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At least 37 records · Page 2

Appropriations and Financing: Strategic Use of Funding for Performance Contracts

42 U.S.C. § 8253 Sections 432 and 512 (EISA of 2007) authorize agencies to use appropriations, private financing, or a combination of appropriations and private financing to comply with its requirements. With this flexibility in mind, federal agencies should evaluate funding options early and employ a strategy that optimizes the impact of existing appropriations and financing options. Maximize value to government through strategic use of appropriations and energy savings, an optimal set of infrastructure improvements that meet site needs and program objectives, and an actionable plan for sustained performance.

37 INORGANIC, ORGANIC, PHYSICAL, AND ANALYTICAL CH↗

Reported Energy and Cost Savings from the DOE ESPC IDIQ Program: FY2021

The objective of this work was to determine the realization rate of energy and cost savings from the U.S. Department of Energy’s (DOE’s) Energy Savings Performance Contract (ESPC) program based on information reported by the energy services companies (ESCOs) that are carrying out ESPC projects at federal sites. Information was extracted from 201 measurement and verification (M&V) reports covering 193 projects to determine reported, estimated, and guaranteed cost savings and the associated reported and estimated energy savings for the previous contract performance year. This report covers projects that had a performance year ending in fiscal year 2021, between October 1, 2020 and September 30, 2021, and had an M&V report issued. Additionally, the annual cost to perform M&V was extracted from the individual project Task Order (TO) Schedules.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Reported Energy and Cost Savings from the DOE ESPC IDIQ Program: FY 2022

The objective of this work was to determine the realization rate of energy and cost savings from the U.S. Department of Energy’s (DOE’s) Energy Savings Performance Contract (ESPC) program based on information reported by the energy services companies (ESCOs) that are carrying out ESPC projects at federal sites. Information was extracted from 190 measurement and verification (M&V) reports covering 182 projects to determine reported, estimated, and guaranteed cost savings and the associated reported and estimated energy savings for the previous contract performance year. This report covers projects that had a performance year ending in fiscal year 2021, between October 1, 2021 and September 30, 2022, and had an M&V report issued. Additionally, the annual cost to perform M&V was extracted from the individual project Task Order (TO) Schedules.

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Reported Energy and Cost Savings from the DOE ESPC IDIQ Program: FY 2023

The objective of this work was to determine the realization rate of energy and cost savings from the U.S. Department of Energy’s (DOE’s) Energy Savings Performance Contract (ESPC) program based on information reported by the energy services companies (ESCOs) that are carrying out ESPC projects at federal sites. Information was extracted from 201 measurement and verification (M&V) reports covering 191 projects to determine reported, estimated, and guaranteed cost savings and the associated reported and estimated energy savings for the previous contract performance year. This report covers projects that had a performance year ending in fiscal year 2023, between October 1, 2022 and September 30, 2023, and had an M&V report issued. Additionally, the annual cost to perform M&V was extracted from the individual project Task Order (TO) Schedules.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Analysis of Ground Source Heat Pump ECMs: Implemented Under DOE ESPC IDIQ Contract

Several federal performance and decarbonization objectives are driving the U.S. government to transition to net-zero emissions across the federal building portfolio. The overarching purpose of this Federal Energy Management Program (FEMP)-Geothermal Technologies Office (GTO) work is to support federal facilities in accomplishing the administration’s federal building decarbonization goals. Creating awareness of existing geothermal (or ground-source) heat pump (GHP) systems deployed on federal property, implemented using performance contracts and evaluating the energy and environmental impacts of these systems, this work will assist federal facilities in considering inclusion of GHP technology energy conservation measures (ECMs) in future performance contracting project awards. This report summarizes analyses of data from GHP ECMs installed under the DOE ESPC IDIQ contract across various climate areas and geographic locations, agencies, and building use types. Through the analysis of proposed GHP ECMs and understanding key metrics on implemented GHP systems in a variety of applications, FEMP and GTO can further support federal agencies in meeting decarbonization and net-zero building goals by evaluating and incorporating GHP systems into performance contracts and communicate the benefits of this technology.

