MOVING NEW ENERGY AND EFFICIENCY TO THE BUILDINGS ON MAIN STREET

The CO2 Abatement Potential Of California’s Mid-Sized Commercial Buildings
Michael Stadler, Chris Marnay, Gonçalo Cardoso, Tim Lipman, Olivier Mégel, Srirupa Ganguly, Afzal Siddiqui, and Judy Lai, January 25, 2010 (Lawrence Berkeley National Laboratory)

THE POINT
A lot of work has been done on net zero energy homes and on streamlining the energy consumption of industrial-scale utility and manufacturing plants. There has been less attention to the mid-sized buildings that comprise the bulk of city life.

In The CO2 Abatement Potential Of California’s Mid-Sized Commercial Buildings, researchers from the U.S. Department of Energy Lawrence Berkeley National Laboratory studied the potential energy and emissions reductions possible by bringing New Energy (NE) and Energy Efficiency (EE) methods and technologies to Main Street.

The study looks at a cross section of buildings in California that consume from 100 kilowatts (about 25 houses) to 5 megawatts (a small suburb) of power. It estimates such buildings use roughly a third of the energy consumed by California’s commercial sector.

A building with that level of energy consumption constitutes a microgrid that serves a variety of purposes including (1) electricity for lighting, office equipment; etc., (2) cooling via (a) electricity-powered compression, (b) heat-activated absorption cooling, (c) natural gas chillers, (d) waste heat or (e) solar heat, (3) refrigeration via standard equipment or absorption cooling, (4) hot-water and space-heating via recovered heat from other generation or by natural gas, and (5) natural gas for cooking.

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Such a microgrid can integrate with the grid power supplied to the building a variety of New Energy and Energy Efficiency options, including especially (1) natural gas-fired engines, (2) gas turbines, microturbines, and fuel cells, (3) solar photovoltaics (PV) and solar heating systems, (4) conventional batteries, flow batteries, and storage of heat, (5) heat exchangers used with solar thermal or recovered heat, (6) natural gas chillers, and (7) heat-driven absorption chillers.

The Lawrence Berkeley Lab researchers drew on Distributed Energy Resources Customer
Adoption Model (DER-CAM), a powerful new tool that integrates the spectrum of a microgrid’s needs and potential supplies to determine which options best serve the goals of cutting back the use of energy and reducing the building’s greenhouse gas emissions (GhGs).

The most noteworthy conclusion is that much heat is available for recapture and reuse, enough to meet a third of the state’s goal for combined heat and power (CHP) (set by the California Air Resources Board (CARB) for 2020 at 4 megawatts). Buildings in the hot inland areas of the state may offer the biggest opportunities for energy savings and GhG reductions.

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THE DETAILS
Terms like combined heat and power (CHP) and microgrid are not nearly as commonly known in the world of New Energy (NE) and Energy Efficiency (EE) as solar panels and wind turbines but they are at least as important.

Combined heat and power (CHP), also known as cogeneration, is the recapture and use of the heat generated and lost in the production of electricity or the running of engines. Buildings often have air conditioning or heating systems that lose much in the form of heat. A micro CHP system is also a type of Distributed Energy Resource (DER) and is essentially comparable to a small PV system except that, instead of the sun's light, CHP uses recaptured heat to generate electricity. (Absorption chillers are a specialized form of CHP that use waste heat for cooling.) In one UK study, micro CHP was found to be a more cost-effective way to reduce GhGs than solar PV.

The California Air Resources Board (CARB) goal is for the state to install by 2020 4 megawatts of CHP capacity.

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A microgrid is any local energy network that integrates various forms of DERs. In a commercial building, the available DERs can be assimilated into the building’s service along with utiltity-provided electricity from the central transmission system through a microgrid. It gives the building the freedom to operate independently from central transmission, run entirely on utility-generated electricity or to combine sources.

When a microgrid and DERs, including CHP, are available, the questions of which sources are the most economical and when they should be used become crucial. Answering thess questions involves a complex set of factors that fall into 2 major categories: (1) The cost, efficiency, and environmental benefits (including – where possible – renewable energy credits, RECs, and emissions allowances), and (2) the power quality and reliability (PQR) benefits of DERs and semiautonomous control of their use.

The Lawrence Berkeley researchers use the Distributed Energy Resources Customer
Adoption Model (DER-CAM) computer program to calculate the entire spectrum of possibilities, identify the optimal economic combination and calculate the GhG reductions associated with that combination.

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DER-CAM was applied to 100 kiloWatt (kW)-to-5 megawatt (MW) peak electricity load buildings in the California Commercial End-Use Survey (CEUS) database and estimated the impact of the most economic choice of CHP uses for mid-sized buildings on GhG emissions.

It is a source of GhG-reductions so far virtually untapped. Only 150 megawatts of CHP capacity is currently installed in California's mid-sized buildings (hospitals, colleges, hotels, large office buildings, etc.). The potential for energy savings and Ghg-reductions is large, however, because they have a balanced and simultaneous requirement for electricity and heat for hot water, space heating, and cooling.

From the CEUS database of 2790 premises, the researchers selected 138 representative California sites, representing ~35% of the commercial electricity demand, across all of the state’s varying climate zones. Through DER-CAM simulations using different technology costs, tariffs for 3 major utilities and a natural gas company as well as varying interest rates and incentive levels, a set of optimal choices emerged.

DER-CAM was designed to consider specific NE and EE technologies that draw energy from solar radiation, utility electricity, utility natural gas, biofuels, and geothermal heat sources: (1) natural gas-fired engines, (2) gas turbines, microturbines, and fuel cells, (3) solar photovoltaics (PV) and solar heating systems, (4) conventional batteries, flow batteries, and storage of heat, (5) heat exchangers used with solar thermal or recovered heat, (6) natural gas chillers, and (7) heat-driven absorption chillers.

