Residential, Commercial, & Industrial Markets- Emerging Technologies

ASERTTI Fall Meeting October 3, 2013

Ryan Kerr Emerging Technologies Manager, Gas Technology Institute Ryan.Kerr@gastechnology.org; 847.768.0941

2 2

Presentation Overview

>Natural Gas Market Drivers and Trends >GTI and RD&D Programs

─ GTI Emerging Technology Program (ETP) ─ Nicor Gas ETP

>Residential Technologies >Commercial Technologies >Industrial Technologies

3 3

Expanding Natural Gas Supplies and Low Prices Driving Demand

> Consumer demand growing ─ 2011: All-time high

─ 2012: All-time high

─ 2020: Likely to exceed DOE-EIA estimates (especially with future LNG exports)

Growth drivers: > Power generation > Rebounding Industrial Sector > Transportation (high growth rates)

Offsetting reliance on coal and oil

4 4

Natural Gas Demand Trends

> Residential/Commercial ─ Flat demand trends; ─ Energy efficiency, electric competition ─ Smart use: source energy policies

> Industrial ─ Onshoring trend, shale gas-driven investment ─ Led by Chemicals & Petrochemicals

> Power Gen ─ Displacing old coal plants ─ Potential for greater CHP use

> Transportation ─ NGV fuel prices driving demand ─ Strong customer pull

5 5

> Not-for-profit (501c3) RD&D organization with 70 year history

> Facilities ─ 18 acre campus near Chicago ─ 200,000 ft2,

28 specialized labs ─ Other sites in

California, D.C., Texas, Alabama,Massachusetts

> Staff ─ Approximately 250 ─ 170 engineers, scientists covering all

fields Flex-Fuel

Test Facility

GTI Overview

CHP and Renewable Energy Lab

Residential & Commercial Lab

6

Natural Gas Industry Sponsors

> GTI-led, utility supported, North American collaborative programs targeting residential, commercial and industrial solutions

> Utilization Technology Development (UTD)

> Emerging Technology Program (ETP)

> Federal & State Agencies

7

Natural Gas Industry Collaboration Emerging Technology Program

> Gas Technology Institute led, utility supported, North American collaborative targeting residential, commercial, and industrial solutions

> ETP’s principle goal is to accelerate the market acceptance of emerging

gas technologies

2013 Members Listed Above

8 8

ETP Scope & Direction ETP Mission

Accelerate the market acceptance of energy

efficient gas technologies

ETP Activities

Identify and demonstrate technologies to

(1) collect and analyze enabling program and

technical data while (2) developing marketplace

through consumer awareness and infrastructure

improvement.

Examples: Existing and New ET Program Activities

• California- Roughly 2.5% of total IOU EE and DSM budgets under 2010-2012 Portfolios

• New York- (NYSERDA) Roughly 5% of total program budget

• Pacific Northwest (NEEA)- 10% of total budget 2010-2014

• Illinois- 3% of Gas EE and DSM Program Revenue

• Canadian ETIC

ETP Results

As gas programs, regulations, and markets mature, low hanging fruit

disappears. ETP helps deliver a pipeline of new

technologies and program solutions enabling utilities

to meet tomorrow’s energy efficiency goals with less risk and more

certainty.

9 9

2013 ETP Technologies and Program Concepts

10

> $50 million/year portfolio, 3% investment in ETP

> GTI selected to implement ETP for Nicor Gas

> Formal, transparent process for project selection

> Goal to identify and demonstrate new technologies for EEP

> Close collaboration with implementation programs

Nicor Gas Emerging Technology Program

ETP is to EEP as the minor leagues is to the major

leagues

11 11

Application Scoring

> Seven key criteria evaluated at Set and Go stages: 1. Cost-effectiveness 2. Gas savings potential 3. Value to Nicor Gas portfolio 4. Non-energy benefits 5. Support/distribution in Nicor Gas service territory 6. Technological maturity 7. Ease of implementation/market adoption

> Criteria are scored on a scale of 0-5 > Different weights are applied to each criterion > Scores are totaled out of a possible 100 points

12 12

Nicor Gas Application/Project Status > 50+ applications received

─ Mix of residential, commercial, and industrial sector

> 10+ ETP projects underway, each project is different because each technology/program concept has its own set of barriers to EEP entry ─ Data Barriers

> Moving from custom to prescriptive (e.g. ozone laundry) > What about gas? (e.g. EcoFactor)

