Jim Davis, President, Chevron Energy Solutions Co.
Why does an oil and gas company sell energy efficiency?
Meeting the growth in global energy
demand requires all forms of energy,
including efficiency. The good news is that
the potential for efficiency is great. The
International Energy Agency estimates
that globally, using measures feasible
today, we could improve the energy efficiency
of buildings by 50 percent. At
Chevron, we recognize that we have a
significant role to play in meeting the
world's energy needs in a sustainable,
environmentally beneficial way. This is
one of the world's greatest challenges,
and to meet it, we need to maximize
energy conservation — the cheapest and
most plentiful source of new energy.
Chevron Energy Solutions Co. (CES) makes
Chevron unique among international oil
companies. CES is an expert at combining
energy efficiency with renewable supply
solutions. Being a part of Chevron provides
a synergy: while Chevron invests in emerging
energy technologies, CES can apply the
proven technologies that our clients will
benefit from for decades. As new technologies
become proven, we will deploy them
to our customers.
How does CES make money?
CES has been a profitable business
since 2003 and is growing by more
than 20 percent annually. We have about
400 employees right now and are bringing
onboard roughly 50 employees per year.
Our staff primarily consists of mechanical,
electrical and architectural engineers,
project managers, and construction
managers.
In the public sector, we look at opportunities
to reduce our clients' energy demand
first, then consider onsite energy supplies
such as solar power. It makes no sense to
install solar panels on a building that is not
using energy efficiently.
Our projects generally start with an energy
audit. We then work with our clients to
implement the recommendations from the
audits. Often this involves a performance
contract, by which Chevron implements the efficiency measures and onsite generation
at little or no upfront cost to the client and
guarantees a certain level of energy savings.
The actual cost savings from reduced
utility bills are credited against the project
costs over time, and at the end of the
contract term, the client retains all of the
cost savings. In other words, our projects
provide an economic, low-risk way for our
clients to improve their energy efficiency
while reducing their costs and impact on
the environment.
In addition to avoided utility costs, our
products offer price certainty and energy
security, which are important to public
institutions. By providing energy cost
predictability, lowering energy demand and
developing onsite generation, we are helping
our clients plan for their energy needs
for many years into the future.
Who are your customers?
Our largest customer is Chevron, where we
work with refineries, offices and oil field
operations to deploy efficiency measures
and onsite generation, including solar
power and fuel cells.
For the U.S. federal government, we
develop and build central utility plants
and introduce renewable energy and
efficiency solutions. In the public sector,
we work with city, county and state
governments, improving administration,
wastewater treatment and correctional
facilities. And we help schools, colleges and
universities take advantage of government
funding available for onsite generation
and efficiency.
In Pennsylvania, we helped the Central
Dauphin School District upgrade four buildings
comprising more than half a million
square feet (46,500 sq m) with lighting
and mechanical retrofits, an emergency
generator and water conservation improvements.
We worked closely with the district
not only on the design and construction
but on operator training, monitoring and
verification. Over our 15-year performance
contract with the district, we are guaranteeing
more than $275,000 in annual
energy and operational savings.
What do you see for CES in 2009?
We believe there is huge potential for our
business and the economic and environmental
benefits it provides. Our projects
and partnerships with our clients are
long term. While maintaining our current
relationships, we will work hard to earn
new business and continue our growth
trajectory. In December, we were awarded
a master Energy Saving Performance
Contract from the U.S. Department of
Energy to work with federal agencies to
reduce energy and water consumption and
increase the use of renewable energy at
agency facilities. This contract provides a
significant opportunity for us to expand
our efficiency work with federal agencies
in 2009 and beyond.
Editor's note: Fast Company included
Chevron Energy Solutions in its Top
50 list of
the world's most innovative
companies (March 2009). According to
the magazine, the 50 companies illustrate
"the power and potential of innovative
ideas and creative execution."
Updated: May 2009