Capturing Existing Asset Value – Reusing and Repurposing

2021-12-22

Capturing Existing Asset Value – Reusing and Repurposing

Reusing and/or repurposing existing infrastructure components is often ignored or overlooked as part of the spectrum of tools and options that can maximize value in energy projects.

Traditionally, existing equipment and systems are replaced with new ones in these types of projects on the assumption that this eliminates risk. However, this traditional approach forfeits the intrinsic value of existing infrastructure and any related benefits associated with equipment that is already in place.

By taking a holistic approach when assessing electromechanical systems and their interconnected parts, it is possible to determine which elements or components can be reused for their original intent or repurposed to add value to the new system.

Thoughtful inclusion of existing assets can add significant value to projects if implemented correctly. Benefits include accelerated project timelines, reduced disruption, improved system performance, and reduced costs (capital and operating expenses). There are also added environmental and sustainability benefits that come with reusing or re-purposing existing assets.

Opportunity Cost

Overlooking existing assets may cost your organization in time and money, resulting in significant opportunity cost.

While it may be technically simpler to replace existing assets, it may also be less financially prudent for the owner as measured by opportunity cost and lost benefits of reusing and re-purposing existing assets – especially in projects where existing equipment and systems can be maximized without sacrificing quality.

Disposing of assets that can fit into the new electromechanical system is wasteful for the following reasons:

  1. There may be less capital- and labor-intensive alternatives (re-engineering parts of the existing system to optimize performance) that yield the same or better results than adding new components.
  2. Implementation and operations may be simplified by reusing or repurposing existing equipment.
  3. Unnecessary replacement of a viable asset forgoes capturing the full value or sunk cost of the asset.

The Status Quo

Project teams often overlook the value of existing assets during energy and sustainability projects.

The traditional approach is to replace the old with the new – irrespective of the intrinsic value of existing assets in electromechanical systems. There are several factors underlying this common approach:

  1. Payment structure – Contractor and engineer fees are typically structured as a percentage of total contract value in traditional procurement models. In these cost-plus models, smaller project costs translate to smaller contractor fees and vice versa. This does not incentivize the contractor to reduce project costs. The contractor may make decisions that maximize fees – in this case, replace old equipment with new and perhaps overdesigned options to drive project cost up within allowable limits.
  2. Risk – There is perceived risk in reusing or re-purposing existing assets. If the system does not function as intended or achieve the desired results, the project owner ultimately bears the risk, especially if the project is implemented by multiple engineers and contractors. As a result, it is often deemed safer to purchase new equipment that may promise certain performance but does not necessarily make the system more efficient or reliable than the existing equipment.
  3. Project complexity – Particularly in complex energy projects, replacing the entire system can be a simpler (although not better) way to achieve the desired results. It takes innovative thinking and a deep understanding of electromechanical systems and their interconnectivity to maximize the value of existing assets while delivering the project’s intended outcomes.

The basis for overlooking existing assets – while seemingly practical — ultimately does not serve the owner or the project. What is often ignored is the opportunity cost in time, money, and lost value of existing assets.

The Right Mindset

The intent of reusing and repurposing existing assets is to add project value by maximizing the value of what is already in place. This strategy is not intended to reduce project costs at the expense of quality.

Within this context:

  • Reuse means continuing to use equipment for its original intent
  • Repurpose means adding value by using existing equipment for a new purpose or function

With this understanding, project teams must think of the opportunities within ageing systems and uncover solutions that use existing assets without compromising the quality of the project.

Instead of throwing out the entire electromechanical system, parts of the system within walls, underground, or in mechanical rooms can be reused or repurposed to meet today’s performance standards. For example, in steam to hot water conversions, steam pipes can be repurposed as hot water pipes, eliminating the need to install a new piping network.

Reusing and repurposing requires careful planning.

It takes a deep understanding of the electromechanical system, its interconnecting parts, and how they function to determine what combination of strategies will best serve a project.

Design and construction engineers must work closely together, relying on techniques and strategies to develop solutions that will indeed maximize existing asset utility while deliver the project outcomes. For example:

  • Steam pipe repurposing – In steam to hot water conversions, repurposing steam pipes for hot water use eliminates the need for new pipes. In existing buildings, this reduces disturbance to the structural integrity of the facility and reduces disruption to occupants during implementation.
  • Using existing terminal networks – When switching from a high- to a low-temperature network, it is possible to re-engineer the terminal network to function efficiently by cascading loads; engineering a high delta T network can eliminate the need to replace high-cost terminal equipment.
  • Refurbishment of select high-value equipment Certain high-quality and costly equipment that fits into future requirements of energy systems should be considered over lower-quality replacements.

