Commercial, Industrial Sites Embrace Innovation for New Generation

The importance of a reliable and resilient power supply continues to grow, and so does the need to control energy costs. That’s why more institutions want power systems that support operational efficiency.

The evolving nature of energy demands, particularly for many businesses, has prompted commercial and industrial (C&I) groups to seek innovative solutions for designing new or upgrading existing power systems. One focus in this transition is on leveraging clean energy technologies to enhance energy efficiency, promote decarbonization, and fortify energy resiliency.

The history of C&I power systems has moved along a path beginning with fossil fuel-burning boilers and generator sets to provide heat and steam, to technologies such as solar and wind, to advancements such as battery energy and thermal energy storage.

1. Brenmiller Energy’s bGen thermal energy storage (TES) system is a patented high-temperature TES unit stored in solid state material such as crushed rocks. It can deliver steam or hot air on demand. The technology enables emission reduction for commercial and industrial facilities. Courtesy: Brenmiller Energy

“Fossil fuel boilers are still the primary means of providing heat and steam for industrial processes,” said Doron Brenmiller, Chief Business Officer at Brenmiller Energy. Brenmiller told POWER that while “the market for fossil fuel-based thermal C&I power systems may be waning, the market for renewably powered thermal systems (Figure 1) is just starting to take off. Thermal energy storage delivers industrial energy users the same level of reliability that they’re used to, and at a rate that is cost-competitive with natural gas, but without the emissions.”

Many businesses are using innovative power technology to reduce energy costs and enhance the reliability and resiliency of their electricity. Read this online sidebar to learn more about how The Sinclair Hotel in Fort Worth, Texas, is utilizing energy storage to power its operations, replacing the property’s longtime use of diesel fuel.

Thermal energy storage is just one of the technologies businesses are using to provide their energy needs as they establish decarbonization goals. Requirements around ESG—environmental, social, and governance—and industrial decarbonization mandates, whether from regulatory agencies or demanded by shareholders, are emerging worldwide. That has brought a need to seek out cost-effective low-carbon solutions as companies overhaul existing power systems, or build new models.

“Currently prevalent technologies include solar photovoltaic (PV) systems, energy storage solutions like batteries, combined heat and power (CHP) systems, renewable natural gas, advanced metering infrastructure for better monitoring and control, and increasingly, microgrid solutions,” said Dr. Harish Krishnamoorthy, associate professor of electrical and computer engineering at the University of Houston. “Smart grid technologies, such as demand response systems and grid-interactive buildings, are also gaining traction. Additionally, energy management systems that utilize advanced analytics and AI [artificial intelligence] for optimization are becoming more commonplace, enhancing efficiency in C&I settings.”

Energy Efficiency and Resiliency

Those C&I settings include college campuses, business complexes, hospitals, hotels, and more, where the technologies referenced by Krishnamoorthy are evident. Systems designed around energy efficiency and resiliency, along with reducing the carbon footprint of the enterprise, are becoming the norm.

“The district energy sector is experiencing an exciting period of innovation, integration, and investment. District energy systems serving cities, communities, and campuses provide mission-critical heating and cooling services to connected customer buildings 24/7 year-round,” said Rob Thornton, president and CEO of the International District Energy Association (IDEA). “By aggregating the heating/cooling needs of dozens or even hundreds of buildings, district energy systems create economies of scale to enable investment in highly efficient, lower-carbon technologies that may not otherwise be competitive on an individual building basis.”

Thornton, who spoke with POWER ahead of IDEA’s recent CampusEnergy2024 conference in San Francisco, California, agreed with Brenmiller when he noted, “Many systems in North America continue to utilize combustion turbines with heat recovery steam generators or highly efficient boilers and large industrial chillers to generate steam, hot water, and chilled water.” Thornton agreed that new technologies are being deployed to advance efficiency and reduce emissions.

“Many district energy systems utilizing combined heat and power are also configured as microgrids to further enhance reliability and resilience for the mission-critical customer, providing surplus power and ancillary services to the local grid,” said Thornton. “Most systems have integrated thermal energy storage [chilled water, hot water, or ice storage] and are managed by highly skilled operations and maintenance staff using very advanced monitoring, control, and optimization backbones.

