Identifying Opportunities for Energy Savings

Energy is used in many ways, from heating to cooling to power and motion. Opportunities to lower energy use are available in all of these areas. The challenge is to identify the best areas for reducing energy consumption by balancing opportunities with their costs. It’s possible to find a positive net present value (NPV) for many different upgrades.

Energy Audits

For many building owners and managers, an energy audit is a worthwhile first step. Often there are some glaring opportunities that easily apparent. Old technologies that use lots of energy are an example. Energy audits can provide a list of items where deficiencies exist, which can be prioritized and addressed by order of value.

Technical Fixes

The low-hanging fruit for energy reduction efforts is through the application of technical fixes. In new-builds as well as in retrofit situations, older technologies are being supplanted by new. Many leading industrial companies such as 3M, GM, and Volvo Group have made great efforts to reduce their use of energy in their processes. For example, Volvo Group announced in May 2018 that they have successfully reduced their energy consumption by 25% at their US facilities! As a company in an energy-intensive business, Volvo Group’s savings is impressive, and impactful. Reducing costs, lowering environmental impacts, and increasing competitiveness and investor returns are all resulting benefits.

Technical fixes are also available for other large energy users such as multifamily buildings, hospitals, and hotels. Larger organizations may have in-house expertise, or work with management companies that dedicate staff to energy reduction efforts. Smaller and medium size organizations in these business areas also stand to benefit from significant cost savings, and a corresponding increase in profitability.

Operational Fixes

As noted in the article at the Volvo link (above), that company is going beyond technical fixes: “As we shift from technical changes — which tend to have a large one-time impact — to operational and behavioral changes that are more people-driven” the company’s objectives are to continue to reduce energy consumption.

Companies like Volvo Group are showing great leadership in their commitment to, and success in reducing energy consumption. The behavioral and operational changes are a frontier that is ahead for everyone, though for the time being, for most, it is the technical changes which will bear the quickest payback.

September 10, 2017November 5, 2018

Buildings and IoT (Internet of Things)

The evolution of building energy is moving toward more connectedness and control. The objectives of this purposeful evolution are lowering costs and carbon emissions, while maintaining or enhancing comfort, safety, and reliability. One innovation that will be key to achieving these objectives is IoT, or Internet of Things.

IoT in the context of buildings refers to a next generation of building controls and components that are connected to each other, and to external controls and monitoring. A key feature of IoT is the ability to automate outputs. Automation using IoT helps optimize the efficiency of building systems such as heating, cooling, air exchange, lighting, snow-melt, water use, and more.

How IoT Automates

IoT systems and components operate in enhanced feedback loops. Sensors gather data about heat, light, pressure, mechanical stress, noise, vibration, you name it. That data is transferred through wires or wirelessly to a controller. Before IoT, that control often comes from a straightforward PID-type control which attempts to maintain the output (such as indoor temperature) at a target value.

With IoT platforms, the control is more sophisticated, incorporating multiple inputs, outputs, and algorithms. The computing power and control is cloud-based. Algorithms make it possible to combine more inputs, and add more output flexibility than is the case with hard-wired frameworks using PID control. As a result, one can say that the system is “orchestrated” through the cloud.

Examples of IoT in Buildings

IoT can monitor and control features that we don’t think much about, but that can have a material effect on energy costs and CO2 emissions. For example, for buildings with large glass facades or south-facing windows, the control of window shade positions can make a big difference in energy use. Window shade positions, and louver angles can be tied to variables such as indoor temperature, room occupancy, time-of-day, day-of-week, time-of-year, and even current and incoming weather. By automating the control of light and solar heat gain, and radiative heat loss through glass, the building is more comfortable while using much less energy.

Another example of using IoT in a building is controlling the demand for power with a microcontroller. Let’s say that a large building has its utility power disrupted, and it switches over to back-up power, such as a traditional on-site generator or fuel cells. The amount of power produced may not be as high as is normally consumed through the grid. With an IoT platform, a microcontroller can reduce power to motors, pumps, irrigation systems, ventilation systems, etc. that are equipped with ECMs (Electronically Commutated Motors) and VFDs (Variable Frequency Drives), and cut off the power to non-critical (and less efficient) on/off components.

By reducing demand for power, the building reduces energy use, making available back-up fuel supplies last longer. Reducing demand also saves money on equipment costs, by reducing the size of the equipment that’s needed for back-up.

Other Benefts of IoT Platforms

IoT is useful in reducing maintenance and repair costs, as motors and pumps, for instance, can be monitored for on-time, heat and vibration. When a motor approaches its maximum “pitch count”, or begins to operate outside of its normal parameters, that motor can be fixed right away, swapped out right away, or added to a maintenance schedule so that it doesn’t create an unexpected shut-down at an inopportune time.

Furthermore, older equipment that continues to run within normal parameters can be kept in service, rather than doing the “safe” thing and taking it out of service early in order to avoid those unscheduled, and costly shut-downs.

