A Holistic Approach to Master Planning:

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1 FEATURE A Holistic Approach to Master Planning: Rice University s integrated climate and energy strategy Courtesy Rice University. P Richard Johnson, Director, Administrative Center for Sustainability and Energy Management, and Professor in the Practice of Environmental Studies in Sociology, Rice University; John Carlson, PE, Principal, Sebesta Inc.; Abbe Bjorklund, PE, CEM, LEED AP, Vice President and Service Line Leader, Sebesta Inc.; and Mark Gardner, Manager, Energy Strategy and Utility Program Development, Rice University lanning for the future of energy on campus is not a new concept at Rice University, a private research university located on a leafy 300-acre campus in Houston, Texas. Opened in 1912, the campus, which has an enrollment of more than 5,900 students, consists of around 6 million sq ft of built space encompassed in an arboretum with more than 4,000 trees. When Rice first opened its central plant and tunnel system 100 years ago, the world population was 1.65 billion; Houston s was less than 100,000; and the university s sole energy source was coal. It was delivered via a rail spur and burned at the central plant with steam distributed to campus buildings via a district energy system. While the technologies related to energy generation and consumption changed considerably during the university s first century, Rice continues to benefit and reap savings from its early energy infrastructure planning decisions in particular, its district energy distribution network. In the university s centennial year of 2012, a team from Rice began a planning effort to serve the campus s energy needs for the next 30 years. It did this with full recognition that by the end of that planning horizon, the world s population would be nearing 10 billion people who would aspire to Western standards of living, putting unprecedented pressure on natural resources, especially fossil fuels. This growth was envisioned by the Rice team as likely and perhaps radically changing how energy would be procured, generated, distributed and consumed at the institution. It was against this backdrop that Rice sought proposals for what it called the Rice Integrated Climate and Energy Master Plan, or RICEMaP, which holistically encompassed the needs for plant equipment assessment and planning, a long-term investment plan for plant equipment and campus distribution infrastructure, building energy audits to bring focus to energy conservation investments and drive demand and energy usage reduction, climate action planning to meet 2015 International District Energy Association. ALL RIGHTS RESERVED. Rice s goal of becoming a carbonneutral campus and an investment plan for upgrading and maintaining campus metering and telemetry infrastructure. Following a competitive RFP process, Rice selected Sebesta Inc., Houston, as its consultant and partner for developing RICEMaP as the 30-year master plan to guide campus energy investment decisions. RICEMaP is Rice-specific, but it s also a useful example for other universities and large corporations that are striving for a net zero carbon future. RICE M A P IS A U S E FU L EXAMPLE FO R OTHE R U NIV E RS I T I ES S TRIV ING FO R A NE T Z ER O CA RBO N FU TU RE. SETTING THE COURSE At the time that Sebesta was hired, changes across higher education in the United States meant that traditional revenue streams for universities were under stress. As such, it became particularly important that RICEMaP District Energy / Fourth Quarter

2 position Rice to invest its energy infrastructure dollars wisely. The university also needed to do so in a way that would help avoid future costs and manage volatility whether by supply, policy or price especially in a world of constrained fossil fuel resources. A steering committee, made up of both administration and academics, guided the development of RICEMaP. The group s guiding principles were the following: 1. Connectivity The steering committee recognized that maintaining the campus central energy plants and distribution systems would provide resiliency, redundancy and flexibility for campus operations. 2. Net zero As a signatory of the American College & University Presidents Climate Commitment, Rice has a net zero carbon goal and looked to the master plan to provide a road map for how to get there. 3. Energy prices Rice looked for strategies to both provide protection from and exploit the opportunities of the volatile, deregulated Electric Reliability Council of Texas (ERCOT) electricity market (see sidebar). 4. Campus building and utility infrastructure performance Rice set a goal to improve building performance reducing total campus building energy consumption by at least 30 percent compared to current usage levels as well as to improve the performance of its energy plants and utility infrastructure. 