Leveraging energy efficiency to finance HVAC system retrofits

December 28, 2018

by Olivier Matte and Patrick Ouellet

All images courtesy Ecosystem[1]
All images courtesy Ecosystem

The Québec City University Hospital Centre (CHU) de Québec – Université Laval is the province’s largest hospital network, comprising five specialty facilities. When facing the need to address an important backlog of deferred maintenance, the network opted for a deep retrofit project.

Implemented between 2011 and 2017 across four of its five sites—up to 366,985 m2 (3,950,237 sf) in gross surface area—the project has helped CHU slash energy consumption by 28 per cent, thereby generating $3.7 million in annual savings. This has been recognized by the industry as the CHU project has won multiple awards. The Québec City University Hospital Centre (CHU) de Québec – Université Laval was awarded the 2017 Canadian Healthcare Engineering Society (CHES) Wayne McLellan. It also received an honourable mention at the 2018 American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Technology Awards in the existing healthcare facilities category.

The project team faced several challenges, such as:

The retrofit also opened the door to new, efficient methods of providing heating and cooling to the buildings.

The combined financials for all four sites are listed above.[2]
The combined financials for all four sites are listed above.

To tackle the complex challenges of project planning and execution, CHU chose a design-build project delivery method and used an integrated approach to rethink energy consumption. This method resulted in maximum savings and generated energy efficiency incentives that were used to pay for a large portion of the asset renewal required in the hospitals.

Each site is located in a different neighbourhood. The facilities do not share a common district network. Hence, they were tackled as separate projects. The biggest site, Centre hospitalier universitaire de Laval (CHUL), was started first, and upgrades to two other sites began a year later. These three projects were completed in 2015. The fourth and last site was improved between 2015 and 2017.


Although each facility had particular needs, a few common drivers were present among all the hospitals. These include:

The boiler plant at Hôpital de l’Enfant-Jésus (HEJ) was completely re-engineered by replacing two steam boilers (adding up to 1200 BHP) with six cast-iron hot water boilers (adding up to 720 BHP) and three steam boilers (adding up to 1050 BHP), which helped eliminate inefficiencies.[3]
The boiler plant at Hôpital de l’Enfant-Jésus (HEJ) was completely re-engineered by replacing two steam boilers (adding up to 1200 BHP) with six cast-iron hot water boilers (adding up to 720 BHP) and three steam boilers (adding up to 1050 BHP), which helped eliminate inefficiencies.

Project planning

To achieve its goals, CHU issued a public request for proposal (RFP), seeking a design-build firm with the ability to contractually guarantee the project cost, financial incentives, and annual savings over the entire payback period. One of the financial metrics used to choose the winning firm was net present value (NPV). This model highlighted the project with the greatest overall value for CHU, accounting for all related expenses and savings over a 20-year period.

In this RFP, CHU made outcomes such as critical asset renewal mandatory. Beyond this, the proponents were free to come up with the best answer to CHU’s needs. It was more about defining the ‘what’ (i.e. goals) than the ‘how’ (i.e. specifying the preferred solutions).

Over the following months, Ecosystem, the chosen firm, virtually became an extension of CHU’s technical services department, doing extensive surveys of HVAC systems and prompting feedback from CHU’s operating staff. The project team focused on achieving substantial results and took a holistic approach to retrofitting the buildings, seeking every opportunity to improve the heating and cooling networks, lighting, and ventilation and centralized control systems.

A central aspect to the design was converting the hospitals’ steam heating systems to hot water, making it possible to add high-efficiency heat pumps. These, in turn, can also provide some cooling and extra flexibility during shoulder seasons. The design for each site focused on maximizing heat recovery and minimizing energy losses throughout all networks (steam and hot and chilled water). Site designs also considered all possible incentive programs available and tried to maximize them.

Once the design for the deep energy retrofit was finalized, the project team provided a detailed description of the energy conservation measures and the contractually guaranteed financial figures. This allowed CHU to secure financing and get started with the implementation phase.

Throughout the entire construction period, the design-build firm supported CHU’s staff to ensure efficient operation without compromising the comfort and security of patients and staff.

There are many ways to tackle large projects, and each approach has its pros and cons. For projects specifically targeting energy-consuming HVAC systems, Québec City University Hospital Centre (CHU) de Québec – Université Laval felt paying a firm to achieve results, rather than simply deliver a project, would compel all the parties involved to a more collaborative approach and thereby provide better integrated solutions.

