Saving money in hospital electrical distribution systems

10/06/2013


Saving money with co-generative demand-side management

In the past, a hospital (typically equipped with a Level 1 generator) was a perfect candidate for peak shaving agreements with a utility. However, this has become more challenging within the last two years with the advent of the EPA’s Tier IV requirements for the generators used in this application. The premium for upgrading or ordering a generator to meet Tier IV requirements is typically not cost effective in the areas of the U.S. where electricity is relatively inexpensive. 

However, the abundance of natural gas provides a new opportunity for many existing hospitals that need more emergency power and want to shave utility demand charges and/or enter into a formal peak shaving agreement with the utility. Natural-gas-fired turbines provide U.S. Environmental Protection Agency-compliant emergency power solutions. The start time for a turbine precludes it from being a life safety generator. However, this technology has the potential to be a triple-bottom-line winner by providing:

  • Peak shaving and/or demand-side management of the electrical load
  • Optional standby power for systems that the hospital needs to run in a prolonged outage
  • Co-generative heat that can be harvested for hot water systems within the hospital. 

 

The utility bills and the facility agreement is really the starting point for determining whether this money saving option is viable. Several factors must be present for this to be a successful design:

  • Access to natural gas infrastructure
  • A significant portion of the electrical bill must be due to a demand charge. This dollar amount is what adding a turbine can significantly reduce.
  • The size of the turbine must consider the minimum base electric load present at the facility. The efficiencies of the turbine will not be present if it isn’t kept at full capacity.
  • Any type of utility demand-side-management program with the utility that can defray the energy rates. 

The initial investment for a high-efficiency natural gas turbine can be daunting (initial cost is usually in excess of $2M). But evaluating the return on your client’s investment based on the offset utility costs and co-generative advantages will typically produce positive cash flow within 3 to 4 years and payoff within 7 years. This is considered a long-term investment and not attractive to some clients. However, give your clients the evaluation and let them decide how to spend their money. We are trusted engineering advisors, not accountants. The clients’ CFO may have a very different perspective on the proper use of their money.

Both of these approaches have been personally successful for me. I hope that you too can employ some of the same strategies in your next energy-saving strategy sessions with your clients.


Versluys is a senior electrical engineer and principal at TLC Engineering for Architecture. His areas of expertise include sustainable health care design and campus distribution systems. He is a member of Consulting-Specifying Engineer's editorial advisory board.


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