Marketplace Need

The roughly 4.6 million existing commercial buildings in the U.S. alone present ESC members with tremendous opportunity to grow load in addition to new commercial construction. BOMA reported a Net Operating Income Increase for the seventh straight year in a row ( BOMA, 2002 EER report).

Far too often, in both existing facilities and the design of new facilities, architects, owners, facility managers, and mechanical contractors still do not fully utilize the wide array of gas-fueled, thermally activated, and hybrid equipment available to maximize savings, reliability, and comfort. By engaging such decision makers, raising their level of knowledge and enthusiasm, and providing easy comparisons of gas solutions, energy utilities may be able to realize significant opportunities to retain and grow gas load. The piecemeal approach to commercial customers taken by many utilities results in missed opportunities to offer the benefits of the entire array of gas solutions including: heating and air conditioning products, distributed generation and cogeneration, humidity control, combined cooling, heating and power, water heating, restaurant equipment, air compressors, etc.

Technology

Objective

The objective is to accelerate commercial and institutional conversion and/or installations of gas-fueled, hybrid, and thermally-activated energy solutions that increase customer productivity, reliability, and comfort resulting in retained or new load growth opportunities for gas utilities with respect to all types of commercial facilities. Consortia members will become better equipped to offer the customer a total value proposition and answer the customer question of, ‘What's in it for me?'.

(Many utilities have made strides to reach out to commercial customers, but often have limited resources to dedicate to the sales and customer support effort. This consortium will leverage experience, information, tools, and funding of the members to provide resources that will allow sales representatives to cover more ground, more effectively, more professionally, and in less time than at present.)

Market Potential & Segmentation

The Consortium will rank and prioritize customers and equipment opportunities into categories of both new construction and equipment conversion and enhancement in existing facilities. The consortium will segment commercial business into Office Buildings, Retail Stores, Healthcare, Schools, and Government Facilities to name a few, so that members can more easily focus and target their most promising customers.

For buildings that use natural gas for heating and hot water alone, the potential to double gas load exists by installing gas fired air conditioning or DG equipment. Each customer segment has its own unique characteristics, and the consortium will develop a package of gas solutions relevant to each. The utility sales representative needs to be armed with a portfolio of information on commercial gas burning equipment and be trained in how to sell the respective benefits of each technology to a broad group of decision makers over various market segments because the owner, end user, consulting and engineering communities may not be aware of all the available gas fired technologies available for use in facilities.

Customer Benefits

Natural gas technologies offer customers several important benefits, including: cost savings, increased source-energy efficiency, maintenance cost reductions, lower environmental impact on a source basis, increased power quality, improved reliability, and greater energy security.

Savings: Energy cost savings is a definite motivator for a prospective customer. Many gas fired options and alternatives provide an energy savings that may be used in the economics of the decision making process to provide the customer a return or payback on their investment. Customers may view a myriad of economic indicators in their respective decision making process such as simple payback, Internal Rate of Return, Net Present Value, Return on Investment, and Life Cycle Costing. Not only does natural gas often provide compelling economics when used exclusively, but also adds flexibility to choose the least cost intensive energy source for dual fuel, bi-fuel, or hybrid applications.

Personal Comfort: There are a number of gas technologies for businesses that not only save the end user money on energy consumption but also have other potentially more important benefits to Indoor Air Quality (IAQ). Desiccant systems are now widely used to keep frost down in supermarket freezer cases to increase retail sales, as well as improve the comfort level of employees and customers in a broad array of businesses.

Reliability: Today, natural gas may provide much more than energy savings for end users as Demand for Power grows much more rapidly than new generation capacity and as congestion as well as constraints plague the electric transmission and distribution network.

Businesses are now demanding higher electric reliability. Distributed Generation (DG) is defined as onsite or near site power generation and may utilize microturbines, fuel cells, conventional gas engines, or combustion turbines to generate power or peak shave which helps to alleviate the electric system constraints while potentially saving the customer a significant amount of money. Cooling, Heating and Power (CHP) comes into play when the waste heat of a process like DG is then used for to fuel another process such as making hot water, air conditioning with an absorption chiller, dehumidifying, etc.

Natural Gas Air Conditioning is well positioned to take advantage of the growing concerns over electric supply capacity, rising electric prices, and electric system constraints by naturally shaving summer electric demand peaks. Natural gas air conditioning may come in the form of Absorption Chillers, Engine or Steam Turbine Driven Chillers, and various forms of humidity control equipment that may operate independently, as a Hybrid System, in conjunction with Co-generation, or as a component in a CHP system.

Environmental Compliance: Natural gas technologies may assist the customer to reach environmental compliance or reduce potential liabilities. Some of those issues include: air emissions compliance, underground oil storage tank liabilities, or reduction in CFC and HCFC's with absorption technology.

Energy Efficiency: Traditionally, natural gas has been marketed for heating of facilities based on its cost, availability, and environmental qualities. Combining various gas fired or thermally activated technologies to further improve total energy efficiencies is gaining significant momentum in the U.S. and Canada.

Program Goals

• To leverage limited funds by jointly producing quality commercial marketing materials aimed at influencing commercial building decision makers.
• Arm sales representatives with the know-how needed to identify new customer opportunities, and with the skills, knowledge, and ability necessary to achieve higher commercial customer acceptance of gas solutions.
• Develop strategies and approaches to enable sales and marketing staff to more effectively influence and partner with trade allies, equipment vendors, and consultants integral to the commercial customer's decision making process.
• Reduce time and costs associated with the development of commercial marketing plans and presentations, and increase the effectiveness of lead generation and follow-up.

Program Approach

This Consortium is broken down into three modules related to increasing gas sales within the commercial buildings sector. Active participation by members in all three modules will yield the greatest possible deliverable products. The investment structure is broken down into a base cost and a requirement that a prospective member must join at least one of the Modules listed. The base cost will cover a great deal of the groundwork needed for all three modules and requests that the members fully participate in the development of all three modules. The only restriction is that members will only be able to take away deliverables from those modules that they elect to join. Members may purchase additional Module Deliverables at any time and a discount may be offered if all three are joined together.

The materials, plans, and presentations developed will be designed to educate, influence, and engage the owner, specifier, consultant and/or engineering community in member's service territory to introduce them to additional technologies that may mutually benefit one another.

For more information contact:

Eric Burgis, Director – Residential and Commercial Markets
400 North Capitol N.W., Suite 450, Washington, D.C. 20001
Phone: 610-796-1946, Fax 202-824-9093, e-mail: eburgis@escenter.org