Identify a project champion within the organization

Despite the pros of the integrated performance contracting approach largely outweighing the cons, the relative complexity of the process requires a full commitment from the organization. This commitment lasts for many years through the design, construction, and performance follow-up periods. Having an internal resource dedicated to the project ensures it moves ahead seamlessly and that all stakeholders work with the best available information to meet the desired outcomes.

Specify needs clearly

Attracting design-build firms willing to contractually guarantee the project cost, financial incentives, and annual savings necessitates a very specific type of request for proposal (RFP), requiring more time to build a proper reference year, among other considerations.

Get the most value out of the RFP

To help get the most from a performance contracting project, prior to RFP, it is advisable to have a thorough knowledge of the building, including existing capital plan requirements such as aging HVAC equipment replacement. This way, one can include a few mandatory requirements within the scope of the project and plan to inject money into the project to finance some of the improvements that do not generate energy savings. The extra effort spent prior to issuing the RFP will pay dividends in the future.

The procurement process should also allow proponents the freedom to come up with innovative solutions, as long as existing environmental conditions remain equally as good or better.

Using the net present value (NPV) calculation over 20 years is helpful to compare various projects with different return on investment (ROI) periods. It is important to ensure proponents enter the useful life of industry-recognized equipment in their NPV calculation, along with the appropriate annual maintenance cost that can at times negate any maintenance cost gains from removing older equipment.

Future building operations

With projects based on the unification of many networks, one must consider isolation devices (e.g. valves and heat exchangers) and strategies to isolate portions of the network in case of maintenance issues.


During the performance follow-up period, a well-documented measurement and verification (M&V) plan is critical to preventing unnecessary negotiations between parties. A thorough knowledge of the building will equip one to set the best M&V strategies for various energy conservation measures.

Investing in operating staff

Major infrastructure upgrades bring on new operating strategies. The staff should get a comprehensive training program.


Geothermal underground heat exchanger at the Centre hospitalier universitaire de Laval (CHUL), one of the four hospital project sites.[4]
Geothermal underground heat exchanger at the Centre hospitalier universitaire de Laval (CHUL), one of the four hospital project sites.

Key measures implemented

A variety of energy conservation measures was implemented at the four CHU sites.

Steam-to-hot water conversion of the heating system

Steam requirements for heating were removed from all four sites. Switching the heating system from steam to hot water reduced thermal losses and eliminated certain inefficiencies associated with steam networks, such as steam trap leaks, boiler blowdown, and flash steam from atmospheric condensate tanks.

Extensive engineering was deployed to understand the heating loads of the buildings before sizing new piping and network components.

The conversion required changing coils in some ventilation systems and radiators. At CHUL, 900 aging steam radiators were replaced with new hot water units. These were spread over six floors and across various departments. Communication with the technical services department and medical staff was key to prevent service disruption for patients.

The Hôpital Saint-François d’Assise (HSFA) underwent a similar conversion for more than 350 radiators. In the grand scheme of things, planning and executing these upgrades was less risky and disruptive than doing nothing and fixing leaks or network failures as they arise.

Planning these interventions involved many meetings with the hospital’s technical services staff, Ecosystem, department directors, health staff, and the infection control committee. It was critical to minimize the amount of relocation time for each patient and to reduce the risk of infection. On average, each patient room was completed within five days and many precautions were taken, such as doing the work with a negative pressurized hatch and wiping clean the wheels of the contractors’ carts every time they exited the hatch.

For the new hot water heating network, some existing steam piping was reused—depending on its condition—and new piping (especially returns) was installed to create new networks. Both the hot and warm water networks focused on using the lowest temperature possible to meet the heating loads. To achieve this, various coils and radiators were sized to provide enough heat with a temperature in the range of 49 to 65 C (120 to 150 F).

On the Hôpital Saint-Sacrement (HSS) site, the chilled water network is now used as a warm temperature heating network during winter, using a switch-over control sequence and warm water supplied by the heat pumps.

One of the most interesting design intricacies was to connect as many loads as possible in series, from the hottest water temperature requirement to the lowest. This enabled a greater temperature differential. Having the return temperature as low as possible allowed the design team to take full advantage of new heat recovery pumps to supply the major part of the heating load during shoulder seasons, and still a fair part during the cold, winter months.

Steam requirements for other needs, such as humidification, sterilization, food services, and laundry, were addressed by a smaller steam network or independent equipment.

Figure 1: This diagram helps to illustrate cascade heat pump system configuration.[5]
Figure 1: This diagram helps to illustrate cascade heat pump system configuration.