5. Finances The master plan was to provide a 30-year financial investment plan for Rice s facilities and energy infrastructure. THE PROCESS With these principles in mind, Sebesta and Rice set out to balance the multiple needs of campus growth, energy capacity and reliability with the priorities of energy efficiency, a net zero carbon campus, reducing operating costs and addressing deferred maintenance. Via the RICEMaP planning process, it was revealed that by taking an integrated approach i.e., addressing all the components of utility infrastructure, campus buildings, and energy system metering and management as part of an integrated system Rice could achieve all these goals. Rice requested that the master plan be structured to present deliverables in three separate reports: Report 1 energy production, distribution and storage plan Report 2 building-level energy efficiency opportunities Report 3 energy system metering and measurement data acquisition The effectiveness of RICEMaP is predicated on the interrelationship of these individual reports: The performance of the utility infrastructure establishes the efficiency of production. The performance of facilities connected to the utility drives the peak demands, usage patterns and efficiency of utility service. Meters and the collected data provide the basis for understanding, documenting and managing utility assets and effective delivery of utility service. Incorporating all these interdependent system components in the master-planning process allowed Rice to achieve greater systemwide benefits. Sebesta established a baseline assessment of the age, condition and capacity of campus utility production and distribution systems. The campus district energy system has grown from the initial steam system to a two-plant system (North and South plants) with chillers and boilers at both facilities and cogeneration at one, the North Plant. As has always been the case at Rice and other district energy systems, long-term system health requires periodic upgrades and the addition of new equipment as assets reach end of life. Looking ahead, the RICEMaP team stressed that the utility infrastructure must not only have the capacity to deliver cost-effective and reliable service to the campus but also the resiliency to respond to the dynamic conditions beyond campus borders. In parallel with the analysis of campus utility production and distribution systems, Sebesta investigated the energy usage profiles of campus academic, residential and research buildings. Utility consumption data indicated that many buildings were operating well above energy intensity benchmarks. Based on detailed energy audits of representative campus facilities, Sebesta developed an achievable target of 30 percent thermal energy reduction (heating and cooling) and 20 percent electric usage reduction over 2012 usage levels. The relatively modest investments in energy efficiency improvements identified through the audit process e.g., lighting retrofits, retrocommissioning, control system upgrades were projected to provide Rice with a simple payback of two and a half years. Funding the implementation of these building improvements would be done in phases over a period of approximately 10 years. New buildings would be constructed with energy usage targets to meet or exceed goals for upgraded existing buildings. THE COMBINATION OF REDUCED CAMPUS ENERGY USAGE AND PLANT EFFICIENCY GAINS DRAMATICALLY REDUCED FUTURE CAPACITY REQUIREMENTS OF THE UTILITY INFRASTRUCTURE. Sebesta uncovered opportunities to improve the efficiency of the plant operations as well. These ranged from cooling tower upgrades and burner replacements to operational changes to improve efficiency. An example is the installation of steam piping to interconnect the campus s North and South plants to provide more flexibility and efficiency in plant steam production operations as well as increased reliability. The combination of reduced long-term campus energy usage, through building efficiency improvements, and efficiency gains at the utility plants dramatically reduced the future capacity requirements of the utility infrastructure. Because a system cannot be optimized if its performance is not accurately measured, Sebesta also analyzed 22 District Energy / Fourth Quarter International District Energy Association. ALL RIGHTS RESERVED.

3 and reviewed Rice s utility metering and data acquisition. Recommendations included development of a budget to upgrade and maintain the system to address issues with the accuracy and integrity of data collected. MASTER PLAN Combining the recommended improvements to campus buildings, energy plants and infrastructure, Sebesta developed projections of future energy requirements and associated investments for the campus over the 30-year RICEMaP horizon. During that time period, 25 percent growth was projected to occur in conditioned space served by the district energy system. In light of this, Sebesta analyzed and compared four scenarios in terms of capital cost, operating expense and associated environmental performance. This gave Rice the opportunity to pick a course of action from the following: Scenario 1 Business as usual. This was the baseline scenario if Rice continued with current facility operations while expanding its facilities to meet future campus growth. Scenario 2 This scenario looked at the impact that