Making GeoExchange mainstream. Ed Lohrenz, B.E.S., CGD. III CONGRESO de Energia Geotermica en la EDIFICACION Y LA INDUSTRIA Slide 1

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1 Ed Lohrenz, B.E.S., CGD Member: ASHRAE GICC MGEA IGSHPA 1

2 Decision to install GeoExchange system based on economics Building owners and developers make their decision to install a geothermal system based on money. A potential geothermal project that doesn t show a good return on your client s investment will probably not be built. A client may want to be green, but they won t accept a 25 year payback to be green. It s almost always about the economics. 2

3 Public policy and the economics of GeoExchange systems Governments and utilities have promoted GeoExchange systems with a variety of policies, including: Cash incentives Financing / leasing GeoExchange utilities 3

4 Incentives and subsidies 4

5 Incentives or subsidies Cash incentives are simple. Install a heat pump and get a rebate from the government or utility. They are: Easy to administer install a system & get money Expensive incentives cost government (tax payers) a lot of money Inconsistent governments change / policies change and confuse stakeholders in the industry 5

6 Incentives or subsidies - experience in Canada The recent experience in Canada with the ecoenergy grant has not been positive. The incentives were put in place, then taken away for several months, reinstated, and then removed a few months earlier than was originally stated. Approximately $100,000,000 was allocated for incentives, and it resulted in an estimated 16,000 installations. 6

7 Incentives or subsidies impact on the industry The on again, off again nature of the incentives caused problems in the Canadian industry. Sales increased as incentives were introduced, but dropped when removed. Manufacturers, distributors and contractors reported of problems with inventory and keeping trained employees as sales increased and decreased as incentives were put in place, then taken away, then reinstated. It is not inconceivable that sales would be greater in 2012 if the incentives had not gone through the changes the previous years. Sales estimates without incentives 7

8 Financing or leasing 8

9 Financing / leasing The initial cost of a GHX is a market barrier. Financing or leasing by private investors, utilities or government agencies provides a method of eliminating the cost barrier. To be effective: The project must show a reasonable return on investment The financing term must be long enough to provide a positive cash-flow Private investors tend to want to finance larger projects not residential 9

10 Financing / leasing A GeoExchange system is usually more expensive to install than a conventional mechanical system. Property Assessed Clean Energy (P.A.C.E.) allows property owners (residential or commercial) to finance energy efficiency projects and: Repay it through an assessment on property tax for up to 20 years Repayment obligation transferred to next owner if property sold For more info, see: 10

11 Financing or leasing 11

12 GeoExchange utilities Electric utilities make large capital investments to produce power and deliver it to their customers. They expect return on their investment over time as customers pay their utility bills. The benefit to the customer is that he does not have to make the investment to build the generating station or infrastructure. The utilities make money on their long-term investments. 12

13 GeoExchange utilities under construction in Gibsons, BC The community of Gibsons, BC is building a district geothermal energy system for 750 homes and a commercial development. The system uses horizontal GHX modules combined with heat recovery from an ice arena and energy from the ocean as energy sources. It will be completed in about 15 years, and is designed to grow with the community. Phase 1 Future phases Future phases Hockey rink & commercial development Commercial development Ocean connection Ocean F year round 13

14 GeoExchange utilities - stakeholders The Town built and operates the GHX and pump house. The developer installs the distribution piping under the street. Ownership of distribution piping is transferred to the Town. The home builder/owner is responsible for connecting the heat pump to the system. The Town invoices homeowners for energy transferred to and from the GHX. Developer responsible for construction of distribution piping Home builder / home owner responsible to connect to distribution piping The Town built the GHX and Pump house 14

15 GeoExchange utilities - typical home heat pump connection to district system Piping connects the distribution piping to the individual homes. An energy meter calculates the energy extracted from or rejected to the GHX. The meter information is read via a radio transmitter and an geothermal utility bill is sent to the homeowner. 15

16 GeoExchange utilities - infrastructure for GeoExchange system The GHX modules are built in park areas and greenbelts in the community. Piping to connect the GHX modules to the pump house and then to the homes is installed by the developer like any other utility. 16

