Electric Thermal Storage Heating System Driving Down Energy Demand Cost

Electric Thermal Storage (ETS) brings demand management savings and maintenance-free operation to commercial and industrial heating.

As hyper energy prices continue to attack operating costs, facility managers, engineers and consultants are more concerned than ever about limiting electrical demand during peak usage hours. Many commercial and industrial (C&I) users use a load control or energy management system to help them manage their electrical usage throughout the day. The goal is to save on costs by keeping overall demand charges low and by improving their load factor (the ratio of the average load over a given period - to the peak load occurring during that period). These users prefer to have a flat load curve rather than one with high peaks and valleys.

"Studies have shown enormous energy-savings potential in the U.S. industrial sector," says an American Council for an Energy-Efficient Economy report. Yet one operating cost - the heating of plant facilities - remains overlooked among most commercial and industrial users, and could be worth thousands of dollars a month. While industrial plants may get low-cost heating via cogeneration or extraction of process heat, those plants using conventional electric heating systems are substantially increasing their demand charges. And those using natural gas or other fossil fuels for heating may be on the brink of seeing costs soar to levels that justify an alternative heating system.

"Many C&I users have done a good job of improving their processes to minimize peak demand rates," says Gary Connett, Manager of Member Services and Resource Planning at Great River Energy, and electric utility in Elk River, Minnesota. "But they don't look at their space heating systems, and that is where additional improvements can be made that will affect the bottom line."

Connett says industrial users very seldom conduct audits that include heating systems because the energy used to power these systems is often considered a secondary operating expense. So, there is the possibility that those using electric heating systems may actually be hindering their load management. Also, those using fossil fuels such as LP and natural gas to generate heat may assume that they are the most practical sources. Yet rising prices and demand in a volatile market are challenging that assumption. Whatever the heating source, if it is not captured from manufacturing processes, payback time is a critical issue.

At the same time, utilities are under pressure to assist users in limiting and controlling demand in order for the utilities to avoid using less efficient and higher cost "intermediate" or "peaking" resources. To encourage C&I users to minimize usage during peak hours, many utilities offer discounted rates during off-peak hours while charging penalties or surcharges for excessive usage during peak hours.

A new demand management tool for space heating
Since the latest surge in energy prices a new demand management tool has arrived on the scope for many C&I users: Electric Thermal Storage (ETS). ETS stores energy in the form of heat during low demand periods for use during high demand times. By storing low-cost (demand free) electricity in the form of heat for use in warming facilities throughout the day, ETS promises users a quick payback plus the potential for significant ongoing energy savings. Moreover, the cost for the new ETS (ThermElect) is competitive to the cost of alternative space heating system, especially the gas and oil furnace.

Although ETS systems have been in wide use for heating homes throughout Europe and North America for over 50 years, these systems have been too small for most C&I applications.

Now a range of ETS products for the C&I market has been developed by Steffes Corporation, Dickinson, ND, the leading North American manufacturer of ETS systems. Teaming with Laboratoire des Technologies de l'Energie (LTE), a leading technology research arm of Hydro-Quebec, one of the world's largest utilities, Steffes has produced a forced air ETS product line that provides C&I users with the benefits of load management, plus a quick payback. By shifting usage to the demand-free hours (valley), and thereby a lower rate, it is quite conceivable that ETS systems will save users thousands of dollars each month.

The new product line, ThermElect, offers much greater heating capacities than current ETS systems. It is also easier to install, and has a smaller footprint for C&I applications, and is safer, quieter, and cleaner than natural gas systems.

Who may benefit most?
Research shows that two categories of C&I users qualify as candidates for ETS. The first category includes users with electric heating systems whose electricity rates can be lowered substantially by a shift to demand-free usage. (As a rule, these are situations where power costs are high or where demand rates are in effect.) The second category includes users who have fossil fuel heating systems and whose demand-free electricity costs are lower than the cost of the fossil fuel.

By shifting demand into the demand-free charge (valley), and thereby a lower rate, it is quite conceivable that ETS systems will save users thousands of dollars each month.

Moreover, as there is generally a good agreement between the client load profile and the utility load profile (valley and peak occur generally at the same time for the C&I client and the utility), the utility can also benefit from the ETS used by a C&I user to optimize his load profile. It's a win-win situation.

Getting to the bottom line
Most C&I customers in North America are billed for electric power in two components: energy use and their electric demand. Energy is billed by kWh usage and demand is billed by kW. The kW demand component of their bill can represent approximately 55% or more of their overall cost, and this is where ETS can have a major impact.

