April 7-9, 2013
TURNING YOUR BUILDING INTO A VIRTUAL POWER PLANT THROUGH THERMAL ENERGY STORAGE & DEMAND RESPONSE
Paul Valenta, Vice President of Sales & Marketing, CALMAC
HVAC systems account for nearly 40 percent of the energy used in U.S. commercial and residential buildings. How can building owners balance cooling needs with sustainability? The answer lies with becoming a member of a community and being good stewards. The local grid community can work together to lessen the environmental impact of our increasing energy needs. Community members with energy storage systems act as “virtual power plants,” and that’s where the smart grid is heading.
This paper will use a real-life case study of a Philadelphia high-rise to demonstrate how thermal energy storage can lower on-peak energy, generate additional revenue and contribute to a smart grid system.
Introduction and Background:
Energy consumption is increasing and seems to be a part of almost every aspect of modern living. Combine that with a power grid that is reaching capacity and more frequent extreme weather due to climate change and you have significant proof that change needs to be made when it comes to how we approach energy consumption in the United States.
Heating, ventilation and cooling in commercial buildings account for 34 percent of energy used on site and 31 percent of primary energy use. As such, improving energy storage in HVAC systems presents one of the biggest opportunities when it comes to reducing energy consumption and meeting new sustainability goals. By incorporating energy storage into a commercial building’s HVAC system, building owners and operators are able to control the timing of their energy consumption and implement a demand response solution.
Increases in peak demand, the hours during the day when energy is at its highest consumption rate, presents a major threat to the reliability of nation’s power grid. To meet high times of high demand utility companies have to rely on reserve capacity. But this is not always enough. Heatwaves during the summer of 2012 created increases energy consumption, which resulted in blackouts. The importance of energy storage is even more apparent since the electric transmission grid does not always allow excess resources to be shared from region to region.
Many power plants rely on fossil fuels, which all have one inherent characteristic: it’s stored energy. Coal is not energy until it is heated. Oil is not useful until it is burned. In contrast, renewables such as wind is energy but needs to be stored to become a viable replacement for coal or oil. Whether the renewable energy is being integrated directly into the commercial building or on the utility end, storage is a necessary component.
Thermal energy storage systems store energy using renewable energy sources or off-peak electricity, when rates are lower. This allows the building to act as a battery. Thermal energy storage shifts some of a building’s energy consumption from on-peak to off-peak times, cutting cooling costs by up to 40 percent while reducing source energy consumption. Consuming nighttime energy results in less CO2 emissions from traditional power sources while encouraging investment in renewable energy resources.
This system not only has environmental benefits but also financial benefits. Utilities acknowledge the fact that they are unable to meet all of the demand in a region during peak hours. If a power plant is reaching its capacity, instead of the plant generating more electricity, it may be cheaper to pay the building to lower its load. By utilizing real-time pricing or incentive programs the building is able to sell energy back to the grid and create an additional revenue stream.
A recent ice-based thermal energy storage retrofit in a Philadelphia high-rise provides a prime example of how a commercial building can act as a member within the local grid community. This commercial space spanned 270,000 square feet and 22 stories and was utilizing an outdated and inefficient HVAC system. This was wasting energy and creating an uncomfortable environment for its tenants.
Approach / Experimental:
To combat the significant amount of energy usage, the Philadelphia high-rise chose a solution that included thermal energy storage tanks and two 300-ton chillers – each installed at the same cost as the existing system. Load optimization software was then incorporated to the system to help. This software determined the duration and rate of use of charging and discharging the ice-based thermal energy storage based on real-time price adjustments made by the utility company. The building could call on the stored energy to substantially reduce its mechanical cooling load for demand response without any effect on the tenants, unlike alternative demand response methods such as changing the thermostat and shutting off lights during energy emergencies.
Results and Discussion:
The system proved a reliable investment with a payback period of only two years. Demand Response software in combination with the thermal energy storage tanks enabled the building to forecast power prices and utilize its HVAC system to generate revenue, essentially becoming a “virtual power plant” in the eyes of the utility. The power plant provides a financial incentive to reduce energy consumption during peak demand hours. The price is lower than what it would cost to provide the building with the extra power creating an arrangement that benefits both the utility company and the building.
The new energy storage based system is saving nearly $40,000 a month on energy costs during warmer months, when more cooling is required to keep tenants comfortable. The ice storage operates as a demand response system, generating an additional $10,000 of revenue per year by responding to market-based pricing and demand response programs.
Summary and Conclusions:
Overall, the new chillers and thermal energy storage tanks provided the Philadelphia commercial building with a system that not only offered the best net present value and significantly cut energy costs but also helped the building prepare for future changes in energy. This high-rise became the first building in downtown Philadelphia to integrate with the Smart Grid and use its HVAC system to earn revenue. The end results are reduced congestion on the utility grid, optimized energy storage to in turn generate revenue, reduced costs and increased reliability.