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Testing times

Saying that Thermal Energy Storage is not economically feasible in the GCC region until we have utility demand charges, rate shifts and incentives, Dan Mizesko explains the fine print. 

| | Aug 4, 2015 | 2:44 pm
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– Dan Mizesko 

Dan Mizesko

Dan Mizesko

I would like to start off by acknowledging that Thermal Energy Storage (TES) is a technology that can save a tremendous amount of money, but not energy, for almost any chilled water facility that incorporates the technology. That said, certain criteria must be met before TES is incorporated, and the number one criterion is utility demand charges and off-peak rate reductions. Without this, TES just does not make economic sense. In this context, the question asked on the website of a prominent TES manufacturer is instructive: “What type of electric rates are needed to justify energy storage systems?” The first sentence of the answer says it all: “Demand charges still provide the incentive for most of our installations.”

About the technology

TES is not a new concept. In fact, its first use came in the 1940s, shortly after the development of vapour compression cooling systems. Early usage was focused on applications with exceptionally high ratios of peak-to-average cooling demand, such as in theatres, churches, arenas and dairies. Ice-on-coil storage systems were often used with the principal motivation being to reduce the size of the chiller.

As cooling systems spread to other building space, cooling applications in the 1960s and 1970s, TES was not often used, resulting in significant electric load growth concentrated during summer daytime hours. The subsequent low utilisation of power generating and delivery assets caused utilities to offer various incentives, promoting TES as well as other demand management technologies. The result was a second wave of TES development and use. The development of effective water stratification technologies made chilled water storage more popular. Ice-on-coil technology improved through the development of non-metal coils and “packaged” systems. Eutectic salt and encapsulated ice storage systems were developed to provide latent heat storage alternatives to ice-on-coil and ice-harvesting technologies. More recent developments include ice slurry generators and chilled water systems employing additives to decrease the minimum storage temperature in chilled water storage systems. TES technology can be used to significantly reduce energy costs by allowing energy-intensive, electrically driven cooling equipment to be predominantly operated during off-peak hours, when electricity rates are lower. (Currently, this is not the case in Qatar.)

TES comes in many different forms, each with its pros and cons. The storage media is most commonly water, with “cold” stored in the form of ice, chilled water, or an ice/water slurry. But other media, most notably eutectic salts, have also been used. Storage media can be cooled (charged) by evaporating refrigerant or a secondary coolant (typically a water/glycol mixture).

Discharge is usually accomplished directly via circulating water or indirectly via secondary coolant. So, to emphasise, TES technology was developed for integration with chilled water cooling systems that typically serve larger buildings.

Although originally developed to shift electrical demand to off-peak periods (from an electric utility’s perspective), and to take advantage of low-cost off-peak electric rates (from an end-user’s Perspective), some applications can also result in lower first costs and/or higher system efficiency, depending on chiller selections, compared to non-storage systems. However again, a large differential between on-peak and off-peak kWh charges or a high-demand charge definitely are the main drivers that should be considered when contemplating TES.

Energy-saving mechanism

TES systems are not commonly thought of as energy-saving technologies. No matter how well-insulated the thermal storage systems, they inevitably suffer some losses, as energy flows from warmer bodies to cooler bodies. In addition, both cool and warm water is commonly stored in the same storage tank in chilled water systems to save on tank costs. Mixing is minimised by injecting and removing water from different halves of the tank via specially designed piping, in order to take advantage of natural differences in water density and buoyancy at different temperatures. However, some mixing and loss of cooling capabilities are inevitable.

Historically, the driving force for developing TES has been reduction of on-peak electric demand and the corresponding reduction of electricity costs. While this is still important, and may be the most significant factor affecting application, cost-effectiveness and energy savings are possible, and can be a significant benefit when the entire cooling system, and not just the storage media and vessel are considered. Besides heat gain by the storage media, chillers in TES systems operate at lower evaporator temperatures, which increase energy consumption if other conditions remain the same. This is particularly true for ice storage systems, which require the lowest evaporator temperatures. The impact of lower evaporator temperatures is partially or totally offset, however, by the lower condensing temperatures generally experienced when operating a chiller at night, rather than during the day. In most parts of the region, dry-bulb temperatures are about 20 degrees F lower and wet-bulb temperatures are five degrees F lower at night than during the day. Thus, night time operation improves the efficiency of all chillers, but especially improves the efficiency of air-cooled chillers, where the condensing temperature is controlled by ambient dry-bulb temperature.

Chiller efficiency can also be improved with storage by allowing more continuous operation at outputs closer to full capacity, thus minimising part-load losses. However, with VFD chillers that operate more efficiently at part-loads, this benefit will not be realised with TES.

TES systems, with separate charge and discharge cycles, will generally require more pumping. This potential disadvantage can, however, be minimised, by increasing the difference between water supply and return temperature by a few degrees, thus reducing the volume of water that must be circulated. It needs to be noted that district cooling plants typically suffer from low delta-T syndrome, rendering this as another negative consequence of TES.

The energy savings possible with TES will vary significantly from site to site, depending on the load profile and the specific cooling system equipment employed. With electric-driven centrifugals with VFD technology, the benefits of TES are minimised, as again, VFD chillers operate very efficiently at part-load conditions.

