How can businesses use thermal energy storage to cash in on Flexiwatts?

January 29, 2016

The commercial sector accounts for a massive share of the nation's electricity use. According to the Department of Energy, commercial buildings are responsible for a fifth of the entire nation's energy consumption. Half of that energy use goes toward electric lighting and HVAC systems, highlighting a massive opportunity for businesses to limit their expenditure by controlling consumption. Traditional wisdom might suggest that business owners should take measures to control their energy use.

However, a better understanding of the energy grid reveals that WHEN electricity is used matters as much as the amount. Arthur Vos, CEO of British Columbia-based tech firm Enbala, emphasized this point to EnergyEfficiencyMarkets.com last October at the 2015 Distributed Sun New Energy Summit.

"The amount of flexibility that already exists on the grid is phenomenal. What you're doing is using resources that are...already paid off and you are using them for the benefit of the grid," said Vos.

He also noted that the same heating and cooling systems that drive energy consumption in commercial buildings could be used as the fulcrum of a strategy to take advantage of the grid's hidden flexibility.

The Rocky Mountain Institute expanded on this flex-centric way of rethinking energy consumption in their 2016 report, The Economics of Demand Flexibility. According to the RMI's findings, taking advantage of demand flexibility applications can help customers cut energy costs by up to 40 percent and will take significant pressure off of the grid.

The report also coined the term "Flexiwatts," which refers to energy that is consumed during periods when the grid's electricity rates are at their lowest. Thanks to widespread access to more granular energy rate structures, the grid is more flexible than ever. Through existing proven technologies like thermal energy storage, commercial business owners can start taking advantage of Flexiwatts.

According to RMI, "Demand flexibility represents a large, cost-effective, and largely untapped opportunity to reduce customer bills and grid costs. It can also give customers significant ability to protect the value proposition of rooftop PV and adapt to changing rate designs." "With enough participating customers, flexiwatts can be used to flatten the grid's aggregate demand profile, lowering overall system costs."

Demand response taken to the next level
Many commercial decision-makers are familiar with the concept of demand response, which refers to monetizing incentives provided by local utilities to limit their own consumption during certain periods of the day. Many of these programs have been extremely successful in shaving peak demand, but the strategy can be stymied by lack of participation by the wholesale electric market.

Demand flexibility is ongoing, making the strategy similar in nature but very different in execution when compared to demand response. Instead of simply adjusting energy consumption based on the instructions of utilities, demand flexibility allows businesses to continuously manipulate demand profiles to minimize costs and subsequent impacts on the grid. Typically, autonomous energy controls are used to ensure that energy continues to be delivered to end users without perceptible changes in performance. Considering that most commercial buildings have access to granular rate structures, demand flexibility applications offer significant cost savings to companies regardless if they employ a demand response strategy.

Thermal energy storage is a proven solution
One of the most exciting aspects of the opportunity made possible via Flexiwatts is that the technologies and systems necessary to control consumption are already available. In some cases, these technologies are well developed and have been in place long before the term Flexiwatts came into existence. Thermal energy storage applications, for example, have helped businesses to adjust their demand profiles all over the world.

Thermal energy storage solution offers demand flexibility.

Thermal storage has been adopted by major corporations, research universities and military installations alike, and helps buildings to enhance demand flexibility. According to RMI, energy storage is "commercially available today, to manage demand charges, optimize for time-varying energy prices, and improve control and visibility of large loads in commercial buildings."

The modular tanks allow companies to store energy in the form of ice, which is then used to cool buildings throughout the day. This ability to shift cooling loads across hours of the day levels the building's electricity load profile subsequently lowering energy costs for the business.

Engineers enlisted by the McConnell Air Force Base in Wichita, Kansas, for example, elected to use thermal energy storage precisely for the high level of flexibility the system's multiple operation modes gave operators over the base's demand profile. This level of control is exactly what is necessary to help businesses cash in on Flexiwatts by bringing down their energy costs considerably.

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