For one commercial office building in Perth, Western Australia, recent hot weather led to a very brief, but very costly, spike in electricity use. How brief? 30 minutes on a Monday afternoon in January. How costly? Around $150K over 12 months.
This post discusses what went wrong and the lessons that can be learned for anyone trying to juggle the, sometimes competing, challenges of building performance and cost management.
HOT WEATHER. HIGH DEMAND
Perth recently experienced an exceptionally warm January and this had major implications for the energy costs of some buildings.
Perth is used to the heat but even by their standards January was a scorcher with an average daily max temperature of 33°C making it the 6th warmest January on record. Of particular note was Monday January 5th, and it is this weather event, the impact it had on electricity demand, and associated costs, that will be the focus of the rest of this post.
BUT FIRST, A RECAP ON DEMAND
While the major theme of this post is pretty easy to grasp, the details are important and so it’s worthwhile having a quick refresher on electricity demand and why it matters to energy managers.
Demand is the rate at which you are using electricity and is often measured in kilowatts (kW), or kilovolt-amps (kVA). This is different to the quantity of electricity you have used in a period, which is measured in kilowatt-hours (kWh).
Your maximum demand drives the cost of the infrastructure required to meet your electricity supply requirements. If you improve energy efficiency and reduce the quantity of electricity you are using, but your maximum demand is still high, then those infrastructure costs will remain the same.
This is usually reflected in your electricity bill as one of a number of network charges. In some cases there will be an explicit demand charge on your bill (e.g. a rate per unit of max demand in the period), in other cases you may have a contracted maximum demand or CMD.
If you’re not seeing any network charges on your bill you’ve got what is known as a bundled tariff. In this case the network costs still exist, and they are still being recovered by your retailer in the form of higher energy costs, it’s just that they are bundled together with your energy (kWh) charges.
KNOW YOUR TARIFF
Often poorly understood, but always very important, the tariff is what turns your building’s energy performance into dollars and so represents a critical part of the cost management story. You can have the best energy management systems going around, but all that good work can be undone if you don’t understand how your buildings energy profile interacts with the tariff you’re on.
This is particularly true for demand related charges, where the tariff structures can be complex. Depending upon in which electricity network your buildings reside – there are about 16 in Australia – you are likely to be subject to a wide array of demand charges, get to know them and you greatly improve your chances of avoiding the fate of our protagonist.
The building that’s the subject of this post sits within the Western Power network and the network tariff that applies to it is known at RT6. The tariff is described in full here (PDF) but, to keep things simple, there are two key elements to the tariff that relate to demand costs:
- Charges are calculated by multiplying the half-hourly demand in kVA by a fixed charge based on demand tiers, from 0 to 300kVA, 300 to 1000kVA and 1000+kVA. Critically, charges increase significantly once demand exceeds 1000kVA
- The demand charge is calculated based on the 12-month rolling maximum for the building. This means that if you were to hit a new demand high water mark today, you pay for it until this time next year (or until you exceed it).
BACK TO THAT FATEFUL MONDAY
So with the scene set, let’s take a closer look at what occurred in this building on Monday Jan 5th.
- The temperature in Perth hit 44.4°C at 1:50pm making it the 3rd hottest January day on record.
- This led to significant additional demand on the electricity network as building HVAC systems struggled to keep temperatures comfortable. On the network as a whole this led to peak demand of around 3,804MW, around 40% higher than on a typical Perth summers day.
- For our building the effects were just as severe. As the graphic below shows, demand briefly peaked at 1,010KVA between 2pm and 2:30pm. To put this in perspective, demand for this building on a typical Perth summers day normally peaks at around 860kVA
- At 1,010kVA the building exceeded the 1000kVA demand threshold within the tariff meaning the fixed daily demand charge for the building increased from $235 to $637 – for the next 12 months. This means an additional cost of around $145,000 over that 12 month period.
- By 2:30pm, with moderating temperatures outside, electricity demand within the building began to fall. By about 4pm it was back to normal but the damage had been done.
SO HOW COULD THIS HAVE BEEN AVOIDED?
1. KNOW YOUR BUILDING AND YOUR TARIFF
This might sound obvious, but make sure you understand how your building behaves in different situations. If weather is the main driver of demand for your building, you should have a good idea of how your building will perform when the days get hot. You also need to understand the details of the tariff you’re on, and importantly what levers you can pull to manage your electricity cost.
Data is your friend here. If you have enough good quality historical data on the demand needs of your building over different weather conditions then you can start to understand how events, such as those that occurred in Perth on Jan 5th, might play out. It’s also critical that you understand the subtleties of your tariff and, where necessary, switch tariffs to ensure you’re on one that best suits the behaviour of your building.
This kind of basic data analysis should be within the grasp of most of us. Just ask your energy retailer or building manager for your historical interval data, get your tariff details from a recent bill, some local weather data from the BOM, and away you go.
By understanding your building’s historical behaviour and your tariff, you can start to anticipate the cost risk factors for your building.
2. HAVE AN EARLY WARNING SYSTEM
If high demand is a big cost risk for your building, then you need an early warning system so you can take preventative action.
While many building managers only have access to historical interval data, and some poor sods only have access to monthly manual meter readings, an effective early warning system will need up to the minute electricity demand data.
Remember though, that networks in Australia typically calculate demand over a 30-minute period, so 5 minutes of very high use won’t necessarily hurt you, but keep it up for half an hour and it will.
But you don’t want to be staring a computer screen all day watching demand tick up on a hot day, so implement an early warning system that can send you an e-mail or SMS when you need to take action.
It’s also important to think about the timeframes required to take action. It might be too late to get a tap on the shoulder half-an-hour before your about to cross a critical threshold.
3. HAVE A PLAN IN PLACE IF THE BALLOON GOES UP
Depending on your building, you’ll have different options available to manage demand, and this is an area where you might need some advice from your engineering consultant. Options they might offer you could include pre-cooling the building in advance, or adjusting the chiller cycle or set-points on your HVAC system, or switching on a grid-synchronised generator.
The main point though is that demand costs are something you can pro-actively manage. The whole reason for these charges is to provide you a price signal, an incentive, to reduce your demand. Armed with the right data, the right tools and some forward planning you can make a big difference to your energy costs.