April 2011

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Productive Load Banking
—as important as Efficiency and Demand Response?

Toby ConsidineToby Considine
TC9 Inc

The New Daedalus

Contributing Editor 

All the Smart Grid attention is on Demand Response (DR), that is, on the half dozen times a year when the grid runs out of energy or has to turn to expensive energy sources. All the building attention is on efficiency, using the least energy inside the building possible. Neither approach supports renewables, or distributed energy resources. Efficiency may reduce the ability to respond to Demand Response signals. Building owners and integrators should turn to productive load banking instead.

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When I am at home, my smart thermostat turns my home temperature up and down. In the winter, the temperature setting goes way down at night. The house uses the least energy just as prices on the local wholesale power market go negative. The price goes negative because it is expensive to turn up and down the power generation; it is cheaper to pay to acquire consumption than it is to turn off the generation. I don’t see wholesale prices, so for now, I minimize use. In a better market, I would increase my use at night, and turn the temperature down when I get up. Instead, I use less energy but use it at the wrong time.

Load banks are familiar to those who test and install generators. Generators can burn out the circuits they are on, or the equipment on those circuits, if there is not adequate load on the circuits to consume the power generated. Load banks are paired with generation to use excess energy and to protect the generator. Most load banks do little more than heat the air to burn off excess energy; the load bank does not produce any service. If we can make our building systems create value while load banking, creating productive load banking, we will turn grid economics upside down.

Renewable energy, or rather intermittent generation, often generates energy when there is no market for that energy. Wind farms often produce far more energy than they can sell at that time. Just google “wind farm Texas toaster” for description of the problem. The problem is not, as many decry, subsidies for wind. The problem is a lack of markets at the right time. With no place to sell enough power when the wind is blowing, the great Texas toaster load banks wind power into heat.

Building systems should look at what they can do to use more energy, but at the right time. Ice Energy, which chills water at night to avoid air conditioning during the day, is better thought of as a daily load bank. The real impulse behind utility support of electric cars is that if charged only at night, they provide load banking while expanding the power market.

The most efficient place to store energy is in the middle of a process you were going to do anyway. Ice Energy is effective because it stores cold in the middle of the air cooling process. My home well would be a great load bank if I had a means to store several days of water pressure. A maker of home water heaters marshals thousands of home units to provide fast 4-second load banking to meet the needs of the gird—and radically changes the net cost of water heating. Productive Load banking that performs a useful service creates value you can see every day.

[an error occurred while processing this directive] The barriers to investments in renewable energy sources are expense and a long payback. Each of these is dominated by capital costs rather than by the incremental costs of generation. This means that increased sales does not increase costs, reducing the market cost and the payback period. The best wind farms can sell less than half of their output. If the great wind farms could sell more than 40% of what they generate, they would be instantly more economic, without waiting for new technologies. If we can buy energy when it is cheap, and use it when we need it, we can get economic benefits in the building beyond those of efficiency. Productive load banking lets us do both.

I always laugh when I go to a conference “powered by wind”. I know that they are paying un-economic fees to a power source that is not the wind, which promises to buy wind at some later time. If you want to encourage renewable energy, you need to buy it when it’s available and cheap, not on some pretend market which sells you conventional power, and promises to buy wind later when it is not needed. If we instead bought energy when the wind is blowing, we would increase the value of wind energy. Think of it as canning fresh tomatoes in summer. You don’t can tomatoes in summer to heat the house; that would suggest canning in winter. You can tomatoes in summer because that is when they are fresh and cheap.

Look at your buildings, and ponder, what you can do in advance, and do it when there is a load banking opportunity. Look for ways to productively load bank your distributed energy resources rather than sell excess to the grid. Look for ways to use more energy, right now.

Demand response happens now and then. For the last couple years, with a down economy and lower industrial demand, it might not happen at all. Load surplus opportunities happen every day. If your building systems can take advantage of this surplus, consume energy when it is cheap and plentiful, to provide service when it is expensive and scarce, you can find new value streams from energy engineering, renewable energy, and building systems.


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