Risk Mitigation

To reduce the risk associated with extending the useful life of existing assets, it is important to conduct thorough tests and assessments that ensure the quality and integrity of the existing asset.

Cost reduction should not be the sole driver when deciding to reuse or repurpose existing assets. The decision must be justified by fully accounting for risk and ensuring that the asset will function as intended.

Some important risk mitigation strategies to ensure integrity of assets include:

  • Planning – Invest the time upfront during the early design and engineering phases of the project to determine the value of existing assets and how they fit into the proposed new system.
  • Facility Condition Index – Review asset renewal needs and deferred maintenance backlogs to determine components that can be used while satisfying capital planning requirements.
  • Physical testing – Visually inspect, pressure test, conduct a systems assessment, check control compatibility, verify code compliance (CSA, UL), and sample for corrosion and wear as part of the consideration process.
  • Terminal equipment – Test the operating condition of terminal equipment to ensure it can meet new system requirements.
  • Commissioning – Include commissioning and controls specialists early in the process when system modifications are part of the plan.

Advantages

Once risk has been properly mitigated and quality verified, there are benefits to reusing or repurposing existing assets. These advantages should be viewed as benefits of the approach and should not drive the decision to reuse or repurpose assets.

Some important advantages include:

  1. Maximized outcomes – Organizational objectives and goals can be maximized by optimizing the use of existing assets within new systems – essentially doing more with less. This strategy can drive project costs down while still delivering the intended outcomes, including addressing asset renewal and deferred maintenance backlogs.
  2. Reduced disruption – Reusing or repurposing assets is less disruptive since entire systems do not have to be removed and replaced. In some cases, existing components may need to be re-engineered to fit within the new system. In others, only specific parts of the system need to be replaced. The result in either case is reduced disruption to facilities and their occupants.
  3. Easier change management – System operators, already familiar with existing systems, do not have to relearn entirely new components, reducing the learning curve associated with energy modernization projects. This leads to quicker and easier adoption.
  4. Accelerated project timeline – By investing time in the planning and design effort upfront, the implementation timeline can be reduced. This is especially true if the existing assets that can be reused or repurposed would require disruptive processes that add to the project timeline, such as large-scale trenching or working within walls.
  5. Sustainability – By reusing or repurposing existing assets, the project’s environmental impact is reduced. This strategy avoids having to dispose of useful assets and eliminates the environmental footprint created by the manufacture, packaging, and installation of unnecessary new equipment.

Takeaways

  1. Existing assets have value that should be considered when planning asset renewal projects
  2. Reusing and repurposing is a tool worth considering in complex energy retrofit projects
  3. The implementation of new energy networks should not equate to the wholesale disposal of old networks
  4. Analyze the entire system and its interconnected parts holistically when making decisions.
  5. Redesign energy networks by considering the future energy landscape.
  6. Reusing and repurposing should not be treated as a goal, but rather as a tool to achieve intended outcomes — it adds value when applied correctly.

Case Studies

The highlighted case studies demonstrate how reusing and repurposing electromechanical system components can capture / maximize existing asset value and benefit energy renewal projects.


Olympic Park

Located in the heart of Montreal, the Olympic Park welcomes more than four million visitors annually. Its facilities include the Olympic Stadium, built for the 1976 Olympics, and the Biodome Space for Life, a unique nature museum in the former Olympic Velodrome that showcases five distinct ecosystems under one roof.

Faced with rising energy costs, aging assets, and high energy use intensity (EUI), the Olympic Park needed to dramatically reduce energy consumption as well as GHG emissions. The park’s highly variable heating and cooling loads added complexity to an essential HVAC infrastructure upgrade. Measures included a major steam to hot water conversion of the heating system, along with improved heat recovery and a completely redesigned chilled water system.

By repurposing kilometers-long steam piping, reusing terminal equipment by re-engineering the system, and reusing high-quality equipment, the project was completed in 30 months for a fraction of the projected cost.

The project won the 2018 AEE Energia Project of the Year Award and the 2019 ASHRAE Technology Awards.

Reuse and Repurpose Strategy

  • Repurpose steam piping for steam to hot water conversion – ​
  • low carbon technology​
  • ​Reuse of terminal equipment — ​ Increased ΔT
  • ​Refurbish select high-quality equipment​

Results

  • 57% GHG reduction​
  • ​Improved operation and maintenance​
  • ​Uninterrupted operations​
  • ​26% energy cost savings

University of Quebec in Trois Rivieres

The University of Quebec in Trois-Rivières (UQTR) is a 14,500-student public institution with 15 buildings across 1.2 million square feet of space. The extensive campus relied on four independent chilled water loop networks with eight chillers at the end of their useful life. The university wanted to reduce energy consumption but also faced several operational challenges, especially the complex maintenance and operation of its extensive high-temperature hot water system. Because of the size of the campus, recovering and transferring heat between buildings was both a challenge and the key to unlocking significant energy savings.