─ Market Barriers > Identifying and addressing the impacts of ‘disruptive’ technologies

(e.g. condensing HE RTUs)

> Awareness and education (boiler heat recovery workshop)

13

Source-Based Water Heating Efficiency Comparison

Pre-commercial gas heat pump water heater

14 14

ETP National Pilot Residential HE Combo Systems 94 EF condensing tankless water heater + hydronic air handler

(Rheem pictured) Improves utility/customer value proposition for water heating by

piggy-backing on larger space heating load

Multi-unit demonstrations/pilots in IL, NY, and CA At least 25 residencies with full data acquisition systems

Measured field performance, energy savings, cost analysis, and customer reaction

Contractor technical/sales training, consumer messaging, and rebate program pilot

GTI is investigating combi systems for oil or gas hydronic (e.g. radiator) replacements too

15

Technology Background

Site 4 – 2,100 sqft

Packaged combo

Cumulative: 81.4%

Condensing furnace

30-gal tank EF 0.58

ETP CONFIDENTIAL

Month System/Gas Efficiencies for each Site

1-G 2-A 3-A 4-B 5-C 6-B 7-D 8-E 9-F 10-A Jan’13 -- 76.9% -- 83.7% -- 82.6% 90.3% -- -- --

Feb’13 -- 78.8% -- 82.6% -- 83.4% 90.3% -- -- --

Mar’13 -- 78.5% -- 82.6% -- 83.6% 91.1% -- -- --

Apr’13 -- 77.3% 91.1% 81.2% 77.2% 83.5% 91.5% -- 95.2% 91.4%

May’13 -- 73.5% 91.8% 76.6% 74.0% 82.3% 86.7% -- 95.5% 89.0%

Jun’13 -- 69.4% 92.2% 70.5% 68.2% 80.8% 87.8% -- 94.5% 83.9%

Jul’13 -- 67.4% 86.5% 68.3% 60.7% 80.9% 85.1% -- 94.5% 80.4%

Aug’13 -- 63.0% 85.3% 68.3% 64.7% -- 77.4% -- 92.7% 79.5%

Cumulative -- 77.0% 90.3% 81.4% 72.9% 83.0% 90.2% -- 94.8% 87.3%

Site 7 – 1,400 sqft

Advanced AHU

Cumulative: 90.2%

Traditional furnace

40-gal tank EF 0.58

16 16

Pilot Evaluation- EcoFactor Home Energy Management

EcoFactor is based on proprietary software that analyzes and adjusts a home’s thermostat to control the HVAC operation based on weather data and other information, including home occupancy status.

Purported 36% reduction in cost to heat and cool a home 10-20% savings from automated energy efficiency 16% savings from personalized schedules

Nicor Gas is partnering with ComEd to install and monitor over 100 EcoFactor Home Energy Monitoring Systems in over 90 homes

Two tier modeling validation for heating savings Therm savings based on hourly data of actual indoor

temperature and furnace runtime versus increased furnace runtime for higher temperature setpoint

Simulation using GTI Building America PARR Team BEOpt models for representative Chicagoland homes

Essess Thermal Imaging

• Technology – Essess is a technology company focused on

improving comfort and energy efficiency in homes and buildings using high-throughput, infrared technology that rapidly identifies and analyzes sources of energy loss experienced by homes and commercial buildings across entire communities.

• Savings Potential – Essess analyses helps identify energy leaks in homes

and buildings. – Analyses can help property owners, energy auditors,

and real estate professionals identify energy upgrade solutions to enhance comfort and efficiency.

• ETP Review – The results from the Essess audit will vary from

house to house, such that any recommendations for improvements will be unique based on the case.

– Requires access to quality contractors and products within the market of the individual client.

– Homeowners themselves would be responsible for following up on recommendations made by Essess.

– It is difficult to quantify the cost/benefit in terms of return on investment; the cost of the audit is only the first step in achieving significant energy savings.

