Industry analysts such as Navigant Research predict a two-fold increase in the market for energy efficiency projects and retrofits in commercial buildings, reaching $152 billion by 2020. One major reason for this is that building owners are looking to cut down on overhead costs. Endless opportunities are available to help buildings save money by becoming more energy efficient, from
implementing “green” products, to lowering energy use with lighting upgrades and replacing windows, to smart grid strategies for better energy management. One energy efficiency option with a large return on investment stands out from the rest with huge savings. This opportunity is retrofitting air-conditioning systems.
Consider for a moment that HVAC systems can be as much as half of a building’s energy use and almost one third of the energy cost in commercial buildings. It’s not hard to see why an efficient system can contribute to drastic savings.
When starting an energy efficiency project, it is smart to check if the HVAC system needs to be replaced. Examine the building’s peak electric loads and note when electricity is used most frequently. After all, energy efficiency is not just about using less energy or putting out lights. It is about using the energy we have more efficiently. The peak load or demand can be essentially double the average electric load during the cooling season. High peak demands cost money because additional peaking plants and spinning reserves are needed to service peak loads. To truly improve energy efficiency all the way to the source and optimize costs, buildings must reduce summer peak electric loads and use the existing infrastructure more efficiently. The penalties of not reducing peak energy use are grid-wide inefficiencies and higher energy bills. Fortunately, what is causing the huge peaks for energy is also the easiest to store, which is cooling. It is cheaper to store a btu of cooling than the electron required to create it!
Storing cooling has been around for several decades, and building designers, especially those in the green building industry, are turning to ice to store and use energy more efficiently. From SAP America to the Bank of America Tower, building designers are not just creating sustainable buildings but smart ones that demonstrate energy efficient technologies and the ability to store cooling. Cooling is essentially created in the form of ice at night, when demand for energy is low, then used the following day to cool buildings.
A growing number of existing building managers are also turning to ice, finding that the existence of an energy storage system creates a revenue stream in the demand response marketplace. Buildings with energy storage are smart-grid ready and can operate as virtual power plants by utilizing data from the utility company to participate in demand response programs, reducing demand and helping maintain grid stability. Additionally, these demand response systems are generating revenue – found money for building owners. Imagine an HVAC system that helps earn its keep!
A recent 22-story office high rise in Philadelphia, for example, implemented an energy efficiency upgrade and went from having unhappy tenants to happy tenants because of a smart air-conditioning system that provides comfort reliably, saves $40,000 per month during the cooling season and $10,000 more per year with demand response participation . The smart air-conditioning system utilized ice storage and smart grid software to function as a real-time demand response system. The software forecasts where prices, due to congestion, will be for the next day on an hour-by hour basis and provides a schedule to the building operator through the building automation system. The ice system is directed by the automation system to make ice or discharge ice based upon grid information. When they are using ice their peak electric load drops. The building operator can then make sure that the grid operator knows that this peak load is dropping during these hours so they can manage generation accordingly. The grid operator pays the building owner for capacity just as it would for power plant generation. As a result, the ice storage is earning the building owner an additional $10,000 from the grid operator because the building can now react to utility price signals. It’s as if there was a virtual power plant sited in the building’s basement, able to manufacture energy when called upon.
As the number of energy efficiency projects increase and air-conditioning systems reach their life expectancy, more building owners will have the option to implement smart air-conditioning that can store energy. Sure, it’s a way to take the burden off the grid, but more importantly it inherently improves the energy efficiency and economics of electrical distribution to buildings, making buildings better and cutting overhead costs.