New York

New York State Energy Research and Development Authority (NYSERDA)

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Program Type:
Technical assistance
Utility financing
Program Type - Description:

Cost sharing for energy audits / technical assistance and Industrial and Process Efficiency (IPE) program incentives for retrofit and new installations that improve energy and productivity efficiencies.

Target Group

Any
Cross Sectoral
Year:
1996
Ongoing:
Yes
Sponsoring Entity:
NYSERDA
NYSERDA, a public benefit corporation, authorized by the New York State Energy Research and Development Authority Act of 1975.
Counterpart Entity:
Consultants
Shanghai Pudong Development Bank (SPDB)
Implementing Entity:
NYSERDA
Objective:

NYSERDA is tasked with using innovation and technology to solve some of New York’s most difficult energy and environmental problems in ways that improve the State’s economy. It has one of the broadest mandates among EE administrators in the US.

In the context of Industrial EE, NYSERDA supports the adoption of EE through technical assistance and audit programs as well as through incentive mechanisms for retrofits at existing facilities and for new constructions. NYSERDA’s stated goal is to return in energy-efficiency improvements as much of SBC contributions by utility customers as possible.

Energy Efficiency / GHG Goals:
IPE's overall goal is to help customers develop and implement continuous improvements in order to lower energy costs and become more competitive in the marketplace. Specific energy savings goals set at an aggregate level for electric and gas programs under the EEPS programs are : Electric: 2,762 GWh Gas: 4,015,132 MM Btu
Barriers Addressed:

Provide customers with the opportunity to recover SBC contributions through EE initiatives.

Promote cost sharing of energy audits and technical assistance to identify EE and productivity efficiency opportunities.

Defray cost of installation of EE equipment, reducing customer payback periods and return on investment made.

Financing Mechanism:

Energy Audits: Conduct of energy audits for small customers with annual electricity bills <USD 75,000. Subsidized Energy audit fees of USD 100 (annual electric bill <USD 25,000) or USD 400 (annual electric bill USD 25,000 – 75,000). Audit fees refunded if audit recommendations are implemented.

Flexible Technical (FlexTech) Assistance and Technical Assistance: Customized energy studies targeted at medium to large customers through a cost-sharing mechanism, typically on a 50-50 share. Under FlexTech, customer selects pre-approved engineering firm and NYSERDA and Customer share costs. Under the TA the customer selects its own service provider and NYSERDA reimburses the customer for 50% of cost upon approval of the final report. 

Existing Facility and New Construction Incentives: In addition to energy audits and technical assistance, NYSERDA also provides a subsidy to defray the cost of retrofits and process improvements at existing facilities as well as new constructions that provide for efficiency improvements through its IPE program. The program works as follows:

  1. NYSERDA's staff and consulting team works with the customer to establish an appropriate baseline for each project.
  2. The energy savings resulting from process improvements (retrofit / new construction) is measured against the baseline to determine the annual energy savings which is multiplied by the incentive rate to derive the NYSERDA incentive, capped at 50% of the project cost or USD 5 million per facility per year for electric incentives and up to USD 1 million per facility per year for natural gas incentives. Incentive rates for 2012 are as follows:

 

 

Incentive Type

Utility

Upstate

Downstate

Process & EE

Electric

$0.12/kWh

$0.16/kWh

Natural gas

$15/MMBtu

$20/MMBtu

O&M

Electric

$0.05/kWh

$0.05/kWh

Natural gas

$6/MMBtu

$6/MMBtu

  1. NYSERDA typically pays a maximum of 60% of the incentive when installation is complete. Progress payments also are available on this installation payment for costs incurred to support installation (design, equipment purchase, etc.).
  2. The remaining 40% of the incentive generally is paid when the project's electricity savings have been measured and verified (M&V). M&V periods are generally one to two years, although accelerated performance payments can be considered in some cases
  3. NYSERDA bears the costs associated with M&V.

Research & Development

NYSERDA provides funding to develop and demonstrate cutting edge technology (e.g. for development, production and commercialization of clean-energy technologies).

Eligibility Criteria:

Customers must pay into the SBC on their electric and/or natural gas bills with the utilities listed below to be eligible.

