Making Big Cuts in Cooling

Costs in Big Buildings:

A Revolution. Or Not?

You choose.

FMA

Weston, FL May 2011

Roger Richmond-Smith Chairman

Smardt Chiller Group Inc

PRESENTER BIASES

• Turbocor oil-free centrifugal (OFC) compressor technology.

- founded 1992

- six prototype generations

- launched 2003

- now more than 16,000 compressors in the field worldwide

• Smardt Chiller Group

- founded 1999 to optimize the Turbocor OFC technology in chillers

- 2300 chillers in the field (6000 compressors)

- water cooled chillers 60 TR through 1200 TR

- air cooled chillers 60 TR through 400 TR

- condenserless chillers 60 TR through 800 TR

- Kiltech chiller plant optimization systems– 82 installed

Turbocor TT300

First oil-free centrifugal compressor 60-200 TR with magnetic

bearings

Smardt oil-free centrifugal

chillers

Evaporatively

cooled

60-255tonR

Water cooled

60-1200 tonR

Air cooled

60-400 tonR

Outline this morning

• How big is the problem

• Big advances in technology

• Chiller EE a heroic opportunity

• Traditional chiller business model

• New chiller technology

• New paradigm

• Whole chiller plant EE

• Next steps

An increasingly fragile planet.

Global warming, climate instability. Kids blame us.

.

Climate change is highly visible, and human

connection beyond reasonable doubt

IPCC Third Assessment Report

April 2001

Summary For Policymakers

natural

levels

Global energy consumption

Source: EIA /IEO 2007 &

Frank Verrastro, CSIS

Liquids

Natural Gas Coal

Nuclear

Hydro/Renewables

23%

7%

26%

38%

6%

2005: 447 Quad Btu

24%

34%

28%

8% 6%

2030: 702 Quad Btu

Growing energy demand is unsustainable

Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms

0

2

4

6

8

10

12

14

16

18

1980 1990 2000 2010 2020 2030

billi

on to

nnes

of o

il eq

uiva

lent

Other renewables

Biomass

Hydro

Nuclear

Gas

Oil

Coal

0

2

4

6

8

10

12

14

16

18

1980 1990 2000 2010 2020 2030

billi

on to

nnes

of o

il eq

uiva

lent

Other renewables

Biomass

Hydro

Nuclear

Gas

Oil

Coal

Imperatives for Energy Efficiency:

National and International Security

Geopolitical changes threaten energy stability.

Worldwide.

Russia

Policy Canada

Oil sands

concerns

Europe

Politics &

Pipelines

Europe

Oil & Gas

Cut Off

Iran

Nuclear

Threats

Iraq:

Unstable

North Africa

Revolutions

Latin America

Anti-US

policies

N-Korea

Nuclear

Threats

US

Disasters

China

Demand

explosion

Strait of Malacca

Piracy

Pakistan

Political

Turmoil

Source: Frank Verrastro, CSIS

Energy Efficiency at the

Nexus Economic

Objectives

Environmental

Objectives

Security &

Foreign

Policy

Objectives

Energy

Efficiency

Renewable

Energy

Nuclear

Oil

Coal

Natural

Gas

Carbon

Capture and

Storage

Affordable/Accessible

Promotes/Supports

Economic Growth &

Employment

Environmentally

Benign

Low/no

emissions

Promotes/Support

s Sustainable

Environment

Defensible

Reliable and Secure

Source: Frank Verrastro, CSIS

EE much less glamorous than renewables

but far easier and far more cost-effective

• McKinsey study: annual world-wide investment of

$170 billion in energy efficiency through 2020 can:

– cut global growth in energy demand by ½

– save $900 billion a year in avoided energy costs

– dramatically reduce greenhouse gas emissions

• Source: The McKinsey Global Institute

Energy efficiency results 1970-2010

Per Capita Electricity Sales (not including self-generation)

(kWh/person)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

19

60

19

62

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

United States

California

EE in Buildings a major opportunity for

the planet

Share of Global Energy-Related CO2 Emissions by Country (2005)

China, 19%

Russia, 6%

Japan, 4%

India, 4%

Western Europe,

13%,

Others, 32%

US Other Sectors,

13%

US Buildings, 8%

Source: Energy Information Administration

US built environment – very large energy consumer

• 40% total US energy consumption

• HVAC is biggest contributor – uses 30% of total US energy consumption

• Major user (>40%) in this category is chillers over 50 TR

• Over 50% of the total energy consumed by this sector, primarily in HVAC, is wasted (Laurence Berkeley Lab, 1998)

How to unlock the EE potential of

large chiller plants?