investing in campus demand-side management (energy efficiency improvements and conservation measures) as well as plant operational improvements would have on the requirements to provide capacity and flexibility to meet future growth. Scenario 3 Building on Scenario 2, Sebesta looked at the impact of installing 6.2 MW of combined-cycle cogeneration capacity at the campus s South Plant. It also considered the purchase of green power/renewable energy credit electricity. Scenario 4 Building on Scenario 3, this included expanding combinedcycle cogeneration capacity at the North Plant when the current cogeneration system there needs to be replaced (estimated for 2024). In table 1 and figure 1, the 30-year net present value (NPV) of capital cost and operating expense for each scenario are compared. The associated cumulative carbon dioxide emissions are also indicated. As shown, Scenario 1 is estimated to have a $282 million NPV. This scenario is dominated by projected electric and gas procurement costs of more than $248 million and also includes almost $34 million in infrastructure upgrades to meet future campus energy requirements. For Scenario 2, Sebesta determined that by investing a total of $28.4 million in energy efficiency improvements in campus buildings and infrastructure and the interconnection of the North and South steam plants, Rice could offset the need to add more utility production capacity to support campus growth. This would reduce total campus energy and capital costs, achieving an NPV reduction of more than $17 million. This scenario would also reduce cumulative campus CO 2 emissions over the 30-year period by around 30 percent. Scenario 3 included the addition of cogeneration infrastructure at the South Plant, which would make Rice less susceptible to volatile electricity prices and provide more opportunity to exploit Texas real-time electricity market through self-generation. Investing an additional $25.3 million (beyond Scenario 2 utility plant capital costs) in cogeneration infrastructure at the South Plant would result in a $12.8 million NPV reduction in overall campus costs compared to Scenario 1. However, purchasing $7.38 million in green power/renewable energy credit electricity in addition to installing cogeneration would bring Rice closer to its net zero carbon goal by reducing cumulative campus greenhouse gas emissions by 68 percent compared to Scenario 1 (see black line in figure 1). With both the added investment in Table 1. RICEMaP Scenarios, Net Present Value Comparison ($000s). FUEL/ENERGY EXPENSE Natural Gas Purchased Electric Service Green Power/Renewable Energy Credit Electricity CAPITAL COST Utility Plant DSM and Plant Efficiency North and South Steam Plant Interconnection TOTAL SCENARIO 1 Business as Usual $63,233 $185,254 $282,326 SCENARIO 2 Demand-Side Management (DSM) & Plant Improvements $52,236 $150,824 $265,309 SCENARIO 3 DSM & Plant Improvements South Plant Cogeneration Installation Green Power/Renewable Energy Credit Electricity $70,633 $111,377 $7,384 $59,125 $276,929 SCENARIO 4 DSM & Plant Improvements South Plant Cogeneration Installation Green Power/Renewable Energy Credit Electricity North Plant Cogeneration Expansion $73,333 $84,633 $2,056 $80,817 $269, International District Energy Association. ALL RIGHTS RESERVED. District Energy / Fourth Quarter

4 Figure 1. Comparison of RICEMaP Scenarios: Thirty-Year Net Present Value of Utility Operations and Cumulative Carbon Dioxide Emissions, Adjusted Base Year Through (Assumes campus growth of 1.2 million sq ft.) Natural Gas Purchased Electric Service Capital Cost, Utility Plant Capital Cost, Building DSM and Plant Efficiency Capital Cost, Steam Plant Interconnection Green Power/Renewable Energy Credit Electricity CO2 Emissions Net Present Value ($000s) $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 $185,254 $63,233 Scenario 1 $150,824 $52,236 Scenario 2 $59,125 $7,384 $111,377 $70,633 Scenario 3 Path to Net Zero CO 2 $80,817 $2,056 $84,633 $73,333 Scenario 4 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Cumulative Carbon Dioxide Emissions (Tonnes) Business as Usual Building DSM & Plant Improvements DSM & Plant Improvements South Plant Cogen Installation Green Power/Renewable Energy Credit Electricity DSM & Plant Improvements South Plant Cogen Installation Green Power/Renewable Energy Credit Electricity North Plant Cogen Expansion cogeneration and green power purchases, Scenario 3 has a total NPV savings of $5.4 million compared to the baseline Scenario 1. As shown in table 1 and figure 1, Scenario 4 has around $21.7 million in increased utility plant capital expenditure beyond Scenario 3 for expanding the North Plant cogeneration capacity. With $5.3 million less in green power/ renewable energy credit electricity, plus lower purchased electric service costs, Scenario 4 is estimated to have a total NPV of $269 million, a $13 million savings compared to Scenario 1. Scenario 4 also reduces campus greenhouse gases by around 70 percent. One of the goals of RICEMaP was to chart a course for achieving a net zero carbon campus. As shown in figure 1, Sebesta estimated that Rice