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• DR and DE In or Out of Synch

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Photo: 4 Seasons

Onsite power commissioning raises hopes, but results do not always meet expectations.

The same sometimes occurs with demand response (DR): Typically it pans out, but sometimes not.

Garth Ramseier, president of a warehousing business in California, has explored a variety of electricity-saving solutions—solar PV panels, onsite combined heat and power (CHP), and DR. He muses: “The crazy thing about these [projects]—and I can see why people don’t do them—is, as an owner you say, ‘as in any deal there’s a gamble in it.’ You hope it does what its supposed to do.”

Fortunately for Ramseier in his latest stake—betting on DR and efficiency retrofits—“it outperformed” for him substantially. He’s delighted.

Comparing the options of distributed energy (DE) versus DR, the latter has certain inherent appeal: It usually demands relatively little up-front from a client and gives a quick return.

Photo: 4 Seasons Keeping produce cool while avoiding high energy bills is the perfect task for energy management systems.

Though the actual payout in Groff’s deal turned out much less than expected, he cannot argue with modest results, given his small outlay.

Groff and other energy managers gain both from DR and from what is now routinely a third element tightly integrated with it: namely, intelligent, integrated, automated energy management systems (EMS). These provide, in addition to a net energy improvement, a suite of robust analytic tools for efficiency optimization and assorted other benefits, working with or without onsite generation and/or load reductions.

Increasingly, this evolving, typically Web-based EMS technology seems the logical prerequisite for doing any significant generation or load-management, above a half-megawatt range. EMS providers would of course tend to agree: Neither significant DE nor DR should be considered without having some version of this rigorous assessment tool and load manager installed in the place first, particularly for industrial, system-critical functions.

Absent the use of EMS, an adopter of either DE or DR risks missteps and disappointments. One vendor describes the unhappy case of a storage plant in Guadalupe, Mexico that “tried twice to do this [DR] manually,” says Bob Zak, president and general manager of Powerit Solutions in Seattle, WA (providers of Ramseier’s energy program noted above).

“A phone call would come in, and they had a maintenance guy all ready to go,” he says. “He had a list of loads that add up to, say, 500 kW. And so he runs around the plant and turns off pieces of equipment. But what happens is, maybe he makes a mistake and turns off one wrong one, or he leaves it off too long. It only takes one real screw-up to negate all the benefit of a DR program.”

This kind of susceptibility to operator error probably accounts for some past historical attrition out of DR. But an integrated EMS will assist proper CHP plant sizing and operation, as well as DR load curtailment, along with day-to-day, energy-efficient management—with or without cogen or DR pieces.

The efficiencies realized from an EMS may also eliminate the need for exploring CHP or, if it’s undertaken, will cost-justify and then help manage it.

If DR is implemented, EMS-based automation becomes indispensable, as the Guadalupe case shows. An EMS can be encoded with industry benchmark intelligence, for example, to help a site match its performance against standards, and flag load reduction opportunities from comparable circumstances.

EMS also tame complexity. The DR universe spans an unwieldy assortment of curtailment and load balancing programs across the country. Each one applies its own sometimes-arcane rules (occasionally with steep penalties for violations), varied payout schedules, and numerous time-increment settings.

Thus, especially for an industrial concern that wants to get a handle on multiple sites, management of these scattered tariff quirks is greatly facilitated by being centralized and integrated, Zak suggests.

Corporate energy managers will also benefit from the DR aggregators’ broader knowledge and expertise in both DR and CHP experience, he adds.

Staffan Akerstrom, chief operations officer for energy firm EPS Inc. (Costa Mesa, CA) describes EPS as an “energy intelligence company” for doing industrial analysis, efficiency, DR, CHP, and clean power management.”

Photo: 4 Seasons Peak shaving requires incremental adjustments and constant communication from the grid to the floor.

“There’s so much excess, we think,” in most industrial plants—speaking of cumulatively wasted energy and inefficiency—“that I can’t think of anyone who has not done a good job at managing their energy, who probably has less than 20% excess energy usage,” says Akerstrom. “And so [for example], if I were to look at doing CHP at a plant [before attempting a feasibility and sizing study], I’d probably first discount the entire load profile 20%.”

EPS’ philosophy for clients boils down to a simple sequence: “First you have to control it, then replace inefficient assets, and then shift to cheaper energy.”

