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Energy is a growing business expense, and large retail organizations with multiple facilities have a particularly significant challenge when it comes to managing this expense. Since each store has a manager, the organization has what amounts to hundreds of individual operators managing resources every time they change lights or adjust a thermostat. Managing these utility expenses, which requires a comprehensive effort, can be accomplished using a multi-site energy management system. NovarŇ, a global energy management firm that markets intelligent building control systems, has taken this concept a step further and developed a multi-site demand response pilot, which allows users to more fully manage utility expenses across multiple sites.
Demand response is the strategic management of energy demands in response to supply. Optional loads and services are reduced during critical timeframes according to a pre-planned load prioritization schedule.
There are two strategies employed in demand response both with the goal of lowering the demand on the electrical grid and reducing electrical costs. Interruptible loads, in which utility customers voluntarily reduce electrical demand at the request of the utility and demand side management, in which utility customers meter their usage so that it never reaches the point at which per-kilowatt costs increase.
Interruptible Loads. Electrical utilities use the most efficient and least expensive generating capacity in any given period, reserving less efficient generating equipment for those times when demand increases. Using this less efficient equipment causes the cost for electricity to also increase.
Customers participating in this program are notified by the utility that their electrical usage needs to be reduced. Customers reduce their consumption at these critical times, which prevents additional power-generating facilities from being brought on-line. Participants in this program may receive a rebate equal to the actual energy curtailed.
Demand Side Management. Utilities determine the cost for electricity based on peak demand charges over a specific period of time. If a user’s electrical demand peaks within a given time frame, the per-kilowatt cost can increase for the entire billing period. This means that the customer could see an increase in electrical costs, even though the utility didn’t request that usage be reduced.
If a customer is using demand response to prevent this, the monitoring system adjusts the usage to keep below a specific set point. It tracks the percentage of usage against the demand target and makes adjustments accordingly. For example, when energy usage is within 90 percent of the demand target, specific loads would be reduced. If demand continues to trend upward, additional loads could be automatically shut down, becoming increasingly aggressive in order to meet the goal, while never turning off more than is needed to keep the customer’s facility running at the optimum level.
Multi-Site Demand Response
Novar is piloting a multi-site demand response program that maximizes energy efficiency. This enables the effective management of utilities by extending the demand response strategy across multiple locations. Often these locations can number in the hundreds or thousands for a nationwide retailer. An enterprise application aggregates KW usage across a pre-defined region or group of facilities. When a utility provider is operating at peak capacity, it notifies participating customers that it is time to reduce the load. The customers trigger routines that apply to the region, initiating simultaneous shed strategies in multiple facilities. This enables the utility company to avoid bringing additional (less efficient) generating capacity on-line, avoiding a significant expense. In return, the utilities offer significant savings or rebates to participating customers.
Retail Stores. Novar and Constellation NewEnergy are working together to implement a multi-site demand response program in a nationwide group of retail stores. Retail stores, while presenting a significant challenge for multi-site demand response, also represent some of the greatest potential for savings.
Retail management has typically been reluctant to risk their customer’s comfort, however, due to the diversity of a multiple store scenario, demand reductions can be rolled across multiple sites for maximum benefit and minimal impact on the customer environment.
Additionally, since the facilities are very similar, one design is implemented and integrated into the standard store layout. Once tested and approved, this design is then migrated across all of the stores. This minimizes costs, standardizes the investment across multiple locations, and provides a corporate standard for utility usage. It also allows corporate facility managers to determine the optimum settings for customer comfort, effective sales environments, and utility costs.
“This fundamental shift in approach that Novar and Constellation have put forth will enable our retail customers to proactively harness and direct energy load across multiple facilities based on a wide range of inputs, ranging from weather conditions to day-ahead pricing information, said Peter Kelly-Detwiler, Senior Director Energy Services, Constellation NewEnergy. “This ability to orchestrate energy use across a multi-site enterprise as one comprehensive ‘ecosystem’ will enable customers to create the virtual peaking plants of the future.”
Using a multi-site demand response program to control utility costs will be particularly effective if the design of the buildings take into account the need to accommodate this strategy. For example, if HVAC systems are going to be moderated to minimize costs, it is essential that each unit be positioned so that when operating it delivers the highest performance possible for the least amount of money. Another example would be arranging lighting for greatest effectiveness. This enables lighting costs to be managed without impacting the retail setting. In addition to applying these strategies in the design stage, demand response also provides a way to fund other energy programs, such as dynamic commissioning, building control upgrades, or energy efficiency retrofits.
Technology Investment. For a large multi-site retail application, Novar provides an executive module and iScopeŇ software. The executive module is a multi-site building management system that is installed at each customer’s site. The executive module receives instructions from a central control center and moderates electrical loads, such as air conditioning, interior and exterior lights, and exterior signage.
The iScope software provides online real-time communication between the executive module and the central control center. iScope is an intuitive building management application that enables Novar to manage multi-site deployments.
“Our vision is for customers to have the ability to use automation systems that can respond to pricing signals to proactively manage their utilities,” said Dean Lindstrom, Vice President and General Manager for Novar. “Our customers are striving to improve energy efficiencies. Using a multi-site demand response strategy is a critical element in achieving the desired efficiencies.”
By reducing the load across multiple stores, energy costs are reduced and there is no impact on customer comfort.
Importance to Electrical Markets
Retail store electrical use varies during the day. The ability to respond based on pricing signals reduces the variability, which results in more competitive pricing. Some have estimated that a relatively modest lowering of demand would have resulted in significant price reduction during the peak hours of the California electricity crisis in 2000 and 2001. With consumers taking control, utilities are better prepared to respond to changes in demand.
Importance to Customers
Electricity is unlike other business expenses in that typically there has been only minimal control over the expense. Novar and its multi-site demand response technology enables retail stores to take control and manage electrical costs while lessening the load on the electrical grid.
Demand control is but one of many strategies a retailer can institute to reduce their overall energy spend. For more strategies on how to take more control of your building visit the Novar site.
About the Author
Bob Coppenhaver, Director of Product Management and Marketing for Novar, has more than 20 years of experience in the Controls industry. His prior experience includes Business Development for Wind River and Strategic Marketing and Product Management for Rockwell Automation.
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