“Currently, we are seeing strong growth in large industrial heat pumps integrated with geo-exchange systems or recovering heat from local sources like wastewater in sewer mains to cut carbon emissions and capture dramatic efficiency gains,” said Thornton. “For instance, a newly commissioned campus energy system in New Jersey has reported a Coefficient of Performance (COP) of 6 while another being designed in Virginia to harvest data center heat is modeling a COP of 9. This means that for every one unit of energy input, six to nine units of useful energy are output. These game-changing outcomes showcase another distinct advantage of district energy—the ability to store heat and cooling diurnally or seasonally and to utilize heat for buildings that would otherwise be thrown away through cooling towers or simply dumped down the drain.”

Decarbonization

The need to reduce a campus’ carbon footprint is driving many of the energy-related upgrades in the C&I sector. “Given the growing interest in decarbonization and energy resilience combined with the declining costs of clean energy technology, the demand for C&I power systems is growing and broadening across customer sectors,” said Lou Maltezos, executive vice president, Central Region and Canada, at Ameresco. “College campuses, business parks, healthcare facilities, industrial facilities, and data centers represent examples of key sectors where energy efficiency and resiliency are paramount.”

One example of innovation is at the University of California-Davis (UCD), where miles of new pipeline are distributing thousands of gallons of hot water to buildings across the UCD campus. The school, focused on agriculture, is in the midst of a $250 million initiative called the Big Shift, moving away from fossil fuels and toward carbon neutrality. The plan is designed to decarbonize the school’s existing district steam heating system.

The current campus central utility plant produces steam using four boilers that primarily burn natural gas. The school also operates a chilled water system that includes thermal energy storage. The shift to a hot water system means UCD will eventually use electricity instead of natural gas to heat the campus. Energy also will come from the campus’ solar power plant, and other off-site solar energy generation.

“Over the next few years, the C&I power market will likely witness increased adoption of renewable energy sources, continued advancements in energy storage technologies, greater integration of smart grid solutions, and a shift toward decentralized energy systems like microgrids,” said Krishnamoorthy. “Additionally, a focus on energy efficiency, demand-side management, and electrification of processes may become more pronounced.”

Maltezos told POWER, “Schaeffler Aerospace Canada is an example of the prioritization of energy efficiency systems to work toward decarbonization goals. Schaeffler is working with Ameresco on the installation of a new high-efficiency chiller and boiler system that will serve new air handling units at Schaeffler’s Stratford, Ontario, plant site.” Maltezos said the new air handling units are replacing five older DX [direct expansion] cooling/gas heating air handling units, “and are equipped with chilled water cooling, hot water heating, and variable speed fans. The project will also update the existing building automation system to integrate control of all of the new high-efficiency HVAC [heating, ventilation, and air conditioning] equipment.”

2. This rendering of a Wells Fargo site in Des Moines, Iowa, shows how the location uses a combination of rooftop and ground-mounted solar to produce 30 MW of onsite power. Courtesy: Ameresco

Maltezos noted that groups such as Wells Fargo have partnered with Ameresco to install nearly 100 solar PV arrays in retail and corporate locations across eight states, and said the banking business has “prioritized the use of on-site solar to ensure they have adequate and clean power resources for operations. Using a combination of rooftop and ground mount systems, the 30 MW of onsite solar at their Des Moines, Iowa, campus [Figure 2] furthers Wells Fargo’s efforts to support the renewable resources development in locations where its energy needs are the greatest.”

Enhancing Reliability

Kyle Julian, a regional director for C&I Sales at S&C Electric, said C&I operators today demand ever-higher levels of energy reliability. “Increasing reliability and resiliency demands, combined with the increased power densities required by the modern commercial and industrial user, have resulted in a major shift. Commercial and industrial users now need to own the same style of robust power distribution equipment and medium-voltage [5–46 kV] system designs as those that make up the backbone of our electrical distribution grid.”

Julian said new technologies offer end-users more choice when it comes to designing their energy systems. “Users aren’t bound by one type of generation source anymore,” said Julian. “Medium-voltage systems allow multiple sources of electricity to be integrated into a C&I user’s site, regardless of origin [utility, CHP, solar]. The quest for perfect power, green power, and onsite generation as a supplement to utility capacity and reliability constraints can be obtained rather simply, through medium-voltage microgrids and smart switchgear. These allow for the selection of the right source at precisely the right time. They can even generate revenue for the owner—all without sacrificing the user’s primary mission of uptime.”

Eliminating power outages is a key consideration for those entities that need a constant supply of electricity, such as hospitals and government agencies. Some of these groups rely on centralized district energy installations. Vicinity Energy, a Boston, Massachusetts–based district energy provider, is focused on energy infrastructure investment. Kevin Hagerty, president and deputy CEO of Vicinity, said the technologies being used to optimize energy production and distribution for the C&I sector bring “economic, environmental, and operational benefits.” Hagerty told POWER, “District energy systems offer high energy efficiency, reducing overall energy consumption and costs for commercial real estate developments. Centralized systems ensure reliable and uninterrupted energy supply, minimizing downtime and disruptions for businesses. District energy can efficiently serve the diverse energy needs of large campuses, including heating, cooling, and hot water, providing flexibility in meeting the specific requirements of academic and research facilities.”

