HIGHER PERFORMANCE BUILDINGS
The road leading to the construction of high-performance buildings has been a long time in the making. These buildings are becoming more of a mainstream reality due to advancements in technology, standards, design, innovations in commercial products, and the hard work of many talented individuals, committees, and associations across multiple industries and government agencies.
Increasing participation in programs like LEED® and Energy Star is evidence that building owners, lessors, and operators understand the accretive benefits that come from attaining higher levels of certification. From an investment perspective, higher levels correspond to the profitability of the building, longer term residual value, and enhanced lessor interest.
As much as these certification programs have done for new construction, they have also helped enhance incentives for owners of existing buildings to upgrade and retrofit mechanical and HVAC systems. However, when dealing with existing buildings and systems multiple additional issues are encountered such as proprietary systems, aging infrastructure, physical restrictions, limitations in executing projects in occupied buildings, and availability of financing. Integrating all these systems can be a challenge and requires considerable expertise and experience by each of the design engineers and vendors, and, of course, the ability to work together in a coordinated and collegial manner.
For institutions that have budgetary constraints or operate without a capital budget, the means to implement projects to improve facilities have relied on various types of financing vehicles such as performance contracts, shared savings, and achieved energy savings. While these can be economically attractive, the contractual structure of historical ESCO models (let’s call them ESCO 1.0 models) are predicated on an historical energy use baseline calculated against actual savings during the contract term. This delta accrues from lowered overall energy usage as a result of the project and combined ECMs. These models usually have contract terms that limit schedules, time of use, and runtime of equipment. These terms may also preclude a facility from participating in certain new energy efficiency programs or demand response (DR) and economic load control programs.
These are just a few of the issues that building operators face everyday. Managing buildings is a complicated job, and it is about to become more complex.
A new element is entering into the building design and operation calculus, and that element is the emergence of dynamic pricing and load responsive energy markets. With these rapidly evolving and nationally varied programs becoming an important economic factor in energy procurement, next generation high-performance buildings are going to have to become even smarter and able to respond to energy markets. This additional factor in high-performance building design raises the bar significantly.
ENTER THE ENERGY MARKETS
By now, most everyone in the facilities industry has either heard about or had some kind of exposure to SmartGrid initiatives, or perhaps participated in a DR program, day-ahead pricing program, or installed smart metering systems.
While we wait to see how the Smart Grid will ultimately materialize, there are real world issues facing the grid that have to be dealt with. The situation could be summed up as inequities between limited power generation and transmission coupled with increasing demand and the energy market models currently in place. This overarching issue becomes focused and weighted differently based on surplus or deficits of energy supply in a given geographic region. If it is a regulated or competitive market, compliance requirements with regulatory, legislative, or policy acts define how the retail energy markets sell power to end use consumers.
The U.S. energy industry has been evolving over the past number of years across the regulated and deregulated markets. Regardless of the region, they each share many of the same issues of increasing demand, limited supply, aging infrastructure, grid reliability, and the economic cost of blackouts. In order to dampen volatility between supply and demand, ISOs have embarked on DR programs as a first step towards engaging individual buildings to participate.
CFOs and energy buyers view DR programs differently from those who operate facilities. Power purchasing agreements in competitive markets are customized based on a customer’s historical load curves, operating characteristics, and building type.
In turn, energy suppliers manage the risk of hedging future positions in the wholesale energy market to cover their individual and aggregate retail sales, at a profit, and have to understand their customer loads to avoid being caught short. To be competitive, the various suppliers have created buying options that customers can choose to match their needs one to two years ahead.
Energy suppliers are often not able to offer these more sophisticated supply options to interested customers in the commercial buildings space because few have connected control systems and most buildings are running out of control — not from the perspective of environmental comfort, but from the energy side.
BAS were designed and programmed to manage building HVAC equipment in direct relation to temperature as the principal variable. Temperature setpoints are established and the systems operate in accordance to strategies and sequences of operation that are put in place by the control contractor, as called for in the construction specifications. It is temperature that drives the equipment strategies, not energy consumption.
This is an issue that reaches across the building automation industry. The typical configuration tools provided by the BAS manufacturer are reset schedules, PID loops, optimized start/stop, and if/and/or/else algorithms that all use temperature as a primary reference point. Different HVAC equipment may use other sensor telemetry such as pressure, flow, humidity, etc., but the overall programming concept is to keep the building comfortable. Inputs from the energy market signals, real-time pricing, curtailment event commands, and day-ahead pricing are not baked into the DNA of modern BAS. However, BAS by their nature are control systems first, and many can be programmed to operate as both comfort and energy management systems. After all, they control most every major energy-consuming device in a building.
