Keith Rice, OUCooling's director of chilled water services, lends scale to the 160,000-ton-hour TES tank during construction. The tank will serve the chilled water needs of both the Orange County Convention Center and Lockheed Martin through the use of two miles of 36-in. chilled water supply and return piping mains.
A major expansion to a leading convention facility meant facing a major investment in new chiller plant infrastructure. However, a creative commercial and technical approach, outsourced district cooling (DC) service using chilled water TES, provided the necessary capacity - with added economy, performance, and 15 MW of demand-side management - for the convention center and other chilled water customers. The use of TES saved the DC developer over $5 million in net capital cost and over $500,000/year in energy costs.

Recently, the Orange County Convention Center (OCCC), the major convention center facility in the Orlando area, was in the process of planning to double in size, to become the largest such facility in North America. The expansion plans involved a new and expensive 10,000-ton chiller plant to serve the expanding air conditioning requirements. The Orlando Utilities Commission (OUC) - already involved in DC utility developments - conceived, developed, and executed a technically and commercially innovative DC project together with its partners and consultants. The selected approach incorporated TES in a manner that created and captured value for all the project participants.

By choosing to "outsource" its supply of chilled water from the local DC utility, the convention center (and the other chilled water customers of the new DC system) avoided the need to invest capital in its own chiller plants. Existing chiller plants were acquired by the DC system developer and operated in an integrated manner with a new TES system to provide the necessary peak cooling load and redundant back-up capacities efficiently. As a result, customers are able to focus their capital (as well as their efforts and energies) on their core business, leaving chilled water generation responsibilities to the DC utility.

The DC utility was able to leverage the long-term customer contracts for chilled water service and the larger and more diverse system loads, aggregated from multiple customer facilities, into a single integrated system that is better able to capture maximum benefits from such elements as TES and its economy-of-scale.

The successful approach involved acquisition of the existing central chiller plant assets of both the convention center and a major aerospace manufacturing facility, Lockheed Martin, two miles away. The DC system is owned and operated by the utility and its partners. Chilled water is sold through long-term contracts to the convention center and the manufacturing facility. Benefits to the chilled water users include avoidance of a $10 million investment in new chiller plant capacity and 10% to 15% reductions in total life cycle cooling costs.

The DC developers utilized TES to reduce their investment costs by more than $5 million and to reduce their operating energy costs by more than $500,000 per year. Furthermore, the local utility achieves 15 MW of peak power demand management for its system. The system has been predesigned and installed with expandability, to address additional chilled water users and achieve up to 23 MW of total demand management.

A key issue for the large customer facilities, and for the DC utility, is the on-peak electric power demand associated with electric air conditioning or cooling loads. Accordingly, it was appropriate to focus on potential means to manage the peak cooling loads and the electric power they require. High-efficiency chillers, nonelectric chillers (such as steam absorption, hot water absorption, direct-fired gas absorption, steam-turbine driven, gas engine-driven, and gas turbine-driven chillers), and hybrid (combination electric and nonelectric) chiller plants all can and do play an effective role in some instances. Another technology to manage peak cooling loads has been known and used for many years, and is now re-emerging on a new scale: TES.

Two Options for TES

TES has a long, successful history of use in large air conditioning systems, including private industry, institutional, and utility applications. TES can economically shift peak air-conditioning and other cooling loads from on peak to off-peak periods.

TES technologies for cool storage include two distinct types:

  • Latent heat storage systems, such as ice TES, in which thermal energy is stored as a change of phase of the storage medium, usually between solid and liquid states; and
  • Sensible heat storage systems, such as chilled water and low temperature fluid TES, in which thermal energy is stored as a temperature change in the storage medium.

Each TES technology has inherent advantages and limitations, and no single type is appropriate for all applications. Generalizations can be made and used as approximate rules of thumb, such as those presented in Table 1. Of course, any generalizations should be viewed with some caution, as a fuller understanding of the technologies is important to optimally select and employ TES for specific applications.

TES typically enhances flexibility of operation, reduces operating costs, and in many large applications, surprisingly to some, reduces capital costs compared to conventional non-TES chiller plants1. TES applications are numerous and include private industry, universities and colleges, hospital and medical facilities, other government facilities, and DC utility systems (i.e., systems in which a business operates a centralized chilled water plant and distribution network to sell chilled water to multiple cooling customer facilities).

The District Cooling Concept

DC involves the generation of chilled water in a centralized system and the distribution of the chilled water, through a network of piping, to multiple cooling user facilities. DC utility systems involve the centralized generation and supply of chilled water by an entity, operating as a utility business, from which the chilled water is sold to multiple cooling customer facilities.

DC systems tend to be large and often employ various types of electric, nonelectric, and hybrid chiller plants. DC systems also sometimes employ on-site generation, usually as cogeneration or trigeneration.

