Hotels and resorts can significantly cut operating costs by reducing peak energy consumption
September 30, 2015
Green building has become an increasingly popular trend in the hotel industry over the past five years. According to McGraw-Hill Construction's 2013 Green Retail and Hospitality SmartMarket Report, nearly 30 percent of hotel owners described half or more of their facilities as green projects in 2011. By 2013, this percentage of hotel owners had risen to 48 percent, and the same study expects over 60 percent of hotel owners to be operating a majority of green facilities by the end of 2015.
The data shows that green buildings offer considerable financial benefits for hotels and resorts willing to take advantage of green building techniques and sustainable operating strategies like demand response. The McGraw-Hill report recorded an 11 percent increase in asset value for hotels showcasing green building features, along with a 4 percent decrease in annual operating costs. Hotels and resorts face many unpredictable cost factors going forward, including growing electricity consumption and ramped-up HVAC requirements, so it makes perfect sense for administrators to deploy cost-mitigating strategies like demand response and permanent load shifting. Both strategies qualify for LEED credits under the U.S. Green Building Council green credit rating system.
Demand response strategies for the hospitality industry
In an effort to both ease the burden on the power grid and encourage sustainable construction, several states have rolled out demand response plans that incentivize limiting energy consumption during periods of peak demand. Because hotels consume large amounts of electricity they make perfect candidates for demand response.
In some cases, hospitality facilities can cooperate with demand response programs by implementing new energy consumption policies to be followed during periods of high demand. Hotel News Resource recommended that hotels can dim lights, reschedule the majority of the building's laundry or shut down aesthetically pleasing energy wasters like fountains and decorative lighting arrays. In addition to helping the hotel earn the financial rewards offered by the utility in exchange for participating in demand response programs, these strategies are so subtle that guests are generally oblivious to sustainable solutions being implemented all around them. The resource also recommended adopting onsite energy storage as a means of taking demand response to the next level.
Pacific Palms Resort saves big by shifting consumption with energy storage
The Pacific Palms Resort in Industry, California is a fine example of a hotel or resort enjoying the cost-saving benefits of energy storage. Though the resort does not participate in demand response, the facility does takes advantage of permanent load shifting (PLS) via a thermal energy storage system installed by CALMAC that shifts demand from peak periods to nighttime hours. PLS takes demand response to the next level by not waiting for utilities to call upon facilities for load reduction. Instead, pioneers in permanent load shifting applications take the initiative to reduce peak energy consumption every day. One proven technology useful in PLS applications is IceBank thermal energy storage. Thermal energy storage tanks provide the storage capacity necessary to shift a portion of the energy consumption from daytime hours, when the cost of electricity is at its highest, to nighttime hours when electricity rates are dramatically less. Thermal storage can reduce peak energy consumption permanently or on demand via a demand response program. Both methods reduces strain on the grid while rewarding consumers financially for conserving energy. The Pacific Palms Resort reported saving over $300,000 in energy costs due to energy efficiency upgrades including thermal energy storage.
Consider the future impacts of higher consumption rates and utility pricing
If a hotel or resort administrator isn't already considering strategies to reduce the building's electric bills, such as demand response or PLS, they should probably consider changing this mindset in the near future. That's because two of the factors contributing to the hospitality industry's high utility bills are expected to push those costs even higher.
Hospitality Net noted that the cost of electricity, already one of the largest utility expenses on a hotel's monthly utility bill, continued a trend of annual surges going up by 4.6 percent during 2014. Similarly, consumption of electricity across the industry is continued to maintain its upward direction. Though electricity costs and consumption are not always directly related, facilities are bound to pay for the extra use somewhere down the line unless they mitigate these costs with proven strategies like demand response and permanent load shifting.