would achieve a cumulative carbon emission reduction of around 70 percent with either Scenario 3 or 4. To achieve the net zero carbon goal, additional carbon-lowering measures would be required. Sebesta recommended a combination of renewable energy generation (solar photovoltaics and/ or wind) and carbon sequestration Figure 2. Rice University Annual Carbon Dioxide Emission Forecast, Based on Scenario 3 installation of cogeneration at South Plant, plus sequestration and purchase of renewable energy credit electricity. Carbon Dioxide Emissions (Tonnes/Year) 120, ,000 80,000 60,000 40,000 20,000 0 Adjusted Base to provide the remaining 30 percent reduction. Rice can claim carbon sequestration through prudent management of the forests it owns through the Rice Land Lumber Co. Through deploying these strategies, Sebesta projected that Rice could reasonably Scope 1 (Direct Emissions): Campus Natural Gas Consumption Scope 2 (Indirect Emissions): Purchased Electric Service Scope 3 (Other Indirect Emissions): University-Sponsored Air Travel, Employee/Student Commuting and Solid Waste Disposal Scope 1, 2 and 3 With Implementation of Renewable Electricity and Sequestration achieve its net zero carbon goal by 2038 (fig. 2). Figure 2 shows Rice s projected carbon emissions in terms of the three broad scopes used to categorize greenhouse gas emissions: Scope 1 comprises all direct emissions from 24 District Energy / Fourth Quarter International District Energy Association. ALL RIGHTS RESERVED.

5 System Snapshot: Rice University Startup Year Number of Buildings Served Total Square Footage Served Plant Capacity Number of Boilers/Chillers Fuel Types Distribution Network Length Piping Type Piping Diameter Range System Pressure System Temperatures Steam/Cogeneration System 1912 Steam service begins at North Plant 1985 Cogeneration begins at North Plant 2008 South Plant added, begins steam production million sq ft North Plant: 130,000 lb/hr steam, 7.4 MW electricity South Plant: 40,000 lb/hr steam 6 boilers, 2 heat recovery steam generators Natural gas 2.6 miles tunnels and more than 1 mile direct-buried piping Pre-engineered direct-buried systems, steel pipe in tunnels Up to 12 inches 60 psig 307 F saturated steam supply/180 F condensate return Chilled-Water System 1960s Chilled-water cooling service begins at North Plant 2008 South Plant added, begins chilled-water production million sq ft North Plant: 8,000 tons South Plant: 5,188 tons 6 chillers Electric 2.6 miles tunnels and more than 1 mile directburied piping Direct-buried ductile iron, steel pipe in tunnel Up to 24 inches NA 42 F supply/54 F return an entity (here, natural gas consumption by the campus); Scope 2 is used to quantify indirect emissions resulting from electricity, heating or cooling, or steam generated off-site but purchased by the entity (i.e., at Rice, purchased electric service); and Scope 3 includes all other indirect emissions related to the entity s activities, such as university-sponsored air travel, employee and student commuting, and solid waste disposal. RICEMAP IMPLEMENTATION When it was completed in 2013, RICEMaP provided the campus administration with a clear road map and financial justification for investing in building and utility system infrastructure. In fall 2013, the Rice administration, facilities and plant operations, and sustainability leadership chose to pursue the RICEMaP Scenario 3 option for now. The university is planning to install cogeneration at the South Plant. As the equipment in the North Plant approaches the end of life in 10 years, Scenario 4 expanding North Plant cogeneration capacity will be considered. With assistance from Sebesta, Rice has begun to implement the recommended campus building energy efficiency and utility infrastructure improvements. Rice also applies the carbon sequestration value of the Rice Land Lumber Co. property as an offset to its carbon footprint. As part of its move toward net zero carbon, Rice has also installed a 50 kw rooftop photovoltaic system on-site and pursued off-site purchases of electricity produced from renewable sources. With an innovative electrical procurement method of purchasing electricity in a shaped load sliced in hourly increments, Rice was able to secure a deal via its retail electric provider MP2 Energy, The Woodlands, Texas, to obtain around 7 percent of its purchased electricity from a solar photovoltaic field in Fort Stockton, Texas. Moreover, given that the solar field produces electricity in a load with a shape similar to Rice s consumption, Rice and MP2 Energy were able to complete the deal at no increase in cost to Rice. For Rice, off-site solar has achieved cost parity with conventional fossil fuel-sourced power. Rice is currently exploring options to increase on-site and off-site renewable generation. Rice University has its eyes set toward the future. RICEMaP ensured that the institution s sight line is clear and focused by developing a plan that meets future needs while reducing operating costs, setting an example for campuses across the country. Richard Johnson directs the Administrative Center for Sustainability and Energy Management at Rice University in Houston, where he coordinates, supports, leads and provides technical assistance for a broad range of campus sustainability initiatives. These include green 2015 International District Energy Association. ALL RIGHTS RESERVED. District Energy / Fourth Quarter