To solve multiple problems, the heating network was converted to a lower temperature, heat recovery and transfer was optimized, cooling was added in several locations, and outdated equipment removed.

Instead of installing eight new chillers, the four chilled water loop networks were connected, two chillers were installed with the capacity to provide cooling to the entire system, and the network was re-engineered. The chilled water network was re-engineered into a heat recovery network to displace the use of fossil fuels. The project eliminated inefficiencies and addressed the operating issues caused by decentralized equipment — the lower-temperature hot water network is not only safer but also simpler to operate and maintain.

UQTR is now one of the most energy-efficient campuses in Quebec. The project has generated continuous energy savings and reduced GHG emissions by 829 metric tons per year.

The project won the 2018 AEE Institutional Energy Management Award and received honorable mention for 2020 ASHRAE Technology Awards.

Reuse and Repurpose Strategy:

  • Re-engineer​ existing chiller network

Results:

  • 53% GHG reduction​
  • ​Improved operation​ and maintenance​
  • ​Asset renewal​
  • ​25% energy cost savings

Lakeridge Health

Located 50 kilometers east of Toronto, Lakeridge Health (LH) provides care for 650,000 people in five hospital locations. A deep energy retrofit of four of its sites renewed energy infrastructure, improved efficiency, and enhanced patient comfort.

Due to the sensitive nature of hospital environments, it was essential to minimize disruption. For this project, repurposing existing steam pipes in the steam to hot water conversion, and re-engineering the existing cooling loop network made both functional and financial sense.

The project won multiple awards including the 2013 Green Hospital of the Year, 2014 Environmental Achievement Award, and 2017 Best Overall / Collaboration Award and was a top 15 green project in 2015.

Reuse and Repurpose Strategy:

  • Repurpose steam piping in steam to hot water conversion – low carbon technology​
  • Re-engineer cooling loop

Results:

  • 25% energy cost savings​
  • ​Maintaining patient welfare​
  • ​Asset renewal​
  • ​Improved resiliency


Quebec City University Hospital Center

Consisting of five hospitals, the Quebec City University Hospital Center (CHU) provides care for 2 million people annually. With its aging infrastructure, the Center needed to modernize obsolete electromechanical equipment in critical areas like emergency rooms and operating theaters and reduce costs and its environmental footprint.

Deep energy retrofits of four of the five hospitals were complex due to their size, ambitious scope of work, and need for continuity of critical operations. A steam to hot water conversion allowed new sources of heat recovery to be installed. This configuration maximized equipment efficiency and the use of the heat pumps in winter while taking full advantage of Quebec’s low hydro prices to reduce the use of natural gas.

The project also included renewable energy measures such as a solar wall to preheat fresh air during the winter and a geothermal system that leveraged an existing 30-mile (50 km) network of underground piping.

The project won the 2017 Wayne McClellan Award and 2017 Energia Award and received honorable mention from ASHRAE in 2018.

Reuse and Repurpose Strategy:

  • Replace terminal radiators with minimal disruption

Results:

  • 56% GHG reduction
  • Uninterrupted operations
  • 30% energy cost savings

Brown University

Brown University serves 10,000 students on a 146-acre campus. In 2008, Brown announced its intent to reduce greenhouse gas (GHG) emissions by 42% by 2020. By 2016, a focus on thermal efficiency was the final and most important stage to reach the reduced emissions goal.

In response, a transformational campus-wide energy efficiency and GHG reduction project focused on the central heating plant and distribution network as well as building-level improvements. The project’s energy measures overlapped with Brown’s deferred maintenance and utilities master plans while solving asset renewal challenges.

The design ensured incorporation and reuse of existing assets and materials to maximize the value of Brown’s recent capital expenditures. For instance, Brown had invested in updating its hot water piping network only a decade earlier, and maintaining this network was more cost-effective than replacement. The project was also aligned with other initiatives on campus, reducing total cost.

This project is estimated to reduce GHG emissions by more than 4,700 metric tons. Other benefits include significant energy cost savings and water usage reduction.

The project won the 2021 SCUP Awards.

Reuse and Repurpose Strategy:

  • Re-engineer the heating loop
  • Repurpose steam piping in steam to hot water conversion
  • Refurbish select high-quality equipment

Results:

  • Asset renewal
  • 40% GHG reduction
  • Improved resiliency
  • Improved operation​ and maintenance