International competition for energy resources, political instability in the Middle East, and the threat of global warming have resulted in rising energy costs and have made energy issues front-page daily news. Oil prices have recently reached an all-time high. Historically, the cost and availability of various forms of energy have been cyclical. Today, however, a combination of pressures on energy supplies could mean high energy costs are here to stay. We are living through a period of unprecedented global economic growth. Developing nations such as China and India are becoming world economic powers. The demand for energy is growing rapidly and outpacing supply.
As energy prices continue to rise and other factors come into play affecting optimal choices for how energy is supplied and used, facility operators are faced with the task of reevaluating their energy infrastructure. In addition to high energy prices, factors such as reliability in the face of electric grid instability, fuel disruption, environmental regulations, conservation incentives, and physical threats such as terrorism must also be taken into account.
A State of Energy CrisisThe Ohio National Guard (ONG) recently requested a meeting with Battelle to discuss their statewide energy problems. At the discovery meeting, ONG officials explained that their energy bills were getting out of control, so much so that auxiliary funding would be needed to pay them. Our objective in these initial meetings was to get an understanding of the problems being faced, what measures have been taken to mitigate them, the results of those measures, and the client’s objectives. It was interesting to hear them tell us about the energy audits that had been conducted over the years and the conservation measures that had been implemented.
In early 2006, the ONG had undertaken a concerted effort to reduce energy usage. That effort involved a number of promising measures, including the installation of high-efficiency lighting, upgrading windows, installing HVAC controls, and instituting a “four tens” work week. Energy usage had decreased as far as they could tell, but costs were continuing to rise. ONG officials requested a meeting because they wanted to know what technologies and approaches were available to help them make a real reduction in both energy usage and cost. They needed ideas for the very near term to ease the crisis, but they were just as interested in improving their future energy outlook.
Many Department of Defense (DoD) installations are currently in a state of crisis because of rising energy costs. However, these problems are not unique to the military. Rising energy costs are being felt across the economy in both the government and private sectors.
The problem is most complex for multi-building campuses that have an intricate energy profile. The traditional approach for addressing rising energy costs has been to conduct energy audits, generate recommendations for energy-savings projects, and to implement the recommendations.
Many of these projects focus on more efficient lighting, HVAC equipment and control systems, windows, insulation, and a wide variety of other technologies and operational changes. These projects are implemented on the basis of life-cycle cost estimates that purport to verify that the savings in energy will pay for the investment in the replacement technology in a certain period of time. While these projects may save energy, they do not necessarily position a campus-like facility for long-term energy profile optimization and cost control. In the DoD, innumerable energy-saving technologies implemented over decades have not prevented the energy crises that are currently being faced.
A Systems ApproachThe proper management of energy means approaching things at the systems level. Whether an investment in an energy technology truly pays dividends depends not only on the life cycle cost implications of the technology replacement, but more importantly on the overall installation-level energy profile.
For example, an energy audit may suggest that replacement of an outdated lighting technology in a given building will reduce energy consumption and will pay for itself in a matter of months, or a few years. This apparently sound investment might, in fact, reduce energy consumption, but it may have no positive impact on the overall energy profile of the installation. Therefore, it may have very little or no impact on costs.
Why? Because important questions were not answered in evaluating this particular investment. What percentage of total power is used by lighting? What is the influence of lights on peak load and utility demand charges? It is vitally important to examine each facility as a unique energy system, not only to identify needed improvements in efficiency, but also to prioritize investments and energy management strategies to optimize the overall energy profile. Only this approach to energy management will reliably reduce energy and energy infrastructure costs now and in the future.
In addition to being a systems-level problem, energy management is also multi-faceted. The ways in which energy is bought, supplied, and used all have an interdependent influence on costs. In order to reduce costs both now and in the future, all three facets have to be continually configured in an optimal way. Investments in energy improvement depend on more data than common energy audits and life cycle cost estimates can provide. Energy usage levels, utility prices, conservation technology costs and capabilities, conditions of the proximal energy markets, environmental mandates, and even the price for fuels all can affect the decision to invest in one strategy or another, one technology or another, or one power source or another.
To effectively evaluate such investments, one must measure and analyze the energy profile. Utility service arrangements must be understood, optimized, and integrated into the management system. Finally, the state of the local grid and energy market should be considered.
Improving Performance One Facility at a TimeIn the mid 1990s, the Marine Corps asked Battelle to help improve the performance of a large central heating plant at the Air-Ground Combat Center in Twentynine Palms, CA. Battelle staff at the Pacific Northwest National Laboratory (PNNL) had developed Decision Support for Operations and Maintenance (DSOM), which is a proactive infrastructure-based software/hardware platform designed to diagnose the performance of energy-intensive equipment and provide the plant O&M staff with the information necessary to make life cycle cost-effective decisions.
The Marine Corps and Battelle used this opportunity to demonstrate the effectiveness of this emerging proactive technology. Due mainly to reductions in military forces, these plants, like many DoD base installations, are being run with minimum O&M staffing and minimal data for cost-effective decisions. The results of the project: a 30% increase in plant capacity, a 17% reduction in natural gas usage, and a 24% decrease in life cycle O&M costs.
At the Marine Corps Air Station in Beaufort, SC, the problem was somewhat different. That installation had 74 buildings with automated HVAC control systems that had been installed and were being used to various degrees. The control systems were all local to each building, however, and could not communicate. Among the other system-level problems identified in the initial assessments were excessive demand charges in utility bills and unreliable meter data. In order to solve these problems while also making maximum use of systems already installed, Battelle installed real-time metering and developed a customized energy-management control system that enabled simultaneous operation of all 74 buildings. Load-shedding algorithms embedded in the system allowed for peak usage avoidance and a substantial reduction in utility demand charges. The result was a $1 million per year reduction in energy costs.
