What are we doing?
Joint Venture and a consortium of local organizations are planning a project aimed at retrofitting existing commercial buildings to enable auto-demand response (Auto-DR), which means the ability to react automatically to changes in energy demand. In order for a building to be both efficient and “smart” it must be able to react to these utility pricing signals (i.e., adjust electricity usage when there are changes in prices due to peak load) through Auto-DR. This will become more important in the coming years as utilities shift their pricing structures to encourage customers to decrease peak load.
The goal of this project is to increase the Auto-DR participation of commercial leased buildings to 26 Mega Watts (MW) load shed - about 10 times current levels in California - within 24 months.
The U.S. Department of Energy (DoE) issued a funding opportunity for the Smart Grid Investment Grant (SGIG) program in June 2009. Through the American Recovery and Reinvestment Act (ARRA) of 2009, this grant is intended to promote Smart Grid technology and deployments that will result in lower energy demand and better performance of the electrical grid.
In addition to the DoE funding, the California Energy Commission (CEC) is offering a cost-sharing grant which would provide a maximum $1,000,000 or up to 10% of the DoE award amount (whichever is less). The combination of DoE and CEC with utility matching funds, assuming continuation of existing incentive programs, will amount to $600 per kilo Watt (kW) load shed (i.e., per amount of decrease in energy use). This amount per kW will entice building owners/managers to participate in the program and will therefore stimulate the Smart Grid industry.
The total project cost is $18 million.
Cypress Envirosystems, based in San Jose, California, introduced a Wireless Pneumatic Thermostat solution in 2008 which accomplishes a pneumatic retrofit in less than 15 minutes per zone and only 20% of the cost of a conventional Direct Digital Control (DDC) approach. Just like a DDC system, it can programmatically change thermostat setpoints in response to Auto-DR events, and includes a built-in interface to the Open-ADR communications standard developed by Lawrence Berkeley National Laboratory and Akuacom, a San Francisco company.
This technology has been successfully deployed in a number of buildings, including an Auto-DR project for the County of Santa Clara for two buildings totaling 300,000 sq-ft. The entire project was completed in eight days and less than $175,000, compared to six months and $880,000 for a comparable DDC retrofit. The full cost of the project was reimbursed via PG&E incentives and represents 300kW of load shed potential.
Why are we doing it?
Commercial Building Pneumatics
In California, 46% of electricity use is related to commercial buildings (more than residential or industrial). Peak electrical consumption for these buildings accounts for up to 30 Giga Watts, and represents a huge reservoir of potential decreased energy use through Auto-Demand Response (Auto-DR).
While commercial buildings are the largest contributor to peak electrical load, they comprise less than 4% of the Auto-DR portfolio for PG&E and Southern California Edison (SCE). To date, a key reason for this under-representation is the high cost and disruptive nature of upgrading older buildings for Auto-DR, and also the complications of multiple decision makers in multi-tenant buildings. Without Auto-DR, in order for commercial property managers to react to peak load events they must dispatch a person to each thermostat to change them manually. This method is inefficient in terms of both labor costs and reaction time, hence electricity costs.
From a technical point of view, the majority of commercial buildings in California remain off-limits for Auto-DR because they do not have communicating thermostats. In fact, most of these are older buildings still use pneumatic HVAC control systems with no electronics of any kind. This makes implementing Auto-DR difficult.
Retrofitting these buildings for Auto-DR has traditionally been very costly and causes disruption to building tenants. Upgrading pneumatic thermostats to Direct Digital Control (DDC) typically cost upwards of $2,500 each (achieving 1 to 2 kW of load shed), which makes it difficult to justify economically. Replacing pneumatic actuators and piping with electronic versions require workers to go behind walls and above ceilings, possibly exposing asbestos or other harmful materials to tenants.
This project amounts to a significant increase in building energy efficiency and will stimulate the Smart Grid industry in California. Efforts will be focused on identifying Silicon Valley buildings for Auto-DR retrofit, although the scope of the project will extend beyond the Valley to other California PG&E and SCE territories.
This project is aligned with two of the five initial Climate Prosperity action items: 1) Accelerate improved energy efficiency in existing buildings; and 2) Grow the smart grid industry in Silicon Valley. It will also help create green jobs, which is one of the indicators of achievement for the Climate Prosperity project.
- Deliver 26MW of load shed in the difficult-to-reach commercial lease building segment
- Create green jobs immediately – more than 50% of funding is for installation labor for shovel ready projects
- Train a workforce - create an eco-system of service providers that can sustain effort for future retrofits in California and nationwide, once stimulus funding is over
- Showcase proven Silicon Valley technology and innovation
In addition to Joint Venture's Climate Prosperity Council, a Consortium has been formed around this Smart Grid project. Consortium members include:
- Cypress Envirosystems: wireless pneumatic thermostat technology
- Echelon: technologies for building communications control
- Akuacom: “open” ADR to communicate pricing signals
- Honeywell: project implementation
- County of Santa Clara: target potential buildings in Santa Clara County
- County of San Mateo: target potential buildings in San Mateo County
- CB Richard Ellis: target potential buildings in both PG&E and SCE territory
- Global Energy Partners: reporting, funds management & disbursement
- work2future: workforce recruitment and training
What are the latest developments?
On August 6, Joint Venture and a consortium of local organizations submitted an application to the U.S. Department of Energy for $9 million in American Recovery and Reinvestment Act (ARRA) Smart Grid Investment Grant (SGIG) funds for this project. An additional cost-sharing application was submitted to the California Energy Commission (CEC) for $1 million.
Seven million square feet of commercial building space has already been identified for retrofit.
We received a letter from the CEC which stated that they intend to provide funding if we receive the DoE funds and follow all application guidelines.
What are the next steps?
We anticipate a reponse from the DoE in October.
Other next steps include:
- Identify commercial leased buildings for Auto-DR retrofit and participation
- Revise agreements with and educate existing tenants/owners/building managers
- Implement pneumatic HVAC upgrade of existing commercial leased buildings
- Where necessary, integrate upgrade with existing building automation system
- Enroll buildings in existing Auto-DR programs from PG&E or SCE
- Verify functional integration with Demand Response Automation Server
Where do I find out more?
1 Decision 06-11-049 November 30, 2006. Order Adopting Changes to 2007 Utility Demand Response Programs. In response to the application of PACIFIC GAS AND ELECTRIC COMPANY (U 39-E), for Approval of 2006–2008 Demand Response Programs and Budgets, Application 05-06-006, Filed June 1, 2005
2 Decision 08-07-045 July 31, 2008. Application of Pacific Gas and Electric Company To Revise Its Electric Marginal Costs, Revenue Allocation, and Rate Design. Application 06-03-005, Filed March 2, 2006.
3 FERC Policy Statement, Docket No. PL09-4-000 paragraph 29.
4 Global Energy Partners, LLC. 2009. http://www.auto-dr.com/
5 Proposed Decision of Administrative Law Judge Jessica T. Hecht (Mailed 6/30/2009) adopting demand response activities and budgets for 2009 through 2011 (pp. 182, 214).