In mid-2008 EPS embodied this thesis in launching the company’s Web subscription-based xChange Point system for doing refined tracking of plant electricity (both grid or CHP); equipment performance, gas, water, weather, and carbon emissions, and comparing these to the plant’s productive output. After about six months of offering xChange Point, EPS has received contracts with a potential to install about 140 systems, with a dozen put in so far, notes Akerstrom.

In taking this approach, data is extracted from potentially thousands of site-monitoring points, fed into the Internet, and massaged for browser display and remote onscreen management.

“On a real-time basis,” energy managers can find “how to best dispatch and manage these loads,” notes EPS’ Dick Williams. Real-time is obviously much better for actionable data than are end-of-month printouts.

Once the data pops up on the screen, managers can often spot opportunities jumping out almost instantly, he says—“things that they didn’t know were going off, things that are out of synch or out of range and costing a ton of money, but were otherwise hidden.”

For example, one corporate manager discovered that one of the company’s distant plants was wastefully firing-up its cogeneration at 4:30 a.m., hours before any production began.

Monitoring of carbon emissions is also integrated, adds Williams. This facet assist firms in complying with evolving and restrictive environmental standards, increasingly weighing on decisions.

25–Year Solar Payback Versus One for DR

For Ramseier’s Anchor Warehouse Services Inc., rate hikes were adding five-figure annual increases to his electric bills, which were already about $400,000 a year, spent to keep farm produce cool in his neck of the California Central Valley.

Looking at alternatives, solar PV needed a 25-year payback—hardly doable. And CHP numbers “didn’t jump off the page” either, he says.

As for DR:  Yes, Ramseier had heard of it, “But, we didn’t think we could ever do it here,” due to 100°F-plus days coinciding with table-grape season. Grape storage demands an unvarying 32°F.

Photos: 4 Seasons Four Seasons spends about half its nearly 8-million-kWh annual load keeping refrigerator temperatures 34°F–55°F in a 260,000–square foot warehouse.

Two further problems he found with local DR were these:

Dealing with utility Southern California Edison (SCE), he discovered that if you sign a contract and can’t perform, you get penalized. You’re worse off than before.

Second, vendors of EMS who can protect against such penalties, “try and make their system as proprietary as they can,” he believes, to thwart customer defections and to upsell services.

Skimming through trade magazines and surfing the Net for EMS alternatives, Ramseier explored four providers, winding up with PowerIt.

Going this route, his DR contract would be pooled—via an aggregator partnering with PowerIt—together with those of other clients. So, if Ramseier failed on a given DR call, he wouldn’t get penalized.

That solved one problem. PowerIt also “took the process from one end to the other,” completing an easy turnkey installation in a few weeks.

A control center was installed to link together a truckload of new Konnekt wireless input/output (I/O) switches throughout Ramseier’s 100,000-square feet, 11-room warehouse in Porterville. Every fan, refrigeration valve, compressor, condenser, and even a few sensors nestled into the grape clusters themselves—all told, close to 200 elements—could be controlled and monitored from Ramseier’s desktop. His own fine-tuning and micro measurements “allow the system to trim where it can, without affecting anything” temperature wise, he says.

Also hugely important in the equation: Older, single-speed fans were upgraded with variable drives. With these, “Savings are gigantic,” he found. The system’s monitoring instantly indicated that retrofits whacked kilowatt usage down to just half or a third.

To do peak shaving, the fine incremental adjustments enable turning off fans or other elements, here and there, without lowering temperature. Cell phone calls from the utility arrive, and Ramseier decides each time on the kilowatt amount and duration he wants to donate to the cause. Depending on what’s in cold storage at the moment, he could potentially either shut down most of the plant or do nothing at all—“with a few settings on the screen,” he says.

All in all, the combination of efficiency retrofits and automated controls have yielded a bumper crop of economizing in a single season.

Some numbers:

• After system commissioning in July 2008, year-on-year peak demand was chopped by 35% the first summer.
• “We got a straight-out savings of 17% off our bill in a [partial] year,” he says.
• Although productivity increased about 15% in 2008 over 2007, energy usage was actually down about 13–15%.
• The first site (Porterville) pencils-out to a one-year payback.
• A second (Exeter, due in June 2009) projects payback in a year-and-a-half.
• As for DR: Although Anchor contracted for six SCE calls a year, only one actually came and yielded money, a few thousand dollars.

