District Energy - 2006 First Quarter

President’s

Message

At the risk of sounding cliché, the world is definitely getting smaller. With global fuel demand rising, energy prices are climbing everywhere, and the resultant problems of cost increases and supply uncertainty are felt in all sectors. Recent U.S. Department of Energy and International Energy Agency reports indicate that $50 per barrel of oil is now probably a baseline and not a short-term supply aberration. The era of cheap energy is behind us, particularly here in the United States. Nowhere is it harder felt than in our nation’s colleges and universities.

estate developments under single ownership. Master planning, capacity allocation and timing, procurement strategies and controls systems are relevant to a private utility developer as well as a public university leader.

Moreover, many IDEA campus systems have successfully implemented innovative district energy schemes such as deep lake water cooling, biomass combustion in fluidized bed boilers and harvested landfill gas for combined heat and power. Alternate-fuel projects are growing in importance and in value as the cost of traditional fuels escalate. The experience of converting a fuel-handling system to inject oat hulls rather than use coal offers some valuable insight to avoid project delays, unnecessary expense and shorten startup costs.

Many IDEA member campus energy systems are providing heating, air conditioning and electricity to growing campuses comprised of 12 million to 15 million sq ft of building space serving communities of 35,000 to 75,000 people. These are small cities. Total operating budgets can reach $50 million and are climbing to $100 million or more. Since energy and electricity are so essential to the core education mission, the IDEA campus energy forum has convened an annual conference for peers and colleagues for the past 19 years.

The lessons learned in our

campus systems are not

only relevant to campus

colleagues, but can provide

valuable insight to the

larger industry.

As Cheryl Gomez illustrates in her column, the campus energy conference is designed to support campus utility managers in dealing with supply, planning and operational issues. But today, as the world shrinks and district energy systems grow in scale and number, the lessons learned in our campus systems are not only relevant to campus colleagues, but can provide valuable insight to the larger industry.

For instance, many of the vast new district cooling systems being developed in the Middle East are designed to serve military bases, campuses, and very large mixed-use real

In particular, as IDEA members broaden their reach to support district energy expansion in the Middle East and East Asia, our ability to effectively exchange ideas and experience is accelerating. A landfill gas project in Seoul, South Korea, can learn from the six years of operating experience at UCLA. A massive new property development in Dubai could learn from the master planning process at UNC Chapel Hill.

At IDEA we clearly understand the importance of collecting and conveying valuable information and have reflected that in our Web site functions. With more than 4,000 visits per day, we frequently hear from energy professionals around the world seeking advice or insight to district energy solutions. Since we invested in the redesign of District Energy magazine, it is now being translated into Japanese for users and colleagues in East Asia.

It seems that not a week goes by with-

out a new inquiry or a new member enrolling from the Middle East. The dramatic growth in district cooling in Abu Dhabi, Dubai, and across the Gulf States is drawing on IDEA-member engineering talent, business development skills and significant manufacturer and supplier resources. While we are all interconnected by the Internet and virtually instantaneous telecommunications, we are even more connected by our common interest in energy efficiency and better use of finite resources.

Our IDEA campus leaders offer decades of combined experience and can personally demonstrate the value and return on investment that innovative district energy systems can provide to constituents, to investors, and to the communities they serve. Our campus energy systems often take the longer view and reflect an environmental commitment often lacking in private capital evaluations. The IDEA campus conference is a terrific showcase of what is possible with district energy.

As we begin 2006, IDEA has taken on a number of initiatives with a global perspective. For IEA, we will be working with international partners on an analysis of the true annual operating costs of on-site air conditioning. In addition, IDEA was fortunate to be one of four recipients (out of 36 applicants) for a Market Development Cooperator Grant (MDCP) through the U.S. Department of Commerce. The MDCP grant will allow IDEA to support our members who are working to expand district cooling use around the world. And for the 97th Annual Conference in Nashville in June 2006, we have chosen the theme “Today’s Solution, Tomorrow’s Advantage” as we explore how urban district energy systems can support environmental objectives like climate change.

In this smaller world, we are all connected. We are connected by what we do, connected by how we do it, and connected by how we work together to achieve important things. I believe that working to improve the way cities and campuses use energy is an important, even noble, endeavor. Stay connected to the district energy industry through your involvement in IDEA and make a difference in 2006.