15 GEOTHERMAL ENERGY↗

Supplement to M&V Guidelines: Measurement and Verification for Performance-Based Contracts Version 4.0

Measurement and verification (M&V) are key to determining and confirming the continued operation of, and savings associated with, performance-based contracts. The Federal Energy Management Program (FEMP) updates these guidelines to reflect the evolution of M&V to incorporate industry best practices and ensure that savings from these performance-based projects are properly planned, communicated, and realized. FEMP released M&V Guidelines: Measurement and Verification for Federal Energy Projects Version 3.0 in 2008. This document was developed with input from industry-government working groups, previous M&V guideline authors, and national laboratory subject matter experts. The document provided the methods and guidelines, with a focus on federal energy savings performance contracts (ESPCs). When FEMP released M&V Guidelines: Measurement and Verification for Performance-Based Contracts Version 4.0 in 2015, FEMP expanded the intended audience to include anyone (energy managers, procurement officers, and contractors) involved in implementing performance-based contracts. The streamlined M&V Guidelines Version 4.0 provided the procedures and guidelines needed to quantify savings resulting from installing energy-efficient equipment, water conservation, improved operation and maintenance (O&M), renewable energy, and cogeneration projects with a performance-based contract; however, it removed some of the associated details on topics such as developing regression models and sampling plans. The details and information provided in M&V Guidelines v. 3.0 are still pertinent to M&V for performance-based contracts. The objective is to keep FEMP M&V version 4.0 condensed, providing the reference document for specifying M&V methods and procedures and a resource for developing project-specific M&V plans; this supplement provides additional details. The content of this supplement has been updated to include pertinent revisions between M&V version 3.0 and M&V version 4.0 by providing details and updating the content to ensure relevancy.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

ESPC ESA Webinar Series: ESPC IDIQ Contract Vehicle Overview

This webinar provides instructions and resources for financing distributed energy projects (e.g. on-site renewable energy, storage, and combined heat and power) using an energy savings performance contract (ESPC) energy sales agreement (ESA) through the U.S. Department of Energy (DOE) indefinite-delivery, indefinite-quantity (IDIQ) energy savings performance contract (ESPC) vehicle. The DOE IDIQ ESPC contract vehicle uses a streamlined master contract that allows federal agencies to work with 21 energy service companies holding the current DOE IDIQ ESPC. Topics covered in the webinar include: An overview of the DOE IDIQ contract vehicle; ESA-specific considerations for IDIQ contracts; and Specific use cases. The webinar also provides an overview of the resources available on the Federal Energy Management Program website, such as IDIQ tools and templates. This webinar is the fifth in a series that provides information, best practices, and resources for implementing an ESPC ESA project. ESPC ESAs are a great option for federal sites that are motivated to reduce site costs, have no capital investment funding, and cannot use the U.S. Department of Defense 10 USC 2922a authority for long-term contracting.

37 INORGANIC, ORGANIC, PHYSICAL, AND ANALYTICAL CH↗

Recommended vs. Actual Escalation Rates For ESPCs: Is the Guidance Good?

Escalation rates applied to the savings from energy savings performance contracts (ESPCs) and related financed energy projects play a large role in their scope and costs. The U.S. Department of Energy’sFederal Energy Management Program (FEMP) employs the National Institute of Standards and Technology (NIST) to package projections of real (uninflated) energy prices and general inflation forecasts developed by two other federal government entities. The main output from this exercise is NIST’s Energy Escalation Rate Calculator (EERC), which is strongly recommended by FEMP for use in performance contracts and relied on by federal agencies and others conducting performance contracts as an objective source for their projects’ escalation rates. This study investigated whether the rates prescribed by EERC (and a coarser NIST tool that preceded it) have provided users with estimates that approximate actual changes in energy prices over the years. The results are encouraging: the NIST tools slightly under-estimated actual electricity prices and somewhat over-estimated those for natural gas. Concern regarding the latter is mitigated, however, because a) it is seen as due primarily to the increasing surplus of natural gas from the “fracking revolution” in the 2010s, and b) natural gas savings were found to account for only 14.4% of the total savings from the largest population of federal ESPCs (FEMP’s indefinite quantity ESPC contract, representing roughly 430 projects), compared to almost four times that (56.8%) for electricity savings. Consequently, reliance on EERC appears to be a sound policy.

