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Hey folks, Phil Zito here and welcome to back. In this post, we are going to go through energy management for BAS professionals, we're going to go through our four-step process related to energy management, and then by the end of this post, you should have a list of ideas that you can implement with your customers or within your own facilities in order to better manage your energy.

Ok, so, energy management, this is a four-step process. Why do we care about energy management? Well, if you've been following the news, you know that the cost of natural gas, the cost of electricity has gone up, as well as the rolling blackouts that are supposed to affect the United States over the next several months. Places where we never thought we would see outings, or rolling blackouts, or brownouts potentially are going to see them throughout the summer.


Evaluating the Opportunity

So, all of that brings us to a need to actually implement some energy management strategies that can benefit your business and can ultimately make things a little bit better for you. This all starts with step one, which is evaluating the opportunity. Oftentimes, I will see folks throw out the “let's put an analytics,” or “let's do a retro commissioning,” or “let's go and do an energy study.” In actuality, the opportunity may be as simple as implementing scheduling, it may be as simple as taking everything out of hand, it may be as simple as raising the temperature setpoint or lowering the temperature setpoint at certain times during the day.

So, the first thing I want to get out of everyone's head is that, you see all this crap out there being pushed about electrify everything, green energy everything, you're going to have to report on greenhouse gas emissions as part of an ESG rating of any publicly traded company. There's all this stuff, and it can feel super intimidating. And it can lead to people taking no action. When in actuality, there's often, even in organizations that feel like they're more advanced, low hanging fruit.

I did business with a major automotive manufacturer who was known for their energy efficiency throughout their organization. Yet this same automotive manufacturer had a building that for several years was running, lights were on, the track was on, and no one was in the building. I know that seems like a highly unbelievable story. It's really nuts that this could happen in a Fortune 100 company, but the reality is, if that's happening there where they actually have a budget to have an energy management team, they actually have sustainability goals, and they have sustainability oversight, how much is it going on in an office building? How much is it going on in a small school district?

So, we want to evaluate the opportunity How do we evaluate the opportunity? An opportunity for energy management comes from typically three things:

  1. People
  2. Processes
  3. Purchasing

So, you can renegotiate purchasing, I would say that right now would be a very poor time to renegotiate purchasing, but there are organizations that renegotiated a guaranteed rate for utilities a couple of years ago when utilities dropped, and they signed an agreement for multiyear utility rates. They are definitely benefiting from that right now.

We're not going to really focus on the purchasing side of things because at least today, June 1, 2022, being the time of this post, that option really is off the table for us right now, unless you are willing to gamble that rates are going to go significantly up and you want to lock in the current rates. That option of purchasing lower utility costs is not really a good option, in my opinion.

So, that leads us to people and processes. In my experience, people have been the greatest barrier to energy efficiency within a building. That had to do with organizational buy in, that had to do with technical acumen, so technical capability and knowledge to actually implement, execute, and maintain.

We're going to talk about strategies you can implement right now, but actually maintaining those strategies over time, that's where there’s energy savings. Anybody can change schedules, anybody can put VFDs in the soft start things, anyone can go implement resets to reduce consumption, but as soon as the energy managers left, did these things remain or did they go back into just controlling things in hand?

I'm reminded of when I lived in Wisconsin. My kids’ school district at the time did an energy savings contract for five elementary schools, and they were really shocked as to why they weren't meeting the savings. I mean, on paper, everything made sense, they were going to reduce energy spend, they were going to put in controls, everything was going to be great. But in actuality, the 65-year-old engineer would go into the crawlspace of the schools, and still every morning would manually adjust valves, therefore taking this energy savings and just throwing it out the window because these systems were no longer controlling how they should control.

This created some major issues. If you know anything about energy savings contracts, they're guaranteed. The energy savings contracting company has expectations of which the owner has to perform, and they get their profit from the savings that are created. They get a portion of the savings, as well as the portion of the savings pays for the energy contract. So, that was the huge issue: personnel.


Identifying the Change

This brings us to step two, which is identifying the change. So, we’ve evaluated an opportunity, and we've deemed that we're paying a higher dollar per square foot, or consumption/demand per square foot. So, kilowatt/kilowatt hours per square foot. I tend to like demand and consumption per square foot, because depending on what part of the world or US you're in, the dollar per square foot could be deceiving. But if you go into things like energy star, and you start to look at averages for consumption and/or demand per square foot by vertical market, you can start to get a pretty good idea for what is a targeted demand and consumption for your vertical market. For example, a data center is going to have a much higher demand and/or consumption rate per square foot than a warehouse. Just the energy density per square foot is going to be significantly higher, so we need to account for that.

