The Energy Wiz: Profit From Versatility (January 2001)
A Parallel From The PastWhen oil and natural gas prices began to rise rapidly in the 1970s, development of the dual-fuel (oil/gas) burner helped many customers cut their fuel costs.
When the price of oil was high, customers could switch over to natural gas until the price dropped again. Utilities promoted this option even further through interruptible gas tariffs that offered deep discounts (as high as 40%) for gas if the customer agreed to switch back to oil when called by the utility, typically during very cold spells. Dual-drive chillers could do the same thing for electricity on very hot days.
A Problem In The PresentAs electric demand increased due to the booming (and ever more digital) economy, problems arose with regard to power generation and distribution. Starting in the late 90s, wholesale electric deregulation widened the price difference between on- and off-peak power periods, pumping up summer retail electric rates. During periods (such as hot spells) where generation capacity is challenged by peak demand, and/or transmission lines are fully loaded, local wholesale prices rise rapidly when unregulated power vendors take advantage of the temporary lack of competition among them. Until new generation and transmission is built to make that market competitive regardless of load, such price spikes will become more common.
Some customers have tried to compensate for high power pricing by replacing old chillers with high-efficiency units. The incremental savings that resulted are now being overcome, however, by even greater rate increases as deregulated utilities pass on to customers the volatile prices they must pay for wholesale power. In the summer of 2000, San Diego and New York City (the first to experience this change) saw summer electric rates jump 40% to 100% over the prior year.
An Option For The FutureDual-drive chillers are well positioned to take advantage of these changes. Now available from three different manufacturers, each unit contains an electric motor and a natural gas engine, on either a common shaft or common transmission. During times of high electric pricing, a unit may be switched over to natural gas drive, completely eliminating its compressor's electric demand. Where a curtailable electric rate is available, such a switch allows a customer to easily drop some of his load, whereupon he is paid handsomely for every kWh he doesn't use during the curtailment.
High power pricing for cooling is thus avoided, stress on the utility grid is reduced, and a customer gets money for load cutting with no negative impact on the building's operation. If system-wide demand is cut enough by such actions, wholesale pricing may also drop as competition is restored during high-demand periods. That cuts the cost for the power the customer continues to use elsewhere in the building.
So Who Makes These Things?Three manufacturers presently offer dual-drive units:
- PowerCold Corp. (210-659-8450, www.ucsc.com/powercol)
- Alturdyne Corp. (858-565-2131, no web site)
- Jenbacher Energiesysteme (248-324-4400, www.jenbacher.com)
The PowerCold units (available since 1995 under the name Rotary Power International) have been aimed at the refrigerated storage market, and range up to 150 tons. Alturdyne's unit came out in 1998 and is rated at 100 tons.
Jenbacher's system (which is basically a Carrier centrifugal chiller attached to a Jenbacher gas engine) became available in 1997 in the 800- to 2,000- ton range.
Dual-drive chillers are not cheap. In general, they cost about 10% more than a gas-only engine-driven chiller, which may cost 70% more than an electric chiller with the same capacity. Changeover to a dual-drive unit in a commercial building may therefore make sense only when an old or failing chiller needs to be changed out anyway, or where a new building/addition is being erected. For industrial or 24-hour cooling (e.g., supermarket, food storage, data center), however, the greater load and use may justify installation purely for energy cost savings.
As deregulation begins to impact retail power pricing, remember this option. Both your client and his utility will thank you. ES