Furthermore, TES is widely employed in DC systems, either as sensible heat storage (typically stratified chilled water or low temperature fluid storage), or as latent heat storage (typically ice storage). The choice of TES technology for a specific application is often affected by factors such as economy-of-scale, existing chiller plant equipment, desired system operating temperatures, available space, and the preferences or experience of the facility's designer or owner. Some representative examples from DC utility systems around the globe are shown in Table 2.

A DC Partnership of Complementary Strengths

The convention center was presented with the option to address the larger cooling loads associated with its expansion by "outsourcing" its chilled water supply from a local DC utility. Several Orlando-area DC systems had recently been developed and are owned and operated by OUCooling, a joint venture formed for the purpose of developing DC systems in and around Orlando. The joint venture comprises two 50/50 partners: OUC, the local municipal electric and water utility; and TCS (Trigen-Cinergy Solutions), an experienced district system developer/owner/operator. This partnership is a public-private combination of organizations with critical and complementary strengths appropriate to the successful development of the DC business.

The OUCooling partnership was formed in 1998. Its initial DC system was commissioned and began commercial operation in downtown Orlando in 1999. By 2002, OUCooling had four separate operating DC systems in the Orlando area, including its newest and largest, the International Drive (I-Drive) DC system located south of downtown Orlando and serving the convention center2.

Long-term Agreements and Asset Acquisitions

Customer contracts or service agreements are for 20-year terms of service, as is quite typical for DC service. Some customers have negotiated early "buy-out" options. The existing OCCC chiller plant assets were purchased by OUCooling. The asset selling price is reimbursed as a monthly credit that reduces the OCCC chilled water service billings. Lockheed Martin also receives a substantial lease payment in exchange for the use of its land as the site for the new TES tank and for a possible future chilled water plant expansion.

The Two "Anchor" Customers

Both OCCC and Lockheed Martin were served by existing electric centrifugal chiller plants:


  • 12,000-ton south plant (12 1,000-ton chillers);
  • 2,000-ton north plant (one 1,200-ton and two 400-ton chillers); and
  • Chiller plants originally owned and operated by Orange County.

    Lockheed Martin

  • 6,600-ton plant (two 1,500-ton and three 1,200-ton chillers);
  • Space for one more large chiller in the existing plant building;
  • Ample space available for an additional major plant expansion; and
  • Chiller plant already owned and operated by OUC.

    Peak cooling loads for these two customers are very large. After OCCC's expansion, its new peak load will be 16,250 tons, which will vary significantly due to the nature of the facility as a convention venue. The load at Lockheed Martin is 5,000 tons and not nearly as variable. The resulting DC system load will be approximately 21,000 tons, with the potential to expand to 40,000 tons or more through the future addition of other DC customers.

    The I-Drive DC and TES System

    The concept for the I-Drive DC system involved acquisition of the existing central chiller plant assets of both OCCC and Lockheed Martin. Even though additional peaking chiller plant capacity was needed to serve the convention center expansion, both the existing chiller plants had extensive, unused nighttime chiller plant capacity, even on nights associated with peak hot summer days. The use of TES allows full utilization of this otherwise lost, idle nighttime chiller plant capacity, thus saving capital investment; and maximum use of low-cost nighttime electric energy, thus reducing operating costs.

    OUCooling conceived, promoted, and executed the district concept in which the OCCC and Lockheed Martin plants were connected via two miles of 36-in. chilled water supply and return piping mains, and a large new TES tank was sited on the Lockheed Martin property.

    The TES tank, the world's largest, was provided on a turnkey, performance-guaranteed basis by CB&I (The Woodlands, TX). The tank has a capacity of 160,000 ton-hrs and the capability to serve peak cooling loads of 20,000 tons for 8 hours per day, thus avoiding the on-peak use of 15 MW of chiller plant equipment.

    The DC/TES system is owned and operated by the utility and its partners. Chilled water is sold through long-term contracts to both the convention center and the manufacturing facility.

    Other benefits are as follows:

    Low capital cost. A stratified chilled water TES system was selected (in lieu of an ice TES system) as it could be recharged with the existing chiller equipment, but also because water storage exhibits an inherently dramatic economy-of-scale. As the tank capacity gets larger, its price per gallon (and thus its price per ton) gets much lower. For large DC system applications, the installed capital cost per ton for water TES is not only much less than for ice TES, but even much less than for conventional chiller plant capacity. For the I-Drive DC system, the TES system was installed to yield 20,000 tons of peaking capacity at millions of dollars less than the cost for adding the 10,000-ton conventional chiller plant.

    Reduced energy costs. Of course, with any TES system, operating cost is also dramatically reduced by shifting much of the chiller plant operation to low-cost, off-peak, non-demand periods. Some significant secondary benefits also factored into the decision to use TES and into the type of TES selected for use.

    Energy efficiency. Several chilled water TES installations have been documented to save 3% to 9% in annual cooling energy (kWh per ton-hour) vs. non-TES systems3. This is primarily due to avoiding the inefficient operation of chillers and cooling towers at severe low-load conditions. The increased operation of equipment at night during the preferred condensing conditions of reduced ambient air temperatures also contributes to savings.

