Building Operating Management September 2011 - FacilitiesNet

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16 buildingoperatingmanagement SEPTEMBER 2011 CLOSE-UP: UTILITIES Incentive Programs Can Help Save Energy Dollars by james piper, contributing editor Rising demand for electricity has led utility companies to seek ways to reduce the need to invest in new generation facilities, system power purchases, and additional transmission and distribution capacity. The problem for utilities is especially critical at periods of peak demand. As a result, utilities have devoted significant resources to programs designed to reduce consumption, particularly at peak. Some utility incentive programs have been designed to persuade facilities to reduce overall electricity use. For example, utilities may offer grants and rebates to customers to assist in the purchase of energy-efficient products. Other programs provide awareness and education resources to aid facility managers in implementing energy efficiency building practices. $2.5 billion Other types of incentives are tied to peak demand reduction. These programs do not necessarily reduce total energy use within a facility. Instead, they are designed to help customers curtail their energy use during hours of peak demand, typically between Utility rebate programs 11 a.m. and 7 p.m. on weekdays, or to shift demand to hours when flourished in the early ‘90s, the demand for electricity is lower: evenings, nights and weekends. then waned as the industry Traditionally, all but the largest customers paid for electricity at a rate based on average annual generation costs. While this pricing moved toward deregulation. scheme did reimburse utilities for the cost of generation and delivery, Since then, there has been a it did not reflect the higher costs incurred by utilities when they had resurgence in utility energy to either purchase power or bring higher cost peaking generators online to meet the highest periods of peak demand. Nor did it cover the incentive programs, with cost of building and maintaining the infrastructure needed to meet total funding from utilities peak demand. The pricing scheme also did not offer customers any or state energy offices hitting incentive to reduce their energy use during peak demand periods. $2.5 billion in 2008. For more, go to: www.facilitiesnet.com/12123bom How Demand Response Works A variety of programs have been developed that focus directly on reducing peak demand. For example, utilities have offered lower, “interruptible” rates to large facilities that would agree to reduce consumption upon request. But there were complications with these programs that led many utilities to morph them into demand response programs. The most common approach to current demand response programs centers around a demand response event. Demand response events are those occasions when the utility foresees the demand for electricity increasing to the point where outside purchases of electricity will have to be made or higher cost peak generating equipment will have to be brought online in order to meet demand. A demand response event also may be the result of equipment failure within the distribution system that could result in an overload to a portion of the system. When the utility determines that demand must be reduced, those participating in the program are notified of the demand response event. Depending on the specifics of the program, participants are given an advance notice of 30 minutes to two hours. Participants are then asked to take steps to reduce their demand for electricity according to a preplanned load reduction scheme. In smaller and medium-sized facilities, customers typically turn off certain electrical loads, such as building airconditioning systems, for the duration of the demand response event. Larger facilities and those with a building automation system can rotate Green Energy Programs These programs offer grants to commercial and institutional facilities for renewable energy systems, including photovoltaic, solar water heating, solar space heating, wind, fuel cell and geothermal-based systems. Most programs offer rebates to cover part of the installation costs and other incentives based on the annual kWh the system displaces. “To do’s” for facility managers: ask if the utility is offering grants and incentives and if their facility is eligible to participate, then perform a site assessment to see if the facility qualifi es. Funding is limited, and competition is high. — james piper Many utility programs are designed to help customers curtail energy use during hours of peak demand, typically between 11 a.m. and 7 p.m. on weekdays, or to shift consumption to hours when demand for electricity is lower: evenings, nights and weekends.
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