Extra: Integrating IoT with BIM (Building Information Modeling)

BIM is the 3-D modeling of a building process using specialized software. This software makes the building process easier, by streamlining the information stream (e.g. system design, engineering changes, etc.) that’s created and used for building a building.

BIM software programs (or SaaS) give more flexibility to the process of building a building because information can be kept up-to-date in real time, and can quickly provide cost scenarios for different options. These programs can also help to reduce costs and implementation errors.

As an increasing part of large building structures and systems, IoT platforms and infrastructure need to be integrated with these software programs. As IoT continues to evolve, BIM needs to adapt and account for these changes. This is a challenge that will be made easier as dialog and partnerships evolve along with the underlying technology.

Resources: A further resource for IoT-related subjects is IoT Hub

April 10, 2017May 30, 2019

Control and Reduction of Peak Power Loads

Peak power loads are high points, sometimes spikes in demand for power. Peak loads are a problem for utilities and their customers alike. For utilities, peak loads must be balanced with supply to avoid power shortages. When the utilities can’t respond quickly enough with their own power, they need to source power on the open market, where price spikes of 1000% or more are possible. Utilities will often attempt to reduce the occurrence of demand spikes by charging power users higher rates for peak power. It’s then incumbent on the customer to reduce or eliminate spikes in power consumption to avoid those charges.

Peak Power Background

In buildings, peaks in power usage are often, but not always associated with a high demand for cooling on summer afternoons. Aggregations of power users all using their air conditioning at the same time result in demand peaks. It shouldn’t be surprising that these aggregations of power consumption are hardest to control because they are all independent of each other and are all responding to the weather, which is out of their control. On the other hand, larger consumers of power may be better able to reduce their peak power consumption by taking steps to reduce power purchases during these peak times. This is possible either by anticipating power peaks and taking proactive steps to reduce demand from the utility during those times, or by supplementing with other power sources.

Utility Rate Structures for Power

Energy Rate

Utilities charge for the power they produce by charging for delivered energy. Energy in the form of electricity is sold in units of kilowatt hours (kWh). Along with a charge for distribution, the energy charge covers most of the costs incurred by the utility for the power it produces and delivers. What these charges do not cover are the added fixed and variable costs associated with peak power production and delivery.

“Demand Rate” for Peak Power Consumption

Where the utility has reliable base load but is challenged in meeting peak loads, they may institute a demand rate billing structure. The demand rate structure imposes a higher charge for power consumption at peak times. The demand rate structure is common in industrial and large commercial application, and has been seen in some residential applications as well.

Responding to Demand Rates

As utilities impose demand rates as a response to their challenges is meeting peaks in demand, a logical response by the customer is to lower demand at those times. If a utility charges different rates depending on time of day, the natural response is to buy energy at the less expensive time of day, and use it when rates are higher. An example of this is when a power buyer makes ice at lower rates, and then melts the ice for cooling purposes during peak rate hours. This is great for cooling, but if electrical energy is what’s needed at peak hours, then other solutions are needed.

Combined Heat & Power (CHP)

CHP is a technology that large energy users can turn to for producing their own economical baseload power, while also reducing peak levels of purchased power. As described on the CHP post, the technology can be cost-effective on its own, in economically producing heat and power, and by increasing the reliability of power. The cost savings CHP can offer by avoiding costly demand rates can also be compelling.

SCADA

Demand control for large energy users can also be accomplished with SCADA applications. From a simple metering device with peak demand warning to a full monitoring network, SCADA can be used to reduce power usage automatically or manually, as needed. This type of demand response is appropriate in situations where reducing power consumption in an ad hoc manner is realistic. Therefore, this may not be a good option for hospitals, hotels, and commercial buildings.

Throttling down, or completely shutting off power to one or several powered items is called load shedding. It makes sense to shed load from one application in order to temporarily provide load somewhere else, and when the power is constrained in some way. The constraint may be peak power pricing, or it may be a limitation in the power infrastructure. In any case, load shed is most often a temporary measure, and SCADA can be used in that way.

Conclusion

Building owners and operators have multiple avenues available for reducing energy costs through peak shaving. Having a working knowledge of these options is a step in the right direction. Contact CIMI Energy to find ways to reduce your energy costs.

Additional Resources

The Peak Load Management Alliance exists, with more detailed information about peak loads and demand response.

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.

Continue reading “CHP (Combined Heat and Power)”

January 5, 2017November 5, 2018

Distributed Energy

A powerful business case can be made for harnessing distributed energy, making it a fast growing category within the energy field. The fast pace of growth results from a combination of the maturation of a variety of alternative energy technologies, and the unwinding of utility regulation. The alternative energy technologies that typically comprise distributed energy provide building owners with the ability to cut energy costs, increase energy efficiency, reduce carbon emissions, increase reliability, and eliminate peak utility charges.

