New Ways of Using Energy Could Redefine the Role of Commercial Utilities and the Building-Utility Relationship
WASHINGTON, DC - Danfoss, a leading manufacturer of high-efficiency electronic and mechanical components and controls for air-conditioning, heating, refrigeration, industrial and water systems, recently hosted its 21st EnVisioneering Symposium in Washington, D.C. The event, titled "The Decade Ahead: Trigger Points to Efficiency," assembled executives in the HVAC and related industries, as well as leaders in research and business, to discuss the future of energy efficiency in new and retrofit buildings. Specifically, the symposium outlined the converging technologies and trends that could redefine the way energy is used in buildings and reshape the role of the traditional electric utility.
"Energy efficiency is the first fuel and the cheapest, fastest way to meet our energy needs," remarked Senator Jeanne Shaheen during her keynote address, setting the tone for the conversation. "In the last 40 years, we have saved more energy through efficiency than we have produced through fossil fuels and nuclear power combined in the U.S. When you think about it in those terms, it has tremendous opportunities for savings and could really help address our energy needs in the long term."
Converging Technologies & New Opportunities
The U.S. Department of Energy predicts that 75 percent of buildings are expected to be new or renovated by 2035, which means a major opportunity for deploying energy-efficient building technology. According to symposium participants, these emerging and maturing technologies -- such as variable speed air conditioning, solar power, combined heat and power (CHP), and energy storage -- are reducing energy use today and, when broadly deployed, harbor even greater potential to improve building energy efficiency, both individually and in the short term.
But the convergence point of these technologies, suggested Robert Wilkins, vice president public affairs, Danfoss, is the current period of low price and plentiful natural gas. "With much higher building efficiencies and onsite photovoltaics, combined heat and power generation, and cleaner fuel, we will no longer be as dependent on massive coal-fired power plants that often have to be located miles and miles away from our cities," he said. "Several utilities are now converting old coal-fired power plants to natural gas to reduce emissions. This is likely to increase with [the proposal of U.S. EPA's] Section 111(d)."
Natural gas, according to R. Neal Elliott, associate director for research at the American Council for an Energy-Efficient Economy, also brings to life the potential for CHP systems, which currently provide just 12 percent of annual power generation, but are efficient, reliable, and environmentally-friendly. Plus, utilities are well-suited to owning CHP systems as they understand their distribution systems and customers, costs can be rate-based, and benefits can be shared system-wide.
"The EPA estimates that a 5-MW natural gas CHP turbine can produce the same amount of energy as the grid but with only about half of the CO2 emissions," he noted. Average grid-provided electricity, in contrast, is only 33 percent efficient, wasting the other 67 percent of fuel. "That's a bigger bang for your Btu buck!"
Building Trends & the Changing Business Model of Utilities
By optimizing the efficiency of individual technologies, the opportunity of systems -- specifically, a whole building systems approach -- today has garnered the attention of industry, large buildings, and multi-building owners who are becoming increasingly interested in the benefits of efficiency and sustainability. This includes industry's move toward new, low-GWP refrigerants, and exploits the benefits of "big data" and the connectivity of buildings and technologies.
It is estimated that in the next 25 years, 50 percent of commercial space will be new -- indicating a dramatic change in a short period for buildings. At the same time, industry is seeking to improve the efficiency of existing buildings through improvements in ASHRAE Standard 90.1, a proposal for which is seeking a 7 percent gain in efficiency by 2016.
Together, these trends are relevant to the new opportunities emerging for net zero energy and onsite generation/district energy on a broad scale. Ralph DiNola, executive director of the New Buildings Institute, described the net zero building as the number one trend his organization sees today. In fact, he notes that the number of net zero buildings has doubled in recent years.
As the use of natural gas, solar, storage, and microgrids will continue to impact the cost of electricity for commercial buildings, symposium participants focused on the idea that the role of the traditional electric utility also will be impacted. Higher standards for building efficiency and the move toward net zero buildings will increase the role of data which already is widely accessible, and, as buildings become less reliant on the grid for power generation, utilities will need to redefine their business model.
"Last year, utilities installed more renewables than the private sector, which seems to be recognition of the issue they have before them," DiNola commented. He explained that in places like Hawaii, Arizona, New York, and California, the cost of solar and storage has now dipped below the cost of retail electricity. "This is exciting and I actually think that utilities are the ideal market actors to be developing renewable energy systems, district energy systems, and microgrids."