Technology upgrades also “allow for the integration of renewable energy sources, contributing to the sustainability goals of universities and life science campuses,” said Hagerty. “District energy systems offer consistent and reliable heating and cooling services to hospitality facilities, ensuring guest comfort and satisfaction. The centralized nature of district energy contributes to energy efficiency, aligning with sustainability goals often emphasized in the hospitality industry.”

Hagerty also noted that these systems support critical loads, such as at government installations, and said that “shared infrastructure can lead to cost savings for government entities compared to individualized energy systems. District energy [also] is well-suited for the high energy demands of arenas, efficiently providing heating and cooling to accommodate large crowds.”

“Only 20 years ago, large medium-voltage C&I-owned systems were found primarily on major campuses like universities, airports, and military bases,” said Julian. “Since then, significant technological and computing advancements have greatly expanded the segments of major C&I power system owners. The massive power densities required to support semiconductor chip manufacturing and data centers have led the way, followed by privately owned alternative energy plants. Electric vehicle charging stations for commercial fleets and private vehicles represent another segment with massive power needs.”

Maltezos told POWER, “Technologies used for commercial and industrial power systems today range from efficiency-related upgrades such as HVAC, lighting, building envelope, and controls to more complex systems such as distributed energy generation through renewables integrated with battery energy storage systems and microgrid controls.”

Julian said, though, there are times when simplicity could work better than complexity. “Interestingly enough, in response to the complex new technologies driving the surge in reliability requirements, some users achieved increased reliability by reducing the complexity of their power systems. Instead of adding more sensors and gadgets to conventional low-voltage equipment in radial systems, some users have moved up to medium voltage and invested in proven technologies arranged in simple power distribution loops. This allows backup power feeds to proliferate down to the entire facility or campus,” said Julian.

Energy Storage and Software Controls

The addition of energy storage to C&I power systems is allowing for more flexibility and scalability, and is expected to become more prevalent as installations evolve.

“Traditionally, we used to see mostly gas-fired generators. Now we’re seeing more software options, hydrogen fuel cells, and increasingly, battery storage,” said John Masucci, business development manager at Peak Power, a company focused on energy solutions for the C&I sector. “One technology we’re seeing more and more is battery energy storage systems [BESS] that are controlled through software. There are a lot of advantages to BESS. When facilities want to curtail their energy use without battery storage, they’re looking at ramping down machinery, lighting, HVAC, or other functions. This affects production goals and occupant comfort. With a battery, they can curtail without touching any of these. Particularly in the case of manufacturing sites, even a millisecond of power interruption can be catastrophic. With battery energy storage, there’s no blip.”

Masucci told POWER, “Most BESS customers have a third-party controlling the batteries offsite. These operators use software to manage the battery discharge and charge from a centralized location. They don’t need a dedicated person to manage the curtailment at the site. It all happens behind the scenes. There’s no disruption to the day-to-day. All they see is savings on their bill.”

The future growth of new C&I systems, and the technologies to support upgrades, could depend on government incentives that could mitigate financial risk as business operators look at their energy costs. Said Brenmiller: “The industrial sector is very conservative when it comes to adopting new technologies. Upfront investment incentives and operational incentives are key drivers to catalyze industrial players to invest in decarbonizing their businesses. A great example of how the government can do this is Germany; the country’s program to create climate protection contracts [CPCs] will make $53 billion available to the [German] industrial sector over the next 15 years. The program, which aims to counter attractive U.S. subsidies and prevent offshoring, is distinct from other climate-related funding vehicles in that it offers companies upfront the difference in energy transition-related operating expenses needed over 15 years. This is an important signal for businesses and gives them the investment security they need to shift to carbon-neutral operations.”

Krishnamoorthy told POWER, “Beyond decarbonization, governments can support C&I power systems by incentivizing research and development in clean energy technologies and improving system efficiencies, providing grants or subsidies for adopting sustainable energy solutions, and facilitating regulatory frameworks that promote grid modernization and renewable energy integration. Encouraging innovation, fostering partnerships between industries and research institutions, and investing in infrastructure for widespread adoption of C&I solutions are crucial aspects governments can focus on.”

—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).