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 Air cooled chillers 60-400 tonR

Water cooled 60-1200 tonR

Evaporatively cooled 60-255tonR

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

2005: 447 Quad Btu 2030: 702 Quad Btu

7% 6% 38%

8% 6% 34%

26% 23%
Liquids Coal Natural Gas Hydro/Renewables Nuclear

28% 24%

Source: EIA /IEO 2007 & Frank Verrastro, CSIS

Growing energy demand is unsustainable

18 16 billion tonnes of oil equivalent 14 12 10 8 6

Other renewables Biomass Hydro Nuclear Gas Oil Coal

4 2
0 1980 1990 2000 2010 2020 2030

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

Imperatives for Energy Efficiency: National and International Security

Geopolitical changes threaten energy stability. Worldwide.

Europe Oil & Gas Cut Off Europe Politics & Pipelines Iraq: Unstable Russia Policy Iran Nuclear Threats Pakistan Political Turmoil China Demand explosion

Canada Oil sands concerns US Disasters

N-Korea Nuclear Threats

North Africa Revolutions

Strait of Malacca Piracy

Latin America Anti-US policies

Source: Frank Verrastro, CSIS

Energy Efficiency at the Nexus

Affordable/Accessible

Economic Objectives

Reliable and Secure

Promotes/Supports Economic Growth & Employment

Natural Gas

Oil

Defensible

Nuclear Coal Energy Efficiency

Environmentally Benign

Carbon Capture and Storage

Renewable
Energy

Environmental Objectives

Low/no emissions

Promotes/Support s Sustainable Environment

Security & Foreign Policy Objectives

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 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)
14,000

12,000

10,000

8,000

6,000

4,000

2,000

United States California

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

EE in Buildings a major opportunity for the planet

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

US Buildings, 8% China, 19% US Other Sectors, 13%

Russia, 6%

Japan, 4% India, 4%

Others, 32% ,

Western Europe, 13%

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

Key aspects of the 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

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

Total costs in 2 years of operation, S. Diego

Whole of life costing model: lower lifetime costs mean higher first costs
operating costs a disadvantage turns into a benefit

operating costs maintenance

maintenance
soft start kit noise reduction

first costs first costs

Leading screw chiller

Oil-free VFD chiller

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 & DellIsola. 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
900,000 800,000
kWh consumption

700,000 600,000 500,000 400,000 300,000 200,000 100,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Time Period 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

35% year-on-year energy savings: first Canadian installation

Sears Mall, Halifax 2005

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 VFDs 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

VFDs 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:

VFDs 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 Power is proportional to the cube of the shaft speed VFD chilled water plants can save energy approx 99% of the year

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 Pumps Tower fans Total: .8 kW/TR .35 .05 1.24 kW/TR

Chiller

= 0.80 kW/Ton = 0.35 kW/Ton = 0.05 kW/Ton = 1.24 kW/Ton

Pumps Tower Fans Total

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 Pumps Tower fans Total plant .40 kW/TR .23 kW/TR .03 kW/TR .71 kW/TR

Premium Equipment Chiller Pumps Tower Fans = 0.40 kW/Ton = 0.23 kW/Ton = 0.03 kW/Ton

/ Standard Equipment 0.51 kW/Ton 0.30 kW/Ton 0.04 kW/Ton

Total

= 0.71 kW/Ton

0.85 kW/Ton

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 planets 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 dont 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?