The inability of many BAS to simply and effectively manage and control their connected load in accordance with DR program rules has opened the doors for specialized DR companies to position themselves as the curtailment service provider who installs their own communications and monitoring/control devices to execute the DR events.
When the BAS system is used as the vehicle to stage the DR event, it is a fairly straightforward process, once the proper analysis has been done, to prescript the BAS with control strategies to shed load. However, many of the early implementations are a static and simplistic approach to the premise of load management. Like the BAS before these additions, they are subject to getting out of tune and becoming less effective unless monitored in real time.
In many ways, we can expect the convergence of the HVAC/building industries with the emerging energy markets will result in seismic shifts in how facilities are operated, how technology is applied, and how projects are financed.
Many view the emerging energy markets as heading toward a real-time or dynamic pricing model to most cost effectively dampen load and provide structure to the economic model that will drive mainstream participation. Since weather drives power prices and buildings regulate themselves according to temperature, the natural evolution of energy management systems will require them to connect the energy markets to effectively manage their buildings and to help mitigate risk and exposure to volatile pricing.
In many ways, buildings are analogous to the early days of standalone PCs prior to the internet. They operated as islands and performed limited functions. Only when the web came into being and PCs were built to connect to large-scale networks did the full power of personal computing and communicating devices become evident. Today, buildings are essentially standalone energy-consuming entities.
Buildings need to get connected, and become networked. As we approach that goal and move past many of the issues inherent in current BAS technology, we might expect rapid advancements in applications and the degree of creativity and functionality that we have already experienced in the world of social media and information management.
Regardless of who actually implements these advanced DR programs, the future state of the energy markets will reward those facilities that go far beyond basic curtailment peak load shedding and are able to modulate load to response market conditions and in response to real-time energy pricing signals. Eventually, our current generation of reactive control systems will give way and evolve into predictive intelligent platforms that provide meaningful analytics and business decisioning tools for plant operators, financial managers, and energy buyers.
We have a long way to go to get to this degree of integrated controls. When we view this new world order from the perspective of life at street level today, it can be daunting, particularly when working with existing buildings that have modern controls but operate in a standalone mode.
As a case in point, a situation recently occurred with the state agency responsible for administering a large capital building complex. They had a goal of upgrading some of their aging mechanical systems and building assets through a capitol improvement bond project. In order to develop the design specifications, a thorough inventory of the existing systems was conducted along with multi-year analysis of their energy usage.
The current power purchasing agreement and operational contracts that were negotiated by another division of the state were reviewed to identify any terms and conditions that might impact the project’s ability to deliver solutions. The building complex was one year into a DR program that would net the state over $300K over the three-year enrollment period.
The deputy commissioner who championed their enrollment in the DR program was also attempting to improve the state’s position with competitive suppliers by proving their ability to manage their load in ways that could lower their electricity supply pricing. The commissioner also wanted to show how different agencies could work together to achieve the state’s energy reduction and efficiency goals.
However, the state capital complex had failed to meet the enrolled load reduction goals during the tests and actual curtailment events and was not achieving any of the desired economic benefits and was in danger of being penalized for lack of performance.
The agency management team reviewed the sequence of events that took place during an actual DR event from getting the phone call (because the BAS could not accept standard web services signals) to when the operator initiated the DR sequence in the BAS. The four buildings operated in standalone mode and were networked together over dedicated control LAN back to a central dedicated host PC.
The evaluative process revealed that it was necessary to close out the software program for one building before connecting to the next one. Since the DR control strategies were programmed into each individual building, it was necessary to activate the DR sequence for each building sequentially — there was no global command functionality.
The operators did not understand this and thought they were activating the entire complex when they were actually only triggering one building out of four. No wonder they were not meeting their enrolled load reduction goals.
As minor as this issue may seem from a higher perspective, it serves to illustrate how the best intentions and hard work of a deputy state energy commissioner and his staff could be unintentionally undermined by a proprietary BAS and building operators who could have been better trained. Unfortunately, there was political fallout from this and the agency was set back in their efforts to expand the program across the state.
This is just one example of the many issues that can adversely effect the mainstream advancement and deployment of high-performance buildings.
As an industry we should prepare and be ready for the impact that the energy markets are going to make on our way of doing business and operating our buildings. We will not be able to serve the evolving needs of our customers if we do not anticipate the changes at hand and prepare for this future.ES