17

MARKET SITUATION

Baseline • Traditional home

energy audits Opportunity

• Energy efficiency: natural gas and electricity savings

Segment • Utilities, commercial

businesses, and residences

• Residential retrofit Status

• Mature technology available for enrollment

Next Steps • Further data on cost

savings in a variety of markets Figure 2: Audit example

Figure 1: Thermal image

18 18

Demand pump for central domestic hot water systems

System operates only when there is demand, energy savings from reduced thermal loses in recirculation loop (generally 1 - 3 years ROI before rebates)

Nicor Gas supporting two demos in Chicago area with complete monitoring, collaborative demos in DTE territory, ETIC territory too

Initial Nicor Gas results suggest roughly 2,000 therms and 750 kWh per building (roughly 40 units/building), with paybacks well below 2 years

Project goal is to develop qualitative and quantitative data to support prescriptive program

Pilot Field Assessment Multi-family Demand DHW Controls

19

Micro CHP Technology Landscape

> Variety of emerging micro CHP systems (under 50 kW)

> Engines, fuel cells, Stirling engines – some with promising electric efficiency

> Commercial activity greater in Europe & Japan due to higher energy costs, drivers

> Achieving acceptable first costs a challenge

?

Target first cost needed to achieve six-year payback in different US markets

20

Technology Landscape

Marathon ecopower Clear Edge CE5 Yanmar CP4 and CP10

Climate Energy, freewatt CFCL, BlueGen M-Cogen, Homeaire Plug Power, GenSys Blue Inspirit Energy (Disenco) Whisper Gen, Whisper Tech EC Power, XRGI 15 Energetix, Kingston Delta 2-dozen others

Increase Market Penetration

Emerging Technologies

21 21

Micro-Combined Heat and Power EC POWER XRG

> Technology ─ EC POWER XRG mCHP units utilize a internal

combustion engine (requires 4” WC minimum gas pressure)

─ Success with implemented 19 kW unit; 8 kW and 25 kW unit available in North America in 2014

> Benefits ─ Output can be modulated to match demand ─ Multiple units can be installed in parallel ─ Black-start operation ─ Long required maintenance intervals (every 7,000

hours) and requires approximately 2 hours ─ Aggressive target market installed cost of

$4,000/kW ─ All units to be CARB certified

> Potential ─ Overall efficiency exceeds 92 percent, thermal

efficiency at 61 percent and electrical efficiency at 31 percent

─ Payback expected around 4 years (dependent on application and heat utilization)

─ Requires better incentives and market push to catch on in the US market

MARKET SITUATION

Baseline • Traditional electric heat

pumps or conventional HVAC equipment

Opportunity • Energy efficiency: natural

gas and electricity savings • Possible water savings (WH) • Market potential: retrofit

existing systems and for new installations

Segment • Residential or commercial • New construction and

retrofits Status

• Technology coming to North American market Q1’2014

Next Steps • Market incentives and push

22 22

Field Assessments High Efficiency Gas PACs- RTUs Collaboration with NREL, DOE, manufacturers, national

accounts, and utilities

Large-scale monitoring shows diverse runtimes for RTUs and more therm use than energy models suggested

Dedicated outside air systems (DOAS) provide high efficiency market entry point application

“big box” retail accounts with established DOAS vendors

high heating degree day (HDD)/heating load locations

24/7 retail stores

Retail partner projected $4,400 premium, = 4.1 years ROI @ 90%TE without incentives

Northern climates see more than 2,500 therm savings/year/unit!

1234

5678910111213

1415

19 18 17 16

AHU 1

AHU 3

AHU 2

2021

22

23

24252627

282930

3132333435

36

3738

23 23

Nicor Gas ETP Walmart Pilot Project

> 3 step condensing heating module retrofit process over late September through mid-October 2012

1. Installation of condensate piping with neutralizer 2. Replacement of non-condensing heating modules 3. Completion of data acquisition system

24 24

Chicagoland ‘Big Box’ Store - Results

> Therm savings to date can be projected with statistical confidence to a full heating season AHU 1 – 2400 therms saved per year AHU 2 – 2200 therms saved per year

AHU 1 @ 90%TE, 2332

AHU 1 @ 80%TE, 2624

AHU 2 @ 90%TE, 2164

AHU 2 @ 80%TE, 2435

0

500

1000

1500

2000

2500

3000

Ga

s U

sag

e (

the

rms)

Therm Savings(10/26/12 - 11/25/12 @ 817 HDD65)

AHU 1 @ 90%TE, 19623

AHU 1 @ 80%TE, 22076

AHU 2 @ 90%TE, 18210

AHU 2 @ 80%TE, 20486

0

5000

10000

15000

20000

25000

Ga

s U

sag

e (

the

rms)

Therm Savings(Projected Full Heating Season @ 6871 HDD65)

