Hybrid Heating Systems: a Logical Step in Decarbonization

Decarbonization of building heating systems is a huge challenge, due in large part to the sheer scale of the endeavor, but also due to technical challenges and at a very basic level, typical purchase patterns for heating system components. Creating retrofit hybrid heating systems greatly reduces the magnitude of these problems, and while decreasing on-site greenhouse gas (GHG) emissions by 90% or more.

What are hybrid heating systems? Hybrid heating systems are heating systems that consist of more than one heating technology. Sometimes hybrid systems share system components, like a distribution system or emitters, but they don’t have to. Ideally, hybrid heating systems are integrated via one control. A typical hybrid heating system would consist of a legacy boiler or furnace that runs on natural gas, heating oil, or propane, and a heat pump of some sort (e.g. mini-split, air-to-air, etc.). Choice of operation of the heat pump or its fossil fuel alternative can be automated; whichever happens to be optimal at any point in time.

Thinking broadly, hybrid systems are seen in a wide variety of contexts and they are used to solve a problem. In silviculture, grafting branches from one type of apple tree onto the stem of another variety can create a productive and long-lasting hybrid. Hybrid cars provide drivers with better fuel economy and the ability to drive long distances conveniently. Sailboats have hybrid propulsion when they are outfitted with motors to help with navigation in harbors and on windless days. Even drying laundry can loosely be considered hybrid when outdoor drying on sunny days is combined with machine drying on rainy days. Hybrid heating systems have similar appeal as the two main components can complement each other, and actually solve several problems at the same time.

Advantages of Hybrid Heating Systems for Decarbonization

There are actually several good reasons to consider hybrid heating systems for decarbonizing buildings.

1. Efficiency – Hybrid systems can operate much more efficiently than single-source fossil fuel systems, provided a heat pump is one of the components. Higher efficiency leads to reduced GHG emissions.
2. Flexibility – Hybrid systems exercise the relative advantages of each heat source, including the ability of a fossil fuel boiler to operate during peak electricity demand periods*, or when the heat pump would be operating at it lowest efficiency.
3. Proactive – Because planning is easier when adding a second heat source, a heat pump can be added to a system at any time of year, which gets around the replacement cycles that center around component failures.
4. Additional weatherization (e.g. insulation, air sealing, etc.), which are highly desirable (even necessary) when heating with a heat pump only, can be accomplished over a longer time frame.
5. Additional system adaptations, such as retrofitting for “low temperature” distribution (i.e. 120F maximum) can be accomplished over a longer time horizon if necessary.
6. Financial benefits – Setting up a hybrid heating system is easier, and less costly than a complete system changeover. Financial incentives for heating retrofits are never unlimited. More GHG emissions can be eliminated by shifting more buildings to hybrid systems, than by shifting half as many buildings to 100% heat pump.

*This is not a huge advantage at this moment, but with increased electrification of heating systems, electricity demand peaks in winter will surpass the level of demand peaks in the summer.

Other Advantages of Hybrid Heating Systems

1. Hybrid systems are redundant. If a boiler or heat pump fails, the building can continue to stay heated.
2. Hybrid systems can heat and cool, so they can replace central a/c and window air conditioners.
3. As long as proper weatherization is in place, hybrid systems can be switched over to single technology/100% heat pump at any time.

More on Flexibility

The ability of a hybrid heating system to be operationally flexible is one of the most important benefits in the race to decarbonize. The reasons why have to do with two things; clean electricity generation and the capacity of the power grid.

Hybrid systems have the ability to reduce peak electricity demand. There is value in having that capability. Much more clean electricity will be generated from solar and wind in the years to come. These are intermittent energy sources. Because of the intermittency, long term battery energy storage systems will be utilized to help provide power when solar and wind aren’t available. Even so, there will be times when supply is limited and demand from electric vehicles and building systems outstrips the supply. So the value of being able to temporarily reduce electricity demand, such as is possible with hybrid systems will grow as more intermittent energy sources feed the grid.

