Optimizing Systems at District Scale Presentation

Optimizing Systems at District Scale
EcoDistrict Conference October 27, 2011
Cole Roberts, PE, LEED AP 415.946.0287 Brian Renehan, MBA 415.957.9445 Bry Sarte, PE, LEED AP 415.677.7300 Clark Brockman (Moderator) - 503.445.7372
(feel free to use, but please remember us)

Copyright 2011 | Arup, Sherwood, Sera
Overview of Session
Introductions & Goals for Today Emergent Questions Principles
Process
Tools (analytical optimization) Business Case (financial & value optimization
Conclusion
Goals for Today

1. Synergy vs Efficiency (across systems & scales) 2. Effective Process 3. Analytical Optimization
4. Finance & Risk Optimization
Emergent Questions
When does it make sense to imagine systems at District scale creating in effect a network of buildings?
At what scale do select energy, water, and waste technologies make sense? What are the implications of systems optimizing at different scales? What are the variables and tools that support decisions about how and when to proceed? What are the financial implications? Are these the right questions?
5
FRACTAL SCALE
REGION
10 MILES
6
FRACTAL SCALE
REGION + WATERSHED
10 MILES
7
FRACTAL SCALE
REGION + WATERSHED + UGB
(URBAN GROWTH BOUNDARY)
10 MILES
8
FRACTAL SCALE
UGB+ CITY
10 MILES
9
FRACTAL SCALE
CITY
1 MILE 10 MILES
10
FRACTAL SCALE
CITY + DOWNTOWN
1 MILE 10 MILES
11
FRACTAL SCALE
DOWNTOWN
1/4 MILE 1 MILE 10 MILES

12
FRACTAL SCALE
DOWNTOWN
1/4 MILE 1 MILE 10 MILES

13
FRACTAL SCALE
ECODISTRICT
1/8 MILE 1/4 MILE 1 MILE 10 MILES

14
FRACTAL SCALE
BLOCK
1/8 MILE 1/4 MILE 1 MILE 10 MILES

15
FRACTAL SCALE
BLOCK
200 FEET 1/8 MILE 1/4 MILE 1 MILE 10 MILES

16
FRACTAL SCALE
BUILDING
200 FEET 1/8 MILE 1/4 MILE 1 MILE 10 MILES

17
FRACTAL SCALE
BUILDING
100 FEET 200 FEET 1/8 MILE 1/4 MILE 1 MILE 10 MILES
18
FRACTAL SCALE
BUILDING
100 FEET 200 FEET 1/8 MILE 1/4 MILE 1 MILE 10 MILES
19
FRACTAL SCALE
BUILDING
20
PRINCIPLES
The Ecological Shed

Whats the problem?
22
The Ecological Shed

Whats the problem?
23
Yosemite National Park
Mariposa Grove of Giant Sequoias
24
Mariposa Grove of Giant Sequoias Yosemite, CA
The Ecological Shed

Watershed
25
Strawberry Creek Watershed

Lawrence Berkeley National Laboratory University Botanical Gardens
Eastshore State Park (Strawberry Creek Outfall)
Strawberry Creek Restoration and Bank Stabilization
UCB School of Law UCB Student Community Center/Lower Sproul Plaza
UC Berkeley Berkeley, California
The Ecological Shed

Ecological Footprint
27
The Ecological Shed

Ecological Footprint
The Ecological Shed

Ecological Systems
29
The Ecological Shed

Water and Energy Linkages
The Ecological Shed

Water and Power
31
The Ecological Shed

Foodshed
Th e S an F r an c i s c o F o o d s h e d ci
SIE R RA PLU M AS
Farm and Other Land Use, 2006
Prime, Unique, and Farmland of Statewide Importance
Data So urce: Farmland Mappin g & Monitoring Prog ram 2004 & 2006 No FMMP da ta available for Calaveras, Mendocino an d Tuolumne cou nties
Study Area
Grazing Land and Farmland of Local Importance
Developed lands
80
EL D OR A DO
www.greeninfo.org August 2008
TUOLUMNE MA RIP OS A
NE VA D A
C A L AV E R A S AM AD OR BU T TE YUBA TEHAMA Chico PLACE R