Based on Steffes expertise, a conservative estimate of demand cost savings of shifting 80kW of peak load during 8 AM to 10 PM weekdays for one winter might look like this:

Month Shifted Load
October 30kW
November 55kW
December 80kW
January 80kW
February 55kW
March 30kW
April 15kW
Total 345kW

Applying the current rates and TOD incentives of Xcel (Public Service of Colorado) to this example would yield a demand shift savings of $4,330 for the seven-month period. In some cases, accounts are billed each month based on their annual peak, as in Quebec. If a facility has a peak of 100 kW for example, and they get billed $10/kW, they would get billed $1,000 each month until next years measurement. In that case, 80KW are shifted and savings is 80kW's worth of billing for each month. There are a innumerable rate structures, some could be better than the Colorado example.

ETS can be used as a load retention tool in regions where utilities have a high kW demand charge or where fossil fuels are replacing existing electric heating systems due to higher operating costs.

ETS may also be highly appropriate for C&I users in regions where the utilities offer an electric rate with a competitive energy cost component (cost per kWh) and/or where fossil fuel heating fuel costs are high. Time of Use (TOU) electric rates, demand free off-peak hours, and "valley filling" within the users current load profile are typical utility incentives that can also be enjoyed through use of an ETS system.

Payback time
For C&I customers, payback time is critical to the justification of any new system. The payback time for an appropriately designed ETS can be quite short, depending on the application.

"The payback period that I can see for ETS is between zero and four years," says Alain Moreau - Researcher and Project Manager for Hydro-Quebec. He says Hydro-Quebec, which has extensive experience with residential ETS installations, does not look at the ETS as a space heating technology per se. "We use the ETS as a demand management system. We use the ETS to optimize the load profile of the business client. We use an appropriate size ETS to 'fill the valley' (off-peak potential), and when the valley is filled, you don't add more ETS. There are no more savings for a client beyond the avoidance of peak demand. That is the way to ensure a good payback."

A burgeoning market
Moreau cites as an example the retrofitting of the heating system during the refurbishing of the 17-story Price Building, Quebec City's oldest skyscraper, in 2001. Four central ETS furnaces and 63 ETS room units were installed, as well as electric base boards throughout the 64,000-sq. ft. building. "The reason we installed the electric baseboards is that there was no more savings available by adding more ETS units to the building." The payback was an astonishing18 months.

To further prove the economic advantages of ETS, Steffes, in concert with LTE/Hydro-Quebec has pilot projects underway at six locations, including a commercial prototype, a hockey arena, a hospital, two schools, a zoo building, and very large multi-residential building.

"The expertise we gain from these pilot installations will permit to obtain technical data to finalize the development of the ThermElect and will help to educate our Hydro-Quebec reps, so they will be further qualified to evaluate the potential for ETS applications," Moreau explains. "According to conservative projections made by our partner and us, we expect a total of 1,000 units to be placed in Quebec between 2005 and 2008. After that we expect an even greater increase in placements."

The typical applications of the ThermElect are for preheating the fresh air and as a central space heating system.

ETS - How it works
The only ETS system designed for C&I applications in North America, the Steffes ThermElect system is a central forced-air furnace. During demand-free off-peak hours, the ETS automatically converts electricity into heat and stores that heat in specially designed high-density ceramic brick core. The core is capable of storing heat up to 1,650 F, which gives it a volumetric advantage of 12 to 1 over water boilers. The ETS has enough storage capacity to provide heating comfort 24 hours a day, while allowing the user to utilize low cost demand-free off-peak electric rates to achieve very economical and affordable heating.

The ThermElect has a programmable, microprocessor-based control system that provides customers with flexible, customized control over heating settings, as well as self-diagnostics. The latter is important to keeping the system virtually maintenance free. Each unit also includes built-in sensing devices and a receiver for wireless communications of information such as utility peak control signals, outdoor temperature, room temperature setbacks and automatic brick core charge control.

Steffes offers five sizes of ThermElect ETS for various types of C&I applications. An air handler is available to ensure smooth distribution of system heat throughout the facility according to thermostat settings in various rooms and areas.

Getting a handle on the potential for ETS
"We believe there is a high potential for ETS in the right C&I applications," says Great River Energy's Gary Connett. "But the first thing you have to do is get a handle on your current situation. You have to find out how much it's now costing you to heat the necessary spaces in your buildings. Sometimes that's not so easy because you don't have a separate meter on your electric or natural gas heating systems. Therefore, it might require sub-metering. Or, a professional audit can help you determine exactly what your heat energy is costing you today. If an audit is called for, most utilities will help support it financially. And whether or not you choose to change out your heating system, the audit might identify some important operational issues for your business."

For over 30 years Steffes has been a leading manufacturer of ETS heating equipment, with hundreds of thousands of systems in use at residential and commercial applications across the U.S. Today, Steffes offers a complete family of ETS heating equipment including room heaters, heat pump boosters, central furnaces and off-peak hydronic heating systems.

For more information, contact Steffes Corporation, 3050 Highway 22 North, Dickinson, ND 58601; Phone, (888) 783-3337; Fax (701) 483-5402; E-mail Jugrin@Steffes.com; Visit the web site www.steffes.com

By Ed Sullivan