That's how we evaluate. It's my personal favorite way to evaluate our opportunity because it’s not against some arbitrary sustainability goal, not against some arbitrary target, but rather to look at the market and see where other people are at. You can go drop yourself significantly below other buildings from a consumption or demand perspective in the market, but is the ROI there? Is that going to potentially impact the environment? Also, is it going to potentially cost you more than the return on investment?

Once you've evaluated the opportunity, and you do indeed believe that there's an opportunity, then you need to identify the change. Which by the way, for those of you salespeople out there, you can simply request energy bills from customers, get their square footage, and figure out what the opportunity is. If the average, and I don't have this memorized, but if the average is let's say 10 kilowatts for every 1000 square feet, and you go to a building that is 20,000 kilowatts for the square feet. I know that's insane, but we’re just spit-balling here. You notice that there is a potential opportunity. So, then you can discuss this potential opportunity with the customer, you can show the potential savings, both in demand rate charges as well as consumption charges, as well as any time of use charges.

Once you've evaluated and identified the opportunity, then you need to identify the change. Knowing that demand is high, and/or consumption is high, and/or both of these are high at a specific time, is really going to enable you to drive your strategy. There are strategies to reduce demand, there are strategies to reduce consumption, and there are strategies to change time of use.

Let's kind of clarify what each of these terms mean, before we go a little bit further.

  • Demand is the amount of power that needs to be provided to your facility to meet the demand. Demand is measured by kilowatt.
  • Consumption is the amount of actual power that is being consumed by devices. Consumption is measured by kilowatt hours.
  • Time Of Use is when you are using that demand and/or consumption.

There are things called ratchet clauses, which if you exceed demand by a certain amount, then the utility provider is going to raise the minimum amount of demand that you have to pay for. They're going to do that because if you've exceeded that demand, then they have to account for potentially having to provide that much demand to you again, so they're going to charge you for that. So, one of the best ways to avoid cost increases is to manage and/or lower demand so that you don't get bumped up into a higher demand rate.

Now consumption is another thing that we can adjust, and that is the consumption of electricity and/or natural gas, for our HVAC systems. Finally, we have time of use. Here in Arizona, you have summertime of use, and you have fall and spring time of use. If you are within those time of use windows, there are different levels. In those windows, you're going to pay different rates.

I think if I remember correctly, there's a specific time of use window in the afternoon where it can almost get to 20 cents/kilowatt hour. It's pretty crazy. You can use renewables in the residential market to offset that. You can also do other strategies, things like ice storage, things like pre-cooling, things like using passive ventilation, or active ventilation in lieu of mechanical cooling. There's a variety of things we can do to mitigate our consumption and/or demand during those time of use periods.


Calculate ROI

All right, so we need to identify the change, we need to identify what we are trying to change. So, we've evaluated the opportunity, we've identified that either demand or consumption is higher than the current market standard for whatever vertical you're in. We've identified the change; we either want to reduce demand, we want to reduce consumption, or we want to change time of use. Now we need to calculate ROI.

This is where we have the IPMVP (International Performance Measurement and Verification Protocol) which, as far as we’re concerned, has three kind of M and V methodologies that we want to apply. There are four, there's option A, B, C, and D. D being whole-building modeling using like DOE-2 and other building modeling software, but we're just going to cover A and B and C.

So, A is going to be M and V with a single variable. For example, we may have an air handler and our single variable that we're driving towards is resetting discharge air temp. Ultimately, we're trying to reduce kilowatt hours. So, we're trying to reduce consumption, but we are doing it with the single variable, discharge air temp.

Option B would be multivariable. Maybe we're changing discharge air temp, maybe we're changing the economizer to reduce outside air and mixed air temp, and all of that enthalpy load, depending on where you're at, but you have multiple variables.

Options C is more of a modeling. So, option A and B are more for modeling out your energy conservation measure, which is known as an ACM, but they are also for measuring your energy conservation measure. Now, option C is where we are going to look at the historical consumption and/or demand, and what we're looking for here is what is our baseline. We're doing what's called baselining, and then we're going to apply what is known as regression, which are regression variables.

These may be things like occupancy, outside air temp, outside enthalpy, etc. What we're doing is we're collecting the utility consumption, demand and consumption, we're applying variables like outside air temp, occupancy, etc, and that gives us a more accurate picture of step 1, the opportunity. It enables us to better calculate the ROI.

If we can assume that our energy consumption and demand are going to stay the same across a 12-month period, and we can account for temperature variables, we can build out a cost model. Then using option A and/or B, we can implement things like discharge air reset, economizer, chiller load management, raising our condenser water temperature, raising our discharge temperatures, using enthalpy control for economizer, CO2 control and reset strategies, demand control ventilation, things like pre-cooling, and increasing ventilation rate in lieu of temperature. We can model these out and their effect, then we can overlay that effect onto our energy model, our 12-month energy model, and then we can figure out what the impact is going to be, and we can calculate our ROI.