50
MA DE R A Fresno
Madera FRES NO Merced
Yuba City SACRAM ENTO SUTT ER

99 4 99
Sacramento
MERCE D
SAN JOAQUIN Modesto
Woodland GLE NN
5
Stockton Davis
Manteca
STA NI S L A U S
YOL O COL U SA
80 205 5
Tracy
Vacaville SOL AN O
4
Brentwood
152
Livermore NA PA LAKE Napa Vallejo CO N T RA C O S TA AL A MED A S A N TA C L A R A

880
SAN BENITO
101
Gilroy
King City
San Jose
Oakland Santa Rosa

101
Salinas SONOMA MA RIN San Rafael S A N TA C R U Z

1
MENDOCINO
MONTE RE Y
San Francisco
S A N M AT E O
Santa Cruz
Monterey Bay
Monterey
50 mile radius
50 mile radius 100 mile radius
100 mile radius
The Ecological Shed

Transportation shed
33
The Ecological Shed

Transportation shed
34
The Ecological Shed

Sewershed
35
Optimal Scales
39
Optimal Scales
Key Variables
40
Optimal Scales - ENERGY

Key Variables
41

Key Variables
42

Key Variables
43
Optimal Scales - WASTE

Key Variables
44
Optimal Scales WATER

Key Variables
45
Optimal Scales
46
Establish, Expand, Optimize, Maximize WATER
47
Establish, Expand, Optimize, Maximize WATER
48
Establish, Expand, Optimize, Maximize ENERGY
49
Establish, Expand, Optimize, Maximize WASTE
50
Establish, Expand, Optimize, Maximize CARBON
51
Comprehensive Prioritized STRATEGY
6. Offsets
1. Load Reduction
5. Renewables
2. Passive Strategies
4. Energy Recovery
3. Efficient Systems
Stanford University Optimization
53
54
Changing in Phases
Source: Stanford University Draft Energy & Climate Plan (April 2009)
Energy and Climate Solution Wedges
Acknowledge changes in the energy and economic efficiency of cogeneration; Moving towards Regeneration via heat recovery Cost savings of $639 million over business-as-usual; Reduction in greenhouse gas emissions of 80% below 2000 baseline levels by 2050; Total campus water savings of 15% 56
Synergy vs Efficiency
WATER ENERGY
WEATHER
LANDSCAPE HUMAN COMFORT TRANSPORT ECONOMY
SOCIETY
MATERIAL WASTE
CARBON
RATING SYSTEMS
PROCESS
Land Use
District Systems
Buildings
Finance & Procurement
Effective Process
Land Use Choices
Building Design & Retrofit
District Systems
Effective Process
review value & context discussion design workshop partnering meetings
Land Use Choices
Building Design & Retrofit
Review Existing Information (Function & Financial)
Vision
Focus Areas Value Criteria and KPIs
Plant Concept
Financial Concept Site Walk City Meetings
Builders
Operators Agencies Owners
District Systems
Concept Modeling of Buildings & District
Technology Analysis (Options Shortlist)
Financial/Risk Analysis (Options Shortlist) Procure, Build, Operate
Workshop Discussions
63
63
Prioritization
64
64
Prioritization
65
65
66
67
5. Central Plant + Tri-Gen | System Diagram
Electric Grid
Electric Chillers
COP: 6
Non-Cooling Elec
Gas Mains
Tri-Generation Plant
Elec Eff: Thermal Eff: ~40%
Absorption Chillers
COP: 1.2
Space Cooling
35-40%
Gas Boilers
Eff: 80%
Space Heating
Electricity
Natural Gas Chilled Water Hot Water (120 + 0F ) Hot Water (90 + 0F ) Waste/Process Heat Heat Exchanger
DHW
Grid
District
Block Equipment
End Use
Review Existing Conditions
Demand
Baseline Gold + Deep Green
Supply
Baseline Existing Plant Existing Plant + CHP Existing Plant + CCHP
Sustainability, Risk, Financial
70
TOOLS
Program
Assumption
Central Plant
Central Plant
72
Heating Load Profile Projections
Phase 1
2010
73
2015
2020
2025
Phase 2
2010
74
2015
2020
2025
Phase 3
2010
75
2015
2020
2025
Phase 4
2010
76
2015
2020
2025
Phase 5
2010
77
2015
2020
2025

