When I hear words like ‘retrofitting,’ ‘co-generation’ and ‘performance contracts,’ my eyelids get droopy and I immediately fall asleep. I don’t think I’m alone in my plight either. When it comes to wrapping our young, developing minds around the idea that the University can spend all this money on energy upgrades and not have to pay for it, it is tough to stay awake for the reasoning.
The University is just finishing up a $13 million contract with Schneider Electric to put new, fancy motion sensors in the CHASS buildings and the solar panels on the roof on Carmichael Gym. The contract also includes some less exciting upgrades, including repairs to building cracks and other building envelope issues.
On Jan. 21, the University also broke ground on the $61 million upgrade to the Cates Avenue Steam Plant. The contract between N.C. State University and Ameresco will upgrade the 60-year-old boilers in the Yarborough plant.
As part of this upgrade, two 5.5 megawatt turbines will be installed. Powered by natural gas, these turbines will generate power for 30 percent of campus — our base load. The ”waste heat” given off by the turbines will be collected to generate steam for campus. This type of power plant is called a “co-generation plant.”
The contract further includes plans to install a system to collect condensation off the pipes running throughout campus. This water will then be sent to the Yarborough or Cates Avenue plant to be circulated through the chillers. Some minor infrastructure changes will be made as well.
It works like this, Ameresco is a company that specializes in using existing buildings and creating greater efficiencies through retrofitting. After the completion of these upgrades, the University will have to pay a lot less for energy. However, by paying the same amount of money that currently is paid in energy for the next 20 years, the upgrades will be paid off.
Basically, the University and Ameresco crunched some numbers and drew up a contract where they ironed out details such as: how much money would be saved and what upgrades would be accomplished. Then it went to the state for approval. Finally, a financial backer lent the money, in this case Bank of America.
The energy savings from the performance contract will go to pay Bank of America. If the price of natural gas drops to five cents a gallon and the energy savings don’t match the projections, which I do not see happening, N.C. State will not be on the hook for the loan. Ameresco would be responsible for the difference.
For the state of North Carolina, performance contracts are a win-win. Companies get lucrative contracts, and various state organizations get upgrades that will ultimately save money and hopefully help to save the environment too. It may be hard to wrap our minds around this, but it makes sense for all involved and helps to overcome the barriers of budget cuts.
