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Intelligent HVAC benefits for demand response and peak load management

Oct. 30, 2023
The application of smart technologies in energy consumption can support building owners, utility companies, and the grid.

A smart HVAC system can track, measure, and report on occupant energy use in or at near real-time and predict future energy use. These features make it a valuable tool in utility companies’ demand response and peak load management strategies. Here are eight ways intelligent HVAC systems can facilitate energy efficiency for both owners and utility companies.

1. Energy conservation

The most obvious benefit of using smart HVAC systems for demand response and peak load management is saving energy. HVAC systems are responsible for 40% of building energy consumption. Smart and connected thermostats can measure and report energy usage directly to the utility. During peak demand, the HVAC system will automatically tweak temperature settings. A smart HVAC system can generate reports to show customers how much energy they are using and when. These insights can inspire people to change their energy consumption habits and reduce waste.

Because most utility companies in this country currently source energy from fossil fuels, conserving energy will lower carbon emissions. It can also reduce the need to build new standby energy plants or continually maintain outdated ones.

2. Financial savings and incentives

Customers can benefit from demand response and peak load management in two ways. First, using less energy directly lowers electricity bills. Second, many utility companies offer incentives to customers who use less energy. These financial incentives have been crucial for growing customer participation. For example, customers who let South Dakota’s Xcel Energy turn off their air conditioner for brief periods—generally 15 to 20 seconds—during peak demand can save an average of $300 annually on electricity.

Intelligent HVAC systems can notify owners when to reduce their energy use, letting them decide if they want to turn off their heater or air-conditioning. Alternatively, these smart systems can shut off the energy load automatically or allow the utility to turn them off remotely during peak load hours or emergencies. Instituting rolling blackouts during a storm, for example, can prevent a total grid failure.

The automatic shutoff feature is handy for customers who do not want to manage their HVAC system manually, minimizing the guesswork in energy management.

3. Grid stability

Commercial buildings accounted for 18% of total energy consumption in 2021, representing a strong market for change. As mentioned, reducing energy use can significantly alleviate strain on the electric grid and reduce supply interruptions and losses.

If the algorithms run by the utility or smart HVAC systems sense a forthcoming grid failure, power companies can quickly notify demand response participants to reduce their load. The software also lets utility companies switch to on-site generation or backup power should the need arise.

A stable grid fosters customer loyalty and trust. Importantly, it also protects people during extreme weather events, keeping HVAC systems, refrigerators, and critical medical equipment in operation.

4. Code compliance

Smart HVAC systems make it easy to track and manage energy use, helping owners comply with building and energy codes, which often reference ANSI/ASHRAE/IES Standard 90.1-2019 for Sites and Buildings Except Low-Rise Residential Buildings. Codes will only become progressively more stringent as technology advances; installing smart HVAC systems now can help avoid a future retrofit should the project be renovated again, saving time, money, and materials.

5. Facilitating demand response and peak load management

By tracking user data over time, smart HVAC systems can make valuable predictions about energy use, giving utility companies time to implement demand response and peak load management strategies. Their role in energy conservation will only continue to grow in the coming years.

6. Predictive maintenance

Unlike preventive maintenance, predictive maintenance does not occur on a set schedule. Instead, it relies on AI or IoT sensors to predict when a device is due for service.

Smart HVAC systems can detect problems early, allowing homeowners or utility companies to service equipment before a problem occurs. Predictive maintenance can reduce downtime, wasted energy, and unnecessary expenses. It saves money for utility companies and homeowners alike.

7. Support for renewable energy and EVs

Wind and solar energy are growing in popularity, producing 12% of global energy in 2022. Adjusting energy consumption to match intermittent wind and solar availability makes it easier to integrate renewable energy into everyday use.

Demand response programs can inform homeowners with on-site renewable energy generation and storage technologies about when to store, sell, or use their energy. They can also help schedule EV charging during lower-cost, off-peak hours.

8. Promotion of energy storage tech

As part of a network of 14.4 billion active IoT devices, smart HVAC systems use predictive technology to shift load consumption to optimal times. As such, they can promote energy storage technologies—like vehicle-to-grid storage—that provide backup power to the electricity grid, essentially functioning like a battery storage device.

About the Author

Emily Newton, Grid Media Services, LLC

Emily Newton is an industrial and tech journalist passionate about how technology is revolutionizing each sector. She has been writing and editing professionally for more than five years and is the editor-in-chief of Revolutionized.

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