Power in the City

Aug. 8, 2001
Cogeneration, energy management, and the quest for reliability

The power crisis in the western states has slowed the development of deregulation in some states. However, deregulation is here to stay. Developing new power generation and transmission capacity to meet the growing need for energy takes a long time. In the meantime, building owners and facilities managers are working with consultants to evaluate their energy needs and cooling options.

Tenants and landlords are also beginning to work together to improve facility efficiency. And, in response to the current energy crisis, interest from facilities professionals in such alternative energy technologies as cogeneration has skyrocketed.
The risk of power outages and price spikes in some markets is having a major impact on facilities managers' approach to their buildings. According to Mark Stultz, vice president of public affairs, Electric Power Suppliers Association, Washington, D.C., "Though the technology has been around for a while, now cogeneration is becoming a viable option for more and more business owners." The importance of distributed energy and cogeneration has been recognized in more than a dozen recent bills, and cogeneration is a key part of the Bush Administration's National Energy Policy Report and Climate Change Plan.

Stultz believes the threat of rising energy prices is spurring the search for more economically sound solutions. The United States Combined Heat & Power Association, Washington, D.C., is devoted to its mission to double the contribution of cogeneration to the nation's power supply from 46 gigawatts to 92 gigawatts by 2010. This group has recently formed an Energy Solution Alliance with American Gas Cooling Center and Distributed Power Coalition of America, both based in Washington, D.C., to advocate state- and federal-level action to facilitate the use of cogeneration and other thermally efficient energy systems.

One example of the increased use of cogeneration is New York City's NY CyberCenter. Developer The Durst Organization, New York City, has begun work on the NY CyberCenter, a cutting-edge facility devoted to delivering uninterruptible, cost-effective, reliable power. This cogeneration facility, which will combine data centers with office and retail space, will service tenants with dense power requirements.

"We started this project with mainly the Internet market in mind, but that market has cooled down. But the demand continues for corporate data centers," says Douglas Durst, president, The Durst Organization, New York City. The NY CyberCenter will offer 100 watts per square foot of electricity with 99.9999-percent availability of the computer-grade standard. Heat from the power-generating process will be used to produce chilled water for cooling.

The Durst Organization has a reputation for creating green facilities. "I believe being

environmentally sensitive and thinking about the future goes hand in hand," says Durst. To be designed by New York City-based architectural firm Fox & Fowle, the highly energy-efficient facility eliminates the need for uninterruptible power systems, batteries, standby diesel generators, and chillers.

"I see more cooperation between building owners and tenants to reduce demand and achieve the highest energy-efficiency possible," says Durst. Tenants, especially those with specialized, high-performance workplaces such as television production studios and data centers, are also asking more questions about reliable, affordable energy sources.

"Increasingly, our tenants look at electric power as the life blood of their business," says Michael Colacino, executive managing director, Julien J. Studley Inc., New York City. According to Colacino, mission-critical businesses with enormous power needs are more and more turning to new energy solutions, such as cogeneration, as well as conducting energy analysis.

"This recent phenomenon was driven by the situation in California. That made everybody realize it could happen here," says Colacino. Because of numerous questions from their clients, the Studley commercial real estate firm commissioned an energy study on the future of electric power and deregulation in 12 major markets. National Outlook on Power: Supply, Demand & Economic Risk dispels some of the confusion surrounding the current state of power reliability and pricing.

According to Colacino, more tenants and building owners are focusing on energy management as an insurance issue and not a facilities issue. He adds, "The dynamics have changed drastically. It used to be, 'How can we shave a few pennies off?' Now, it is, 'How much am I willing to pay to protect myself from an outage?' "

Of course, the majority of tenants do not know how much power they consume, making energy conservation difficult. Occupancy sensors, environmental controls, and other conservation systems could go a long way to minimize the energy load during peak periods. Colacino predicts that in the future more leases will be drafted to allow tenants to choose their own energy providers. Tenants and building owners will also have to factor in adequate facilities' space for backup energy equipment.
Farhad Ghahremani, president, Cogeneration Planners, Irvine CA, explains that interest in cogeneration and energy management consultation has greatly increased in building owners, especially those with 24/7 operations. "We see a lot of opportunity in cogeneration because you save a lot of fuel. If you need heat and electricity, it doesn't make sense to have separate systems," he notes.

Cogeneration Planners serves two types of clients: those with small power needs of 50 to 200 kW who can use microturbines, and larger building owners who need 3,000 kW of electricity and use cogeneration with larger turbines. Some building owners are even producing additional energy to sell back to their overtaxed local power grids. Someday, predicts Ghahremani, entire communities may be run by cogeneration.

Education on energy management and conservation options is crucial. "We go to companies who know their business very well, but are not aware of what is going on in the energy market. They depend mostly on state utilities to tell them what to do," says Ghahremani. He encourages building owners to stop hoping energy prices will decline and, instead, become more informed and proactive.

"Know thyself is the theme," says Colacino.
In this time of crises and opportunities, facilities professionals will have to re-evaluate their buildings, their cooling and heating needs, and, most importantly, their attitudes regarding reliable power. In the words of poet Heinrich Heine, "Wild, dark times are rumbling toward us." Proper management of energy resources will make all the difference.

It's not news that the United States' incredible economic growth during the past decade has dramatically increased the need for electric power. Nor is it news that the development of new power plants and transmission systems has lagged behind our growing energy needs. What is news is that facilities professionals are beginning to reconsider their approach to energy management and heating, ventilation, and air-conditioning issues.

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