MSCN Business Plan
Energy Efficiency, Renewables, and Microgrid
Opportunities
November 29, 2022
Project Background
Phase I – Feasibility Study
Phase II – MSCN Business Plan
Questions
Agenda
Project Background
Project Background
Resiliency and sustainability objectives of the City of Santa Rosa – City and State mandates
– Increased cost of energy
– Increased frequency of natural disasters and catastrophic climate events Phase I - City-Wide Energy Efficiency, Renewables, and Microgrid Feasibility Study – Studied feasibility of deploying microgrids at two City building clusters – identified opportunities for installation of solar photovoltaics and energy efficiency measures at all City facilities and parks
Phase II – MSCN business plan and additional solar PV opportunities – investigates different financing mechanisms for project implementation at MSCN • Phase 1 measures (energy efficiency, solar and battery storage) • Bus Electrification and electrical infrastructure upgrades – Feasibility study for carport and floating solar PVs for the Santa Rosa Water Phase I – Feasibility Study
City-Wide Energy Efficiency, Renewables, and Microgrid Feasibility Study Energy Efficiency
Scope Overview
– Performed Site Investigations for 47 Facilities
– Provided the City:
Energy Efficiency Measures
• Reducing Energy Consumption
• Addressing Deferred Maintenance
• Supporting City Electrification Goals
Energy Efficiency
Results
Mix of Energy Efficiency Measures (EEMs) that address different City needs, goals and level of capital investment Lighting and Lighting Controls
Upgrades
Remote Monitoring and
Control System for 10
Buildings
HVAC Upgrades Energy Management and Control
System
• City Hall
• City Hall
Annex
• Chamber
Building
• Finley Park
Community
Center
• Finley Park
Swim Center
• Finley Senior
Center
• MSCN
• MSCS
• PSB
• Sam Jones
Hall
Upgrades at 8 Main Facilities
• City Hall
• City Hall Annex
• Chamber Building
• Finley Park Community Center
• MSCN
• MSCS
• PSB
• Steele Lane Community Center
Upgrades at 44 Facilities
• $155,000 Annual Cost Savings
• Simple Payback 5.5 Years
Renewables
Scope Overview
– Total of 107 Sites
– Evaluated for Solar Application Based on:
• Space Availability
• Shading
• Electrical Infrastructure
Renewables
Results
– Maximum Solar Potential of 7.2 MWdc at
17 Sites
• Tire 1 - Maximum Solar Potential of 3.2
MWdc at 11 Sites
• Tire 2 - Maximum Solar Potential of 4.0
MWdc at 6 Sites
– Preliminary Site Layouts for each of the 17
Sites
Microgrid
Scope Overview
– Investigate Microgrid Viability for Two Groups of Facilities • Group 1 - 18 Buildings and 4 Unique Address
• Group 2 - 7 Buildings and 4 Unique Address
Microgrid
Results
– Seven (7) Individual Microgrids
Microgrid Implementation Cost Summary
Facility
Battery Energy Storage
System
Solar PV
(kWac)
Stand By
Generator
(kW)
Implementation
Cost ($)
O&M
Costs ($)
MSCN 840 kWh / 200 kW 400 365 $1,991,000 $35,000
MSCS 106 kWh / 46 kW 150 100 $877,542 $10,000
City Hall 210 kWh / 50 kW 0 450 $923,500 $25,000
City Hall Annex 210 kWh / 50 kW 0 450 $923,500 $25,000
PSB 840 kWh / 200 kW 0 365 $1,635,000 $25,000
Finley Park Senior Center 210 kWh / 50 kW 310 100 $1,030,612 $25,000 Finley Park Community Center 132 kWh / 58 kW 63 100 $904,611 $17,500 TOTAL 613 1,930 $8,285,653 $162,500
Phase 2 – MSCN Business Plan
Business Plan Scope
A subset of Phase I recommendations + Bus electrification at MSCN ECM Description Electrical Savings (kWh) Electrical Demand Savings (kW) Natural Gas Savings (Therms) Lighting and Lighting Controls Upgrades 214,820 52 0
MSCN Packaged Unit Replacement 34,077 6 30
MSCN New Chillers 4,754 1 0
kW-DC kW-AC DC/AC Produced Energy (kWh/first year)
519 402 1.29 762,584
Battery Size kW Battery Capacity kWh Solar PV (kW-AC)
200 840 400
Charger Type Charger Quantity Charge Window (hour) Minimum Charger Rating (kW) Battery Capacity (kWh)
ABB 150 10 (2 phases) 8 44 466
Energy Efficiency
Solar PV Systems
Battery Energy Storage Systems
Battery Electric Buses and Charging Systems
Business Plan – Objectives and Methodology
Objective:
Identify the best financial mechanism for
installation of the scope
Methodology:
Identified four financial options suitable for
the scope of work
Created a cash flow analysis for each option
to identify the net present value of the
investment
Studied complexities, risks, and advantages
of each of the financial options
Business Plan – Types of Financial Mechanisms
Energy Savings performance Contract
City and the ESCO
– Energy Services Company (ESCO) conducts Investment
grade audit (IGA)
– ESCO provides a comprehensive energy efficiency and
renewable energy packages of measures
– City signs a design-build performance contract with
the ESCO firm
– Contract includes performance guarantee and the
payback schedule
– City pays the project fees to the ESCO per the contract City and the Financier
– City works with a financier to secure a tax-exempt
lease financing
– City pays the loan payments
Business Plan – Types of Financial Mechanisms
Energy as a Service (EaaS) or Energy Savings Agreement
(ESA)
– Energy savings agreement similar to previous option
• Payment obligations tied to the project performance
– Project fees are paid to the Trustee, ESCO works directly with the Financier
– In general, a more complex contract structure and
– Contract fees are usually higher reflecting the higher risk for the financier
Business Plan – Types of Financial Mechanisms
Power Purchase Agreement (PPA)
– Developer will perform the design, permitting, financing and installation of the solar PV and the battery storage system with little to no upfront cost
– Developer will sell the generated power to the City at an agreed upon fixed rate • This rate will be lower that the City’s utility rate and therefore offsets the cities utility costs while the developer earns income on the difference
– Developer can take advantage of the tax credits that otherwise the City would not be eligible for. • Developer can incorporate these tax credits to the agreed upon rate to share the benefits with the City – Developer will be responsible for the operation and maintenance of the systems. – At the end of the PPA term, City may choose to
• extend the PPA,
• have the developer remove the equipment,
• or purchase the equipment from the developer at a fair market value.