25

Next Steps

>GTI Commercial Reference Building Model Project ─ Participating utility “billing analysis” for heating EUI ─ Influence DOE/ASHRAE model heating loads

>GTI R&D project working to enhance RTU thermal efficiency, getting beyond 90%

>Mainstreaming Actions for Condensing RTUs ─ Foster condensing gas heating specifications, i.e., Commercial

Building Energy Alliance RTU Challenge, and joint gas/electric driven market analysis of advanced RTU economics in heating dominated climates

─ Demos for other early market entry points (e.g. 24/7 drug stores with high runtime RTUs)

26 26

Condensing Heating Rooftop Units (RTUs) for Mixed Air Applications

> Technology

─ Moving beyond initial dedicated outside air system (DOAS)

market, 90 to 94%TE condensing heating RTUs are being

introduced that cover the full spectrum of OA%, from 100% to

fully recirculated or 0% OA, and everything in between.

> Savings Potential

─ Up to 15% energy savings, with paybacks directly proportional

to the OA% and runtime.

> ETP Activity

─ GTI pursuing various funding opportunities for demonstration of

50% or more OA market applications including ETP member

interest in working together to demonstrate these RTUs in high

%OA systems in movie theaters, schools, daycare centers, etc.

in Midwest cold climates.

MARKET SITUATION

Baseline • Conventional packaged gas

heating and electric air conditioning roof top units

Opportunity • Energy efficiency: natural

gas and electricity savings • Market potential: retrofit

existing systems and for new installations

Segment • Move beyond initial 100%

outside air (OA) markets for condensing heating RTUs into mixed air broader commercial applications with next market niche focused on 50% or more OA in higher occupancy buildings

• New construction and retrofits

Status • Technology is emerging

Next Steps • Collect further data on cost

savings in a variety of markets

27

Modulating Gas Dryer Retrofit Field Validation Two-stage modulating gas valve, temperature sensor, control unit Industrial-sized modulating dryers are available at a high up front cost, but

modulation is rare in smaller capacity dryers Modulation technology is very mature

Application in dryers is more recent Good fit in hospitality, laundromats,

healthcare, dry cleaners. Could be added during ozone system

installation to capture further energy savings Installation requires dryer to no longer be

under warranty Relatively modest installed cost of $525 Payback time <2 years

ETP CONFIDENTIAL

28 28

Modulating Gas Dryer Retrofit Field Validation > GTI has recruited 2 hotel sites, 1 laundromat, 1 healthcare site, and 1

dry cleaner for testing. The identification of 1 laundry/linen service site is pending.

> A total of 12 dryers will be installed: ─ Hotel (4 dryers – one 75 lb, one 120 lb, two 170 lb) ─ Laundromat (4 dryers – two 30 lb, two 45 lb) ─ Healthcare (2 dryers – two 75 lb) ─ Dry Cleaners (2 dryers – one 30 lb , one 50 lb)

> The monitoring is expected to end in Q1 2014.

> Assist the relevant EEP IC in applying the findings from the pilot assessment in work paper they would generate to propose a new energy efficiency measure

ETP CONFIDENTIAL

Commercial Food Service Technologies

• Description – The commercial food service industry is a

significant energy market with over double the energy intensity of the average commercial customer. There exist opportunities for new technologies to transform the market through increased efficiency.

• Market Barriers – Traditionally commercial foodservice

operators have been reluctant to replace existing equipment with newer models for reasons including cost and concerns over the new equipment being able to prepare the food as expected. This has made getting new gas-fired, more efficient equipment into the market much more difficult.

• New Approach – GTI and its partners are implementing new

whole kitchen assessment approach to foster better alignment with customer needs and multiple replacements for more savings

29

MARKET SITUATION

Baseline • Traditional food services

technologies Opportunity

• Energy efficiency: natural gas, electricity, and water savings

• Market potential: retrofit existing systems and for new installations

Segment • Commercial food services • New construction and

retrofits Status

• Technologies are mature Next Steps

• Further research and demonstration projects for: 1. Low volume fryer 2. Conveyor oven 3. Pilotless Range 4. See latest ETP CFS

Demonstration Menu

Low Volume Fryer

Conveyor Oven

Pilotless Range

30 30

Rheem H2AC™

> The first-of-its kind Rheem H2AC™ Packaged Rooftop Unit works by taking the heat removed from conditioned space — which would normally be rejected into the atmosphere — and uses it to pre-heat water, by switching from an air-cooled condenser to a water-cooled condenser.