Morning heat demand peak
(Showers, washing)
Reduced mid-day heat demand
Evening heat demand peak

(Space heating, showers)
Peak heat demands in Winter
Reduced summer heat demand
Phase 5
2010
78
2015
2020
2025
Heating Load Duration Curve Projections

absorption cooling)
(Without
Load Duration Curve

35 30
25
MBH 20 15
10
5 0 0 2000 4000 6000 8000
Hours/Year
Phase 1
2010
79
2015
2020
2025

absorption cooling)
(Without
Load Duration Curve

35 30 25 MBH 20 15
10
5 0 0 2000 4000 6000 8000
Hours/Year
Phase 2
2010
80
2015
2020
2025

absorption cooling)
(Without
Load Duration Curve

35 30
25
MBH 20 15
10
5 0 0 2000 4000 6000 8000
Hours/Year
Phase 3
2010
81
2015
2020
2025

absorption cooling) Load Duration Curve
35 30 25 MBH 20
(Without
15
10 5 0 0 2000 4000 Hours/Year 6000 8000
Phase 4
2010
82
2015
2020
2025

absorption cooling) Load Duration Curve
35 30 25 MBH 20
(Without
Run Criteria 4,500 Full Output Hours/Year
Potential CHP size 8.3 MBH

(2.5 MWth)
15
10 5 0 0 2000 4000 Hours/Year 6000 8000
Phase 5
2010
83
2015
2020
2025

(With absorption cooling)
Load Duration Curve
35 30 25 MBH 20
Run Criteria 4,5000 Full Output Hours/Year
15
10 5 0 0 2000 4000 Hours/Year 6000 8000
Potential CHP Size 11.8 MBH

(3.5 MWth)
Phase 5
2010
84
2015
2020
2025
Water-Energy Nexus Pilot, Expand, Optimize, Maximize (4 dimensions)
District Energy Pipe
Case Studies
Case Studies
Case Studies
Case Studies
90
Mantri Lake Agara Development Bangalore, India
Case Studies (India)
Project-Wide Water Balance (Caption)
Stewardship of water resources is one of the driving principles behind the projects philosophy through:
Watershed-scale thinking
Closing the water loop onsite
Hydrologic Analysis (Caption)
Potable Water Strategies

Onsite Wastewater Strategies
All wastewater will be captured and reused on site. Additionally, a portion of the wastewater will be used to create a demonstration wetland on the edge of the site near Belandur lake to enhance the habitat of the lake edge and expand the ecological function of the region.
Three strategies combine to reduce the projects energy demands: passive, active and onsite generation. While each is manifested differently depending on use type they combine for a dramatic reduction in total energy use, energy costs and related carbon emissions in perpetuity.

SITE UTILITY OVERVIEW
LEGEND
UTILITY STRUCTURE / ROOM NON-POTABLE STORAGE TANK PRETREATMENT STORAGE TANK
POTABLE WATER STORAGE TANK

STORMWATER
LEGEND
STORM DRAIN LINE PUMPED STORMWATER DISCHARGE
INLET
PERENNIAL WATER FEATURE / STORAGE SEASONAL IRRIGATION STORAGE
Case Studies
99
Mantri Lake Agara Development Bangalore, India
Integrated Resource Modeling
A holistic quantitative model for improved understanding of urban systems and the impact of decisions
101
land use
waste
energy
Land use demand
carbon transportation
Emission factors, trip length, %
water
Water consumption rates
material s
Design life, material consumption
Landtake Density Units
Integrated Resource Management (IRM)