The Energy Market Transforms

Distributed energy equipment suppliers have invested heavily in hardware and software in order to achieve the goal of safe and dependable integration with the grid. Having achieved this goal, the available options for building owners to utilize alternative energy have broadened out.

A “mature” distributed energy sector means that all aspects of a distributed energy network operate safely, predictably, reliably, and cost effectively. Tying in new energy sources becomes a straightforward matter, and doing so does not adversely affect production and distribution from other parts of the grid. A mature sector also means that the power produced meets acceptable standards.

As noted above, deregulation of energy markets has been a driver of growth in distributed energy as well. With the elimination of utility monopolies, competition from new sources of power give organizations a choice in where they get their power. Among the available choices for building owners is to produce their own power, in whole or in part. In such cases, consumers become producers as well, leading to the label “prosumer”*.

With distributed energy, power sources can be placed on-site (such as on-site CHP), or off-site, such as from renewable energy sources like solar, wind, and biomass (usually as CHP). The power sources need not be local, as innovative energy contracts allow buyers to purchase the output from remote energy sources.

The Impetus for Distributed Energy

For building owners, making an investment in distributed energy must of course make sense from a timing perspective, as something that’s working is not ordinarily high on the priority list for change. The initial impetus that shifts an organization’s “energy inertia” can come from failing energy assets (such as a heating or cooling system that breaks down), or simply an energy audit that reveals costs above achievable benchmarks.

In most cases, there are several benefits that can be identified in advance. Opportunities in cost savings, as well as in enhanced efficiency and increased security and reliability are usually all present when the decision is made.

Benefits of Distributed Energy

Cost Savings

The most salient reason organizations give for choosing a distributed energy solution is to save money. The IRR (internal rate of return) for investing in distributed energy must be greater than the anticipated return offered by alternatives, including not doing anything (i.e. maintaining status quo) if that is a possibility.

With the fast pace of advancements in energy systems in recent decades, there are often good cost savings available just from reduced maintenance and repairs. By incorporating the right solutions at the outset, an on-site CHP project such as producing electricity while making process heat, space heat or hot water can bring predictable cost savings to the user.

Efficiency

Decentralization can also lead to higher efficiency where energy assets allow more energy to be captured from the fuel. A great example of this is when an organization produces it own power, and at the same time captures the “waste” heat for some internal process. Combined Heat and Power (CHP) is inherently more efficient than a case where standard power generators are used.

Higher system efficiency is to be had where companies with large electricity demand such as server farms (e.g. IT Services, ISPs, Amazon, Google, and other cloud services) are locating in out-of-the-way places that are newly served by the expansion of distributed energy. Server farms create a lot of heat, so their locations are often being located where electricity is cheap, and either where the climate is cool (making cooling the equipment much more efficient), or where the waste heat from the server farm can be used for some other purpose.

Security and Reliability

The electric grid is old and suffering from technological senescence. It is vulnerable to damaging natural and man-made events. Flooding events that cause power outages are more threatening than they used to be, particularly alongside rivers and sea coasts where much of the traditional power producing infrastructure is located. Wind storms, ice storms, fires, and human threats are thankfully uncommon, but real enough to be taken seriously.

Businesses rely on power. Distributed energy makes the power supply more reliable for those businesses with the foresight to take advantage.

Reduced Carbon Emissions

Alternative energy sources reduce carbon emissions. This result is caused either through the higher utilization of the energy content of fuel (i.e. efficiency), displacing a high-carbon fuel with a lower carbon fuel, or through the utilization of some form of renewable energy, such as wind or solar.

Hedging Against a Possible Carbon Tax

The idea of imposing a carbon tax is routinely discussed in Washington these days. Supporters include market-oriented conservatives, and progressives concerned about climate change. If a carbon tax were to be passed into law, it will be advantageous for organizations to be positioned with low-carbon utilizing assets in place.

For energy investments in durable goods expected to last 5 years or more, the possibility of a carbon tax is definitely something to weigh.

Eliminating Peak Power Charges

By providing an alternative source of energy to traditional utility-provided grid energy, additional cost savings can be secured by avoiding peak energy charges. More on this topic will be available in a separate blog post on this topic.

How to Proceed with Distributed Energy

What is required to reach cost savings, efficiency, and reliability goals with distributed energy is good planning, modelling, and execution. These are essential to achieve long-term success. Working with a team that has experience with all these working parts, and which is willing to learn about your businesses’ energy needs is probably the best way to achieve success.

CIMI Energy will serve as a conducer*, working with you and your internal team to ensure a successful result.

*An equivalent producer/consumer word blend to “prosumer” is “conducer”. But what I thought might have a lower chance of getting baked into the language, “conducer” is, as it turns out, an actual word in the dictionary. It means “a person or thing contributing to a specific result” 🙂