Now things are a little crazy right now, because the Mbtu cost of natural gas, and the kilowatt hour and demand, kilowatt costs are going up, they are variable. Depending on what happens in Europe, we may or may not see significant increases in those costs. I would say on the conservative side of things, if you do model things out, you stay at the rates we are right now, because most likely those rates are not going to decrease in the near future. I would almost be willing to guarantee that natural gas costs are only going to increase as we exit summer. As there's more push for electric vehicles, as there is more push for electrifying HVAC systems, we are going to see an increased cost of demand and consumption.

Naturally as demand increases and supply stays the same, because it doesn't look like we're increasing our power supply anytime soon, naturally, costs are going to increase. So, from a modeling perspective, if you stay with the current prices, you should be good for a rolling 12-month window.

So, we've evaluated the opportunity, we've identified that there is one and I told you to check out Department of Energy, ENERGY STAR, etc. You can pull data from vertical markets, and you can figure out kilowatt and/or kilowatt hours per square foot, and BTUs per square foot as well. You can figure out all these numbers and you can identify if the building you're looking at is significantly above other buildings. Then you can identify what you want to manage.


Identify Your Strategy

Do you want to avoid demand ratchet charges? Do you want to reduce consumption? Do you want to adjust for time of use? What do you want to do? Once you’ve figured that out, you can calculate the ROI. In order to calculate the ROI, you need to identify your strategy. As I mentioned, there are 3 strategies: reduce demand, reduce consumption, and change time of use. Let’s look at each one.

Reduce demand. So, demand, once again is the amount of power the utility has to provide us in kilowatts, in order to meet the demand of our building. They need to be providing us enough power, enough kilowatts, for if we decided to turn all our chillers on at the same time, or all of our air handlers on at the same time. Now, how would they know what that amount of demand is, and this comes into our first strategy.

Typically, they measure demand in 15-minute increments. So, they’ll look at 15 minutes. That's why the general strategy when you're turning on your buildings, not only as the soft start things have VFDs, because what happens is you have braking amps, and braking amps, if I remember correctly, breaking motor amps is four times the amp draw of your full load amps. That's typically the numbers.

So, you've got this thing where you turn on this motor, this compressor, this fan motor, etc, and what happens when you turn on an air handler in the morning, right? It ramps up to 100%. Because what typically happens, at least if it's in the summer, all the VAV boxes open to 100%, because all the spaces have gotten hot overnight. So, all the VAV boxes open up 100%, the air handler opens up 100%, the fan goes boom, right there. If you don't have a speed drive to soften this, you are going to surge all of those amps, and you're going to get that demand spike.

Now, this isn't necessarily such a big deal if it's one air handler, but what if you're like this one church I did in Dallas, where there were 24 air handlers, and they all turn on at the same time, you get this massive demand spike if there's no VFDs on these. So, one of the easiest ways to control demand is to soft start. That means to slowly ramp up the motor with a VFD, variable frequency drive, or variable speed drive, and to have some sort of soft start logic.

If you want to take it a step further, then you can batch that soft start logic across several units across 15-minute periods. Now, your utility will vary. Some of them will have 15-minute intervals, some of them will have hour intervals. It's up to you to figure out how they calculate demand and when they do it but understanding that they're going to calculate demand every 15 minutes, every 10 minutes, every hour, well, I'm going to stage. It may make sense for you to stage your air handlers over two hours and avoid demand charges, or stage your chillers over an hour and avoid demand charges, because demand is pretty expensive, and take the hit on the consumption side.

This is something that you'll have to measure, and you'll have to figure out, but that is the first strategy, reduce demand. We reduce demand soft starting things. This is why VFDs are such a good strategy. Not only do they reduce wear and tear and give you better control ability for some of the consumption strategies we'll cover shortly, but they also enable you to soft start.

Now that being said, we also can reduce demand of our full load amps by reducing the demand on the system. This may be looking at things like doing discharge air resets, doing temperature resets, economizing, etc.

Now consumption is another topic that folks focus in on. So, my if I'm advising people, I tend to advise people to fix your time of use first, then fix your demand, then fix your consumption. Time of use, especially if you're in California, in New York, in Arizona that can hit you really, really hard if you get in one of those like 2x or 3x time of use periods where you're 20 to 25 cents of kilowatt hour. That's crazy. You can really ratchet your bill up super-fast if you don't have guaranteed rates.

So, consumption is going to be the consumption of power or MBTUs, in the case of natural gas, in order to actually execute your conditioning, your mechanical cooling, or mechanical heating. So, there's only so many things that consume power and/or MBTUs, natural gas, within a facility. The consumers have power are motors and compressors, that's pretty much it. You have boilers as well, if you're talking natural gas, but those are the consumers.