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Reported Energy and Cost Savings from the DOE ESPC IDIQ Program: FY 2024

Energy Savings Performance Contracts (ESPCs)are a contractual mechanism that allow a federal agency to procure energy savings and facility improvements without upfront capital costs to reduce costs and resiliency. ESPCs are covered under FAR Part 23.2, and 42 USC § 8287. Section 8287(a)(2)(A) of Title 42 of the U.S. Code requires that each energy savings performance contract (ESPC) undergo an annual energy audit, resulting in a separate audit report for every project. The objective of the present report is to compile and analyze all annual ESPC audit reports issued between October 1, 2023, and September 30, 2024, for projects awarded under Generations 1, 2, and 3 of DOE’s ESPC IDIQ contracts. During this period, 205 measurement and verification (M&V) reports were produced for 200 projects; the total number of reports exceeds the number of projects because some projects generated more than one report(for example, a few projects measure savings twice per year and produce two audit reports annually, each covering a different six-month period). By aggregating the results from these individual audits, the report determines the portfolio-wide realization rate of energy and cost savings for all active ESPC projects awarded under DOE’s IDIQ program. For all 205audit reports, sufficient information was available to compare project-level estimated, reported, and guaranteed cost savings. Reported cost savings accounted for ESCO verified savings per each project’s M&V plan. The total reported cost savings for the period addressed were $\$$647.8million,compared with the total guaranteed cost savings of $\$$601.6million. On average across the reported projects: •ESPC contractors guaranteed 92.8% of the estimated cost savings• projects reported achieving 100.0% of the estimated cost savings• projects reported achieving 107.7% of the guaranteed cost savings. The M&V performed for the period indicated adjustments for government operations and maintenance impacts to savings amount to$\$$43.9millionandcould be restored with the original operational parameters for impacted projects. Accounting for this potential cost savings impact, these projects still realized 100.4% of the guaranteed cost savings. The information on estimated and reported energy savings was collected and compared for all 205of the reports examined. Based on site energy, estimated savings totaled 14.88million MMBtu, and reported savings were 15.33million MMBtu; 3.1% greater than the estimated energy savings. All of the reports examined contained sufficient information to calculate source energy savings. Based on site-adjusted source energy, total estimated energy savings were 20.90 million MMBtu, and reported savings were 21.22million MMBtu, 101.5% of the estimated energy savings. For water savings, the estimated savings were 11,539,055 kGal and the reported savings were 13,315,930 kGal. This means 1,776,875 kGal more water was saved than estimated, which is about 15% higher than the estimate. These results indicate that, overall, the reported energy savings slightly exceeded the estimated values, while estimated water savings significantly exceeded estimated values, suggesting that the projects achieved greater cost savings than originally projected. The total annual expense for the ESCOs to perform annual M&V audits and reporting was $\$$10.02million. Through this effort, $\$$647.8 million in annual cost savings was verified. The M&V results indicated that $\$$43.9 million of these verified savings reflected adjustments due to government operations A-6and maintenance impacts, which could be restored under the original operational parameters for the affected projects. These findings show the value of M&V that only costs 1.7%of the guaranteed cost savings to ensure guarantees are met.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

ESPC ESA Training Series: Site-Specific/Stand-Alone Contract Vehicle

This webinar provides instructions and resources for financing distributed energy projects (e.g., on–site renewable energy, storage, and combined heat and power) using an energy savings performance contract (ESPC) energy sales agreement (ESA) through the site–specific/stand–alone contract vehicle. The site–specific/stand–alone contract vehicle is a procurement process using a request for proposal (RFP). Topics covered during the webinar include forming a strong project team, validating the feasibility of the distributed energy project at a site, acquisition planning, RFP development, procurement, proposal evaluation and contract award, and the construction and performance period. This webinar also provides an overview of the resources available in the ESPC ESA Toolkit, such as checklists and templates.

37 INORGANIC, ORGANIC, PHYSICAL, AND ANALYTICAL CH↗

Reported Energy and Cost Savings from the DOE ESPC IDIQ Program: FY 2024

Energy Savings Performance Contracts (ESPCs) are a contractual mechanism that allow a federal agency to procure energy savings and facility improvements without upfront capital costs to reduce costs and enhance mission resiliency. ESPCs are covered under FAR Part 23.2, and 42 USC § 8287. Section 8287(a)(2)(A) of Title 42 of the U.S. Code requires that each energy savings performance contract (ESPC) undergo an annual energy audit, resulting in a separate audit report for every project. The objective of the present report is to compile and analyze all annual ESPC audit reports issued between October 1, 2023, and September 30, 2024, for projects awarded under Generations 1, 2, and 3 of DOE’s ESPC IDIQ contracts. During this period, 205 measurement and verification (M&V) reports were produced for 200 projects; the total number of reports exceeds the number of projects because some projects generated more than one report (for example, a few projects measure savings twice per year and produce two audit reports annually, each covering a different six-month period). By aggregating the results from these individual audits, the report determines the portfolio-wide realization rate of energy and cost savings for all active ESPC projects awarded under DOE’s IDIQ program.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