 

Utility

Elec

Gas

Downstate

Brooklyn Union Gas Company

 

ü

Consolidated Edison Company

ü

ü

KeySpan Gas East Corporation (KEDNY/KEDLI)

 

ü

Upstate

Central Hudson Gas & Electric Corporation

ü

ü

National Grid Generation

ü

ü

National Fuel Gas Distribution Corporation

 

ü

New York State Electric & Gas Corporation

ü

ü

Orange and Rockland Utilities, Inc.

ü

ü

Rochester Gas and Electric Corporation

ü

ü

Project eligibility is determined by electricity (and gas) savings. Projects that improve manufacturing process productivity e.g., increase throughput / productivity (electricity use per unit of production), reduce scrap / waste may also be eligible for their energy efficiency / savings component. 

Energy audits aimed at small customers <USD 25,000 annual electric bills.

FlexTech and technical assistance aimed at medium to large customers USD 25,000 – 75,000 in annual electric bills.

Major Activities:

Energy audits (small customers).

FlexTech / TAs (medium to large customers) focus includes:

  • Feasibility studies
  • Energy master plans
  • Energy procurement
  • Retro-commissioning
  • Energy advisor consulting

Incentive schemes available for:

  • Both new construction and existing facilities (retrofits)
  • Manufacturing facilities
  • Data centers
  • Electricity and natural gas savings

Examples of target activities, include:

  • Lighting
  • Chillers and refrigeration
  • Variable frequency drives (VFD)
  • HVAC
  • Motors
  • Interval Meters
  • Gas efficiency

Process improvements – scrap / waste reduction, throughput increases

Key Results:

New York is ranked fourth in the American Council for an Energy-Efficient Economy (ACEEE) scorecard. New York State currently has the second highest energy costs in the US and the third highest average electricity rate (US 15.27 cents/ kWh vs. the national average of US 8.9 cents/kWh)

By the end of 2011, NYSERDA reported that more than USD 2.3 billion of SBC funds had been allocated to support the full range of NYSERDA-administered Energy Efficiency Portfolio Standard (EEPS) programs.

USD 246 million NYSERDA spending on Commercial and Industrial (C/I) initiatives between July 2006 and December 2010 resulted in customer co-funding of USD 862 million – $3.5 for each NYSERDA $1 spent.

Cumulative savings from Commercial and Industrial (C/I) initiatives were as follows:

Electricity savings:       1,433 GWh/year

Capacity savings:         466 MW per year

Natural gas savings      167 B Btu

The calculated levelized benefits and costs per kWh are below:

Benefit / Cost

US cents /
kWh

Ratio of
Benefits / Costs

Electricity benefits

12.9

 

Aggregate costs (NYSERDA + customer)

7.3

1.8

NYSERDA costs

1.6

8.1



 

Lessons Learned:

The SBC program has been in place in New York since 1998, initially supporting the $mart Energy program and later the EEPS programs.

  • Project size: There is a need for a balance between the cost of M&V procedures and the size of EE projects. NYSERDA offers a Pre-qualified Incentive program intended for smaller, less complex projects (incentives limited to USD 30,000) which obviate the need for M&V. 
  • Estimating savings: NYSERDA pays a significant proportion of the cost share at installation. Establishing benchmarks for energy savings is therefore critical and requires periodic review of benchmarks which form the basis for anticipated energy savings (electricity and gas).
  • Program evaluation: Given the allocation of public funds (SBC) appropriate governance, transparency and evaluation procedures are critical. A 2008 review of program evaluation established more systematic procedures involving oversight.
  • Program structure and financing: NYSERDA’s EE program aimed at C/I entities does not provide financing; rather it is structured as a cost sharing program (maximum of 50% based on energy savings achieved) that pays 60% upon completion of installation and 40% following verification of energy savings i.e., post one year of M&V . C/I counterparts must therefore raise EE financing either from their own resources (internally generated cash flow) or third party financing. 

NYSERDA programs do not provide risk sharing facilities; this limits the development of opportunities through other channels, such as ESCOs.

Contact:

NYSERDA
17 Columbia Circle,
Albany, New York 12203-6399

Tel: +1 518 862 1090