Your valves, your dampers, they consume a little bit of amp draw, but nothing compared to a fan motor, nothing compared to a compressor, a pump, and your boilers, right? Your heat generators. So, if we know that, then how do we reduce consumption on those devices?

Well, if those devices consume power, in order to meet setpoint, we have a couple options. We can reduce setpoint, or we can be more efficient with setpoint. So, let's talk about reducing setpoint. Reducing setpoint is quite simple. I'm not saying it's comfortable, I'm not saying it's necessarily advisable, but it's quite simple. We can do things like reducing airflow, reducing temperature set points, or increasing temperature set points in the case of cooling. We can do things like raising our chilled water setpoint. Now all of these will have a compounding effect on the environmental quality within a building. We can also do things like using free cooling.

Now there's this delicate dance. And if you haven't studied ASHRAE Standard 55, I really encourage you to do it. ASHRAE 55 and ASHRAE 62 are two of my favorite standards, because ASHRAE 62 really explains how much oxygen you need in a space, and a lot of people will just do the standard 10-15% minimum outside air damper and call it a day, when in actuality depending on the type of space, and whether it's persistently occupied or not persistently occupied, may not require you to actually use that CO2 and condition that space.

ASHRAE 55 is really cool because it helps you realize things like metabolic rate, things like ventilation rate, things like relative humidity, moisture saturation of air, and how all of that affects the evaporative effect, solar load, etc. As you start to understand these things, you realize that you can have someone at 72 degrees, 65% relative humidity, and that's pretty high relative humidity, and they can feel crazy uncomfortable. Then you can have someone at 78 degrees 10% relative humidity with a high ventilation rate, and due to the evaporative effect, they can feel very comfortable. So, you then have to ask yourself, is it better for me to reduce the utilization of my chillers and their compressors, and increase my ventilation rate, and raise my discharge air temperature? This is kind of one of the things you have to figure out, and understanding ASHRAE 55 can help you to figure that out.

So, there's this thing called the thermal comfort corridor. If you Google ASHRAE 55 Thermal Comfort Corridor, you'll see on a psychrometric chart, the area of which thermal comfort is met within a building. That's why you know, I live in Arizona, if you go down to Phoenix, you'll see a lot of buildings that are 76-78, and they're able to get away with it, because the relative humidity outside is 5%. So, with that low relative humidity that keeps that thermal comfort corridor at such a point that you're able to have a higher dry bulb temperature and still satisfy your tenants.

So, something to be aware of is, can I reduce my discharge air temperature? That is a consumption strategy. Reducing your chillers is a consumption strategy. Having a better lift on your chillers is a consumption strategy. All of these are consumption strategies because as soon as that chiller turns on, yes, there is a demand associated with pumps, with compressors, with fans, but that demand can be mitigated, but consumption is a little harder to necessarily mitigate.

Lastly, let's cover about time of use. So, time of use is typically in the afternoon and evening. They will look at the kind of 12pm to 4pm period, and then the 4pm to 8pm or 4pm to 9pm period. If you are operating during these time of use periods, and you don't have a guaranteed rate, then what can happen is there's a multiplier effect on your demand income, and your consumption rates.

So, what you want to try to do here is you definitely don't want to stand stuff up during this time period, if you can avoid it. Ideally, what I see a lot of people try to do is sub cool a building, maybe use ice storage and cool ice with their chillers, because it's cheaper to run them at night, and then use that stored energy. What we have to remember at the end of the day, heating and cooling is all about energy transfer. We are converting electricity or natural gas into energy.

In the case of a boiler we're converting natural gas or electricity into BTUs energy that is then transferred into the hot water loop, which is then distributed throughout the building. In the case of chillers, we are transferring energy into a compressor and evaporator which are running the refrigeration cycle, which is forcing basically heat transfer from the chilled water return into atmosphere, whether it's an air cooled or a hydraulically cooled chiller.

So, understanding those concepts, we can understand that with time of use, if we can execute our consumption and our demand prior to those time of use periods, then we are able to go and not be penalized as much during those time of use periods. So, that's why I say time of use is my primary focus. The only reason I don't bring it up first is because it's not in every state or every country. So, it is something to be aware of, but it's not necessarily something that exists in every state or country.

So, to summarize this post, you should evaluate your opportunity, you can do that with ENERGY STAR with DOE, look up comparable vertical market buildings. Ideally, look at the demand and consumption per square foot and not at the amount of money. That won't give you a better idea of your energy density compared to other facilities.

Identify the change you want to make whether you want to reduce demand, consumption, or manage time of use. Calculate your ROI using IP MVP, Option A, B or C. There are calculators out there on the web that you can google. Then step four, you implement your strategy.

Be sure to leave comments below on this post or any other posts you’d like to see. I love to read comments from our readers.

Thanks so much and take care.

Phil Zito

Written by Phil Zito

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