Grid capacity is the other limitation, especially during peak weather events like very cold mornings in winter. As more building heating systems shift from fossil fuels to heat pumps, this will become a bigger issue. Just as described for intermittency issues, buildings with hybrid systems have the ability to temporarily reduce electrical demand by switching to a different energy source, which directly reduces demand on the grid.

More on Financial

Heat pumps operate at very high efficiency, particularly when outside temperatures are not near their winter lows. So building owners (or those paying the energy bills) can save money over combustion-based alternatives that can’t achieve above 100% efficiency.

With regard to asset and installation costs, home and commercial building owners will need some financial assistance to retrofit a system that reduces or eliminates GHG emissions. In what form, and at what level the support takes are worthy of debate but in any case, at any one time, any available support is likely to be limited. Investments in retrofits could be made on hybrid systems, or a smaller number of full changeover heat pump systems where the previous heat source is eliminated. The full changeovers can more than double the initial cost of an add-on heat pump because of the system and weatherization adaptations that are necessary at the start.

Increasing the number hybrid systems will have a greater decarbonization effect than would be the case with fewer transitions to stand alone heat pump systems. This is true at least for the initial period where speed of decarbonization has a high priority.

Summary

Using hybridization of heating system retrofits as a logical step for transitioning buildings with fossil fuel systems will result in the fastest cuts in GHG emissions. Where building owners have the resources to make a full changeover, they should probably do so, as long as they make other changes to reduce demand at the same time. But where external financial incentives are needed, hybrid systems make sense.

New buildings are different. They should be built with no accommodation for fossil fuels, and should be built to minimize the need for heating and cooling through building to passive house standards or similar.

What are the Next Steps?

Clearly hybrid systems can play an important role as a bridge to the future of 100% GHG-free heat. Questions that remain include:

1. what policies and incentives make the most sense to maximize near term GHG reductions?
2. what carrots and sticks make sense in areas like demand charges, energy storage, and variable energy charges?
3. where should subsidies come from and who should benefit?
4. at what level are subsidies or grants needed to achieve GHG reduction goals?
5. what controls are necessary for hybrid systems to operate optimally for GHG reductions?
6. what data should be collected on systems operations to help optimize or balance GHG reductions and end-user costs?
7. should operational data collection be required in return for a grant or other incentive?
8. how are environmental justice and other communities going to be equitably served?
9. how does the workforce need to change to ensure that this will happen?

These and other questions need to be explored, debated and pursued.

May 31, 2019

Energy Storage Systems

Energy storage systems (ESS) present an opportunity for lowering energy costs, particularly for large energy consumers like industrial plants, hospitals, and large multifamily complexes. This is especially relevant in Massachusetts and New York, where incentives make the financial benefits compelling.

What is the value of storing energy?

ESS provide value in several ways. For one, these systems can be configured to help utilities reduce the energy transmitted during peak weather events, such as exceedingly hot or cold days. The batteries are loaded in anticipation of the peak event, and subsequently disbursed of energy during the peak event. By disbursing the energy in this way, the ESS acts like a small scale power plant. This lowers power transmission spikes and the very high costs often associated with them.

Grid stability and resiliency are additional benefits. If part of the grid goes down, for example, during a weather event like Superstorm Sandy, the energy in the batteries can be used to provide power in a local area, if they’re integrated within a microgrid.

A fourth point of value is in the context of renewable energy, particularly solar and wind energy. Both energy sources are growing quickly, particularly in Massachusetts and New York State. Solar and wind capture energy, but not always when it’s needed most. So the ESS stores excess (or cheaper) energy when it’s produced, and then disburses it when its value is optimized.

ESS Optimization

As noted, customer-sited energy storage systems provide benefits to power producers and power distributors. These benefits are monetizable for the owner of the ESS. In a typical scenario, the utility pays the owner of the ESS for power drawn from the ESS to the grid.

In a second common scenario, the energy is used on-site to flatten out demand and reduce utility demand charges. Our partner, Enel X provides value in both scenarios. The company’s software optimizes the revenue for the owner of the ESS, buying power when it is cheaper, storing it in the ESS, and either using it when utility demand charges kick in, or selling it back to the grid.

