Your first energy bill

Waiting for your sites first energy bill after completing a development is quite common, although from an energy engineers perspective quite unnerving.

Perhaps what most project developers don’t realise is that it can be possible in certain cases to forecast expected energy use at a granular level for a full year. It is also has other, sometimes surprising, benefits aligned to core business.

This blog gives an energy engineers view on approaching greenfield sites and proposes a “reverse energy audit” method or structured approach to exactly understanding future energy use, quite early in the process.

The principle in summary is

“Model Energy Backwards” not end up with a “Backwards Energy Model“

Sizing solar energy and battery storage after 12-months or having the operational costs of key equipment being revealed within the first several bills is the backwards approach. Having an energy professional work with your design early reduces risk although in many cases is not even considered simply because people don’t ask the question – is that even possible?

Building a detailed operational energy model

In many cases it is possible on an hour-by-hour basis for a whole year to model theoretical energy use and perform sensitivity and scenario analysis based tests, using certain operational assumptions and inputs.

This is a similar exercise to performing an energy audit, using the same software and modelling tools, except in a way, applied in reverse.

The approach considers, similar to a detailed energy audit, the integration of operational factors with key equipment and how all the parts work together as a whole.

While traditional electrical engineering will review site plans and outline the cumulative site power of refrigeration compressors, motors, and other equipment to size transformers and such, this approach is more focused on the usage of equipment on an hourly basis and the energy usage load profile (given this relates to energy costs).

Involving an energy engineer early in the design

Some of the benefits of involving and energy engineer early in the design process include:

CapEx vs. OpEx

• An understanding of the upfront (CapEx) and operational (OpEx) of each piece of major equipment can be understood in the context of the site (with careful modelling)
• Budgeting for the whole of life operation of key equipment over 5 or 10 years (and even knowing what this will be!) can help highlight not only what it costs upfront, but how much it costs to run annually – let’s not make that a surprise right!

Whole of life costs and upfront financing efficiency

• Attractive lower interest rates and depreciation incentives can be a positive when considering purchasing that more expensive, but more efficient system, process or technology
• A negative (to trade off against) can be the level of debt associated with higher upfront construction costs
• Let’s look at one practical decision – say a moderately sized motor that delivers 30 kW of mechanical power to a pump for 12 hours of each day
• If the existing motor is an IE1 rated motor and it is replaced with an IE3 rated motor, the motor efficiency goes from 90.70% to 93.60%
• This increase equates to 3,591 kWh of energy saved, or $1,005/year (assuming a few things)
• If the higher performance motor costs around $4,000 more to purchase, the new motor is paid back in just 3.98 years
• Multiple this same equation by fifty key processes and you have an upfront cost of $200,000 with an attractive 25% return on capital, or if you don’t act, a permanent $50,000+ increase in your energy bill that is locked in due early design decisions

Buying equipment at auction

This will be a short section – don’t buy equipment at auction! Your “buying” in many cases higher future energy costs that can significantly outweigh lower upfront costs. We have seen some genuine shockers here!

Surprising Findings

When you model how a facility operates on an hourly basis for a whole year some interesting things can happen.

• By looking at hourly expected operation of key equipment, effective asset life and maintenance cost issues might arise
• System sizing issues or “oversizing” can be dealt with
• Given most energy is lost as heat, specifying for efficiency has natural links to effective asset life
• “Demand stacking” or how different pieces of equipment operate within any one hour period can have a significant impact on energy costs, depending on the energy tariff
• You can understand your energy tariff ahead of time given there are can be certain financial penalties for being inefficient
• Trade offs between future electricity and gas prices can be made early with a view to electrification (to take advantage of increasingly higher renewable energy percentages in the national energy market)
• YES it is possible to procure energy in the future using energy futures contracts, and therefore YES (strangely) you can sign a contract before a facility is built in some cases 18-months in advance
• Different forms of energy storage can be modelled with energy reliability examined based also on the possible uses of stored coolant as a co-benefit – see article on small scale solar thermal storage
• You can forecast roof area requirements relating to solar sizing and then design the load bearing correctly, possibly even more around not over sizing the solar and therefore over engineering the roof because you assume you need a large system and are planning to wait 12-month for the energy data, and not save costs by modelling it early – see here
• The same process can also apply to rainwater storage, roof area and decisions on connecting mains water supply to the site – see the Tankulator calculator for an intro to tank sizing (residential calculator although can be used for larger projects to get a basic idea)

Ask yourself the question – what risk can I reduce and what costs can I avoid my adding an energy modelling layer to my project? Remember to engage early at the design phase because once it is installed, you have locked in your energy bill and have less flexibility!