Smart energy management for lower costs
The strategic use of batteries can help organizations make best use of fluctuating energy prices and significantly reduce their costs, writes energy storage specialist Travis Starns.
For any organization, a power supply that is cost effective and resilient has to be crucial to mission success. For particularly heavy energy users, cost saving measures delivering significant savings are now available with integrated energy storage or Battery Energy Storage Systems also known as BESS. These innovative battery systems take advantage of the differentials between peak and off-peak energy costs, by storing cheaper energy for use during peak times.
Benefitting from the savings
Energy prices fluctuate based on the peak demand in a rate cycle. Heavy-use facilities, which can range from industrial installations to military bases, particularly located in hot-weather climates, see a consistent peak of demand to cool the facilities in the summer months at the height of the afternoon. Lowering the peak threshold can reduce the energy costs significantly over time.
Facilities that have predictable peak demands and higher demand charges can see a cost savings from charging a battery storage system in non-peak-demand hours and discharging the battery to “shave” the peak during the peak-demand hours. This innovative, software driven smart-energy system not only reduces the cost of electricity, but can be utilized for backup power during weather or other transmission system failure events.
Affording the savings
Energy Savings Performance Contracting (ESPC) has been proven to be a successful alternative financing mechanism used by several energy end users. Authorized by the United States Congress to accelerate investment in cost-effective energy conservation measures, ESPCs allow federal agencies, for example, to accomplish energy savings projects without up-front capital costs and without special Congressional appropriations. The Energy Policy Act of 1992 authorized federal agencies to use private sector financing to implement energy conservation methods and energy efficiency technologies.
ESPC delivery can be utilized for the installation of this battery storage “behind the meter” to reduce the cost of electricity, reduce peak usage charges, and to store the power generated by renewable sources.
It has been done
A first-of-its-kind demand charge-management BESS was recently implemented at the US Army Corps of Engineers, Fort Carson facility in Colorado Springs, Colorado. The BESS consistently saw peak demand in the month of August between noon and 6pm local time. The BESS was able to discharge fully while lowering the demand during this six-hour window, reducing the peak. The software was designed to begin the discharge of the battery at the appropriate time so that a level drain on the system occurred between noon and 6pm. The minimum engagement level of discharge was configured and changed on a daily basis when the battery was not maintaining power throughout the time period. Once the maximum engagement level was attained, the demand charge was calculated for the rate period (typically one month). AECOM modeled past data and estimated the demand charges for the rate period. The maximum engagement level for the month was reached then maintained for the rest of the month, only requiring the battery to discharge six days within the month. This is important on the life of the battery system, as it is determined that the BESS will maintain its life with an annual discharge of 80-100 times per year.
The resulting difference in the peak demand and the battery engagement level for the month would have resulted in approximately $58,000. At Fort Carson, the year-one demand charge savings from peak saving are expected to exceed $400,000. Assuming a 4 percent escalation rate per year will estimate year 19 savings to exceed $700,000. Right sizing the BESS optimizes the return on investment.
The BESS is strategically best for facilities with high predictable demand peaks, and adequate space for the system.