Business Plan – Studied Options
Four combinations of the discussed finical mechanism studied Scope Loan Self/Grant Fund Service Contract Payment
Option 1 - ESPC + funded BEB EVSE
Solar PV and Battery Storage X
Energy Efficiency X
Bus Electrification X
Option 2 - ESPC + PPA + funded BEB EVSE
Solar PV and Battery Storage X
Energy Efficiency X
Bus Electrification X
Option 3 – EaaS/ESA + funded BEB EVSE
Solar PV and Battery Storage X
Energy Efficiency X
Bus Electrification X
Option 4 – PPA + funded EE and BEB EVSE
Solar PV and Battery Storage X
Energy Efficiency NA
Bus Electrification X
• BEB – Battery Electric Buses
• EVSE - Electric Vehicle Supply
Equipment
• ESPC - Energy Savings performance
Contract
• EE – Energy Efficiency
• PPA – Power Purchase Agreement
• EaaS – Energy as a Service
• ESA – Energy Service Agreement
Business Plan – Cash Flow Analysis
Cash flow analysis provides the net
present value (NPV) of the investment
Considers capital costs, operating cost
savings and expenses, contract fees, and
escalation rates
Provides a comparison point for
deciding between the different financial
options
Capital Costs Operating Expenses Maintenance and
replacement
Lighting and Lighting Controls
Upgrades Packaged Unit savings Energy Efficiency O&M savings Packaged Unit Replacement Chiller Replacement savings PV O&M Rate New Chillers Boiler Replacement Savings BESS O&M Rate
New Boilers Lighting Retrofit Savings BEB Replacement Cost (net) Energy Efficiency Rebates and
Incentives
Renewables Energy and Demand
Cost Avoidance
EV O&M Avoided Cost
Solar PV Install Cost NEM 2.0 Excess solar payment PV Panel Replacement Cost BESS Install Cost BEB Charging Energy and Demand
Cost PV Inverter Replacement Cost
BEB and EVSE implementation cost Fuel (Diesel) Cost Avoidance BESS Replacement Cost Low Carbon Fuel Standard Credits BEB Replacement Cost
EVSE Replacement Cost
Business Plan – Results and Recommendations
EaaS/ESA has lowest net present value
Remaining options have similar NPVs
Contract fees and rates are based on market
values and similar projects
– Exact rates should be collected from service
providers before making a final decision
Results/Specifications Unit Option 1 –
ESPC
Option 2 -
ESPC + PPA
Option 3 -
EaaS/ESA
Option 4 -
PPA
NPV $ $3,047,971 $2,997,932 $853,147 $2,794,438
Contract term years 25 25 25 25
ESPC Scope - EE, PV, BESS EE - -
PPA Scope - - PV, BESS - PV, BESS
Self/Grant funded - BEB EVSE BEB EVSE BEB EVSE BEB EVSE Loan amount $ $(3,751,062) $(1,207,801) - -
Loan interest rate % 5% 5% - -
Grant/Self fund $ $2.4M $2.4M $2.4M $2.4M
PPA Rate $/kWh - $0.25 - $0.25
Energy Service Agreement
Fee
$/kWh - - $0.28 -
Comparison of the NPV between the different Options and a summary of the contract assumptions Business Plan – Results and Recommendations
City-wide Recommendation
– To obtain maximum benefit from the phase 1 study, AECOM recommends that Santa Rosa considers city-wide solutions • Microgrids at MSCN/MSCS and Finley Community Center combined one contracting vehicle through third party financing • Whole city energy efficiency upgrades and solar PV/battery deployment using ESPC mechanisms Risk level comparison of the different Options
Risk Type
Option 1 - ESPC Option 2 -
ESPC+PPA
Option 3 -
EaaS/ESA Option 4 - PPA
Contract complexity Medium Medium High Low
Accounting implications High Medium Low Low
Development/Implementatio
n period
High High Medium Low
Equipment ownership High High Low Low
Maintenance and operation Medium Medium High High
Performance Period Low Low Low Medium
Recommendations (MSCN Specific)
• PPA including both solar and BESS is the best option
• Energy Efficiency measures can be self funded
• Bus Electrification and infrastructure upgrades can
be implemented with available grants and
incentives
Questions
Thank you.