Thursday, January 7, 2010

Is there a better way to save $10 million?

The financial crisis that the university finds itself could be seen as an opportunity to look closely at the efficiency of our operations and how to make them more sustainable.  We should evaluate our use of human and material resources to see how efficient they are. Perhaps there are ways proximal departments can share staff and equipment.  The Office of Sustainability’s offices are in the same corridor as Facilities Information Management’s offices and we’ve started thinking about whether we could share a fax machine. Informally, our staff help each other out but maybe formalizing it would make more sense.

One of the biggest opportunities we have for efficiency is in the energy sphere. A recent university-wide energy task force report presented to the Board of Trustees and UI president proposed that we could save 20 to 25% of energy used in buildings “through regular, prudent investment in conservation measures”. The problem is always making the large initial capital investment when the funds are not there. One way many universities, schools, institutions, and facilities have dealt with that lack of capital is through energy performance contracting and third party financing. How does this work? An ESCO (energy services company) performs a detailed (investment grade) audit of a facility’s energy systems from lighting, to HVAC (heating, ventilation and air conditioning), to power plants and determines what kind of equipment upgrades and energy management practices could be implemented that would save energy. Saved energy means saved $$. The ESCO will then guarantee those savings on an annual basis so the institution can secure financing based on that “equity” and pay the ESCO to conduct those projects. However, if the facility doesn’t save that money (and all contractural provisions are met) the ESCO writes a check to the facility. Studies suggest we could even save up 34% on our energy consumption through energy conservation measures and that translates to over $10 million evert year and reduction of over 65,000 tons of carbon dioxide every year. UIUC is piloting a project. UIC is planning one. We think now is the time to act – to save money and save the planet.

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