SOLAR THERMAL COOLING TECHNOLOGY & TECHNOLOGY RISK

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1 SOLAR THERMAL COOLING TECHNOLOGY & TECHNOLOGY RISK Prepared by: Peter Brodribb, Expert Group May 2009 Page 1 1 TECHNOLOGY - A HYBRID-RENEWABLE? Definition: Low emission technology that uses a passive renewable energy source (solar, ground or water) to store or transfer energy Relies on an external electricity supply to move energy around Electricity Supply Heat Thermal Cooling System Conditioned air or chilled water Ground Source Heat Pumps Water-Source Heat Pumps (Open or Closed Loop) Hot Water Heat Pumps & Heat Recovery Systems offer very high efficiencies (not renewable) Page 2 2

2 SUSTAINABLE TECHNOLOGY INVESTMENT DECISIONS Least Investment $/CO2-e Energy Efficiency Initiatives Low Risk Sustainable Designs Fuel Switching Renewable Energy Emerging Technology Highest Investment $/CO2-e Higher Risk Emerging & renewable technologies are riskier Essential to achieve achieve carbon neutral footprint!!! Page 3 3 THE CHALLENGE OF NEW TECH If its new to the engineering community it is very very new to the clients Innovation adds risk Low accumulated operating hours adds risk Extremely limited practical experience in field of any professional or trades workforce adds risk Implementation requires a diverse range of skills, expertise & suppliers including: Solar field, thermal system, absorption chiller, mechanical services, HVAC system, general construction/demolition & project management Page 4 4

3 AN EMBRYONIC INDUSTRY Estimated 200 solar cooling systems installed & utilized globally both commercial & subsidized R&D/Demonstration Knowledge is concentrated within a small group of specialized researchers, innovative technologists & suppliers Technology is emerging from R&D proto-types to commercial phase Industry is entering a critical stage of building knowledge, capability & capacity Accumulating experience with demonstration & early commercial systems Systems are purpose built; not off the shelf in commercial volumes No supplier offers a turn-key HVAC solar thermal cooling package Projects are experiencing 12 month delays due to on site development! Page 5 5 INDUSTRY-GOVERNMENT PARTNERSHIPS DEWHA & COAG constantly engaging with HVAC industry to achieve mutually beneficial outcomes Energy Efficiency (MEPS) Team; Ozone & Synthetic Gas Team (GGAP); Renewables & Energy Efficiency Division (Solar Cities) Ideal to sit under the AIRAH s umbrella as the industry transitions to mainstream HVAC Solar Cooling industry needs a joint industry-government blueprint to provide a coordinated, strategic framework for hybrid renewable technology 5 year partnership strategy to commercialize the industry Hot Water Heat Pumps emerged 5 to 10 years ago, today 15,000 to possibly 20,000 units p.a. rapidly move to 100,000 p.a. State Rebates, Federal Rebates & Renewable Energy Certificates totaling $4,196 per unit in NSW HVAC HESS - Cool Efficiency Program about people, systems & practices Page 6 6

4 THE ELEMENTS ARE COMING TOGETHER Australian industry has an Identity & is sharing knowledge via ausscig Solar collectors & thermal systems are constructed from conventional materials, requires sound engineering rather than scientific breakthroughs HVAC system design & operation are well known, requirements & performance well understood, 50 years of development Australian HVAC industry spending estimated at $10b in 2006 & single biggest contributor to peak electrical load in CBD s on hot days Big prize if get solar driven cooling right Page 7 7 SOLAR THERMAL PROJECT CYCLE Site Review & LCCP Analysis Detailed Concept Design Independent Technical Reviews Specialist Detailed Design & Planning Implementation & Commissioning More analysis & planning than a mainstream HVAC project Greater due diligence to identify & address critical control issues Allocation Investmentoftospecialized minimize expertise technology risks Page 8 8