Chiller business model: problem

• Traditional “iceberg” model stresses lowest first cost for chillers

• Major ownership costs start after warranty expires

• Chiller companies harvest high margins from after-market parts and labor pricing

• ENERGY COST the major component

Key aspects of the problem

• Traditional chiller efficiencies calculated at 100% load (only relevant less than 4% of annual operating hours)

• Traditional capacity over-sized by 20%, as safety margin

• Traditional chiller condemned to operate inefficiently 100% of the time

• Net result: traditional chiller specification and business model is obsolete

• New chiller business model required

Key aspects of the problem

Paradigm shift imminent: driven by change in climate, energy and technology

• Increased comprehension that chiller plants in the US operate at part-load at least 96% of the time

• Increased uptake of variable-speed drives

• Oil-free centrifugal chillers (with inbuilt VSD and PFC electronics) offer annual chiller energy savings well over 30%

• Annual maintenance costs well over 50% lower

• Total cost of ownership of new-technology chillers much lower than traditional business model

Whole of life costing model: lower lifetime costs mean higher first costs

first costs

first costs

maintenance maintenance

soft start kit noise reduction

operating costs operating costs

Leading screw chiller Oil-free VFD chiller

To

tal costs

in 2

years

of opera

tion,

S. D

iego

a disadvantage

turns into

a benefit

Moves to new market paradigm

• Strong move to IPLV rather than full load as comparative chiller metric (IPLV standard is 1% @ 100%, 42% @ 75%, 45% @ 50%, 12% @ 25% load)

• Noticeable movement away from first cost to whole of life costing of chiller purchase, not only among younger engineers

Whole life cost analysis – chiller plant. Comparing the icebergs

• Royal Academy of Engineering (UK) 1998

• US DOE, ASHRAE models very similar

• 25 year lifespan is assumed

Office building: lifetime energy and

operating costs 400% of first cost

New paradigm pays back chiller cost differential 8 times. Simple

payback 4.5 years at 10c/kWh.

School 1-12: lifetime energy and operating

costs 600% of first cost

New paradigm pays back chiller cost differential 12 times. Simple

payback 3 years.

Hospital: lifetime energy and operating

costs 1200% of first cost

New paradigm pays back chiller cost differential 20 times. Simple

payback 1.5 years.

Whole life cost analysis – chiller plants

Cost elements include:

• Equipment economic life

• Energy consumption

• Utility costs

• Maintenance program

• Occupation patterns

• Taxation, tax credits, borrowing costs

• M&V

Ref: New York, McGraw-Hill 1995. Kirk & Dell’Isola. Life cycle costing for design professionals.

Whole life cost analysis – barriers to adoption

• Developer greed

• Owner ignorance

• Tenant masochism

• Competition between building stakeholders

• Artificial separation of capex and opex – planning, management and reporting

• Lack of framework and GAAP standards

• Building and systems complexity

Performance standards start to reflect the new market paradigm

• ASHRAE 90.1 – 2010: finally shifts some emphasis away from the traditional “full load” paradigm with Path A (full load) and Path B (slightly lower full load with substantially higher IPLV) – at minimum level delivers 30% energy savings over 90-1-2004.

• BUT strong resistance from numerous old-school engineers.

• New whole-building standard ASHRAE 189 – in public draft Sep 2009 – reflects design approach aligned with LEED. But process is slow.

New technology paradigm

• Oil-free variable-speed chillers offer 30+% saving on annual energy costs

• Lifetime maintenance costs cut by 50+%

• Higher first cost (around 20%)

• New focus on lifetime ownership cost

• BUT, oil-free chillers still a disruptive new technology, so market flux and uncertainty to be expected

New technology: oil-free VSD compressors move up- industry consensus

• Turbocor – first oil-free patent 1993

• Carrier/UTRC/USAF/SBIR project with hydrostatic

bearings 1995

• York series with mag bearings from 1998, new launch

now rolling out

• Trane oil-free with ceramic bearings 2002

• Mitsubishi Heavy with mag bearings in lab 2002

• Turbocor takes market lead with launch of TT300 at AHR

Expo Chicago 2003

• Daikin follows 2009

Revolutionary oil-free technology unveiled 2003, accelerating growth since then

• WC chiller IPLV .375 kW/tr

• 2 amp starting current – soft start

• 60 to 190 TR capacity range

• Homopolar magnetic bearings

• 48,000 RPM synchronous permanent

magnet direct drive motor

• fully integrated control system including

bearing and inverter (VFD) control , with

PFC

• Turbocor 2003

• McQuay 2007

• York 2010

Magnetic bearings mean no oil system

Typical IPLV comparison

• Recips:

– 0.9-1.2kw/TR (2-3 COP)