Energy consumption Water consumption/w astewater generation CO2 emissions (indirect, direct, mobile) Waste generated & diverted Embodied Carbon in Materials VMTs
Emission rates
Generation Composition
Supply
M itg a tio n
B a s lin e e
compare baseline and design across multiple indicators
compare baseline with design
compare alternatives
compare with comparable everyday items (e.g. waste generation measured in # of garbage bins)
detect hotspots of resource consumption across the plan
102
land use
waste
energy
Land use demand
water
material s

Emission rates
Supply
M itg a tio n
B a s lin e e
103
land use
waste
energy
Land use demand
water
material s

Emission rates
Supply
M itg a tio n
B a s lin e e
104
land use
waste
energy
Land use demand
water
material s

Emission rates
Supply
M itg a tio n
B a s lin e e
105
Greenhouse Gases and Emissions
106
Optimized and Informed Planning
Develop strategies IRM model Optimize Strategies
IRM model Refine strategies
- Plan evolution - Performance optimization
GIS Integration
109
110
111
Results
Chose 284 KPIs.
Found all reference input (52,000 cells)

Found 1224 actual inputs
Packett-Burman Sensitivity Analysis
112
Anaerobic Digestion Electric Vehicles
13% waste diversion
5% energy reduction 10% reduction in parking
3% carbon savings
6% energy demand
113
Water Efficiency Strategies

Fixtures and Appliances
15% water reduction
3% energy savings
4% energy savings
40% water reduction
Energy Efficiency Strategies

District Water Loop
114
115
Total Operational Carbon

40000 35000 30000 25000 20000 15000 10000 5000 0 -5000 1 2 3 4 5 6 7 8 9 Scn2_Carbon_Primary Scn2_Carbon_Primary_New Scn2_Carbon_Primary_Existing
Operational Carbon per Person

1600 1400 1200 1000
800
600 400 200 0
Higher density enables lower carbon per person. Existing starting at much higher carbon per Scn2_Carbon_Primary Scn2_Carbon_Primary_New person. Need to both retrofit and Scn2_Carbon_Primary_Existing design new build to effect low carbon strategies.
1 2 3 4 5 6 7 8 9
116
Different Synergy Ownership Scalability
Focus Valuation FINANCABILITY RISK MANAGEMENT Buildability Entitleability
BUSINESS CASE
Business Case Process - Moving Toward Implementation

1. Initial Value Analysis
Life Cycle Cost Analysis - Does it pencil? Qualitative Value
2. Finance & Procurement Analysis Self-Perform or Third Party approach make sense?
Risk Analysis Financing Strategy Use Project Finance? Third Party Engagement Final Net Present Cost Analysis
3. Launch Procurement RFQ, RFP
119

2. Finance & Procurement Analysis Self-Perform or Third Party Approach?

120
Life Cycle Costing Does the System Pencil vs. Business As Usual?
Takes into consideration capital costs and energy savings only Assumes electric rate of $0.09/kWh and gas rate of $1.25/therm
121

2. Finance & Procurement Analysis Self-Perform or Third Party Approach?

122
Procurement Options
Ownership
Third Party or Alt. Procurement Options
Financing
Increasing Risk Transfer
O&M
Design
Construction
DBB
DB
DBOM
DBFOM BOO
Increasing degree of third party involvement & use of performance incentives
123
Is a Third Party Option Right for You?

If No to any one question, self perform If Yes to All Three, Move Forward with Third Party Procurement
124
Risk Management Preferences