So, in sum, the real honey-pot is the outright “free money” that comes month after month, simply for being available for a curtailment. In doing the contract, PowerIt had conservatively estimated that SCE might rebate him about $52,000; here, Ramseier got a nice surprise from the utility, for a change—“We actually got $84,000.

“But,” he reminds himself, “Edison will chew that away with increases again.”

Bottling Lower Rates
Jim Smith, VP and general manager at Aaron Industries, helps run a plant in Lynwood, CA, that bottles name-brand pharmaceutical products. Under a DR agreement with SCE, he lowers kilowatt loads in return for lower rates. It’s a fairly aggressive contract, he says: After receiving an e-mail request, curtailments may last from noon to 6 p.m. on a given day.

“We’re signed up to provide 10 to 12 demand events from May or June through September,” says Smith. Several might occur in a month.

Adjusting load at that magnitude would put a crimp on making, in this case, one particular bottle type, which is being mass-produced virtually non-stop. So, to make room for lower power, the number of bottle molds was increased, boosting bottle production so as to enable “flex” power curtailments.

DR service is managed by EPS. Of this arrangement Smith says, “Basically, they shut down our chiller and our five blow-molding machines for the bottles, to get the wattage they need.”

Since its installation in spring 2008, Smith has seen kilowatt numbers on his screen shrink about 18%, year to date. In dollar terms, billings which were nearly $52,000 for a brief few months prior to the DR efficiencies, were cut to $42,500 for the same period afterwards, even before summer.

“We get a lot of neat features,” he sums up. “We can read what our kilowatt usage is. We can see if there are peaks. So we can actually learn more about how we’re consuming our energy. There’s a lot of benefits to the program.”

Four Seasons, Three Curtailment Options
Four Seasons Produce Inc. (Ephrata, PA) spends about half of its nearly 8-million-kWh annual load on keeping refrigerator
temperatures between 34°F and 55°F in a 260,000–square foot warehouse, notes Groff, the company’s director of facilities and energy.

Several years ago he learned about the DR “free money” concept, and soon was exploring options with four curtailment providers. Then a chance conversation led him to EnerNOC, which does energy management, procurement, efficiency, and DR in most of North America, from eight locations, as its Web site states (www.enernoc.com).

Based on assumption on how much DR Four Seasons could handle, EnerNOC guesstimated a flow of utility rebate checks amounting to a little over $40,000 annually. EnerNOC’s contract-winning offer then consisted in giving Four Seasons a higher percentage of revenue, along with installing completely free metering, capable of minute increments.

After signing up in April 2007, Groff’s DR went online that fall.  

In the mix were three DR program options available in the Pennsylvania, New Jersey, Maryland (PJM) regional grid: “synchronous reserve,” “emergency,” and “economic.”

“Synchronous reserve” denotes a load-reduction call by the utility, typically to preserve grid reliability. PJM’s regional DR partners receive advance notice; if they come, curtailments may last up to 30 minutes.

To respond, EnerNOC provided Groff a sophisticated tool “to actually shut our whole refrigeration system down,” he says.

In impact, it’s quite a brownout.

“We’re reducing maybe 1.2 megawatts,” he says, of a total 1.4-MW load, for the whole facility. “So that’s what we go to market with, as far as the synchronous reserve.”

“Economic” curtailments are load reductions done by the site owner in response to an advance notice of high electricity cost.

“Emergency” curtailments—he says, “by far the most profitable, even if no calls ever come”—occur from April to September. PJM makes these to avoid blackouts. Durations range from a few minutes up to six or eight hours, and minimum/maximum kilowatts are based on calculations of how long the Four Seasons chiller can be sustained on low power.

Calls for either synchronous or emergency needs come by phone or e-mail, perhaps minutes before an event. This being the case, what’s key to Groff is the automated response. On signal, the chiller shuts down, and then comes back up without human intervention.

“All we have to do internally is make sure things do come back to normal,” says Groff. “We don’t need to have people running around shutting breakers off.”

With automation, there’s flexibility to override, reset thresholds and maximums, and such, at will.

Refusing to curtail is permitted, but if it happens too often it will jeopardize future participation, Groff notes.

For 2008, his call logs show about 20 events, all synchronous reserve, totaling 164 minutes, with most lasting fewer than 10.

Even at only 50% of anticipated income, he is very pleased.

“We’ve got free metering installed,” says Groff. “I can go online any time, day or night, and see our usage in almost real time. So, there are a lot of benefits to it. And, we’ve got $20,000 in our pocket that we didn’t have last year or the year before.”