|Descriptive Title of Proposal:||Addressing Climate Change: U of T's Utility Reduction Revolving Fund (URRF) - An Innovative Approach to Implementing a Green Revolving Fund|
|Person(s) Responsible for the Idea||
|Name of Institution||University of Toronto (St. George Campus)|
|Office Address||Simcoe Hall, Room 114, 27 King's College Circle
Toronto, Ontario M5S 1A1
|Name (Senior Administrative Office of the Institution)||Scott Mabury|
|Title (Senior Administrative Office of the Institution)||Vice-President, University Operations|
|Office Address||University of Toronto - St. George Campus, Simcoe Hall, Room 114, 27 King's College Circle
Toronto, Ontario M5S 1A1
The Utilities Reduction Revolving Fund (URRF), established in 2012, is UofT’s innovative approach to implementing a green revolving fund. This forward-looking project directly satisfies the commitments made by the university in the President’s 2016 report Beyond Divestment: Taking Decisive Action on Climate Change, as well as the mandate of the Committee on the Environment, Climate Change, and Sustainability (CECCS) to identify ways to advance the institution’s contributions to meeting the challenges of climate change and sustainability. The URRF is also a vital component of the University’s future strategy in meeting the province’s greenhouse gas (GHG) emission reduction target as outlined in the Ontario government’s Climate Change Action Plan (CCAP) launched in June 2016 and the Cap and Trade Legislation that came into effect on January 2017.
The URRF provides comprehensive funding to facilitate projects that result in reducing the University’s environmental footprint and utilities consumption. The fund, through the very successful projects completed so far, has been very effective in reducing the University’s utilities usage and expenditures. Utility savings realized through these projects, based on electronic meter readings, go to repay the loan. After repayment of the loan, ongoing project savings benefit the departments in the buildings where the projects took place. The “repaid” capital is then used to fund other projects. This reuse of the capital loan funds give the fund its “revolving” nature.
One of the unique features of this green revolving fund is that it applies incentive funding obtained from projects directly into building the fund capital. Since the URRF’s inception five years ago, projects completed have resulted in cumulative savings of $11.5 million in energy costs to the faculties, $2.1 million in incentives, and a total reduction in GHG emissions of 18,652 metric tons CO2, roughly equivalent to 3,994 passenger vehicles driven for one year!
Recognizing the importance of this fund on the University’s action on climate change, President Gertler increased it by 50% in March 2016. The fund, currently at $7.5M, is by far the largest of its kind in Canada and one of the largest green revolving funds of any University in North America.
|Criteria||Please submit one paragraph describing how the proposal fulfills each of the evaluation criteria.|
The concept of the Utility Reduction Revolving Fund (URRF) is completely transferable. Institutions not just in Canada and North America but globally, have a responsibility to make a commitment to address climate and to establish projects and initiatives that would address the triple bottom line of sustainability – the environment, the human or social aspect, and the financial or economic aspect – the URRF is a perfect example of one of these vehicles. Many educational institutions are financially constrained – energy retrofits are often expensive and therefore not pursued but these opportunities can save institutions significant amounts of money over the long term. Dedicated green revolving funds, such as the URRF are not commonplace but should be as they reduce consumption of a necessary commodity that continues to increase in price every year. Where green revolving funds do exist, they are often fairly small in real terms and therefore do not get the same magnitude of results available to larger well-endowed funds. Beyond the direct financial cost reductions on utilities costs, these programs and the projects they support, provide an opportunity for community engagement – particularly important when we are educating the leaders of tomorrow. Generally green revolving funds provide the capital money to pay for an energy reduction project. The realized savings return to the fund until the capital is fully recovered and then it is reused to support other similar projects. The high initial cost of many sustainability projects related to upgrading the built environment can deter departments, faculties and even campuses from implementing them, despite the fact that such projects often have very positive long-term cost savings – having a green revolving fund helps remove this impediment. One opportunity that is available to many institutions is government incentive programs. These provide funds to augment institutional funding and lessen the initial financial burden of taking on some of these projects. Our model, which may not necessarily be transferable in terms of the magnitude of the funding, can easily be adopted at lower levels of initial capital investment with similar results. Similarly, the impact to the triple bottom line of sustainability is also transferable – lower greenhouse gas emissions benefitting the environment, opportunity for engagement and additional comfort to building occupants benefitting the University community, and financial cost savings from reduced energy usage. We have demonstrated and promoted the URRF methodology adopted at UofT to other institutions and business entities.