Other benefits of TES

In addition to reducing the average cost of electricity consumed, and possibly reducing energy consumption – these two major advantages of TES will not be realised at this time in the GCC region – TES can reduce overall cooling system capital costs. For new construction, partial storage designs (where the chiller and storage combine to meet peak cooling loads) reduce chiller (and cooling tower and cooling water piping for water-cooled chillers) capacity and cost. Savings in chiller and related costs are often greater than the costs of the partial storage unit. Similarly, adding storage is a way to increase a cooling system’s peak capacity without adding new chillers in situations where cooling load is growing. However, without the benefit of off-peak electrical rates, I do not feel the cost analysis will show any tangible savings for chilled water plants in the GCC region.

Chilled water storage systems rely solely on the sensible (that is, no phase change or latent energy) heat capacity of water and the temperature difference between supply and return water streams going to and from the cooling load. As a result, the storage volume required is greater than for any of the ice or eutectic salt options. However, using water eliminates the need for secondary coolants and heat exchangers, and standard water chillers can be used without significantly degraded performance or capacity.

Water is typically cooled to between 39 and 44 degrees F, or slightly lower than for a standard chilled water system without storage. The return water temperature may be increased slightly as well, but must remain low enough to ensure adequate indoor humidity control. Maximising the difference between cooling water supply and return temperatures maximises the sensible energy storage capacity per unit of water, and minimises the size of the storage tank. A single tank is usually used to store both the chilled water and the warm water returning from the cooling load. Separation of the two entities is maximised by placing the cooler, denser water at the bottom of the tank and the warmer water at the top of the tank. Specially designed piping networks, called diffusers, allow water to enter and leave the tank without causing significant mixing. The result is a layer of cold water separated from a layer of warm water by a thermocline. Chilled water systems tend to work best in retrofit situations without any chiller modifications required, and/or higher capacity systems, where size and economies of scale lower the unit cost of the tank. In a typical chilled water storage system, chilled water storage tanks may also be used as a reservoir for fire-protection water, reducing the total facility costs and/or fire insurance premiums.

A study performed in the United States by Sohn and Cler focused on the potential savings in electricity demand and energy charges from shifting chiller use to off-peak hours. The overall efficiency of the cooling system was presumed to be unaffected by the TES; that is, there was no net increase or decrease in energy consumption, which in fact, is almost always the case. Incremental capital costs were estimated for new construction. Simple rules of thumb were used to establish the size of the TES system required to reduce peak electricity demand by either five per cent or 10%. Incremental system costs were assumed to be $80/tonne-hour for the new construction scenario. Thus, the only site-specific inputs to the estimate were the electric rates. The results of the study indicated that cost-effective application (payback period of 10 years for investment) of TSE designed to reduce peak electrical demand by 10%. As the GCC region currently has no rate shift, there would be no realised payback by implementing TES.

TES applications for optimum results

TES will reduce the average cost of energy consumed, and may potentially reduce the energy consumption and initial capital cost of a cooling system compared to a conventional cooling system without TES. While most buildings’ space cooling applications are potentially attractive candidates, the prospects will be especially attractive if three or more of the following conditions exist:

  • Electricity energy charges vary significantly during the course of a day.
  • Electricity demand charges are high or ratcheted.
  • The average cooling load is significantly less than the peak cooling load.
  • The electric utility offers other incentives (besides the rate structure) for installing TES.
  • An existing cooling system is expanded.
  • There is new construction.
  • Older cooling equipment needs replacing.

In general, applications lacking the conditions identified above should be avoided. In addition, it should be avoided at sites where the space available for TSE is limited or has other, more valuable uses.

In closing, I realise that electricity rates are greatly subsidised in the GCC region. However, if demand charges, night time off-peak rate reductions and utility incentives were put in place, this could be a major driving force in TES being implemented by almost every end-user with a chilled water system. This would benefit both the utility companies which produce power, and the end-users, by reducing their high-peak electric rates – a win-win situation for the power companies and the end-users alike.

To reiterate the point, TES is a great technology with many benefits. However, taking all the criteria into consideration, and especially having no electrical rate structure that provides incentives for making chilled water at off-peak times, in my opinion, prospective chilled water plant owners considering TES will receive minimal benefit from utilising TES, until rate structures are put in place in the GCC region and utility incentives are provided. Without these being implemented, I would recommend that TES not be considered from the end-user’s perspective. The payback is just not going to be realised under the current rate structures.

CPI Industry accepts no liability for the views or opinions expressed in this column, or for the consequences of any actions taken on the basis of the information provided here.


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One comment on “Testing times”

  1. Paul Norton says:


    In general agreement with what you have said. One form of TES, which I know is not commonly used or often referred to is Fabric Energy Storage (FES). There are several existing FES projects in Saudi Arabia and limited numbers in UAE (along with many other countries with varying climates), which use the building structural hollowcore floor slabs as a means of reducing cooling capacity to great effect. Further savings can be achieved during peak cooling hours by throttling back cooling plant capacity, achievable by making use of the ‘thermal flywheel effect’ of the exposed structural concrete mass. By incorporating FES into new buildings would overcome many of the problems, which you have outlined above, whilst reportedly giving far superior energy savings when compared to other forms of TES.

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