> 2013 AHR Expo Product of Year Award

> 27 EER during heat recovery mode – 10 tons

ETP CONFIDENTIAL

31 31

Target Markets

> The facilities targeted for early adoption are those with cooling degree days in excess of 1800 days per year

> 1500 gallons hot water loads per day: ─ restaurants ─ food processing ─ health clubs ─ hotels ─ assisted living

ETP CONFIDENTIAL

32

Field Demonstrations

─ Six field demonstrations of H2ACTM systems planned: > Two sites in Alabama

– July 2013 Project Kickoff – Funded by:

> Alagasco > APGA Research Foundation

> Partnership with SoCal Gas, four Technology Assessment sites in Southern California Region

─ Strong partnership with Rheem on field demonstrations

ETP Confidential

33

New Markets: GHPs

> Commercial Warm Weather Gas Heat Pumps ─ Leverages technology used extensively in Japan

> Includes zone control and variable refrigerant flow ─ Focused on moving beyond ‘friendly’ installations ─ Working with Intellichoice and selected ETP members ─ High profile demonstrations or pilot program focused on

developing and vetting utility incentive/marketing program

34 34

Cold Climate Performance of NextAire™ GHP

> Objective: Evaluate the cold climate performance of the NextAire™ 15-ton Multi-Zone GHP

> Although designed to provide gas cooling in hot climates, its high heating efficiency (120%) can reduce operating costs, source energy, and emissions in colder climates

35 35

Cold Climate Performance of NextAire™ GHP

> Laboratory Tests: Evaluate GHP capacity and performance over a range of heating and cooling loads at temperature conditions typical to cold climates

> Operating Range: > 0°F-120°F > 25%-80% > 1000 cfm

> IntelliChoice and Aisin provided: > GHP outdoor unit > Air handlers and

controllers

36

Steam Systems and Energy Efficiency Improvement Opportunities

37 37

• Combines Cannon’s HTE and LTE Feedwater Heaters with TMC Technology to provide the ultimate in heat and water recovery

• Transport Membrane Condenser (TMC) technology recovers Sensible and Latent Heat from flue gas stream

• Recovers clean water from natural gas burning combustion systems

• Boiler efficiencies of 95% are possible

• Reduction in emissions is equal to the reduction in fuel consumption

Cannon Ultramizer System

Automated Steam Trap Monitoring

• Technology – Automatic steam trap monitoring

is an automated system that can identify a failing steam trap as it is becomes ineffective and notifies a web-based system instantly.

• Savings Potential – 1 year payback period

• ETP Activities – Nicor Gas looking for single high

pressure steam system site – Targeting branch with 200 traps – Coordinating with active SoCal

Gas project

38

MARKET SITUATION

Baseline • Standard steam trap with no

notification upon failure with or without manual steam trap auditing

Opportunity • Energy efficiency: natural

gas and electricity savings • Water Savings • Market potential: retrofit

existing systems and for new installations

Segment • Industrial steam traps • New construction and

retrofits Status

• Technology has been installed at a number of facilities

Next Steps • Third party verification of

benefits and market analysis

Typical monitoring program

After installation of automated steam trap

monitoring ACTIVE ETP PROJECT

39 39

Boiler Demand Monitoring Controls

> Devices that act to minimize unnecessary equipment operation & cycling to save energy ─ Boilers and other equipment

> Manufacturer claims of 10-30% energy savings ─ Limited controlled testing to quantify

> NYSERDA/Brookhaven reported 12.9% savings (+/-3.2%) at 13 sites

─ GTI conducting controlled lab testing on gas-fired boiler

Sandler

Greffen

Intellidyne

40 40

Industrial FlexCHP Power & Steam Package

> Fully integrated high-efficiency ultra-clean power and flexible steam production ─ NOx emissions below 0.07 lb/MWh (for strict California standards) ─ Power generation using

microturbine ─ Waste heat boiler fed with

turbine exhaust gas plus low emission supplemental burner

> Variable steam output ─ 85% system efficiency

41 41

Comments, Questions

Ryan Kerr Emerging Technologies Manager, End Use Solutions Gas Technology Institute 1700 S Mount Prospect Road Des Plaines, IL 60018 Email: ryan.kerr@gastechnology.org Phone: 847.768.0941 Mobile: 224.735.0264 Website: www.gastechnology.org/ETP