17 GeoExchange utilities homeowner benefits with lower monthly costs Ultimately the homeowner pays for the GHX. The Town of Gibsons as the owner of a geothermal utility, charges the homeowner a monthly fee for the energy and recovers its investment, just like an electric utility building a generating station. Like any other utility, the Town meters and charges for energy taken from or rejected to the ground. GeoExchange Gas Electric Electricity Cost Geo utility bill Total Energy Cost Total Gas Cost Total Electric Cost Single $981 $948 $1,929 $2,275 $2,906 Cluster $342 $264 $611 $719 $860 Cottage $462 $372 $836 $984 $1,188 17

18 Conventional system cost The cost to install a typical conventional heating and cooling system in a 250 m2 home in Spain is estimated at about

19 GeoExchange system If the GHX is not included, the equipment for a GeoExchange system can be installed for about If connecting to a GeoExchange utility system, the cost difference is minimal. 19

20 GeoExchange utilities homeowner sees little additional capital cost For the GeoExchange utility, there is little difference in cost to the homeowner if they install a conventional system or a GeoExchange system. They see about a 10% to 15% energy cost reduction with minimal increase in capital cost. CO 2 reductions in the development are approximately 1,440 tonnes annually High Efficiency Gas System GeoExchange System Dist. System Furnace & AC Total Cost Connect to GHX Dist. System Heat pump Total Cost 100 m m m

21 Design process 21

22 Design process for conventional HVAC system The design process for a conventional heating, ventilation and air conditioning system is pretty straightforward. The size of the gas line and cooling tower is simply based on the peak heating and cooling loads of the design heating and cooling days. Rooftop units and other conventional systems have been around a long time. You don t have to prove they work, and it doesn t really matter if they have a bit more capacity than needed. No one gets sued for oversizing! Cooling tower capacity specified Size of gas line based on peak heating load 22

23 Design for geothermal system requires more detailed analysis Detailed hour by hour energy model of a building is the only way to determine: Peak heating & cooling loads Monthly heating & cooling energy loads Provides numbers to determine energy balance between heating and cooling An accurate energy model allows you calculate energy cost & size and cost of GHX and payback. As the designer of the energy source you have to know the long term performance of the system 23

24 The ground is not an infinite energy supply Designing a geothermal system is somewhat like designing a heating system for a building in a remote community where fuel can only be delivered once a year. The designer needs to know how much energy the building will need over the entire year to determine how big a storage tank is required. Calculating annual energy loads is the only way to accurately determine this. This requires a detailed hour by hour load calculation with appropriate occupancy, lighting and ventilation scheduled. 24

25 Design process for GeoExchange systems 25

26 Design case study 26

27 Economics is affected by design The designer of a GeoExchange system can have a large impact on the cost of building it. Working with the architect, engineers and rest of the design team, the heating and cooling loads can be adjusted to work most efficiently with a ground heat exchanger. 27

28 Initial energy loads provided for project The client provided initial peak and annual energy loads for the project. The loads showed the building to be very cooling dominant with peak cooling loads of over 4,000 kw and peak heating loads of 3,500 kw. 28

29 GHX model based on initial loads provided The GHX for the project based on provided loads cannot be sustainable over the long term, even with 91,000 m of drilling. After approximately 10 years the maximum temperature of the entering water temperature to the heat pumps exceeds 40 C. Cost of GHX at 50 / m:

30 GHX model based on initial loads provided with addition of fluid cooler Adding a fluid cooler to dissipate excess heat from the building reduces the amount of drilling required for the project by about 67%. Cost of GHX at 50 / m: plus cost of fluid cooler 30

31 Initial energy model for project A detailed hourly energy model was completed for the building. The client provided detailed information about the building, including: Occupancy (hourly / weekly) Lighting schedules Ventilation schedules Peak loads and annual energy loads were much lower than model provided by client. 31

32 GHX based on first energy model The GHX was recalculated with the new energy model. The amount of drilling required was 70% less than needed with the original energy model and 10% less than needed with the original loads with a cooling tower. The temperature of the GHX still keeps increasing over time and will eventually fail. Cost of GHX at 50 / m:

