Businesses seeking to shrink their carbon footprint can take a cue from the U.S. Air Force. Decarbonizing aircraft fuel will take some time, but meanwhile the Air Force has been deploying energy efficiency as a powerful tool for reducing carbon emissions and saving money, too. The Air Force also stands to reap additional benefits that can apply equally to the commercial sphere, including improved reliability, resiliency and productivity.
Energy efficiency has often been called the low-hanging fruit of climate action, and for good reason. According to one study, a full slate of energy-efficiency measures could cut carbon emissions in the U.S. as much as 50 percent by 2050.
An energy-efficiency upgrade can easily pay for itself over time by cutting utility costs. However, the up-front cost of equipment and installation has prevented many business owners from making the investment. Similarly, up-front costs can be a significant obstacle for upgrading public facilities. That is why the Air Force, and other federal agencies, have begun focusing more attention on a financial arrangement called an ESPC, or an Energy Savings Performance Contract.
The basic premise of an ESPC is fairly straightforward: The upgrade is conducted by an energy services company, and little or no up-front payment is required from the client. Instead, the client pays for the upgrade in increments over time.
An ESPC can also include a long-term maintenance and repair contract, as well as provisions for training and updating employees. That’s an important consideration where new technology and staff turnover are involved.
If all goes according to plan, the client still saves money compared to past utility costs, even after deducting the payments to the energy services provider.
The ESPC concept is not actually a new idea. However, in past years there was little post-installation data available for assessing such projects’ effectiveness on a broad scale.
More recently, the data has been piling up in favor of ESPCs. In 2017, the Department of Energy published a list of benefits attributed to ESPC projects.
“ESPC projects can yield benefits beyond just energy savings, like avoided operations and maintenance expenditures, increased occupant productivity, health and comfort, and reduced air pollution,” the agency wrote. “Research has shown gains of 6 to 26 percent in ‘occupant performance’ in various groups, such as students learning in schools, employees working in commercial offices, or consumers spending in retail venues.”
With the COVID-19 pandemic still raging full blast, the Department of Energy’s observations on the health benefits of ESPCs are especially interesting. The agency made this point in 2017, three years before the pandemic hit the U.S.:
“Building retrofits that improved the indoor environment of a building have reduced instances of communicable respiratory diseases by 9 to 20 percent and allergies and asthma by 18 to 25 percent, and other health and discomfort by 20 to 50 percent.”
Even after a COVID-19 vaccine becomes widely available, experts warn that the world must increase its guard against communicable diseases moving forward. That provides businesses with yet another reason to invest in energy-efficiency upgrades.
The Air Force provides a useful decarbonization model for businesses that don’t have a clear pathway for switching to carbon-free or carbon-neutral fuel in the near future. This branch of the military has been actively promoting the use of jet biofuel, including numerous contributions to foundational biofuel research. However, its transition to renewable fuels will take years if not decades.
Meanwhile, last October the Air Force launched a new crowd-sourcing initiative aimed at decarbonizing itself and the entire Department of Defense, too. With jet biofuel and other alternatives far off on the horizon, energy efficiency and ESPCs are certain to play leading roles in the near term.
A new $403 million ESPC project for the Air Force’s Yokata Air Base in Japan provides an illustration of the scale and potential for savings involved. The sprawling base includes more than 450 buildings.
The contract covers $167 million in installation costs plus a 21-year service agreement with Schneider Electric. The firm has amassed considerable experience in the ESPC field, and the Yokata project is its fourth ESPC with the Air Force.
The heart of the project is a new 10-megawatt combined heat and power plant with microgrid controls. Along with building automation systems, new lighting systems, plumbing fixture upgrades and other measures, the contract provides for guaranteed energy savings averaging $20 million annually. The Air Force expects to save 30 million gallons of water annually along with the considerable savings in energy and electricity.
The Yokata project also highlights the interplay of resilience and energy efficiency. While the cost and energy savings of the Yokata project are impressive in terms of both climate action and bottom-line benefits, the main motivation behind the upgrade is resiliency. Once completed, the new ESPC will help Yokata Air Base continue operating smoothly despite the grid issues that have troubled the Tokyo area in recent years.
Resiliency is a key issue for national defense, and it is also looming large as an issue for businesses facing the impacts of climate change. In previous years, companies had to rely on fossil-fueled emergency generators for backup power. ESPCs can provide a pathway for building resilience while reducing carbon emissions.
Image credit: Aral Tasher/Unsplash
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.