by Corey Lee Wilson — This article originally appeared in the May/June 2020 issue of FMJ
Understanding a building’s energy usage and managing it efficiently and effectively is a key risk mitigation factor in lowering a facility’s operation costs, namely the electricity bill. With current green button technology available from most energy providers and utility companies, FMs can stay on top of their energy usage and also benchmark their building’s usage using today’s data-driven technology. Benchmarking a building’s energy performance is critical and in California it is now the law per AB 802 – Mandatory Energy Benchmarking & Disclosure. With that free data and energy use analysis in hand, FMs can implement best practices for planning energy reduction policies and procedures.
Energy! It’s one of any FM’s major cost components. It is a hot topic and will continue to be so. For most facilities and properties, the cost of energy is not going down—only up. It is essential for FMs to reduce energy costs on their building(s) whether new or existing.
Energy management is an integral part of the day-to-day operations for FMs and property owners. Rising energy costs and increasing interest in sustainability are driving the need to reduce energy consumption in buildings and develop strategies for better management.
How the United States Uses Energy
FMs must ask themselves how energy efficient is their property and how does a facility’s overall energy efficiency compare to a portfolio of buildings? Or, how does it compare to other similar buildings regionally, nationwide or internationally? Many FMs assume they are using SMART goals in their efficiency plans.
SMART is an acronym:
Sadly, this may not be the case. If they have not developed and implemented a Sustainable Energy Buildings Plan (SEBP) and are not utilizing a smart energy savings system (SESS), the chances are they are not reducing energy usage to its full potential.
The market for solar energy has grown quickly over the last decade, but ultimately, to tap into the full value of solar energy, businesses need a way to control the timing of that energy use. The best way to do that is with energy storage.
Electricity and natural gas have been, and continue to be, the two dominant energy sources in the commercial buildings sector. Together they accounted for about 93 percent of total energy consumed in 2012. Along with the increase in total electricity consumption, electricity increased its share of total energy consumed from 38 percent in 1979 to 61 percent in 2012.
Americans use a lot of energy in homes, businesses, throughout industry, and to travel and transport goods. Thirty percent of energy consumed in the commercial and industrial buildings is wasted. There are five energy-use sectors:
- The Industrial Sector:facilities and equipment used for manufacturing, agriculture, mining, and construction.
- The Transportation Sector: vehicles that transport people or goods, such as cars, trucks, buses, motorcycles, trains, aircraft, boats, barges, and ships.
- The Residential Sector: homes and apartments.
- The Commercial Sector: offices, malls, stores, schools, hospitals, hotels, warehouses, restaurants, and places of worship and public assembly.
- The Electric power Sectorconsumes primary energy to generate most of the electricity to sell to the other four sectors.
In addition to primary energy use, the industrial, transportation, residential, and commercial sectors also purchase and use most of the electricity (a secondary energy source) the electric power sector produces and sells. These four sectors are called end-use sectors because they buy or produce energy for their own consumption and not for resale.
The good, the bad and the ugly
For California’s buildings, a larger percentage (now 60 percent as of 2020) of the state’s energy is supplied by renewable resources and of those renewal resources solar power is by far the largest. That’s the good news!
As the transmission of energy moves from these sources to power substations, electrical energy is distributed to fill the various power needs of California’s buildings. During that process between 61 and 86 percent of the generated power is lost, wasted, along the way and this power supply is also imbalanced, creating power surges and sparking electrical fires. The bad news!
In addition, utilities have also increased demand charges by more than 100 percent over the last decade. The ugly news!
Energy Rates and Solar Policies Are in Flux
Because of solar power’s success, utilities across the country are adopting pricing policies that place an increasing emphasis on time-variable rates and demand charges. For an average commercial energy user today, 60 percent of energy spent is based not on how much energy is used, but when it is used.
In California, for example, utilities have changed the timing and price of Time-of-Use (TOU) rates in a way that diminishes solar project economics unless developers pair solar with energy storage. In addition, utilities have also increased demand charges by more than 100 percent across the last decade.
That means businesses are getting charged more for their peak energy usage each month. If those peaks occur when time-based rates are highest, it can mean a huge energy bill, and can impact the savings from solar energy. Solar energy alone does not address the most expensive demand peaks, which now with the new rate structures, often occur in the late afternoon when solar production drops. By employing both solar and energy storage systems (ESS), businesses can reduce not only energy charges, but also address demand peaks that may occur when solar output goes down.
Solar will continue to expand but with the shift in energy demand to non PV producing time frames in the evening when demand peaks, the newest and most promising renewable is the use of ESS and the Distributed Energy Resource (DER) technology that allows them to flatten end user energy usage as well as distribute surplus energy back to the grid all the while reducing buildings energy costs and improving an organization’s bottom line.