33 Changes made to reduce cooling loads During design charette cooling loads were reduced when information about the energy model was provided to the architectural and electrical engineering teams. Lighting was reduced from 2.25 Watts / square foot to 1.25 Watts / square foot Roof was changed to reflective white material Peak heating loads were not impacted, but annual heating energy loads increased from 129,279 mwh to 159,944 mwh because less heat was contributed by lighting. 33

34 Ice storage added to reduce peak cooling loads Ice storage system designed to provide 790 kw of cooling for approximately 8 hours per day. This reduces the capacity of equipment needed to provide peak cooling, yet still provides all of the heating for the building. Energy storage allows client to take advantage of peak electrical demand reduction, demand shifting and time of use electrical rates. 34

35 Additional cooling loads from the building Refrigeration for a 600 seat restaurant, a computer server room and elevator equipment room were all tied into the GHX rather than roof-mounted air cooled condensers. 35

36 Dissipating excess heat To prevent the GHX from overheating over time, a method of getting rid of excess heat was still required. A cooling tower could have been added. Instead 3,500 m 2 of snow melt piping was added to the ramp to the parking level and loading dock area. This can also be used to pre-cool the GHX all winter to store cold in the ground. 36

37 Final energy model based on changes to building & systems Changes to the building and systems made significant changes to the building energy profile and the Peak and annual energy cooling loads reduced by changes to roof & lighting Peak cooling loads reduced by integrating ice storage Cooling loads to GHX increased by additional refrigeration loads Heating load from GHX increased by snow melt / heat dissipation 37

38 Final energy model based on changes to building & systems Decreasing cooling loads while increasing heating loads balances the energy loads to and from the GHX. This results in a much smaller GHX. Using the snow melt / heat dissipation to cool the ground lets us control the GHX temperature and prevent it from becoming saturated with heat over time. Cost of GHX at 50 / m:

39 Peak load summary of successive energy models The peak loads were reduced significantly when an actual energy model was built. The goal during the succeeding iterations was first to reduce peak loads to the ground, and more importantly, to balance the loads. Working with the client & design team allowed the changes to the roof, lighting, mechanical system and snow melt. Peak cooling loads are 2 to 3 times greater than peak heating loads without the artificial heating load imposed by the snow melt/heat dissipation system. 39

40 Energy load summary with successive energy models The heat rejection capacity of the snow melt / heat dissipation pad helps control the temperature of the GHX, and is used to prevent the GHX from overheating over time. Without the artificial heating loads imposed by the snow melt/heat dissipation system the annual cooling energy loads are approximately 10 times greater than the annual heating energy loads, not including the electrical energy used to operate the compressors and pumps. 40

41 Drilling required with successive energy models The total amount of drilling required for the building changed significantly as the energy model developed and the design team made changes to the building. The land area needed for construction of the GHX must be considered. The boreholes for this project were drilled under the building. There was not enough space on the site to build the original GHX with 600 boreholes. 41

42 Capital cost of ground heat exchanger with successive energy models The cost of the GHX is typically the difference in cost between a conventional HVAC system and a geothermal system. As the size of the GHX drops the cost drops. In an integrated design process there are many implications to the cost of the project. The cost of ventilation energy recovery, redesigned lighting, white roof, energy storage, snow melt etc. must be considered in the payback, and are included in this analysis. 42

43 Energy cost saving and simple payback of system based on successive models The total amount of drilling required for the building changed significantly as the energy model developed and the design team made changes to the building. The financial model must work for the client. Reducing size and cost of the GHX, improving system efficiency and providing additional benefits helps make it happen. 43

44 Conclusions INCENTIVES influence the market but must be consistent and well thought out or suppliers and contractors can be adversely affected. FINANCING AND LEASING reduces first cost for end user. Private investors typical prefer to finance large projects. Local governments or utilities can facilitate the finance single residential projects GEOEXCHANGE UTILITY - owns the ground heat exchanger. Cost of equipment inside the home is same cost as a conventional system DESIGN PROCESS needed for GeoExchange system is different than the design process for a conventional system The designer has the power to change the energy loads of a building to make it more cost-effective to install a GeoExchange system 44

45 Ed Lohrenz, B.E.S., CGD Member: ASHRAE GICC MGEA IGSHPA 45