As important as new building performance, if not more so, is the performance of existing buildings. Major building retrofits provide the opportunity to improve function and performance - but how do we select a project to be funded through the URRF program? Prior to any funding being provided for a project, a business case must be completed. It must be reviewed by one of our in-house energy managers. It must be accompanied by a letter of support by senior academic or administrative staff within the building that the project will take place. It must be presented to the tri-campus URRF committee and approved by the committee. And finally, the Vice-President University Operations needs to approve the funding. This structured, discipline approach ensures that by the time a project has been approved to proceed, we have great confidence that the end product will meet the business case and the criteria of the program. A number of major building retrofits completed through the funding provided by the Utility Reduction Revolving Fund were tremendously successful, these projects are:
(1) The Robarts Library Energy Reduction Project;
(2) The OISE Building Energy Reduction Project; and
(3) The Medical Sciences Building Energy Reduction Project
These projects have dramatically reduced energy consumption and GHG production in these facilities. The project infographic for each of the major building energy project completed so far are available on the Facilities & Services website at: http://www.fs.utoronto.ca/ - each infographic contains the summary information for each of the projects mentioned (infographic for each of the major project mentioned here also attached with this submission as supporting documents).
As previously mentioned, a mandatory requirement of any URRF project is electronic meter verification. This ensures that the results of the project are what were originally anticipated and provides opportunity to learn should the results be significantly different, whether positive or negative from the business case presented to the URRF Committee. The additional value of this oversight is ensuring ongoing savings long after the project has paid back the original loan. We are tracking in real time the results of a project that was completed over four years ago. Many energy reduction initiatives provide initial costs savings but as time goes by, the savings lapse. Through the continued oversight of our energy managers and using data from the project electronic meters, building operations can ensure that the modified building continue in an efficient manner. Currently, we have just surpassed the $5M in savings milestone on our first energy reduction project undertaken at the Medical Science Building. This building has moved from the second most energy intensive building on our campus of 120 buildings to the fifth as a direct result of the URRF project.
The more recently completed ‘24/7/365’ lighting project on campus funded through the URRF is a major lighting retrofit that focused on upgrading to superior energy efficient LED lamps and involved de-lamping unnecessary fixtures and replacing bi-level lighting fixtures in stairwells and underground garages on the St. George campus. During the formulation of the business case for this particular project, the project team ensured that the following criteria would be satisfied: (1) superior lighting quality, (2) extended 50,000-hour lamp life, (3) reliable long-term source, (4) excellent pricing and (5) ease of replacement. The result? A total electrical cost reduction of approximately $363,000 per year. Along with the ‘Save On Energy’ incentive of approximately $125,000, the payback on the project is less than two years. Environmentally, this will reduce GHG emissions by 250 tonnes per year and save 2,470,000 kWh annually. More importantly, this project was not only an exceptional opportunity to reduce UofT’s energy footprint and energy costs but also helps in ensuring an excellent quality of light promoting a safer environment to our campus community.
In the last five years, the projects completed through the URRF have generated the following:
* cumulative savings of over $11.5 million in energy costs,
* received $2.1 million in incentives that flow back to the fund,
* a reduction in GHG emissions of 18,652 metric tons CO2 (roughly equivalent to 3,994 passenger vehicles driven for one year)
Just taking into account the three major building energy-reduction projects (at Robarts Library, OISE, and the Medical Sciences Building) funded through the URRF, these three projects alone have resulted in remarkable savings and have a combined average payback of only 1.4 years. The savings and incentives generated by these three major URRF projects are tremendous considering that they have more than doubled the total implementation cost of $4.9M for these three projects.
All three buildings were retrofitted with modern building automation systems, variable speed drives (VSDs) on ventilation equipment, and other unique and cutting-edge technologies which led to these impressive results. These millions of dollars in savings that would have gone to paying for utilities can now be put into teaching and research furthering the University’s academic mission. Furthermore, thanks to the funding from the URRF that facilitated these projects, the better ventilation (heating and cooling) resulting from these innovative projects will provide students and employees a better quality building experience. Having the optimal ventilation, heating and cooling will make students and employees more productive. As most of us have experienced at one point or another, it is quite hard to be productive and to concentrate when you’re in a building that’s either too hot or too cold. As an added unforeseen benefit, the air noise levels in the building(s) dropped to the point that occupants thought the fans had shut off when in fact they were still in full operation thus contributing to a quieter work and study environment. Stakeholders of the buildings will have a better quality experience at a much higher level since they know that their building is being run as optimally as possible and that it is their department who will ultimately receive the benefit of the resulting cost savings. It is also enriching for the wider University community to know that we are constantly finding ways to reduce our energy use and therefore reduce the resulting greenhouse gas emissions resulting from our operations – it proves to the wider University community that we are an institution who care about cultivating an environmentally friendly culture.
