Energy Storage Systems May Cut Bills 25% : Businesses Cool Off the Cheaper, Old-Fashioned Way
Churches once used it to keep their congregations cool. Farmers used it to keep milk from spoiling.
Thermal energy storage, or ice-making for air conditioning purposes, is coming back in vogue in Southern California, experts say, with updated systems that may offer non-residential consumers a potential reduction of 25% of their current energy bill.
The four systems, introduced recently at a two-day thermal energy storage seminar in San Diego, include an ice-harvester that makes ice in a tank lined with large steel plates, a eutectic salt tank that allows water to freeze at 47 degrees Fahrenheit, a gas hydrate solution that freezes water at 48 degrees Fahrenheit, and an air-agitated ice builder that builds ice on pipes, similar to the ones used in churches and farms 40 years ago.
Make Ice at Night
Each of the systems employs a building’s existing air conditioner to make ice at night when the electric rates are lowest. As the ice melts, the chilled water is then used to run the air conditioning during the day, when the utility costs are highest, said Doug Goodman, an energy loads program supervisor at San Diego Gas & Electric Co.
The cost of these systems ranges from $35,000 to $1 million, depending on the size of the building and the work needed to retrofit the system to the existing air conditioning, the products’ promoters said.
But the new systems will pay for themselves within three years, Goodman said.
Currently, the 35,000 non-residential customers throughout San Diego pay a demand charge of $7.31 per kilowatt-hour for power consumed during the peak hours between 10 a.m. and 6 p.m., Goodman said. Peak-hour power can cost as much as six times the rate of off-peak energy with no demand charge.
An added incentive from SDG&E; will allow customers to earn up to $2.50 per kilowatt-hour consumed at night using thermal energy storage, he said.
“Our customers will have considerable savings,” Goodman said. “And it will help defer the need to build more power plants. We would like to be able to supply more customers with the same number of plants.”
SDG&E; officials in the past have worried that some of their larger industrial customers will seek out their own energy sources to avoid high utility rates. Savings from off-peak usage could convince these large users to remain with SDG&E;, officials believe.
Because the giant utility’s overhead costs are paid for by both residential and industrial customers, SDG&E; officials argue that if large users abandon the SDG&E; energy system, residential customers will be stuck with steeper rates.
State tax incentives vary from a 25% tax credit on systems costing more than $6,000 and a 35% tax credit on those costing less than $6,000, said Geoffrey D. Commons, a member of the California Energy Commission.
Residential systems, which manufacturers say are not cost-effective, are given a 35% tax credit up to $1,500.
Commons said that thermal energy storage is the only viable alternative to the escalating costs of electric power. The construction of a new energy plant in California, for example, now costs about $14 billion, he said.
Electric rates rise with consumption during peak hours and, if left unchecked, would require the building of more power plants, Commons said. “Our aim is to contain the rates.”
Commons said that with thermal energy storage, the state would also be able to avoid purchasing out-of-state hydroelectric power, primarily from the Northwest, which California utilities sometimes buy at prices double the local market figures.
John Johansen, a financier specializing in thermal energy storage systems, called the cooling systems a “wise” investment but said certain risks must be considered.
‘Maturing Right Now’
“The systems are maturing right now and the new technology has not been proven in operation for more than five years,” Johansen said.
Other considerations, Johansen said, would include the fact that nighttime electric rates could change and the possibility that other, less expensive, alternatives might appear within the next few years.
But he said the systems currently offered are “simple and stable.”
Victor J. Ott, vice president of Thermal Energy Storage Inc. of San Diego, said that the various incentives offered by SDG&E; and state tax credits will give his company an estimated 1% to 2% share of the estimated $8.5-billion total market potential by the year 2000.
Roy E. Hobbs, director of engineering at Mercy Hospital and Medical Center, said that the hospital’s chilled-water storage system--a 220,000-gallon tank buried beneath a park area on the site--has been problem-free since it was installed three years ago.
Hobbs estimated the hospital’s 1985 energy savings at nearly $42,000.
The $144,800 system, which cools a 137,000-square-foot, three-story ambulatory service center, paid for itself in only two years, Hobbs said.
“Our initial pay-back estimate was 8.9 years but the system has proven to be 25% to 40% more efficient (than the traditional air conditioner), and we have avoided big expenses,” he said.