5 STEP 1: SITE REVIEW & ANALYSIS Energy Audit Preliminary HVAC Calculations (base & peak load demands) Clear understanding of project objectives Peak load, base load abatement, showcase technology Any special needs of the site or occupants Solar & thermal capacity modeling Life Cycle Climate Performance (LCCP) analysis of key options Direct & indirect emission from cradle to grave Variables include types of solar collectors, size of field, thermal storage capacity, types of chillers, other renewable technologies Page YEAR LIFE CYCLE COSTS 100% 90% 80% $ Investment 70% Carbon Tax 60% Gas/Heating Cost Electricity Cooling Cost 50% Breakdown 40% Maintenance 30% Plant Replacement 20% Capital 10% 0% Option 1 Option 2a Option 2b Option 3 Option 1: Replace Old Plant Option 2a: Upgrade plant with high efficiency HVAC Option 2b: Upgrade plant with high efficiency HVAC & purchase renewable green energy Option 3: Solar Thermal System Page 10 10

6 20 YEAR LIFE CYCLE COSTS 100% 90% 80% $ Investment 70% Carbon Tax 60% Gas/Heating Cost Electricity Cooling Cost 50% Breakdown 40% Maintenance 30% Plant Replacement 20% Capital 10% 0% Option 1 Option 2a Option 2b Option 3 Solar thermal twice the capital cost Less than half the electrical cooling cost Maintenance is 20% to 50% higher Carbon tax still a big unknown, assess with worst case & without $$$ stack up on target sites with long term tenancies Financial benefit of peak demand should be included in calculations! Page CARBON REDUCTION & TECH RISK 100% 90% 80% 70% Carbon Reduction & Risk 60% 50% kt CO2-e 40% Risk 30% 20% 10% 0% Option 1 Option 2a Option 2b Option 3 Life cycle emissions (CO2-e emissions per $) for each alternative Weigh up emissions, risks & investment Option 2b: 100% carbon abatement & low risk Challenge for solar thermal technology is to lower capital cost & reduce risk Page 12 12

7 STEP 2: DETAILED CONCEPT DESIGN Design performance criteria Standards, codes & regulations Detailed solar field & thermal storage modeling Detailed HVAC design (3D modeling) Detailed design of mechanical services (other can be left to contractor) Operation (plant, system & general control methodology) Equipment schedules & specifications Preliminary project schedule Timeline, staging, existing or new site, demolition, impact on occupants, commissioning Detailed cost estimations Page STEP 3: INDEPENDENT TECHNICAL REVIEWS Risk What s involved: Greater due diligence Question status quo Totally independent from other parties Divide the project into parcels that can be treated according to the level of risk On-site R&D Critical Items Normal project treatment Outcomes: Minimize on-site development & associated delays Identify & manage critical control issues Understand implications of worst case scenario Allocate specialist expertise to minimize risks Page 14 14

8 STEP 4: SPECIALIZED DETAILED DESIGN & PLANNING Detailed specifications: Solar collectors, scoping out watts, guaranteed efficiency, type of controls, tracking system, storm protection strategies, warranties and maintenance/cleaning requirements Thermal storage/reticulation systems Sizing and specifying of mechanical components (such as pumps, heat exchangers, valves, etc.) to ensure all components are optimally sized Other good practice considerations: Control strategy & proper system integration with the building Back-up HVAC plant Safety in Design risk assessment of the plant area Particularly if the super heated water option is undertaken Consultation with the Environmental Protection Agency regarding containment of hot oil on the site Any simulations to minimize refinements to the design & on-site commissioning Page STEP 5: IMPLEMENTATION & COMMISSIONING Tendering: Contract structured (individually & collectively) Head contractor to take on risk of commissioning & on-site development Individual contractors responsible for delivering to specifications (solar, thermal, chiller, mechanical services) Avoid blame game during the development process!!! Some detailed design can be done after the contract is awarded as points for innovative or added value 5-year maintenance contract on solar thermal system Other considerations: Pre-delivery inspection of critical long lead-items Solar system & absorption chiller Involvement of local engineers or maintenance personnel in commissioning process Need to understand the development history & why its set up a particular way Inclusion of monitoring equipment for commissioning & post implementation Page 16 16

9 RECOMMENDATIONS Ensure general principles are widely promoted to design engineers & commercial property industry Market industry successes: Demonstration sites & case studies Economic data on ideal applications Carve out your niche in the 10B HVAC market Minimize risk to future clients by offering standard turn key packages Page CONCLUSIONS To avoid a LEMON! Need to underwrite early successes with exemplary diligence in design, procurement, installation & commissioning Early failures could be extremely costly for the industry as a whole & the only solar thermal cooling we will see is in the wilderness Page 18 18

10 QUESTIONS & OBSERVATIONS? Prepared by Peter Brodribb Page 19 19