The productivity impact of the URRF-funded projects goes far beyond the specific project savings and other related project statistics. The fund and the completed projects funded through the fund are instrumental in paving the way for future projects and investments in energy efficiency. As such, the URRF is a vital instrument in the University’s present and future strategy in addressing climate change and continued demonstration of leadership in sustainable actions. That’s why, in recognition of the URRF’s importance in sparking energy-saving projects and initiatives, President Meric Gertler’s administrative response to the report of the President’s Advisory Committee on Divestment from Fossil-Fuels included the increase of the fund by 50 per cent (from $5 million to $7.5 million), funded by central reserves, to expand the number and size of projects undertaken. The advent of the Climate Change Action Plan and the Ontario Cap and Trade Legislation present a bold challenge to institutions to reduce their GHG emissions by 15 per cent below 1990 levels by year 2020 and by 37% by year 2030. This is not an easy challenge for any institution but certainly more challenging for an institution as large and complex as UofT. With the infusion of an additional $2.5 million, the fund, which is currently at $7.5M, is by far the largest of its kind in Canada and one of the largest green revolving funds of any University in North America. This increase will allow divisions to plan for larger energy-saving retrofits, which will enable the University to be better prepared to meet these targets. We believe that the demonstrated impact of our URRF will be influential on municipal, provincial and federal officials as we collectively work towards creating viable solutions to significantly reducing our emissions of greenhouse gases.
Other institutions have green revolving funds however, several features of the URRF make it unique. Very few green revolving funds can match the scale of the URRF which now stands at $7.5M. It is actually one of the largest revolving loan funds in North America. Having a very large fund allows for very large retrofits to be undertaken which can have extremely significant cost savings. A well-endowed fund also provides for several projects to be undertaken simultaneously. U of T’s Utility Reduction Revolving Fund is innovative for the following reasons:
(1) While there are many possible ways to structure a campus sustainability revolving loan fund, the URRF is unique in that it grows over time as projects get completed. All incentive moneys garnered from a project funded under the URRF program flows directly to the fund and will not be included in repayment of the project loan. This feature ensures that our fund continues to grow over time and that there is adequate liquidity to reinvest in several energy efficiency projects concurrently. Government agency incentives received to date is $2.1M (incentives provided from Toronto Hydro and Enbridge).
(2) We measure all outcomes through electronic metering to ensure that we are achieving what we set out to achieve. On our three biggest projects (building energy reduction projects at the Medical Sciences Building, OISE, and Robarts Library), our electronic metering technology has verified that we have actually met or exceeded our project targets (please see project infographics included in the supplemental information for specific statistics on each of the projects). Most other green revolving funds used estimated savings and straight-line loan repayment - in so doing, it is difficult or impossible to verify if the business case justifying the project meets its savings targets. Within the URRF program, we verify savings based on electronic meters installed as a mandatory part of all projects. Actual savings realized are used for the loan repayment so we can verify savings and learn from our experience. The institution can be assured that the savings envisioned actually materialize and the loan payments are repaid grounded in real savings on utilities.
(3) We engage and get approval from major building occupants so the stakeholders are aware and supportive of the project(s). This in turn provides an opportunity to educate and garner support for other sustainable activities on the campus.
(4) We have a tri-campus committee that evaluates the business cases for the projects submitted to ensure that the best projects are selected and that they meet our core requirements.
(5) We place a sustainability kiosk in the buildings where we have undertaken major building retrofits which assist in telling the story and engaging and educating the building occupants (the sustainability timeline also available on the Facilities & Services website is one of the components of the sustainability kiosk – link: http://sustainability_timeline.fs.utoronto.ca/).
(6) Our fund is large and as such has allowed our staff to think big and outside the box. For example, one of the major building energy projects completed, the Robarts Library retrofit, utilized a unique approach to using occupancy sensors that significantly reduced energy use in the building. In recognition of this project’s success, it earned the first Energy into Action (EIA) Innovation Award in 2016 for the MASH sector in the over 1MW+ category. The EIA awards were made possible by the independent Electricity System Operator’s (IESO) Collaboration Fund and was launched by the Energy into Action program as part of their ongoing efforts to acknowledge organizations or institutions such as the University, who continue to be leaders in conservation (see Awards & Recognition included in the supplemental information).