    Maintenance savings. The selected option of stratified chilled water TES is nearly maintenance-free. The TES tank contains no moving parts. The required maintenance for the associated pumps and valves is significantly less than would have been required for the alternative, new 10,000 ton chiller plant.

    Reliability and flexibility. Stratified chilled water TES is an inherently simple system, exhibiting high reliability. The chosen combination of existing chillers and new TES tank provide the system operators and the users with a high level of capacity redundancy. Furthermore, TES provides the flexibility to respond effectively to uncertainties and future changing conditions in the energy marketplace4.

    The Flexibility for System Growth

    The initial chilled water TES system will be in full operation in the summer of 2003 and is capable of serving peak loads of 20,000 tons - essentially a full load shift for the two initial customers -with no chillers running during high-cost, on-peak electric periods. As the system load grows, the tank can operate in a partial-load shift mode, with some or many of the existing chillers running both night and day. In this manner, the original capital investment can serve more customers and much larger peak loads, without the need to invest in further chiller plant additions.

    Eventually however, customer loads may grow to the point that additional chiller capacity is needed and additional TES capacity would also be desired. As system loads grow, even the large 36-in. mains may become inadequate to handle peak conditions at the original operating supply and return temperatures.

    To provide the flexibility to more readily accommodate this future potential, the TES system was predesigned for future conversion from stratified chilled water TES to stratified low temperature fluid TES. In this manner, the supply temperature in stratified TES can be lowered well below the normal 39 degrees F minimum for plain water5. The increased supply-to-return temperature difference results in a significantly increased capacity in the TES tank and, if used in the distribution piping network, a similarly increased peak supply capability without changing the original pipe sizes.

    An additional nearby customer, a future new Hyatt Hotel property, has signed a letter of intent to connect to the DC system for chilled water service, thus avoiding the capital cost and space allocation associated with installing its own chiller plant. Once in full operation, this new customer will add an additional 3,000 tons of peak cooling load to the I-Drive DC system.

    There are also additional near-term or mid-term customer prospects, including other large hotel properties and some extremely large entertainment developments. Accordingly, it is desirable that the DC system be capable of growing efficiently and rapidly to serve loads beyond the initial contract amount of 21,000 tons, perhaps to 25,000 or 30,000 tons, and ultimately to 40,000 tons or more.


    The I-Drive DC development has created significant benefits for customers and developers alike.

    Customer benefits from using DC:

  • $10 million in avoided initial capital cost for the OCCC;
  • A six-figure, long-term land lease for Lockheed Martin (site of the TES tank)
  • 10% to 15% reductions in life cycle cooling costs;
  • Higher reliability;
  • Reduced risk;
  • Improved space utilization; and
  • Enhanced focus on core business.

    DC project benefits from employing TES:

    • Over $5 million savings in net capital cost;
    • Over $500,000/year savings in energy cost;
    • Creation of adequate financial value for the project to proceed; and
    • An economical approach to future phased capacity expansion.

    DC utility/developer benefits from implementing the DC/TES project:

    • Very satisfactory ROI, based only on the two initial customers;
    • Exceptional ROI, with future customer additions;
    • Pleased customers;
    • Opportunities for further projects;
    • Immediately, 15 MW of peak electric demand management on the local grid; and
    • In the future, potentially 23 MW of peak electric demand management on the local grid.

    Summary and Conclusions

    Restructuring energy markets are expected to value on-peak electric power at increasingly high levels. Accordingly, energy users will benefit significantly from technologies that allow them the flexibility to manage peak electric demand.

    For many customers, and for utilities, peak electric power demand is driven by cooling loads. Various technologies, including non-electric chillers and on-site power generation can and will play a role in managing these loads, as will TES.

    DC provides an opportunity to incorporate these various load management technologies, including TES, in relatively large-scale applications. The economy-of-scale inherent to chilled water TES and low temperature fluid TES, makes those technologies particularly attractive in large-scale applications such as DC. The use of TES in DC applications can thus provide the double benefit of both initial capital cost savings and reductions in energy costs.

    The example of the DC/TES development at I-Drive in Orlando demonstrated the dramatic results in terms of economy and benefits to the chilled water users, to the DC developer, and to the peak load on the local electricity grid. In addition, by configuring an initial chilled water TES installation for possible future conversion to low temperature fluid TES operation, TES capacity discharge capacity can be readily increased by 56%, and peak electric demand-side management capacity can be increased by 56% to 23 MW.

    TES can be an alternative or a supplement to additional utility peaking power plants, to on-site power generation, and to other methods of peak electric demand management. Especially in large applications such as DC, TES can be the optimum approach, combining proven technology with low captial cost per ton and low energy cost.

    As illustrated by the case study, economic benefits can be delivered to the developers and the users, while literally tens of megawatts of demand-side management can also be realized, without the addition of any utility or on-site power generating equipment installations. ES

    The tables that appear in the print version of this article do not translate to the Internet. To view these tables, please refer to the print version.