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May 21, 2019May 21, 2019

Peak Demand Flattening for Natural Gas Utilities

Using Demand Flattening to Alleviate Capacity Constraints

Shifting natural gas demand away from demand peaks has several benefits for utilities. The most obvious benefit is that it helps alleviate natural gas constraints that can arise on very cold and very hot days.

Capacity constraints occur when demand is highest. They also can occur in local areas where older gas lines require a lower limit for safe pressure levels. (Higher pressure in older distribution lines may also contribute to higher rates of methane leaks.)

Flattening demand also can help reduce or eliminate low pressure at distal points in the distribution network.

Visualizing Peak Demand and Demand Flattening

The following chart shows an example of what demand looks like over the course of one winter day for a large multifamily property. Over the course of this 24 hours, the building consumes 1020 therms of gas. In this example, the peak consumption is in the morning, from about 6:00am to 10:00am. A second, smaller peak occurs in the late afternoon and early evening.

The example shows the exact same consumption over the 24 hour period. The only difference between the two is that the red line is flatter, spreading out the demand, and maxing out at 50 therms/hour, a 17% reduction from the 60 therm/hour peak.

Incentivizing Demand Flattening

Ideally, the best and most cost effective way to manage capacity constraints is to incentivize natural gas consumers to willingly shift their demand away from peak hours. This can be true during all times of the year.

This is already a common practice with power utilities, and to some extent with district energy utilities. In both cases, the utility is charging more for consumption during peak periods, in the form of a demand rate. What consumers of electrical power do to reduce their demand costs is either lower demand during peak summertime hours by raising thermostat settings, or they shift consumption to off-peak times of the day (e.g. making ice at night for cooling during the day).

As noted, power and district energy utilities use demand charges. This is the “stick” approach. Utilities could also offer a “carrot” in the form of either a monetary benefit, or some other kind of reward. There are many rewards, both tangible and intangible, that can be considered.

Using Leanheat AI Technology for Peak Demand Reduction

Leanheat technology success to date has been reducing peak demand in district heating networks. The technology applies equally well for natural gas distribution networks. The only difference is the source of energy: hot water, steam, or natural gas.

The technology works best is dense buildings with a constant, but not necessarily consistent demand for thermal energy like apartment buildings, nursing homes, and retirement communities. The consumer (or tenant) receives more consistent and comfortable indoor temperatures.

Leanheat uses artificial intelligence (AI), combined with lots of data; each building’s “energy fingerprint”, and near-term weather forecast data. Virtually any kind of incentive can be embedded in the software as long as the incentive can be digitized for the underlying algorithms.

Alternative Methods of Peak Demand Reduction

Lowering peak demand can be accomplished in several ways:

In some cases it’s possible for a customer to shift to an alternative (supplemental) form of energy. This isn’t common.
It can be possible to lower peak demand through conservation during peak periods.

An example of raising or lowering the thermostat settings by several degrees for a limited period of time has been field tested in Southern California. One downside of this approach is that it requires thousands of typically single family homes to sign on in order to make an impact. Another downside is that it only reduces peak demand for a few select days, as opposed to every single day with the Leanheat approach.

Conclusion

It makes sense for natural gas utilities to reduce the intra-day volatility of natural gas delivery. It reduces peak upstream gas pressure requirements on a daily basis, and provides more consistent pressures at the ends.

Leanheat is the logical technology choice for achieving meaningful reductions peak natural gas demand.

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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