In the News
More Schools
Turn to Energy Efficiency as Economy Slips Reuters
By Adveith Nair
April 14, 2009
BANGALORE, April 14 (Reuters) - Hit hard by the global economic slowdown, more educational institutions in the United States are participating in energy efficiency programs to reduce expenses and earn additional revenue.
Companies like CPower, EnerNOC Inc and Comverge Inc -- called demand-response companies for their role in limiting electricity use during peak demand -- employ technology that manage large companies' power usage and control their costs.
"Given the fact that either endowments have gone down or just the very tough economic conditions, we have seen a big increase in educational institutions looking to participate," Matthew Plante, regional director for PJM at EnerNOC told Reuters.
Software used by demand-response companies can automatically adjust an air conditioner's temperature or turn off a swimming pool pump when power supplies are tight.
Utilities pay such companies for managing a certain amount of capacity on their demand-response network. The company then passes on part of the money to end-users who agree to limit consumption when required.
Gary Fromer, chief executive of privately held CPower said schools, like any other enterprise in the current economic environment, are looking to find as many opportunities as possible to fund personnel, close budget gaps and execute existing and new projects.
According to latest data available from the U.S. Dept. of Energy, educational buildings represented as much as 12.5 percent of all U.S. commercial building energy consumption, Ardour Capital analyst Richard Baxter said. Depending upon the amount of power curtailed, educational institutions, for instance, can earn anywhere from $2000 to as much as $30,000 a year. This money can be used to fill in budget deficits, or even be put back into further energy efficiency programs.
Patrick Moran, business administrator at the Middlesex Regional Educational Services Commission (MRESC), in Piscataway, New Jersey said given the economic climate, it was important for schools to find innovative ways to reduce costs without cutting corners.
In March, the MRESC enlisted CPower to manage energy consumption for 12 school districts served by it. About 20 schools within these districts will use the company's solutions to reduce energy consumption.
MINIMIZING IMPACT ON DEMAND
Ardour's Baxter said institutional groups like educational universities had large loads, and so utilities were interested in finding ways to minimize their impact on overall demand.
"If it is done in a way which helps that customer reduce costs, then all the better. And with the strain that a lot of customers like that are finding themselves in nowadays, they are definitely looking for creative ways to save energy and money," Baxter said.
EnerNOC's Plante said the company worked with about 200 educational institutions throughout the country. "With 150 to 200 customers, we're talking about at least 100 megawatt (MW) of power under management which is made up of schools and universities."
A megawatt under management is a megawatt that the company can curtail and for which it can start earning revenue within about a month's time. One megawatt of power can serve about 800 average U.S. homes.
EnerNOC reported over 2,500 MW under management as of the end of its fourth quarter, while CPower, which was known as ConsumerPowerline until last September, has about 2000 megawatts (MW) under management.
Plante said this "sizeable" market had witnessed considerable growth. "It's now a market we are very much focused on," he said, adding that schools as well as municipalities and public institutions were taking a harder look at demand response across the company's markets.
CPower's Fromer said many schools, both universities and municipal educational programs, have the ability to work with the company on both demand response and energy efficiency programs.
He added schools could typically curtail anywhere between 100 kilowatts (kw) to 500 kw of power for larger schools. "For an entire school district, with a multitude of facilities, those numbers can add up to something material."
CPower also has a variety of schools, including both intermediate school districts as well as higher educational institutions, participating with it. Fromer expects more such programs in the future.
"I think we'll see more from the MRESC in New Jersey as well as around the country where we offer programs."
Both Fromer and Plante also said many customers used demand response revenue to execute energy efficiency projects that they might not have otherwise budgeted for.
To make participation in demand response even more lucrative, states like New Jersey offer supplemental payouts for first time participants. This coupled with the fact that being energy conscious fits in with a "green movement" happening in many campuses also helps.
EnenrNOC's Plante said the company had seen some increase in participation due to New Jersey's recent "master energy plan," which includes a supplemental payment for end-users participating in demand response for the first time.
"It's a great market and it's just starting to open up."