Heat recovery and geothermal heating

On all four sites, heat pumps were installed to maximize heat recovery and take advantage of Hydro-Québec’s clean electricity. In many areas, chilled water loops were unified to maximize heat recovery potential. Heat recovery coils were also installed in some ventilation exhausts and boiler chimney stacks. Existing direct contact heat exchangers on chimney stacks were optimized by connecting them to the chilled water loop rather than the heating network return. All these improvements served to maximize the recovery loads for the heat pumps and ultimately increase their output.

On all the sites excluding HSFA, dedicated geothermal heat pumps were also installed and properly sized for the geothermal underground exchanger. The design team opted for a horizontal underground heat exchanger for one site, while the other two sites saw vertical boreholes drilled 183 m (600 ft) deep in their parking lots. With all three sites combined, this underground network adds up to around 53 km (33 mi) of piping. The geothermal system was not employed at the HSFA site due to limited space for drilling boreholes.

In some buildings, the design team opted to connect two heat pumps in a cascade system configuration. The dedicated geothermal heat pumps’ condensers were connected on the evaporator side of the building’s main heat recovery chiller (Figure 1). This configuration made it possible to run the geothermal heat pump at a low discharge temperature on the condenser side (in the 7 to 15.5 C [45 to 60 F] range), improving its co-efficient of performance (COP), while providing an additional warm temperature heat source recovered by the main heat recovery chillers.

Solar wall at CHUL allowing fresh air preheating.[6]
Solar wall at CHUL allowing fresh air preheating.

Solar power for fresh air preheating

For CHUL, a 230-m2 (2475-sf) solar wall was installed to preheat the fresh air used in some ventilation systems. In optimal winter conditions, the heat gain can reach 12 C (22 F). During summer, dampers allow the fresh air intake to bypass the solar wall and enter the ventilation system without being preheated.

Dynamic ventilation in lab space

At the CHUL hospital,  there is an important laboratory/research department with 43 chemical hoods to ensure proper air quality. The air change per hour (ach) rate was maintained at 12 prior to the project. With 100 per cent fresh air systems, operating costs were high. Motion sensors were installed at each hood, allowing dampers to reduce the exhaust air speed. Additionally, a new air sampling system channelling samples from various areas to a central probe station was installed. This dynamic ventilation system enables efficient monitoring of contaminants and conditions in large areas. The limited number of probes/sensors reduces maintenance costs and the required recalibration for such components. Sensors in the centralized probe station can be changed periodically, ensuring they are always well calibrated. With this new system, as well as motion sensors on each hood and variable-speed drives on the ventilation fans, evacuation rates under normal operation can be reduced. However, if air contaminants are detected, fresh air and evacuation rates can increase rapidly. This translates to significant energy savings on air-conditioning, heating, cooling, and humidification.

Optimization of the various networks

Most of the water networks (chilled and hot water) were optimized to modulate according to the building’s cooling and heating loads. They primarily use two-way valves, making them variable flow networks where the main pumps are controlled by variable-frequency drives (VFDs).

For the chilled water networks, this system prevents excessive heat from the pumps dissipating in the water, an additional cooling load for the chillers. Thus, these optimizations generate savings from both the pumps and chillers. As for the steam networks, all the unused lines following the conversion were removed or capped to minimize heat losses. The supplied steam pressure was also optimized based on the needs of equipment requiring steam.

At HSFA, a stock room was converted into a mechanical space housing a 600-tonne (590-ton) chiller and a 235-tonne (231-ton) heat pump. This chiller rejects outside heat through two new adiabatic cooling towers installed on the roof above, while the new heat pump recovers internal cooling loads to provide hot water for the heating network. This also allowed for an increase in the cooling capacity of that part of the hospital and improved redundancy.

At Hôpital de l’Enfant-Jésus (HEJ), an old internal cooling tower was replaced by a new one located outside, while the room was repurposed to support the electrical load of some of the new equipment and other needs of the hospital.

Controls and buildings optimization

New controls and graphic displays were implemented where needed, along with probes and sensors required to optimize and manage the new systems.

A complete optimization of the systems was conducted at all four sites, including a review of the operating schedules. Simultaneous heating and cooling, occurring on some sites, was also reduced. With guaranteed savings on the line, the design-build firm remained fully involved after the completion of the implementation. Alongside CHU’s building operators, they were making sure the performance indicators were met without compromising comfort.

