Energy storage: A component of energy conservation

Energy storage must be embraced as part of energy policy, and captured in standards such as ASHRAE 90.1 to maximize the environmental and resiliency benefits of increased renewable energy production

By Adam McMillen and Sean A. Smith January 26, 2021


Learning Objectives

  • Understand why energy storage is a critical component of energy conservation.
  • Know how time of use rates provide a good barometer to use for shifting energy availability or load to maximize benefits of renewable energy production.
  • Preview how energy standards, such as ASHRAE 90.1, may embrace energy storage in the building code.

Energy policy and efficiency standards such as ASHRAE 90.1: Energy Standard for Buildings Except Low-Rise Residential Buildings define requirements for buildings that save energy. However, a fundamental shift is happening in energy production that makes it critical that standards address more than energy reduction in buildings. Standards must also address the timing of when that energy is used because not all energy is created equally.

Energy producers must match production to the demand in real time. This forces producers into situations of high production cost at times of peak demand. If possible, energy producers want to load their lowest-cost energy production plants first. Then they ramp up higher cost plants as demand increases. Energy production cost is driven by both cost of fuel available to a plant and the efficiency of the plant. At peak, utilities must operate the highest-cost plants.

Furthermore, transmission losses increase as more power is transmitted from the plants to the consumer at peak. Therefore, energy producers try to incentivize consumers and businesses to shift demand to the low-cost times through time of use rates, demand charges, grid-enabled devices and real-time pricing.

Some regions of the country are in a transition where renewable energy sources have become a significant portion of energy production (see Figure 1). Figure 2 shows how this is projected to grow through 2050, according to the U.S. Energy Information Administration. Some states have set a goal to eliminate use of fossil fuels for energy production within this same timeframe. This is being driven by both decarbonization efforts and the falling cost of solar photovoltaics and wind compared to fossil fuel generation facilities.

This progress, however, does come with some growing pains. For regions with a large penetration of renewables, some renewable energy sources produce energy when the underlying energy source, such as wind or solar, is available, not when it is needed. Therefore, renewable energy makes it difficult for energy producers to match load to demand. In some markets there is so much renewable energy production that production is curtailed due to lack of demand.

California enacted daily curtailment of solar power in 2019. To be clear, these curtailments only represent 3% of the 2019 solar energy production, but the trends grow each year as more solar capacity is installed.

In the article, “California has too much solar power. That might be good for ratepayers,” the Los Angeles Times reported that at around 1 p.m. May 27, 2019, “Solar plant operators shut off a record total of about 4,700 megawatts of capacity at the same time — nearly 40% of the entire solar capacity installed on the California grid.”

This anomaly highlights the opportunity to use energy storage systems to bring demand and production together in time. Expanded use of TOU rates and even real-time pricing models may be used by energy producers to encourage consumers to help with the problem. In addition, grid operators such as CAISO are working with utilities to develop flexible resources that includes more granular demand models and flexible capacity requirements including reserves and the ability to add or trim capacity quickly.

Another way to look at this is that not all energy saved is equal. For example, if a new code requirement saves energy in the middle of the night in East Texas, where wind turbines produce much more energy than is consumed, were the goals of energy savings realized? Did it improve economic resiliency or reduce demand on the international energy supply chain? Did that saved energy reduce the detrimental environmental effects of burning fossil fuels?

The same could be said for reducing energy usage during the sunniest part of the day in southern California, where solar power dominates production.

Several codes and standards encourage energy production on-site. For example, the California Energy Commission states that solar will be included in all new homes starting in 2020 and ASHRAE 90.1 provides several exceptions to prescriptive requirements when the building has on-site renewable energy generation. If the energy generated by these on-site systems is not consumed on-site, but put back into the grid, it can aggravate the problem.

Therefore, to remain viable in the future, energy standards such as ASHRAE 90.1 must fundamentally change how the standard addresses energy savings to include two measures. These standards must consider both energy savings and timing of that energy savings to coincide with the times when the energy savings achieves the underlying economic and environmental goals.

Energy storage plays a key role in managing the timing. In some cases, energy storage systems will use more energy at the building. Therefore, standards need a way to make sure that the environmental benefits of matching demand to production outweigh the cost associated with higher energy usage. Building analysis using TOU is an appropriate tool to evaluate the trade-offs.

Time of use rates

One way that utilities can try to match load to the lowest-cost power production is to use economic incentives such as TOU rates, demand charges and demand response controls. These options are not available or consistent in every location. For example, a survey of 2,757 utilities done in 2019 by NREL — each with multiple rate schedules — showed that 56% of the rate schedules did not include demand charges. However, of the 44% that did, the average demand charge was $10.18/kilowatt with a standard deviation of $7.35/kilowatt and a maximum of $90.37/kilowatt. Clearly energy storage benefits vary by location.

Figure 3: Energy demand and net demand, less solar on select days, is shown in this duck curve from 2020 data from California Independent System Operator. Courtesy: Trane Technologies[/caption]

Some utilities institute demand charges during this peak to incentivize the consumer to curtail demand and to recover their costs. To further illustrate this point, Figure 3 shows this same peak demand charge overlaid with the July 15 data from Figure 3.

One solution to benefit both the consumer and the utility is to shift load from high-demand time period to low-demand time period using energy storage systems.

One option for shifting this load in a warm climate is chilled water storage. Consider a 300,000-square-foot health care facility with high cooling loads in a southern climate. It has 1,000 tons of peak cooling and anticipated energy costs of $750,000 per year. This facility has a utility rate structure that was recently adopted by ASHRAE 90.1 to represent a representative time of use schedule. The figure outlines this schedule for a summer weekday, showing that demand charges and consumption charges approximately double during an eight-hour period in the afternoon/early evening.