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The building end uses for those technologies and energy sources that DER-CAM addresses are: (1) electricity for lighting, office equipment; etc., (2) cooling via (a) electricity-powered compression, (b) heat-activated absorption cooling, (c) natural gas chillers, (d) waste heat or (e) solar heat, (3) refrigeration via standard equipment or absorption cooling, (4) hot-water and space-heating via recovered heat from other generation or by natural gas, and (5) natural gas for cooking.

DER-CAM’s conclusions include optimal distributed generation (DG)/storage options and an hourly operating schedule that considers varying rates (fixed charges, on-peak, off-peak, shoulder energy prices, and demand/power charges), as well as costs, fuel consumption, and CO2 emissions.

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The study estimates that the mid-sized commercial building sector can economically install 1.4 gigawatts of CHP capacity of CARB’s 4 gigawatts by 2020 CHP goal. That’s ~35% of the goal, about the same percentage of the commercial electricity demand medium-sized buildings create.

Deeper weeds: CARB assumes a fixed capacity factor of 86%. DER-CAM estimates an average 60% capacity factor. Therefore, CHP can actually meet only ~24% of the CARB goal. Other factors mean the 1.4 gigawatts of CHP from Main Street buildings will only meet 19% of CHP’s share of the GhG cuts.

Still, that's a significant reduction. DER-CAM estimates the optimum use of CHP will lower the sample buildings' annual energy bill by $190 million per year.

Natural gas used for cooking in restaurants represents ~one quarter of the state’s commercial natural gas consumption. Appropriately applied, CHP can replace some of this fossil fuel use and impact GhGs. Differences between restaurants are so great, however, that accurate estimates of impacts are not readily available even with a tool as comprehensive and malleable as DER-CAM.

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Internal combustion engines (ICEs) with heat exchangers (HXs) are expected to play a strongly dominant role in medium-sized buildings’ power supply, even in 2020 and even despite being less efficient and creating worse GhGs than macrogrid electricity. DER-CAM calculations also include a less common 2020 mix of solar thermal, estimated to total 416 megawatts in 2020, and PV, estimated to be 183 megawatts.

The impact of either a CHP-only feed-in tariff (FiT) incentive or a pure net-metering incentive would be moderate on the 2020 estimates. The FiT increases New Energy and CHP production (the higher the FiT, the more the New Energy and CHP) but also increases GhGs (because CHP from ICEs with HXs generate more GhGs). When solar thermal (329 megawatts) and PV 423 megawatts) are included, there is higher total DG energy output and CHP and GhGs decrease.

If, by 2020, there is a much higher investment ($1500 per kilowatt) in fuel cells (FCs) to provide distributed storage for the DERs, CHP could provide 73% of CARB’s 4 megawatt CHP goal while cutting GhGs more significantly than in any other DER-CAM case. There would, however, be less PV (95 megawatts) and solar thermal (247 megawatts) installed.

In the absence of the kind of spending or a GhG price that would drive investment in FCs, GhG reductions from the use of CHP would be modest – but higher than previously estimated and completely worth efforts to obtain.

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As the (hypothetical) price on GhGs increases, there will likely be less natural gas used to drive ICEs but more FCs, more CHP, and more PV and solar thermal.

Varying climate zones also impact the amount of CHP used. The very hot and dry Southern California region served by San Diego Gas & Electric has the highest uptake of CHP. More temperate coastal regions served by Southern California Edison and Pacific Gas & Electric have more average uptake of CHP. Hotter drier climate regions drive CHP use because of the requirement for more air conditioning.

The most likely candidates for the sum total of advantages gained from the use of CHP come from large office buildings, health care facilities, colleges, and hotels/motels, especially in hotter, drier climates.

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QUOTES
- From the Lawrence Berkeley report: "The successful deployment of microgrids will depend heavily on the economics of distributed energy resources (DER) in general, and upon the early success of small clusters of mixed technology generation, grouped with storage, and controllable loads. The potential benefits of microgrids are multi-faceted, but from the adopters’ perspective, there are two major groupings: 1) the cost, efficiency, and environmental benefits (including possible emissions credits) of combined heat and power (CHP), which is the focus of this study, and 2) the power quality and reliability (PQR) benefits of on-site generation with semiautonomous control."

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- From the Lawrence Berkeley report: "How DG with CHP might be implemented in cost minimizing microgrids is analyzed by applying an optimization that minimizes example sites’ annual energy costs. Using a representative sample of 138 mid-sized commercial buildings taken from CEUS, existing tariffs of three major electricity distribution ultilities plus a natural gas company, and performance data of available technology in 2020, the GHG reduction potential is estimated for a market segment representing about 35% of CA’s commercial sector. In a reference case, this segment is estimated to be capable of economically installing 1.4 GW of CHP, 35% of the CARB statewide Scoping Study 4 GW goal...Several sensitivity runs were completed. One applies a simple feed-in tariff similar to net metering, and another includes a generous self-generation incentive program (SGIP) subsidy for fuel cells. The feed-in tariff proves ineffective at stimulating CHP deployment, while the SGIP buy down is more powerful."

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- From the Lawrence Berkeley report: “Note that efficiency and behavioral response may contribute towards meeting future energy services requirements, however, these were not taken into account in this study. Additionally, the area constraint for PV and solar thermal systems needs a more detailed analysis since they vary with climate zone as well as building ownership. Finally, we believe the ownership of buildings and the issue of project decision-making authority needs special attention since it might constitute a major barrier for DG adoption and dampen the DG / CHP potential identified in this study.”