Canadian Forces Base Gagetown: Energy performance contract project reduces cost to taxpayers and delivers valuable planning lessons

Project highlights

Project award
September 2007

Project completion
March 2011

$16 million

Annual savings
$1.6 million

Annual consumption savings:
81,000 gigajoules (16 percent reduction)

Annual greenhouse gas (GHG) emissions reduction: 4,800 tonnes

Canada’s commitment:
Reduce GHG emissions in federal buildings by 40 percent from its 2005 levels by the year 2030

A growing facility in need of energy upgrades

Located between Saint John and Fredericton, New Brunswick, the 5th Canadian Division Support Base Gagetown (5CDSB Gagetown) is one of the largest military bases in Canada. It covers 1,100 square kilometres and houses more than 450 permanent buildings, including 22 armouries throughout New Brunswick and Prince Edward Island. In 1995, the base implemented its first energy performance contract (EPC) at a cost of $8.3 million, which generated annual energy savings of close to $1.2 million. In 2007, the base awarded a second EPC to Direct Energy, a qualified energy service company (ESCO), through a competitive bidding process under the Federal Buildings Initiative (FBI). The project was valued at $16 million and resulted in annual energy savings of $1.6 million.

Although the main base facility was the primary focus, the project was also implemented across a wide geographic area. This initiative lowered the annual energy consumption of 5CDSB Gagetown – reducing costs to taxpayers – and provided an opportunity for the contractor and client to learn valuable lessons about how planning and shifting economics can affect a program’s energy-saving outcomes.

Keeping pace with progress

After its first EPC project in 1995, the main base at 5CDSB Gagetown added more than 90,000 square metres in new building space, increasing its infrastructure by more than 27 percent. These changes, combined with a lack of effective metering, made it difficult for 5CDSB Gagetown to establish a solid baseline of energy consumption and demand, consequently delaying the work. “Work could not begin until there was sufficient data,” explains Doug Thompson, EPC Contract Coordinator at Defence Construction Canada.

Energy Performance Contracting

In an EPC, an organization contracts with an ESCO to do a comprehensive energy efficiency retrofit project. The ESCO pays the full cost of implementation up front and recovers its expenses by repaying itself through the client’s monthly energy savings. The ESCO also provides turnkey service, managing the energy retrofit project from start to finish.

Substantial improvements in submetering

As part of the 2007 retrofit project, Direct Energy expanded and reconfigured the submetering equipment and integrated it into a comprehensive data gathering and reporting system. The system transfers accurate and reliable building data daily, which enables the construction and engineering group to do the following:

  • Easily monitor and verify energy consumption for each building at the main base as well as for the 22 armouries connected to the system.
  • Keep pace with the changing portfolio of the base.
  • Operate and maintain buildings more efficiently by knowing why, when and where energy is being used.
  • Define the scope of future projects by highlighting possible energy inefficiencies and improvement opportunities.

One of the region’s largest ever lighting retrofit upgrades

In addition to submetering, the project included substantial lighting retrofit work and controls upgrades. The lighting retrofit project was one of the largest ever implemented in Atlantic Canada at that time, with more than 132,000 lamps and ballasts replaced. The project included installing T8 fixtures, T5 fixtures and occupancy sensors in offices, hallways and washrooms in all of the facilities.

The lighting and control measures implemented at the Bathurst Armoury (New Brunswick) were a stellar success and reduced electrical consumption by 50 percent. The results were so significant that the account manager from New Brunswick Power questioned the validity of the meter readings and personally inspected the facility. The account manager determined that the meters were functioning correctly. The savings were attributed to the new lighting and control measures.

Other initiatives

Existing satellite boilers at the main base were upgraded to high-efficiency boilers and converted to natural gas. The project team implemented control system upgrades both in the main base and in the armouries. The team also installed a solar air heating system on the Combat Training Centre building, which represents 13 percent of the overall floor area of the base buildings. Transpired solar air heating systems are an efficient and cost-effective way to heat large buildings by using solar energy.