Development and Ownership of the ESS

Obtaining an ESS is not akin to buying an appliance or new motor… there’s much more scale and complexity with the storage system. As you might expect, the capital requirements are significant. Fortunately, they do not have to be born by the property owner.

For most ESS installations, the engineering, planning, installation, ownership, maintenance and operation of the ESS can all be farmed out, typically to one single entity. That entity is proficient in doing (or managing) all of those things. For most organizations considering an ESS, this is the type of arrangement that’s most suitable. Exceptions might be large Fortune 500 type companies that have the scale to develop and maintain the specialized knowledge and expertise that’s needed to optimize the ESS.

The ESS developer/maintainer/owner attempts to maximize revenue from the equipment. The owner of the property on which the ESS sits gets paid a percentage of the revenue derived from the ESS. Because the payment is a percentage, it keeps the interests of all the parties, ESS owner and property owner, aligned.

For the property owner upon which the ESS sits, there’s no capital required. The ESS generates revenue with no downsides.

Resources

A good extra resource on this subject, with content that goes beyond battery storage can be see on this page published by the Federal government’s Energy Information Administration.

February 5, 2017May 30, 2019

CHP (Combined Heat and Power)

Combined Heat and Power (CHP), also known as cogen, or cogeneration, is a fast-growing energy technology in North America and around the world. A large reduction in energy costs (up to about 50%) is the primary reason for this growth.

For typical applications, where there is no change of fuel, the energy cost savings result from dramatically higher system efficiency (power + heat instead of just one or the other), and minimal distribution losses due to power produced on site. In many applications, another cost-saving benefit is peak shaving (the reduction of peak power load bought from the utility). Lowering peak power purchases can greatly reduce costs by avoiding demand rates when they spike.

In areas where electricity costs are high, and natural gas prices are low, CHP yields an excellent payback on investment due to the inherent efficiency in maximizing the utilization of the energy content of the fuel.

How CHP works
As its name suggests, Combined Heat and Power creates both heat and power at the same time.

Various fuels can be used for CHP, such as natural gas, oil, or biomass chips or pellets. The most efficient and cost effective systems use natural gas. Creating power from the combustion of a fuel yields heat as a byproduct.

Ordinarily, most of the heat that’s created during power production, such as at a utility-owned power plant, is wasted. That’s because heat is not transferable over distance the way electric power is. Heat has to be used nearby to where it is produced, and at the time it is produced, or it is lost.

By using the byproduct of power production, heat, CHP uses a higher proportion of the energy content of a fuel than is the case with power production alone.

The sankey diagram below provides another look at how much energy is wasted from the production of power at utilities. That wasted energy is largely in the form of heat, which is what you capture when the CHP power production is at your site. Further energy losses from utilities occur in transmission and distribution (T&D).

Reliability and Resiliency
One of the great advantages of CHP is the capability to provide heat and power to a building even during power outages. This is a great advantage where the grid is not so reliable, or where large storm events like hurricanes, tornadoes, ice storms , and human-caused events can cut power.

Not every CHP unit is capable of providing power during a blackout. The units that can do so have inverters to support this capability.

Typical CHP Applications
As mentioned above, CHP is most attractive in areas where electricity costs are relatively high, and where natural gas prices are comparatively low. Applications such as large multifamily buildings, industrial plants, hospitals, and schools are all good candidates because they all use both heat and power.

Selling Electricity for a Profit with CHP
In some multifamily buildings, power comes in through a single metered connection, from which power is separately metered to individual units. In such cases, it may be possible for the landlord to pay a lower, commercial rate and charge tenants a higher, retail rate. This adds to profits, as well as to the value of the building.

Investigating CHP
CHP is worth investigating to cut energy costs, increase your capacity to produce heat, and to lower your peak power from your utility.

Take a look at the blog post on evaluating your options here.

Additional Resources

The US EPA has an in-depth overview in a 24 page PDF on their website here.

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