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Energy Efficient Procurement – Examples and Lessons Learned. Paul Schwengels Environmental Protection Agency Workshop on Public Sector Energy Efficiency Procurement Mumbai, India September 20, 2005. Why Energy Efficiency Procurement In the Public Sector?. Situation

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Energy Efficient Procurement – Examples and Lessons Learned

Paul Schwengels

Environmental Protection Agency

Workshop on Public Sector Energy Efficiency Procurement

Mumbai, IndiaSeptember 20, 2005

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Why Energy Efficiency Procurement In the Public Sector? Learned


  • Government is biggest buyer of energy-using products

  • Product choices not driven by life cycle cost

  •  Results in significant energy waste

  • Successful international program models and technology specifications available

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Program Examples: LearnedBuying Energy-Efficient Products

  • China– phased procurement program tied to energy labels

  • South Korea – requirements for 55 product types

  • Japan – “Law Promoting Green Purchasing” (2000) for office equip., appliances, A/C, lighting

  • Australia – government purchasing of Energy Star and low-standby products, “Managing Energy in Local Govt.,” ICLEI Green Purchasing

  • Mexico – ICLEI municipal purchasing

  • U.S. – Federal purchasing (FEMP); State/local Energy Star® purchasing

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Public Procurement Opportunity Learned

  • Lower government energy use and operating costs quickly

    • reduces capacity shortages, local pollution and greenhouse gases

  • Opportunity to lead the rest of the market

  • Market transformation response to government demand

    • volume + competition  lower prices

  • Pull the market for energy efficient products

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Efficiency standards Learned

“Market-pull”: Information, Rebates, Public Sector Leadership

Number of Units

Original Distribution


New Distribution


Government Leadership HelpsTransform the Market

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India/Mumbai Situation Learned

  • Electricity Shortages – pressure to reduce government energy use

  • Government building stock

    • Many have no central HVAC

    • purchased equipment – lighting, fans, room AC, etc., may be largest energy uses

  • Opportunity to save energy

    • No current energy performance specs

    • Variations in equipment energy use, quality and cost

  • BEE is moving forward with national labeling and standards for equipment

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US Federal Energy Management Program Learned

  • U.S. Federal Government is the nation’s single largest user of energy.

  • $9.7 billion Federal annual energy bill

    • 500,000 facilities at 8,000 locations nationwide

    • Vehicles & Equipment: $5.0 billion

  • Estimated savings $1.4 billion to date

    • 2003 data show reduced energy use by 25%;

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Targeted Opportunities: LearnedCustomer Needs

FEMP Program Elements


Maintenance,& Operations








& Load




FEMP’s Portfolio of Services






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FEMP - Procurement Learned

  • Energy Policy Act of 1992 --“guidelines to encourage acquisition and use by all federal agencies of energy-efficient products.”

  • The Federal government spends about $10 billion annually on energy-using products and services for its buildings, operations, and transportation.

  • Energy-efficient products save 10%-50%

    • Energy Star and FEMP purchasing criteria can save US$ 1 billion/ year (all public agencies including state, local)

    • Reduce greenhouse gases: 4+ million tons C/yr.

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Setting Priorities Learnedfor Government Purchasing

  • Significant energy use

  • Large government purchasing volume

  • Potential energy/cost savings

    • range of efficiencies (lowest to highest)

  • Energy testing and rating method

  • Product efficiency data available

    • product lists

    • energy ratings/labels

    • “quality-mark” (e.g., Energy Star™)

  • Several suppliers

    • price, availability, domestic sources (?)

  • Consistency with other programs

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FEMP Product Purchasing Recommendations Learned

  • 45 energy-efficient product purchasing recommendations, ranging from large chillers and boilers to exit signs and fluorescent ballasts

    • Coordination with ENERGY STAR® program

    • Low Standby Power Products List

    • Rating systems based on significant DOE Research

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China - Government Procurement Program Learned

  • Managed by NDRC and Min of Finance

    • Many other government Agencies involved

  • Implemented by China Certification Center for Energy Conservation Products (CECP)

  • Technical support from PEPS, USEPA, Energy Foundation, and other international sponsors

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Background Learned

  • Recognized as a priority during “Energy Conservation Week” 2001

  • Survey of energy consumption of products and equipment, procurement procedures

    • 3 Central govt and 12 local Agencies

    • Representative range of scale, location, level of development, type of Agency

  • Estimated government energy use 5% of total, 13% government finance budget

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Policy Learned

Issued Dec 2004 – Phased implementation

  • January 2005 – central government offices in Beijing and provincial facilities in each provincial capitol.

  • By the end of 2006 –

    • all levels of government including central, provincial, and local.

    • “government” sector also includes schools and hospitals as well as offices

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Products Learned

  • Initial list includes energy and water saving equipment already covered by CECP’s endorsement label

    • Refrigerators

    • Room Air Conditioners

    • Double Capped Fluorescents for General Lighting Service

    • Self-ballasted Fluorescents for General Lighting Service

    • Televisions

    • Computers

    • Printers

    • Toilets

    • Faucets

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Expected Results Learned

  • Preliminary analysis by Lawrence Berkeley National Laboratory

  • “Technical potential” assumes successful implementation of current requirements

  • 2015 Annual savings

    • 4.6 TWh electricity

    • 2.9 Billion Yuan energy savings

    • 4 Million Metric Tonnes CO2

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Lessons Learned: LearnedPurchasing Programs

1) Need clear policy and regulations/laws

  • communicated repeatedly to buyers (and sellers)

    2) Make the efficient product the easiest to buy:

  • efficiency as the default choice

  • use first-cost to choose among efficient products

    3) Keep the guidance simple: levels, lists, labels !

    4) Coordinate purchasing with other programs:

    (Product testing/ labels, construction spec’s, rebates, tax credits – and “green purchasing”)

    5) Seek active private sector involvement

  • Manufacturers, vendors, ESCOs, architects

  • Clear, consistent efficiency requirements (lead-time when updating)

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Life-Cycle Cost Barriers Learned

  • Information (energy savings vs price)

  • Staff time, effort, expertise

  • Procurement rules

    (or “perceived” rules, common practice!)

  • Budget constraints

  • Safest choices:

    • replace-in-kind or

    • lowest-price

  • NIMB (= “Not In My Budget”!)

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Life-Cycle Cost Solutions Learned

  • Clear information, easy to find

  • Make $ savings more obvious; simplify LCC calculations

  • Lower the cost of efficient products:

    • volume + competition

    • common technical specs

  • Finance the first-cost; capitalize future savings

  • Reverse the burden of proof!

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Energy-Efficient Purchasing Learnedand Energy Labels

Labels make it easier for buyers to select efficient products

Government purchasing encourages private sector support for energy labels (adds value to labeled products!)

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Thank You! Learned

Paul Schwengels

US Environmental Protection Agency

[email protected]