Risk Risk Description Risk that the design of the facility is incapable of delivering the services at the anticipated cost or that there are errors or omissions SCOPE DEFINITION Risk that the actual captial costs are higher than budgeted or anticipated Keep Shed Share
Design
Capital Cost Overrun
X
X X X X
Contract Alignment Risk that design and construction execution results in O&M challenges that result in cost increases and poor performance Time to Completion Risk that the construction schedule is longer than anticipated Technology Risk that (a) the design and its method of delivery do not keep pace, from a technological perspective, with Genentech requirements or (b) the design life of the facility proves to be shorter than anticipated, thus accelerating refurbishment expense Risk that soil contamination on site will require remediation, delay project
Remediation
X X X X X X X X
Pollution/Environm Risk that ammonia storage could result in a leak that would require SAFETY NOT JUST AMMONIA IF AN ENVIRONMENTAL INCIDENT ental Seismic (Force Majeure) Fuel Performance Regulatory (change in law) Reduction in Occupancy Exit Risk that contracted service delivery (pre- or post- completion) is not met because of a seismic event Risk that fuel prices escalate faster than anticipated (what about if they escalate slower than anticipated?) Risk that the unit cost of production is higher than anticipated RATIONALE? Risk that regulatory requirements increase permit fees for constructing and operating the facility Risk that Genetech demand decreases due to unforeseen changes to Genentech's business. Risk that Genentech needs to exit a contract AT ITS OWN DISCRETION
125
Risk Scoring
Weighting based on risk management priorities, (qualitative) probability of the risk occurring Scoring on a 1-5 scale
The higher the points the more aligned the delivery option is with the preferred risk management approach
Risk Design Risk Description Risk that the design of the facility is incapable of delivering the services at the anticipated cost or that there are errors or omissions Risk that the actual captial costs are 4 higher than budgeted or anticipated Weight DBB (1-5) 3 3 DBB+OM DBOM 3 6 DBFOM BOO 6 6 Comment/Rationale Design build most effective way to shed or share design risk Design build most effective way to prevent change orders for out of scope items (up front planning, milestone payments, contract enforcement, external banks involved)
Capital Cost Overrun
126
Risks Caused by Third Party Approach

Risks inherent in transferring project delivery to a 3rd party
Negative scoring Same weighting approach
Added to project delivery risks (to create a net reduction in the overall score)
Risk GMP Long Term Flexibility Risk Description ???????? Weight DBB (1-5) 2 0 0 DBB+O DBOM M -2 -2 -4 -4 DBFOM BOO -2 -4 -2 -8 Comment Risk to GMP certification; is this a showstopper? 3rd parties and lenders will want some certainty regarding Genentech's ability to meet future payment obligations, but this does not mean a loss of flexibility in the contract if obligations are being met.
Risk that changes to the long- 4 range campus planning cannot be adjusted due restrictions on a long-term contract
127
Total Risk Management Score

Project risk + 3rd party risk + key market drivers = total risk management score
Key Driver Market Robustness Driver Description Weight (1-5) DBB 4 DBB+OM 4 DBOM 2 DBFOM 2 BOO 2 Comment Acknowledge that there are fewer firms that can own and operate facilities than design and build them Contract enforcement risk cannot be avoided but question is - how much administrative burden can Genentech take on before it does not pay? Pool of qualified firms 2 that can deliver full 3rd party service as required is insufficient. Similar to contract alignment, Genentech gains efficient of contract oversight the more the services are wrapped into a single delivery. 4
Contract Burden/Oversight Required
12
16
20
Technology Innovation Genentech wants 5 continual improvement on sustainability metrics and efficiency
10
15
15
15
The more project delivery components that are wrapped into a single contract the more opportunities there are to incentivize efficiency and performance.
Qualitative Score Combined Project & Third Party Risk Score Total Qualitative Score
13 44
22 40
29 53
33 57
37 53
57
62
82
90
90
128
Overview of Project Finance Structure

Investors Lenders
Equity
Debt Operator Financing Contracts
Design Build Contractor
DB Contract Project Company
O&M Contract
Input Supply Contract
Off-taker Contract
Supplier
Off-taker
129
Why use project finance?

Benefits
Owner/Off- Avoid large initial capital costs Taker Lower unit cost long-run Perspective Leaves room for additional investment Risk transfer Bank due diligence
Costs
Long-term contract (20-30 yrs)
Potential higher early unit prices

More limited input on specifications
130
Implementation Partners - Market Overview

Utilities
Ownership
Financing
Developers/ ESCos
Technology Providers
O&M
Operators
Design EPC Contractors Construction
DB
DBOM
DBFOM
BOO
131
Self Perform Case - Annual Cash Flow (US$)

