The Pennsylvania Treasury, in partnership with Blue Hill Partners, Tuesday announced the launch of a $6.6 million energy efficiency project to upgrade five buildings at Drexel University in Philadelphia.
Blue Hill Partners co-developed the project with SCIenergy. Blue Hill manages the Campus Energy Efficiency Fund (CEEF) that led investment in the project.
The Pennsylvania Treasury created CEEF to help Pennsylvania colleges and universities lower their operating expenses through innovative energy efficiency and sustainability projects. Other investors in the project are SCIenergy, Mitsui USA, The Reinvestment Fund and Philadelphia Industrial Development Corp.
"As the Treasurer of Pennsylvania, I am enormously proud of the Campus Energy Efficiency Fund. It is an innovative, profitable public-private partnership that helps colleges and universities in our state to upgrade their buildings while reducing their environmental footprint and energy costs. The Fund also provides a new model for other universities in Pennsylvania and around the U.S. to improve operations and spend less on overhead and more on hands-on education," said State Treasurer Rob McCord.
“This project will enable Drexel to reduce energy consumption and emissions, upgrade five key buildings, increase comfort and safety in labs and classrooms, and lower overall operating costs. We are particularly excited that Drexel, which is already a national leader in campus sustainability, found that CEEF provided a smart and attractive vehicle for making even more smart, profitable improvements," McCord added.
“This is the largest transaction to date using the energy-efficiency-as-a-service business model,” said Brad Copithorne, Director of Financial Innovation at the Environmental Defense Fund. “Congratulations to Drexel University, Blue Hill Partners, SCIenergy, and the Pennsylvania Treasury for putting together this innovative financing that can serve as a template for additional transactions.”
Upon completion of the project, Drexel’s energy consumption will decrease by more than 25% in three science and two mixed use campus buildings — the Lebow Engineering Center, the Center for Automation Technology, the Bossone Research Center, Nesbitt Hall, and the Paul Peck Problem Solving and Research Center— which cumulatively account for more than 430,000 square feet of building space.
The upgrades will cut energy consumption by approximately 19.4 billion BTUs a year, approximately the amount of energy consumed annually by 142 U.S. families, and recover the costs through savings on Drexel’s energy bills.
Some of the highlights of the project include:
— Demand Based Controls of Three Science Buildings — The project includes state-of-the-art, centralized demand based controls for three buildings with more than 62 lab spaces at the LeBow Engineering Center, the Center for Automation Technology, and the Bossone Research Center. The controls will reduce the energy used to operate the lab spaces by more than 46 percent.
— Complete Mechanical Upgrade of Research Center — The project includes a complete mechanical upgrade of the 100,000-square-foot Paul Peck Research Center, installing a new 300-ton chiller, replacing 11 air handling units, and adding new ductwork. The Heating, Ventilation, and Air Conditioning (HVAC) energy load will decrease by 35 percent. The mechanical upgrade at the Paul Peck Research Center will also allow Drexel to replace the use of inefficient and expensive interim cooling equipment, saving the university more than $200,000 each year on energy utility bills.
— Supplemental Energy Efficiency Investment for a Building Renovation — The project also includes an investment in energy efficiency improvements such as variable volume air handling units, supply air distribution systems, new lighting, and new controls. These upgrades are part of a major renovation project at the 78,000-square-foot Nesbitt Hall.
“This innovative project reflects Drexel’s ongoing commitment to environmental stewardship,” said James R. Tucker, Drexel’s senior vice president for Student Life and Administrative Services. “We are grateful to a forward thinking Pennsylvania Treasury Department that values both energy efficiency and investment in higher education for creating an investment program that helps eliminate the barriers that can impede projects like this.”
The Drexel project is one in a series of projects spearheaded by Blue Hill Partners as manager of CEEF. Blue Hill expects to lead more than $45 million in investments in CEEF projects at multiple colleges and universities in the Commonwealth.
When fully invested, the fund will save Pennsylvania schools more than $150 million in energy costs over 20 years.
“The retrofit of Drexel’s science buildings is a very important part of this project. Science buildings are often overlooked when searching for energy efficiency projects, but innovative facilities managers, like those at Drexel, recognize the huge potential savings opportunity that these buildings represent. Due to their ventilation requirements, science buildings are the largest energy user on campuses and consume dramatically more energy than other buildings on a per square foot basis,” said Joyce Ferris, Managing Partner at Blue Hill Partners. “The upgrades, which reduce energy consumption while improving lab safety, are an excellent example of the types of impactful, proven solutions that CEEF invests in.”
Dallas-based SCIenergy co-developed the project and used their unique contractual structure, the Managed Energy Service Agreement.“All too often universities face tradeoffs between the need to upgrade aging infrastructure and the imperative to devote resources to growth and academic excellence,” said Steve Gossett Jr., CEO of SCIenergy. “Performance contracts and other kinds of conventional debt do not solve this problem. A structure like MESA can leverage operations savings to fund major improvements without sacrificing resources schools need for the core mission — education.”