Be it financial and/or environmental, it is the best of both worlds as the following statistics show:
- S. energy storagedeployment nearly doubled in 2018 as the nation installed 350.5 MW, 777 MWh— more than80 percent more than was deployed in 2017 in terms of megawatt-hours, according to a new report.
- Behind-the-Meter (BTM)storage accounted for 53 percent of the total deployment in megawatts while front-of-the-meter (FTM) installations accounted for 47 percent, according to the U.S. Energy Storage Monitor 2018 Year-in-Review. FTM installations often had durations of four hours or more.
- Report authors from Wood Mackenzieand the Energy Storage Association expect the energy storage market to double in 2019, deploying 1,681 MWh. By 2024, they expect annual deployments to exceed 4.4 GW that are powered by DERs.
As new rooftop solar and battery storage systems evolved, the technology to aggregate their extra energy capacity BTM and distribute it back to the power grid has arrived. It is called DER and it offers utilities the opportunity to meet bulk power sector needs by utilizing their smaller customers who have extra energy reserves to transfer back to the electrical distribution grid.
Solar energy produced during the day gets stored inside batteries for later use. When the solar production goes down in the late afternoon and time-based rates spike upward, businesses can draw energy from the batteries rather than paying for expensive power from the grid. Businesses can also use power from the batteries when their energy demand is highest to lower their demand charges.
A SESS can manage and regulate energy usage by purchasing it at the lowest peak usage rates and releasing it when energy demand is at its highest. They also prevent energy spikes and excessive energy demand by modulating and flattening energy usage for peak performance. As more loads and generating resources are connected through DERs, power usage will decrease, outages will cease, and this nascent industry will graduate to a full-fledge grid resource, which is ready to happen.
Already, a small mix of aggregators and utility-run programs are starting to bring a wide range of resources together for facility and property management professionals to reduce peak load, take stress off the system in key areas, and reduce the need to purchase expensive power. This could help defer or replace more costly investment in traditional grid infrastructure, as well as help integrate renewable resources and decrease sector emissions, all part of California’s aggressive goal for a sustainable near future.
The commercial and residential need for rooftop solar, electric vehicles and now battery storage shows no sign of slowing down and will accelerate to meet the nation’s growing electrical requirements that are replacing non-renewable resources like coal, petroleum and natural gas.
Until now, getting from the grid of the past with demand response load reductions to the multi-resource network of today’s of DERs was no easy task. It required not just managing the impacts of countless new resources on utility distribution systems but designing the software products and market models to allow the new aggregations to meet grid needs.
The same is true for DER, a catch-all term for rooftop solar, battery storage, and electric vehicles electrical and power sources attached to the distribution grid. For the typical commercial and industrial (C&I) facility, transforming and integrating their various power requirements with the latest solar, battery and EV technologies requires a SESS.
A limited number of certified open automated demand response program providers in California are offering SESS programs in 2019. There is no better return on investment for energy reduction savings in California than these promising SESS programs.
Because Energy Storage Systems providers collaborate and partner with their clients for the most effective and profitable SESS, they design, install, operate, and maintain their proprietary Aggregated Energy Resource Solutions (AERS) system using advanced building energy demand and emulation analysis that balances the energy rate as well as using the lowest rates available.
All their energy saving partners need to do is provide the necessary interior or exterior equipment space for a SESS and a copy of their energy usage data and electrical bill. Design to completion is typically three months or less and from then on, the SESS installer owns, operates and maintains the equipment and shares the energy savings per a mutually agreed percentage with its partner. Or, the partner can own, operate and maintain it as a capital investment and keep all the energy savings.
SESS network operation center specializes in lowering and flattening peak energy TOU by storing energy and releasing it as needed by utilizing a Qualified Balance Resources (QBR) system. QBR essentially releases stored energy during peak demand and TOU periods after purchasing the facility’s peak power usage reserves during the time of day with the lowest TOU rates.
A SESS’s AERS makes qualified balancing resources of electrical consumption using kw Demand Charge Management and kwh Energy Charge Management systems. These client and the SESS’s integrated systems help control and distribute energy resources between the electrical power grid and the building’s energy demand which maximizes a client’s energy bill savings and helps balance the electrical grid.
About the Author
Corey Lee Wilson is a California native and founded the IFMA Inland Empire Chapter in 2013 and was its past president from 2013-19. He is the president of CLW Enterprises, and project manager for MicroNOC Inc. He holds a BS in Economics from California State Polytechnic University Pomona, is an IFMA FMP, LEED AP O+M Specialty, CMAA CCM, and a member of the USGBC-LA Chapter. He is an Energy Savings Consulting that facilitates cost-effective and efficient energy reduction and battery back-up systems that reduces energy usage that lowers operational costs.