New adiabatic cooling towers installed on the roof of the Hôpital Saint-François d’Assise (HSFA).[7]
New adiabatic cooling towers installed on the roof of the Hôpital Saint-François d’Assise (HSFA).

Beyond impressive results

After more than two years of completed performance monitoring, the numbers affirm the contractual targets set with the design-build firm were met. The site energy intensity of the four CHU sites combined dropped by 29 per cent, well beyond the 14 per cent government target (Figure 2).

Much critical HVAC equipment was also replaced, including 12 boilers, a chiller, cooling tower, a few ventilation units, and more than 1250 radiators. This resulted in improved redundancy and continued reliability for building occupants. GHG emissions were reduced by 49 per cent or 14,320 tonnes (14,094 tons) on an annual basis.

Although not monitored, many measures, including the steam-to-hot water conversion of the heating network are generating water savings through reduced losses and boiler blowdown. The use of heat recovery chillers translates into a reduced use of cooling towers, which are huge water consumers. Additionally, the geothermal fields used to reject heat during the summer reduce the use of the towers.

At HSFA, the new adiabatic towers helped raise the building’s cooling capability without increasing the water consumption, as the equipment works in a closed-loop fashion. Compared to a typical open-loop cooling tower, this eliminates the risk of equipment freeze during the shoulder season. It also reduces required maintenance, use of chemicals, and risk of legionella.

Several of the older chillers using R-11 refrigerant have been replaced. The replacement chillers and heat pumps all use R-134a refrigerant, in compliance with the Montréal protocol.

Figure 2: The energy intensity factors for each site before and after the project. [8]
Figure 2: The energy intensity factors for each site before and after the project.

Operation and maintenance considerations

The outcome-based approach incentivized the project team to spend extra time analyzing and studying the buildings before the implementation. This not only allowed for designing highly efficient installations, but also offered better understanding of operating issues and addressing CHU’s needs in terms of maintenance and ease of operation.

The steam-to-hot water conversion of the heating networks reduces the number of parts to maintain, such as steam traps and pressure reduction valves, across all four sites. Old radiators and steam networks supplying the patient rooms used to fail quite often, requiring urgent work compromising the patient experience. The new hot water network is reliable and easier to maintain.

The design-build firm provided specific training sessions for CHU’s operating staff on all new equipment, efficient building operation strategies, and centralized control upgrades. The project was well documented with manuals, including each system’s spec sheet, technical drawings, user manual, and any relevant control strategies, as well as the manufacturer’s guarantee.

In hindsight, by favouring a holistic approach and embracing a deep energy retrofit, CHU took advantage of the maximized utility savings and financial incentives to address as much asset renewal backlog as possible. This approach also helped CHU preserve its maintenance budget for other improvements (such as roof replacement, elevators, or other building components) that simply cannot be self-financed through savings or incentives.

The outcome-based approach favoured an alignment of interests for all parties and better collaboration throughout the entire project to deliver the targeted results.

With new equipment and better control systems, the CHU operations staff can now invest more time in preventive maintenance rather than constantly reacting to failure calls. This ultimately improves the patient experience.

[9]Olivier Matte is development manager at Ecosystem. After receiving a bachelor of mechanical engineering degree in 1999, he joined the Ecosystem team in 2003 as a project development engineer. An excellent communicator, Matte is responsible for staff training and occupant awareness. He also educates the market about energy-efficiency solutions by contributing to articles and videos. Matte can be reached via e-mail at Olivier.Matte@ecosystem.ca[10].

[11]Patrick Ouellet is assistant director of technical services at the Québec City University Hospital Center (CHU) de Québec – Université Laval. He was responsible for project management at CHU and is also promoting the integrated, performance contracting approach with various public institutions in Québec. Ouellet can be reached at patrick.ouellet@chudequebec.ca[12].

  1. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Lead2.jpg
  2. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Total-investment-1.jpg
  3. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Boiler.jpg
  4. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Geothermal.jpg
  5. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Fig-1.jpg
  6. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Wall.jpg
  7. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Tower.jpg
  8. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Site.jpg
  9. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Couleur-Olivier-M_02.jpg
  10. Olivier.Matte@ecosystem.ca: mailto:Olivier.Matte@ecosystem.ca
  11. [Image]: https://www.constructioncanada.net/wp-content/uploads/2018/12/Ouellet-Patrick.jpg
  12. patrick.ouellet@chudequebec.ca: mailto:patrick.ouellet@chudequebec.ca

Source URL: https://www.constructioncanada.net/leveraging-energy-efficiency-to-finance-hvac-system-retrofits/