Assessing the True Value of Energy Efficiency
The truth is that reducing energy consumption does not guarantee a lower utility bill.
In fact, these efforts to reduce consumption could backfire and ultimately cause bills to rise, similar to how a diet that relies on skipping breakfast could lead to more net calorie consumption due to a large dinner. Plus, energy bills are heavily influenced by peak usage periods that occur during just a few billing intervals rather than being based on total yearly usage.
Why Less Can Be More
For example, many facilities use an energy management system (EMS) to cut back kilowatt hour (kWh) usage during nights and weekends to help achieve energy efficiency targets.
However, on the third or fourth day of a heatwave, a building may contain a lot of heat from the previous days, and if efficiency setbacks prevent the building from being cooled during the night, the HVAC would need to work much harder the next day, using more energy and potentially cause a demand (kW) spike while laboring to maintain comfort.
The Impact of Demand Charges on Budgets
The following charts demonstrate an actual example of the staggering budget impact that avoidable peak demand costs can have in a facility with a fine-tuned EMS, which was being managed in an Energy Savings Performance Contract. The X axis of the load curve represents the extent of time a peak demand amount was used throughout the year; the Y axis represents the amount of peak used. For this account, 295 kW peak out of the 839 kW total load occurred during just 1% of the time!
This demand instance could have been lessened by backing off the nighttime efficiency setbacks.
Conversely, had the facility been cooled at nighttime and weekends, kW demand would have been avoided. Moreover, nighttime kWh usage would have been during off-peak hours, when the kWh costs are significantly lower than during the day. And the facility’s kWh power supply capacity cost of goods would have been much lower for the year as well.
The Need for Total Cost Evaluation Using Real-Time Analytics
To avoid scenarios like the above example, companies need to combine their energy conservation measures with an EMS using data and analytics that monitor utility rates, capacity tag costs, and real-time facility usage in order to manage against peaking instances and thresholds. By doing so, they can ensure their energy conservation efforts appropriately align with their energy savings goals.
Today’s smart building and smart manufacturing programs are also calling for real-time analytics and integration into building automation and process systems to address the holistic costs of kWh usage and power supply costs, kW demand charges, and greenhouse gas (GHG) emissions. Similarly, ordinary buildings can be smartly managed by introducing wireless EMS and auto demand management functionality that can control when energy is consumed in order to avoid peaking.
The key to effective total cost evaluation is using real-time energy analytics that incorporate kW/kWh rates, grid capacity costs, GHG emissions and more, coupled with end-point device integration and responsiveness. And with today’s big data and Internet of Things interoperability, this is becoming an increasingly easier reality.
Request a complimentary energy efficiency assessment to find out how Artis Energy’s RTIS® energy analytics platform can provide you with the visibility and insight to transform energy from a fixed cost into a distinct competitive advantage.
Request a complimentary energy efficiency assessment to find out how Artis Energy’s RTIS® energy analytics platform can provide you with the visibility and insight to transform energy from a fixed cost into a distinct competitive advantage.