• Screws:

– 0.6-0.7kw/TR (5 COP)

• Turbocors:

– 0.4kw/TR (9 COP)

Sustainable energy efficiency with oil degradation (ASHRAE study 2002)

300 kWR (85 tR) flooded chiller

with 3% oil in refrigerant

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Time Period

kW

h c

on

su

mp

tio

n

Turbocor TT300 McQuay Frame 4 Screw McQuay 050K Centrifugal Trane RTUA80 Screw

Removing compressor oil removes major chiller maintenance costs

• Copeland and AHRI report that over 70% of chiller failures in the field are due to problems with compressor oil return

• Oil-free design removes 70% of conventional field service risks and costs

• Current US field reports confirm maintenance cost reduction by at least 50%

• Traditional chiller business model challenged

Oil-free centrifugal chillers now well-proven in market worldwide

• Water cooled: often use flooded shell and tube evaporator and condenser e.g. Smardt, McQuay, York

• Air cooled: e.g. Smardt

• Modular product increasing in difficult retrofit sites e.g. Smardt, Multistack

• Some markets now showing oil-free centrifugals at over 30% chiller market share by value e.g. Australia, UK, German industrial

First Turbocor beta units, California. March 2001.

Still running reliably. 41% energy savings.

AXA Insurance, Melbourne. 38%

savings

First Australian installation 2002

Sears Mall, Halifax 2005 35% year-on-year energy savings: first Canadian installation

Juvenile Hall, San Diego

.

Next steps in chiller paradigm

shift • 1. Start with oil-free centrifugal chiller

• 2. Expand variable-frequency concept to embrace whole chiller plant

Add VFD’s to pumps and tower fans

Optimize efficiency of whole chiller plant as an integrated

system

Measure and verify with calibrated instruments

Example: integration of Smardt chillers with the Kiltech

CPECS (Central Plant Energy Control System)

CPECS algorithms optimize the combination of VFD operating

speeds to deliver lowest energy consumption for the system

VFD’s save energy at part load

• ASHRAE confirms most HVAC systems run at part load more than

96% of the time; load profiles vary with type of building, function and

location. Below is a Phoenix school:

VFD’s save energy at part load

• VFD-driven centrifugal machines like pumps, centrifugal chillers &

fans offer large energy reductions when operating at part load.

• Power input is proportional to the cube of the shaft speed

• 80% of design speed means only 50% of full speed energy

• VFD chilled water plants can save energy approx 99% of the year

Power is proportional to the cube of the

shaft speed

Typical efficiency – 10yr old centrifugal

chiller plant

• typically use fixed speed chilled water pumps, chillers and tower

fans and have very little ability to reduce energy at part load.

– Chiller .8 kW/TR

– Pumps .35

– Tower fans .05

– Total: 1.24 kW/TR Chiller = 0.80 kW/Ton

Pumps = 0.35 kW/Ton

Tower Fans = 0.05 kW/Ton

Total = 1.24 kW/Ton

Typical efficiency – 2010 optimized VFD

chiller plant

• New plants operating with VFD driven chillers and cooling tower

fans, constant speed chiller pumps and VFD driven building pumps

– Chiller .40 kW/TR

– Pumps .23 kW/TR

– Tower fans .03 kW/TR

– Total plant .71 kW/TR

Chiller = 0.40 kW/Ton 0.51 kW/Ton

Pumps = 0.23 kW/Ton 0.30 kW/Ton

Tower Fans = 0.03 kW/Ton 0.04 kW/Ton

Total = 0.71 kW/Ton 0.85 kW/Ton

Premium Equipment / Standard Equipment

Optimized chiller plant – empirical data

CPECS Off

Mean =

0.79kW/Ton

CPECS On

Mean =

0.36kW/Ton

Energy comparison A

• 2010 screw plant vs 2010 CPECS & Smardt oil free

centrifugal

– 45% to 60% energy reduction based on location and type of

occupancy.

Energy comparison B

• VFD centrifugal plant vs CPECS & Smardt oil free

centrifugal

– 35% to 47% energy reduction based on location and type of

occupancy.

Summary

• The planet’s in trouble

• EE can help in a big way: investment is increasing

• Chiller plant EE can be a win of heroic proportions, but

start with the new life-cycle-costing business model

• EE-optimized chiller plants have arrived. 2300+ Smardt

oil-free centrifugal chillers, 80+ CPECS optimized plants.

• Many older HVAC engineers and building owners don’t

yet understand that the world has changed. Irreversibly.

They need help.

Revolutionary chiller technology is here. The

lifetime-costing paradigm shift has started.

The revolution

needs leaders: is

your building a

candidate?