Millions 105 90 75 60 45 105 90 75 60 45 30 15 Millions 120 120
(Inflows) <<< >>> Outflows
30 15
(15) (30) (45) (60) (75) (90) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 -
(15) (30) (45) (60) (75) (90)
Capital investment
Cash outflows - Commodities
Cash outflows - Maintenance
Tax (-) creditor / (+) debtor
Annual cash flow
Alt. Procurement Cash Flow (US$)

Millions 105 90 75 60 45 105 90 75 60 45 30 Millions 120 120
(Inflows) <<< >>> Outflows
30
15
(15) (30) (45) (60) (75) (90) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 Cash outflows - Procurement & Pre-Operations Cash outflows - Service payments Tax (-) creditor / (+) debtor
15
(15) (30) (45) (60) (75) (90)
Annual cash flow
133
Net Present Cost (US$)
Alt. Procurement
Self-Perform
Is a Third Party Option Right for YouYES!

If No to any one question, self perform If Yes to All Three, Move Forward with Third Party Procurement
135
Business Case Process -Moving Toward Implementation

2. Finance & Procurement Analysis Self-Perform or Third Party approach make sense?
3. Launch Procurement RFQ, RFP...let the implementation begin!

136
Optimizing Systems at District Scale

EcoDistrict Conference October 27, 2011
Cole Roberts, PE, LEED AP 415.946.0287 Brian Renehan, MBA 415.957.9445 Bry Sarte, PE, LEED AP 415.677.7300 Clark Brockman (Moderator) - 503.445.7372

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Optimizing Systems at District Scale

EcoDistrict Conference October 27, 2011

(feel free to use, but please remember us)

Goals for Today

4. Finance & Risk Optimization

REGION + WATERSHED + UGB

(URBAN GROWTH BOUNDARY)

1/4 MILE 1 MILE 10 MILES

1/4 MILE 1 MILE 10 MILES

1/8 MILE 1/4 MILE 1 MILE 10 MILES

1/8 MILE 1/4 MILE 1 MILE 10 MILES

200 FEET 1/8 MILE 1/4 MILE 1 MILE 10 MILES

200 FEET 1/8 MILE 1/4 MILE 1 MILE 10 MILES

The Ecological Shed

The Ecological Shed

Yosemite National Park

Mariposa Grove of Giant Sequoias

Mariposa Grove of Giant Sequoias Yosemite, CA

The Ecological Shed

Strawberry Creek Watershed

Eastshore State Park (Strawberry Creek Outfall)

Strawberry Creek Restoration and Bank Stabilization

UCB School of Law UCB Student Community Center/Lower Sproul Plaza

UC Berkeley Berkeley, California

The Ecological Shed

The Ecological Shed

The Ecological Shed

The Ecological Shed

The Ecological Shed

The Ecological Shed

C A L AV E R A S AM AD OR BU T TE YUBA TEHAMA Chico PLACE R

Madera FRES NO Merced

Yuba City SACRAM ENTO SUTT ER

SAN JOAQUIN Modesto

Livermore NA PA LAKE Napa Vallejo CO N T RA C O S TA AL A MED A S A N TA C L A R A

Oakland Santa Rosa

Salinas SONOMA MA RIN San Rafael S A N TA C R U Z

50 mile radius 100 mile radius

100 mile radius

The Ecological Shed

The Ecological Shed

The Ecological Shed

Optimal Scales - ENERGY

Optimal Scales - ENERGY

Optimal Scales - ENERGY

Optimal Scales - WASTE

Optimal Scales WATER

Establish, Expand, Optimize, Maximize WATER

Establish, Expand, Optimize, Maximize WATER

Establish, Expand, Optimize, Maximize ENERGY

Establish, Expand, Optimize, Maximize WASTE

Establish, Expand, Optimize, Maximize CARBON

Comprehensive Prioritized STRATEGY

Stanford University Optimization

Energy and Climate Solution Wedges

LANDSCAPE HUMAN COMFORT TRANSPORT ECONOMY

Finance & Procurement

Land Use Choices

Building Design & Retrofit

Land Use Choices

Building Design & Retrofit

Review Existing Information (Function & Financial)

Concept Modeling of Buildings & District