How Smart Grid Impacts Facility Management
As smart grid technology matures, it's likely new products will be brought to market. "Once we set price signals, people will invent new products to take advantage of the difference between very high peak periods and low off peak periods," says John Kelly, deputy director of the Galvin Electricity Initiative.
That day may not be far away. The American Clean Energy and Security Act of 2009, which passed the House over the summer, directs EPA to investigate requiring products that receive the Energy Star label to be Smart Grid compatible.
The good news is that for all the discussion about Smart Grid, facility executives don't necessarily need to learn any new tricks to benefit. Instead, they will simply need to become more aggressive about energy efficiency and energy management.
"The new rate structures will have more pain than reward built into them, until you understand there are opportunities in the pain," says Audin. "It's going to be more of a battle to maintain the bottom line where it is now."
There are numerous ways to benefit, Audin says. Many deal with making small behavioral or process changes within the organization. For one organization that owned a stadium on a time-of-use plan, Audin suggested that the facility staff change how it prepared for night games.
Under the old policy, the staff turned on all the field lights at 2 p.m. — when electricity was the most expensive — to test the lights. That drove up energy use and set the facility's peak load higher than it needed to be.
The answer was to add a little overtime to the budget to test the lights at night the day before a game. That shifted the energy use to off peak.
Similarly, in manufacturing facilities that use electric forklifts, it makes no sense for the staff to charge them at 3 p.m. at the end of the shift. Instead, have the forklifts plugged in and set to charge overnight on a timer, Audin says.
Other changes involve integrating the BAS to respond to price signals from the smart meter. For example, during a demand-reduction event — or to simply reduce a facility's peak load during the day — the BAS can be programmed to practice sequencing.
Basically, the smart meter can send a signal to the BAS so that a VFD in the BAS is slowed by 20 percent for 10 minutes. This reduces the motor's energy use by 40 percent. Once the 10 minutes are up, the VFD goes back to full speed and a different VFD is slowed. Occupants are unlikely to notice the change, and peak load is reduced.
Facility executives who have electric heat in their buildings — whether it is baseboard heat or electric reheat coils in their rooftop units or space heaters — may want to rethink those applications because, in some places, Smart Grid means critical peak power periods will occur in winter, says Audin.
One other scenario possible in the future if plug-in hybrid cars become popular is that employees would park their cars in a lot and plug them in. If it became necessary to shave peak demand, the cars could feed part of their batteries into the grid.
Similarly, a data center could discharge part of its UPS system during a peak demand event to reduce cost. Normally the UPS system is only an operational cost that never gets used, says Wakefield.
One of the other advantages of Smart Grid is that it has the potential to automatically uncover operational problems that today are often only found through retrocommissioning. A building that has multiple smart meters on its large equipment, for example, would allow the utility to automatically perform load profile analysis to determine problems.
A 2008 study by EPRI indicated that continuous commissioning through smart metering could save 2.2 to 8.8 billion kWh annually by 2030.
The cost of adding submeters can be rolled into larger projects, especially if a facility is being upgraded under an energy service contract (ESCO).
Audin has used submeter data to find problems like outside air dampers jammed open even though the system indicated they were closed, and once used it to show how a facility operator needlessly started a building's extra chiller on a hot day, leading to $20,000 in extra demand charges.
"You can find all those problems for 20 to 40 cents per square foot through retrocomissioning," he says. "Or you can spend less than that on submetering and see all those things into the future too."
Avoiding a Dumb Building
A shift from time-of-use rates to real-time pricing offers opportunities to facility executives too. In real-time-pricing rate structures, facility executives may buy power a day ahead of time, or a few minutes ahead of the hour.
"The critical thing to understand with real-time pricing is it provides elasticity," says John Kelly, deputy director of the Galvin Electricity Initiative. "It provides customers and innovative companies with an economic pricing gap."
Under a real-time rate structure, a facility executive could buy power under a long-term contract at 5 cents per kWh. If the real-time rate jumps to 10 cents, even for a short period, facility executives could make profit off the difference.
"Once I know a day ahead of time what the price is, I could make a trade to reduce my power use tomorrow and make money off of it," Kelly says.
Such a capability requires tighter control of a building, solid knowledge of the BAS and a smart meter. But it will also require a facility executive who is willing to embrace more aggressive thinking about energy use.
"It all goes back to, if your building is dumb, you are going to suffer," says McGowan. "You are not going to provide the environment tenants might want. You're going to suffer because you're not going to be able to manage and control your costs. And you're going to suffer because the value of your building might decline because you cannot operate it effectively."
It's unlikely that facility executives will be forced into new pricing structures. Those that want to will probably be able to stay on traditional flat-rate plans, says Audin.
But those that do will still get hit with price increases, especially if the economy picks up and energy supplies become scarce again. Though the rates on traditional plans will stay the same regardless of when the most energy is used, facility executives will get hit with fees like fuel adjustment charges, he says.
That in turn, will make smart grid technology, demand response and real time pricing structures a more attractive way to manage energy costs.
"I think Smart Grid is going to be like LEED," says Delurey. "It's going to start off being a curiosity, but soon everyone is going to be scrambling to figure out how it works."