To install the system, a perforated dark metal cladding, usually unglazed corrugated aluminum, is mounted over a south-facing wall. Sunlight hitting the cladding warms the air near its surface, which is then drawn through thousands of small perforations in the cladding into a narrow space between the wall and the building. The heated fresh air is drawn into the facility via the building’s HVAC system.

Heat escaping through the exterior wall behind the solar collector is brought back into the building. In recapturing this heat, a solar air heating system effectively doubles the R-value of the existing wall. Even on cloudy days, these systems provide significant energy savings by being a preheating system for ventilation air. Cory Hayes, the Energy Management Officer at 5CDSB Gagetown, stated that the solar air heating system “is working as designed and has been relatively maintenance free.”

Reassessment of the biomass plant

In the original project concept, Direct Energy proposed building a biomass plant at the main base. The plant would be fueled with inexpensive wood pulp and waste material from New Brunswick’s numerous pulp and paper mills. These materials would generate heat that would augment the base’s main central heating plant, which uses natural gas and other fossil fuels. This biomass measure was to be the centrepiece of the project, expected to cost $14 million and generate annual savings of $2.8 million – with a very attractive payback period of roughly five years.

The feasibility of the biomass plant needed to be reassessed before implementation because of profound changes in the local economic landscape. Many of the province’s pulp and paper mills closed, which made wood waste material more scarce and doubled its cost. Despite the ESCO and the Department of National Defence working collaboratively to find an amenable solution, which highlights the flexibility of the EPC mechanism to deal with unforeseen external circumstances and the importance of a strong and open working relationship between all parties, the biomass plant was dropped from the project.

Lesson learned: Use caution when planning complex measures

A more detailed feasibility analysis would have been useful before the biomass plant component was added to the project’s scope. However, few could have anticipated that mill closures would make the cost of wood waste material skyrocket. Some risks may be unavoidable.

How much feasibility analysis is required during the planning stages?

Conducting an independent energy audit or feasibility study before implementing an EPC project can provide greater certainty about opportunities for saving energy as well as the feasibility of the specific measures being considered. But, ultimately, the optimal amount of analysis and planning required depends on the complexity of the specific measure and how familiar the project team is with implementing it.

For relatively simple measures, few enhanced planning and feasibility analyses are required because the risks and requirements are well understood by all parties. For more complex measures, it becomes more important to conduct further study and analysis up front.

Final project scope still generates considerable value

Significant benefits were still realized through the measures implemented at 5CDSB Gagetown and at the 22 armoury facilities despite the removal of one of the project’s main components. In the end, the project cost $16 million and realizes annual energy savings of $1.6 million.

Collaboration is key

An EPC is a collaborative relationship between an organization and the ESCO it hires. Although the ESCO is the technical expert for energy conservation, an EPC must be managed as attentively as any other contract to ensure that it runs smoothly. In particular, a strong project team of all key personnel who manage and operate the property must be involved from the project’s outset.

Natural Resources Canada’s Federal Buildings Initiative

Natural Resources Canada’s Federal Buildings Initiative (FBI) enables federal real-property managers and decision makers to lead by example, undertake retrofits with no upfront capital costs and take advantage of private-sector funding.

By using energy performance contracting (EPC), a federal department or agency contracts an energy service company (ESCO) to implement and finance the retrofit project. The ESCO pays for the work, the capital cost of new equipment and service charges with the energy savings that the project generates.

Many federal organizations have used the FBI program to help them implement EPCs and reduce their energy and operating costs as well as greenhouse gas emissions.

For more information on how the FBI can help your organization plan an energy efficiency project, contact:

Federal Buildings Initiative
Natural Resources Canada
580 Booth Street
Ottawa ON K1A 0E4
Fax: 613-947-4121
Toll-free: 1-877-360-5500