Firms Turn to Old Idea to Keep Cool at Less Cost

Churches once used it to keep their congregations cool. Farmers used it to keep milk from spoiling.

Thermal energy storage, or icemaking for air conditioning purposes, is coming back in vogue in Southern California, experts say, with updated systems that can offer non-residential consumers in San Diego a potential $250-million savings in cooling costs, or 25% of their current bill.

The four existing 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 Farenheit, a gas hydrate solution that freezes water at 48 degrees Farenheit, and an air-agitated ice builder that builds ice on pipes, similar to the ones used in churches and farms 40 years ago.

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.

The cost of one of these systems ranges from $35,000 to $1 million, depending on the size of the building and the work needed to retrofit it to the existing air conditioning system, according to the products’ promoters.

A system can be expected to pay for itself within three years, however, 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. Power costs between 12 cents and 16 cents during the peak hours, while power used during off-peak hours costs between 2 cents and 4 cents 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.

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.

State tax incentives vary from a 25% tax credit on systems costing more than $6,000 to a 35% tax credit on those costing less than $6,000, said Geoffrey D. Commons, a member of the California Energy Commission.

Customers who install 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 real alternative to electric power, the cost of which continues to rise. Constructing an energy plant in California, for example, now costs about $14 billion, he said.

Electric rates rise with consumption during peak hours. If use is unchecked, it would require more power plants, Commons said. “Our aim is to contain the rates,” he said.

John Johansen, a financier specializing in thermal energy storage systems, called the cooling systems a “wise” investment but said certain risks must be considered.

“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 night-time electric rates could change and the possibility that other, less expensive, alternatives might appear within the next few years.