These projects demonstrate the importance of analyzing each facility as a unique energy system. Diagnostics and decision support was an appropriate solution at Twentynine Palms because the energy usage was centralized and O&M were important factors driving costs. At Beaufort, the cost driver was peak demand and the energy usage was distributed, requiring customized metering and control. Battelle has conducted numerous other energy-savings projects over the years for both commercial and government clients, where some have required the implementation of sophisticated technology and others recommendations for changes in operating practices. What has emerged over the years is recognition of the need to perform systems-level evaluations and implement systems-level solutions in order to have a positive influence on both energy usage and costs, particularly for multiple-building campuses.
Intelligent Energy ManagementBattelle has established Battelle Intelligent Energy Management in response to this growing need. Battelle Intelligent Energy Management is a new approach that does not presume to know the best strategies for a particular facility. It is not a packaged product, but rather a process that virtually guarantees that investments in energy efficiency will have a positive influence on energy and energy infrastructure costs, in both the short and long term.
Battelle Intelligent Energy Management analyzes the system, establishes appropriate metrics, computes a baseline energy profile based on those metrics, and selects those technologies and approaches that solve the unique set of problems at hand. It is a vendor-independent process that seeks solutions that will produce results given the constraints inherent at a particular facility, whether they are related to current infrastructure, mission, or even politics. Perhaps most importantly, it establishes a system for energy management that will compute and analyze the energy profile on an ongoing basis. It allows for the identification of system-level energy concerns and the prioritization of strategies and investments toward continual optimization so that year-over-year objectives can be met and long-term costs can be controlled.
The first stage in Intelligent Energy Management is to perform a high-level expert review of an installation as a system. Stage 1 makes maximum use of contractor expertise and personnel experience to identify energy supply, load, and management strategies that have the potential for high value energy and energy infrastructure cost savings in both the short and long term. Detailed analysis is reserved for the next stage to ensure that the investment in this process is spent on high-value opportunities.
Stage 1 involves the collection and review of historic utility bills, interviews with facilities staff, and tours of the installation. These activities will develop an understanding of the current state of infrastructure, physical characteristics of the installation, methods used to manage energy, existing control systems and the degree to which they are integrated, and energy-efficiency measures that have been implemented or are planned. Utility bill analysis allows the contractor to understand why costs are what they are and to identify whether new service arrangements may present potential opportunities. The objective of Stage 1 is to generate a preliminary strategy, or set of strategies that have the potential for high value and therefore warrant detailed analysis in Stage 2. These strategies may be long- and/or short-term strategies and may include consumption reduction or manipulation measures, supply and service arrangements, monitoring, metering, and management protocols.
Having identified and selected promising strategies and opportunities, we move to Stage 2, which scrutinizes them both scientifically and economically to assess their system-level impact. It provides quantitative information to answer questions related to which strategies should be employed, how they affect one another and should be integrated, and in what order they should be implemented. Stage 2 provides the necessary scrutiny for each component of the strategy, whether demand, supply, contractual, or operational, to make confident decisions about what should be implemented for a particular installation. This effort will most often involve, but will not necessarily be limited to, the following activities.
- Develop strategy for restructuring utility service arrangements to reduce costs, which could depend on technology options and management systems being investigated.
- Establish optimal metering and data metric(s) for tracking energy supply and use.
- Establish a baseline for quantifying effects of changes and savings year after year.
- Design advanced software algorithms that make use of existing DDC systems, integrate facilities, and extend the capabilities for energy-demand management (e.g., strategic spike management, peak demand control, or automated diagnostics for central heating plants). Details will depend on the specific installation.
- Upgrade energy management software to enable identification of inefficient facilities and/or equipment, assess impacts on system-wide use and costs, and to prioritize ongoing investments.
- Examine possibilities for third-party financing for implementation.
Opportunities for third-party financing and/or private partnerships will also have been investigated in Stage 2 and will be exploited in an attempt to mitigate the capital investments required for implementation. A common strategy seen today is for the contractor to perform the implementation at reduced cost and collect the remaining fees out of the energy-related cost savings under a performance contract.
We recommend reviewing these strategies thoroughly to ensure that savings from the project are not completely consumed in payments under the performance contract, or at least that such payments are limited to a reasonable number of years so that the long-term benefits can be realized.
In addition to implementing the tools and technologies identified in Stage 2, Stage 3 also ensures the transfer of capability to the facility staff. The capability to properly use the technologies and strategies that have been implemented is as important as the technologies themselves.
Stage 4 involves the optional engagement of Battelle or another contractor on an annual task-order contract to assist the facility in maintaining the energy management system, perform necessary analyses to prioritize investments, and ensure that year-over-year energy and cost savings objectives are met. The contractor will also assist the installation with upgrading or adapting the systems to changing regulations, facility expansion, or other new threats and challenges. The objective of Stage 4 is to maintain needed expertise and ensure the continuous improvement of energy systems.
Battelle Intelligent Energy Management is a new approach to energy efficiency improvement that analyzes an installation as an energy system and recognizes that multi-faceted strategies are needed to ensure that energy saving measures result in sustained cost control. This approach has the potential for achieving the objectives of energy audits, while at the same time providing the long-term cost-control benefits that conventional approaches have often failed to provide. ES