Discussing specific electricity market pricing and demand opportunities, David Ulmer, project manager at EnergyCAP, Inc., explained that, today, building owners could actually be paid to reduce energy costs. By reducing consumption on those days of the year when demand is highest, he suggested that the United States could save energy and billions of dollars in transmission and generation investment.
"Market designs can help incentivize certain behavior, causing electricity demand to respond when conservation is needed most. Building owners and consumers can see significant utility savings and make some real money," said Ulmer.
Practical Deployment: Finding Value in New Approaches
Moving forward, the changing vision for energy efficiency and the building-utility relationship would require more advanced and defined benchmarking and disclosure practices.
DiNola remarked, "The idea of knowing how your buildings are performing is so vital in understanding what to do next." Building owners will need to rely on a shared knowledge of payback on net zero or onsite generation projects in order to prove the value of energy-efficiency programs.
To shed light on how new opportunities for energy efficiency can be actively deployed today, Dr. Kurt Roth, director, building energy technology, Fraunhofer USA, and Vincent Cushing, president, chief technology officer, and co-founder of QCoefficient, presented demonstration case studies -- highlighting the practical deployment of technologies impacting building efficiency and the utility relationship.
Roth's case study discussed Fraunhofer's "Living Laboratory," a mixed-use and active office and research space, and demonstrated to symposium participants the benefits of integrating high-efficiency technologies, including low-lift cooling technologies, radiant floor cooling and heating, active chilled beams, radiant sails/panels, displacement ventilation, dedicated outside air systems, LED lighting, energy recovery ventilation (ERVs), and building automation systems, into new and existing buildings. Together, these systems have helped to successfully reduce building loads, but Roth noted that integration and ongoing commissioning are critical to system optimization.
Cushing then explained how innovative software can reduce HVAC energy use and expenses up to 30 percent, improve electric generation efficiency and environmental performance, and introduce demand elasticity into grid markets. Using Chicago's Willis Tower as an example, he presented the case for turning buildings into batteries capable of storing energy on a multi-MW scale. They key to deployment, he said, is educating buildings owners and managers about the potential of new software strategies in supporting their efforts to maximize efficiency and improve tenant comfort while reducing cost, extending equipment life, and supporting corporate sustainability goals.
These examples combined with proof of trends and opportunities in technologies and buildings elevated the idea that the future of the traditional utility and grid could soon change. Achieving energy efficiency will, ultimately, require a unified approach while establishing a new building-utility relationship in the decade ahead.
But, progress, participants discussed, will depend on the continuing education of building owners, who are not always aware of the many high-efficiency technologies available today for installation in their buildings.
"Moving forward, the opportunity for energy efficiency, net zero energy, and emissions reductions is great," commented John Galyen, president, Danfoss North America, at the close of the symposium. "What became increasingly evident throughout the presentations and discussion at this symposium is that, while converging technologies are creating a trigger point for change, these changes will define a new utility model of the future. And, that reality would require a change in the mindset of everyone -- from the equipment manufacturers to the building owners and maintenance professionals to the electric and natural gas utilities."
Related links: www.envisioneering.danfoss.com
Danfoss is a world-leading supplier of technologies that meet the growing need for food supply, energy efficiency, climate-friendly solutions and modern infrastructure. The company's wide range of products and services are used in areas such as cooling food, air conditioning, heating buildings, controlling electric motors and powering mobile machinery. The company also is active in the field of solar and wind power as well as district heating and cooling infrastructure for cities and urban communities. Danfoss was founded in 1933 in Nordborg, Denmark. Today, the Group employs around 22,500 employees and sells its products in more than 100 countries around the world. Read more about Danfoss at www.danfoss.us. Learn about its energy-efficient solutions at http://www.danfoss.com/SolutionsReady/.
With sales offices and production facilities located throughout North America, Danfoss has the local support necessary to help our customers solve their greatest challenges. Through EnVisioneering(SM), Danfoss creates engaged partnerships with our customers by combining engineering innovation to develop products and solutions that are energy efficient and environmentally responsible, while also helping to reduce emissions and ensure sustainable business growth. For more information about EnVisioneering, visit www.envisioneering.danfoss.com.