6 buildings, recycling, energy conservation and environmental education. Johnson also holds an appointment at Rice as a professor in the practice of environmental studies in sociology. He earned a Bachelor of Science degree in civil engineering from Rice University and a Master of Urban and Environmental Planning degree from the University of Virginia. He can be reached at rrj@rice.edu. John Carlson, PE, is a principal with Sebesta Inc. in Saint Paul, Minn. He brings to his position overall expertise in power plants, utility infrastructure and industrial facilities, including specialized experience in boiler and chiller plants, generation, cogeneration, compressed air, controls systems, utility assessments and system studies. Carlson is a registered professional mechanical engineer in six states. He received a Bachelor of Science degree in mechanical engineering from the University of North Dakota. He may be contacted at jcarlson@sebesta.com Abbe Bjorklund, PE, LEED AP, CEM, is a vice president and service line leader with Sebesta Inc. in Boston, Mass. She has expertise in integrated high-performance sustainable design, construction, commissioning and operations of facility and utility systems. This includes energy performance contracting, total utility outsourcing, energy supply and management, and energy information and metering. Bjorklund earned a Bachelor of Science degree in mechanical engineering from the University of Massachusetts as well as Master of Science degrees in mechanical engineering and architecture studies from the Massachusetts Institute of Technology. Contact her at abjorklund@sebesta.com. Mark Gardner is the manager of energy strategy and utility program development at Rice University. Gardner came to Rice 20 years ago with a background in electrical construction and computer programming. This combined with his entrepreneurial spirit proved to be a good fit for the world of energy management at Rice. He has contributed to the work of the university s Administrative Center for Sustainability and Energy Management through his involvement with the Electric Reliability Council of Texas and CenterPoint Energy programs. Significant savings have been realized by strategically aligning these energy programs with the energy assets on campus. He may be reached at mrg@rice.edu. TEXAS VOLATILE ELECTRICITY MARKET Texas has one of the most volatile electricity commodity markets in the world. At times, the real-time price of electricity within the Electric Reliability Council of Texas (ERCOT) can be close to zero, and within the same day the price can spike as high as the regulatory market cap, which was recently increased to $9/kWh. In some electricity markets, consumers pay a flat rate for electricity. While convenient, it does not provide an incentive or market signal to customers to save electricity when the grid is stressed due to high demand or constrained supply. Moreover, that flat price for electricity over-rewards energy efficiency measures during the times of the day when conservation is least necessary. With the deregulation of the ERCOT electricity market in Texas more than a decade ago, customers within ERCOT now have the opportunity to pursue contracts with retail electric providers that allow for the clearer flow of market signals. year or more in advance. This allowed Rice to more closely manage its energy costs and to participate in demand response programs. If the campus consumes more electricity than has been contracted for a particular hour, that additional electricity is purchased at the real-time price. When less electricity is consumed than has been contracted, the excess electricity is sold back at the real-time price. This provides Rice with a powerful incentive to reduce electricity imports at times when real-time electricity prices spike well above the contracted price. Rice uses its combustion turbines and standby engine generators to participate in demand response programs through ERCOT and to curtail electrical imports when dispatched, providing added value to its generating assets. Over the past three years, Rice has realized a total of approximately $1 million in direct payments or bill credits as a result of active participation in these programs. In 2012, Rice switched away from the traditional model of purchasing electricity in daytime, nighttime and weekend blocks of energy. Instead, Rice began procuring electricity in a shaped load, matching the campus s consumption profile, with hourly sliced blocks for a Working in a deregulated market takes more sophistication and is more complicated than paying a flat price for electricity. However, Rice has found great financial value in doing so, thanks to the unbundling of the electricity procurement process. 26 District Energy / Fourth Quarter International District Energy Association. ALL RIGHTS RESERVED.