1. Administrative Staff College of India, Hyderabad Retrofitting Mahindra Towers: How an Innovative ESCO model Lowers Energy Bills with no Upfront Cost Rajkiran V Bilolikar Associate Professor Energy Area Administrative Staff College of India

2. 2 2 Energy Efficiency in Buildings – Role of ESCO “It was the first time that we could get buy-in from people in the company to show that energy efficiency pays. For us, the ESCO was an enabler to validate our claim and show that energy efficiency is a good business case. We changed the mindset at the company through this retrofit and we would recommend it [the ESCO model] to other companies.” - Ms Beroz Gazdar, Sr Vice President – Group Sustainability, Mahindra & Mahindra

3. 3 Administrative Staff College of India 3 Mahindra Towers ESCO Model - Key Findings Key Findings  Mahindra Towers worked with an ESCO to implement energy efficiency measures, resulting in a payback period of less than half a year, without making any upfront payments  The building reduced its power consumption by 14 percent in the first 12 months of the retrofit.  Key energy conservation measures included lighting and cooling systems  ESCO model enabled the company to make payments over time through the energy savings.

4. 4 Administrative Staff College of India 4 ESCO Agreement BUILDING BASICS LocationWorli, Mumbai, India Climate ZoneHot and Humid Building Area18430 sq m (198,277 sq ft) Occupancy1380 Number of wings2 Number of Floors6 (A Wing) & 7 (B wing) Building UseCommercial Constructed1985 Retrofit StartedMarch 2009 Retrofit CompletedJuly 2009 Building OwnerMahindra & Mahindra Retrofit FinancingProvided by ESCO ESCO ENCON energy management services Pvt Limited Pre-retrofit Annual Energy Consumption 3,836,910 kWh/Year 36 Months (Mar 2009 – Feb 2012) Duration of the Contract and Billing Period Savings were calculated monthly on the basis of a pre-determined baseline Savings Monthly savings were shared 50/50 between Mahindra and ENCON throughout the duration Sharing of savings Upfront retrofitting costs were borne entirely by ENCON – No initial capital expenditure by Mahindra Upfront Costs It was mutually determined which allowed any variations in normal electrical load or operating conditions to be accounted for in final measurement of savings Measurement and Verification

5. 5 Administrative Staff College of India 5 Role of ESCO Investment Grade Energy Audit Technical Report and Proposed ECMs ImplementationTraining and Monitoring Investment and associated risk Payment to suppliers / contractors by Mahindra and deduction of 50% from savings profit of ENCON ENCON was entitled to receive a professional fee at the rate of 50% of the savings in a particular month

6. 6 Administrative Staff College of India 6 Establishing the Baseline and Energy Audit Lighting Lights were normally operated for 250 hrs per month with a connected load of 250 kW Were ceiling mounted luminaries with two 36 W FTL The utility areas – one 36 W FTL 150 W – Security lights FTLs accounted for 78% of total lighting CFLs accounted for 10% of the load HVAC 22 air handling units (AHUs) AHUs consume an average of 30,500 kWh Motors were loaded below 50% Electrical rooms with AHUs were poorly insulated Two screw chillers with a capacity of 350 tons using 75000 kWh per month Cooling tower used 60 cubic meters of water a day and a 15 HP motor using 29060 kWh Electrical System Energy audit revealed that the building did not require a retrofit in electrical system Lighting Replaced with T-5 high efficiency tube rods with high frequency, low harmonic electronic ballasts Over 500 lamps were changed resulting in savings of 5,551 kWh per month HVAC The Air conditioning system was optimized while maintaining pre-retrofit air-temperatures The AHU motors were replaced with appropriately sized high efficiency motors, reducing wasted energy and capacity The chiller system’s pump’s capacity was reduced to 15 cubic meters per hour with 7.5 HP motor Electrical System By working with ESCO, Mahindra was able to modify their electrical system with no additional cost After RetrofitBefore Retrofit

7. 7 Administrative Staff College of India 7 Cost and Savings Yearly Consumption kWh Average Monthly Saving kWh

8. 8 Administrative Staff College of India 8 Energy Efficient Retrofit: Motivations Saving Cost and Energy No upfront investment needed from Mahindra Simplicity and transparency of the ESCO Model Mahindra & Mahindra Client’s Reputation Fair work agreement Flexible work agreement ENCON - ESCO

9. 9 Administrative Staff College of India 9 Overcoming Four Common Barriers to ESCOs

10. Administrative Staff College of India, Hyderabad Thank You Rajkiran V. Bilolikar, Associate Professor, Energy Area, Administrative Staff College of India, Bella Vista, Raj Bhavan Road, Hyderabad – 500082 www.asci.org.in T: +91 40 6653 4390 F: +91 40 6653 4356 M: +91 9704087888 rajkiran@asci.org.in www.asci.org.in rajkiran@asci.org.in