ESPC ESA Webinar Series: ESPC ENABLE Contract Vehicle Overview

This webinar provides instructions and resources for financing distributed energy projects (e.g. on-site renewable energy, storage, and combined heat and power) using an energy savings performance contract (ESPC) energy sales agreement (ESA) through the U.S. Department of Energy's (DOE) ESPC ENABLE contract vehicle. The ESPC ENABLE contract vehicle is a streamlined procurement process that uses a standard investment grade audit tool and standard contract templates. Topics covered in the webinar include: An overview of the ESPC ENABLE contract vehicle; ESA-specific considerations for ENABLE contracts; and Case studies. This webinar also provides an overview of the resources available on the Federal Energy Management Program website, such as ESPC ENABLE templates. This webinar is the fourth of a series that provides information, best practices, and resources for implementing an ESPC ESA project. ESPC ESAs are a great option for federal sites that are motivated to reduce site costs, have no capital investment funding, and cannot use the U.S. Department of Defense 10 USC 2922a authority for long-term contracting.

37 INORGANIC, ORGANIC, PHYSICAL, AND ANALYTICAL CH↗

ESPC ESA Training Series: Photovoltaic (PV) Project Considerations

This training covers technical, economic and other photovoltaic (PV) project considerations. Technical topics include cost-effectiveness, resilience, cybersecurity, and electrical considerations. In addition, other topics, such as compatibility with agency mission, site plans, coordination with the serving utility, the National Environmental Policy Act, and agency approval requirements. Considerations specific to third-party owned/third-party financed PV projects are also covered, as well as available resources and templates for project development. The training also includes a recap of the first session in the Energy Savings Performance Contracts Energy Sales Agreements (ESPC ESA) Webinar Series.

37 INORGANIC, ORGANIC, PHYSICAL, AND ANALYTICAL CH↗

The Chilling Effects of Administrative Burden on Efficiency Policy Uptake: Examining the Case of Federal ESAs

Utilizing policies and programs which incentivize energy efficiency or on-site renewables is difficult. The challenges and costs associated with researching these policies, interacting with their providers, and ensuring regulatory compliance can be collectively referred to as administrative burden. To better understand the impact of administrative burden on energy efficiency policies, we investigated the administrative burden associated with energy sales arrangements (ESA). ESAs are a contracting vehicle related to energy savings performance contracts where an energy services company designs and constructs a renewable energy system at a federal site, transferring ownership of those generating assets to the site after a 20-year term. We conducted a series of in-depth interviews with a variety of relevant ESA stakeholders, including federal project managers, subject matter experts, and energy service companies. We then augmented these interviews with a review of the relevant literature. This research indicated that the current level of administrative burden decreases the adoption of renewable energy through ESAs by the federal government by raising upfront costs, depressing project attempts due to complexity, and introducing delays and challenges in successfully implemented projects. This chilling effect is especially pronounced in new policy vehicles and with inexperienced implementers. Findings from the specific case of ESAs can be generalized to other types of energy policy including efficiency programs. Policy makers decrease the efficacy of initiatives through increased administrative burden, and these effects will be most pronounced in programs with novel design or targeted at unfamiliar audiences.

Newkirk, Alex↗

External Financing for Carbon Reduction Projects

This fact sheet summarizes 7 common external financing modes and provides examples for each: Energy-as-a-Service, Energy Savings Performance Contracts, Power Purchase Agreements, Sustainability Linked-Loans, Green Loans, Property Assessed Clean Energy, and On-Bill Financing/Repayment.

carbon emissions↗

Internal Financing for Carbon Reduction Projects

This fact sheet summarizes 6 common internal financing modes and provides examples for each: Capital Expenditure/Operating Outlay, Self-Funded Energy Performance Contracts (ESPC), Carbon Fee Funds, Green Bonds, Green Revolving Funds, and Capital Investment Funds.

financing, carbon reduction, carbon emissions, ESP↗

Guidance and Recommendations for Streamlining Reporting for Federal Energy and Water Efficiency Projects

Federal agencies are required to report on their progress in meeting various energy and water management requirements. These reporting requirements encompass energy and water projects at federal facilities, including projects that are alternatively financed, e.g., conducted through energy savings performance contracts (ESPCs) or utility energy service contracts (UESCs). The purpose of this guidance is to provide recommendations to streamline federal agency reporting. The guidance recommends the use of eProject Builder (ePB), a project development and archiving tool for energy projects. ePB carries additional value in its simplification of federal agency reporting by dovetailing with the Federal Energy Management Program’s (FEMP’s) EISA 432 Compliance Tracking System (CTS).

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