Figure 5: This shows the three operational periods of thermal storage scenario. It’s an example of an hourly chilled water plant load profile without storage (baseline) and with storage. Courtesy: IMEG Corp.[/caption]

At 100 gallons of chilled water storage per ton hour of load (14°F delta T), this gives us a 300,000-gallon tank. If we then assume a 10-hour charging period, we need to produce 300 tons of chilled water during each hour of the charging period. This stored chilled water would then discharge about 3,000-ton-hours of chilled water load at a rate to keep the peak kilowatt as low as possible during the on-peak period (~500 tons in this case).

With these new load profiles established, we convert the plant from cooling tonnage to kilowatt by assuming a 0.8 kilowatt/ton chilled water plant (chiller, primary pumps, cooling tower and condenser water pumps) efficiency to establish the electrical load profile for each scenario. For simplicity, we assume this same efficiency for the entire 24-hour period.

The savings in energy consumption occur each day, five days per week, by shifting the chilled water production to the lower-rate period. The savings in demand come each month by shifting 358 kilowatts of demand away from the peak demand period each day. Note that in addition to the peak demand charge reduction, the “all hours” demand charge reduction coincides with the peak demand. While it is a lower rate than the demand charge, this example did realize a monthly savings of $1,023 from this reduction as well. The sizing and timing of the storage does require careful balancing to keep demand relatively flat and not spike in the off-peak period and take away from the overall savings.

If we assume this daily and monthly savings equally across the four-month summer period of this example, high-level analysis shows about $30,412 savings in energy costs per year using thermal energy storage. There would also be savings available for the other eight months of the year, but we limited this example to summer only. In an integrated design scenario, this annual savings would be coupled with first-cost savings in other areas being served by the chilled water tank.

Energy storage projects often reduce installed cooling plant capacity since part of the load is being served by the tank. If 300 tons could be removed in our example at $2,500 per ton, this would realize a first cost reduction of $750,000 to help fund the install of the tank. For projects with backup generator required, chilled water storage often allows a reduction in generator size, providing additional first-cost benefit.

This example demonstrates an approach to energy cost savings using the ASHRAE 90.1 adopted TOU rate. TOU rates vary across the country; some regions have higher demand charges for a shorter time window that would realize much higher savings. The goal is to shift the load from a more critical five-hour window (4 to 9 p.m.) when the load is increasing and solar PV generation is declining. In this scenario, the facility could shift that load to the night period as shown in the ASHRAE TOU example or shift it to the period when excess solar PV energy is available.

That decision could be made on a cost basis if rates are lower during a period of excess solar PV. It could also be made on a carbon basis if the grid mix during the day with excess solar PV has lower carbon content than the grid mix at night when no solar PV is available.

Classifications of storage systems

ASHRAE 90.1 energy storage working group is focused on short-term storage types 2 and 4. The three goals of a good short-term storage system are:

  • Maximize use of renewable energy sources.
  • Match load to production such that the net demand curve shown in Figure 3 is flattened.
  • Minimize conversion losses (also known as round-trip losses).

This will result in the lowest total energy cost by reducing the need for high-cost and less environmentally friendly energy production methods to satisfy peak loads.

The ability of energy storage systems to meet these goals depends upon several factors including selection and application. For example: a compressed air system, due to the complexity of the plant, is likely to be applied at the utility or grid. Batteries can be effectively applied to a building with on-site electrical power generation if the power cannot be consumed immediately.

According to a 2019 article, “Lithium-Ion Battery Prices are Declining, Powering Growth and Opportunity in the U.S. Energy Storage Market,” the cost of batteries dropped by 73% from 2013 to 2018. If this trend continues, batteries will be effective tools for energy storage in many applications. Water and ice storage can be applied to many chilled water systems, providing redundancy as well as storage benefits. ASHRAE published the second edition of the Updating Cool Thermal Storage Techniques in 2019 and Guideline 21: Guide for the Ventilation and Thermal Management of Batteries for Stationary Applications in 2018 to help practitioners evaluate and apply these systems.

Energy storage

The purpose statement for ASHRAE 90.1 is: To establish the minimum energy efficiency requirements of buildings other than low-rise residential buildings for:

  • Design, construction and a plan for operation and maintenance.
  • Use of on-site, renewable energy

To further this purpose the standards committee established an energy storage working group to investigate where storage should be part of the total energy savings solution in the code. Some issues under investigation include:

  • Establish round-trip efficiency requirements for storage equipment.
  • Establish storage requirements related to on-site renewable energy production to ensure that the energy produced is used on-site.
  • Establish requirements to use energy storage systems that save energy and/or energy cost.

Building standards such as ASHRAE 90.1 have a role to play to encourage use of renewable energy. Establishing requirements for energy storage supports the original intent of the standard and can lead to a more environmentally friendly electrical grid.

ASHRAE 90.1: Reducing energy use for 45 years

ASHRAE 90.1: Energy Standard for Buildings Except Low-Rise Residential Buildings was created in response to the 1970s global energy crisis with the goal to reduce dependence on international supply for energy. Over the intervening years, society has benefited from a building energy standard that reduced energy usage by more than 50% from the minimum requirements established in 1975 to the most recent requirements in 2019. In the intervening years, it has also become clear that energy conservation produced a positive impact on the environment through reduction in demand for power plants and reduced consumption of fossil fuels. The positive environmental impact of conservation is just as critical to society as the original purpose of achieving economic resiliency that birthed the standard.

Author Bio: Adam McMillen is director of sustainability at IMEG Corp. Sean A. Smith is chief engineer for Trane Technologies.