicated you were OK with a 10 year return, do you think the ESCO might sell you some extra equipment with less of return, promise 10 years with a $250K savings and pocket the rest?  Would you blame them for doing it?

Owners need to understand the real performance of their buildings to get real value from their ESCO.  Handing the keys over to the ESCO is like giving your teenager the keys to the Ferrari and telling them not to go over 40.

Instead of going to the ESCO, owners should first implement a real time facility management system that lets them gather the data to understand real performance.  That data will show off the top a bunch of commissioning errors that account for 10%-20% of the facility energy bill.  With the building properly commissioned and a real performance scorecard, its time to call the ESCO to replace the 10 ton chiller with a 7 ton chiller.

Implementing a real time data system is getting a lot cheaper.  You may have legacy equipment, but there are several vendors with software that can extract data from these systems.  Then there are outfits like Interval Data Systems and Texas A&M that understand commissioning errors.

It is a lot easier today to implement a real time system that pays back in months vs. the years promised by the ESCOs.  Start with the CAT scan before moving to the heart transplant.

Facility Costs

According to the National Institute of Standards (NIST) , more than $16B is wasted each year in the US because the software used to design, build and operate buildings is not well integrated.  This lack of interoperability results in expensive changes in the construction process, and poor maintenance in the operation phase.  I suspect they have just scratched the surface in terms of cost.

NIST really is just aiming at maintenance and support.  In parallel to NIST's thinking, I believe there is a similar cost in energy.  Many buildings do not have the real time systems in place that can correlate building design intent, real energy costs, and the condition of equipment over time.  Based on the retro commission market, it may be fair to say that poor building system interoperability might account for 20% of the energy cost in a facility.  I looked it up, a 20% improvement in facility energy cost would reduce the nations energy bill by more than $20B .

This means lack of interoperability might account for a waste in excess of $36 B per year.  That is a big number to me.