How four industries use the same methods to cut energy costs

Editor's Note: To learn more about the energy efficient buildings, be sure to check out VERGE@Greenbuild, November 12-13.

At first look, it would be easy to say that a steel mill, a retailer, a hospital and a school have very little in common. They are very different types of organizations with different goals, objectives and purposes. But look a little closer and they all share one thing: the opportunity to save money and generate new revenue sources by using demand management to rethink how they use energy.

Below are common electricity cost-reduction methodologies that organizations from across sectors can quickly and easily apply to reduce their energy costs.

Industrial businesses

For most businesses and organizations, the electricity consumed by heating ventilation and air conditioning (HVAC) and lighting account for more than 65 percent of their electricity costs. But for industrial businesses, the lion’s share is used to run processes and equipment.

Many industrial businesses can reduce their electricity costs simply by shifting the timing of their operations away from the “on-peak demand hours” to “off-peak demand hours.” In general, these businesses work with their utility to create a curtailment strategy that permits them to occasionally shift the timing of production operations to minimize electricity consumption during peak electricity demand hours (typically noon to 8 p.m.) in order to take advantage of financial incentives from demand response (DR) programs. To encourage participation, DR programs are designed to be financially attractive and easy to comply with.

Industrial businesses can and do participate in various DR programs, which vary in notification time.  Typically, the electric supplier notifies the business a day in advance to reduce its electricity usage. This usually allows businesses sufficient time to adjust their operations.

As an example, a water supply company that works with Comverge took advantage of its water storage capacity to curtail pumping operations for a number of hours on three different days. Specifically, it removed normally high electricity demand (1 megawatt) from the peak electricity demand on a few days. This resulted in the business being well compensated by the electric supplier for a relatively painless adjustment.

Commercial & retail businesses

Like most businesses, retail and commercial businesses use the majority of their electricity for HVAC and lighting. The most common way that these businesses save electricity costs is through upgrades to more energy-efficient lighting systems and the use of energy management systems. Businesses may benefit from an upgrade to their HVAC system, but this is case specific and requires a thorough engineering analysis, which Comverge provides customers as part of an overall energy audit.

Commercial and retail businesses may also have sufficient electrical loads to permit their participation in DR programs. Unlike industrial businesses, commercial and retail businesses are usually unable to shift the timing of their operations to reduce demand. Instead, they can turn off non-critical electrical devices, dim lights, reduce fan and pool pump speeds and increase air conditioning settings a few degrees.

Some commercial and retail businesses operate multiple, smaller facilities that individually may not have sufficient electrical load to qualify for participation in demand reduction programs. Drug stores, coffee shops and specialty clothing stores are common examples. In these cases, the business may be able to aggregate the demand reduction potential of all of its facilities in the service area of the same electric supplier. During a DR event, each store would simply raise the air conditioning thermostat a few degrees and dim non-critical lighting. One of our customers, a national specialty clothing chain, has reduced its electricity costs by more than $5.5 million a year primarily through upgrading lighting systems and participating in DR programs throughout its retail locations.

Next page: From Health care to high school