Supply and Demand: The push to understand building energy use | EXPLORE→

How Energy Forecasting Saves Money and Resources

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As our cities grew over the years, so has our reliance on energy in order to provide the comfortable and well-lit buildings inside them. The building sector’s energy consumption has risen dramatically in recent years, owing mostly to population growth and the need for increased residential and commercial space. Just a few years ago, the U.S. Department of Energy found that the buildings sector accounted for about 76 percent of electricity use, 40 percent of all U. S. primary energy use, and all the greenhouse gas emissions that go with it. Suffice to say, reducing energy consumption in buildings is vital in order to meet decarbonization goals, not to mention lowering energy costs for building and energy managers and tenants. 

As 2030 inches closer and we race to hit emission reduction targets, there are tremendous opportunities to improve energy efficiencies. When it comes to buildings, the topic of energy performance is a huge concern of property owners and managers because it equates to cost. Since such a huge chunk of the energy supply goes towards commercial buildings like the schools and offices people frequent on a daily basis, it’s easy to grasp how much money and energy can be saved when our buildings are as efficient as possible. It just so happens that the best strategy to achieve energy efficiency in buildings is through something called “forecasting.” Simply put, energy forecasting is the practice of using statistical data to predict consumption levels and corresponding utility expenditures for both the short and long term.

With the rise in building energy efficiency research and solution development, building energy forecasting has gained traction. Advancements in sensors and software have now enabled the grid with the ability to predict it. By strategically consuming energy based on usage predictions and external conditions buildings can be more profitable, more efficient, and more sustainable. Forecasting a building’s energy usage can serve as a preliminary assessment tool for facility managers and building automation systems to identify any differences between projected and actual energy consumption. In order to forecast energy demand, facility managers, and building commissioning projects use accurate energy consumption projections to adopt energy-saving strategies and improve the operations of chillers, boilers, and energy storage devices. 

Essentially, forecasters aim to understand how customers react to prices, weather, climate change worries, and personal economic conditions on an hourly or monthly basis. Forecasters try to predict how customers will use energy and then organize utilities’ operations accordingly. They also consider new elements like energy management software and concerns about electric vehicle recharge.

It’s better if you don’t peak demand 

Energy pricing is heavily reliant on supply and demand economics. In a perfect world, at least in the context of a traditional power grid that continuously generates and dispatches electricity, we would require the same amount of power throughout the day. Unfortunately this isn’t the case. Each day, electricity demand cycles into periods of low and high demand. Early in the morning, when most people have yet to crawl out of bed, the power demand is relatively low. But during the hustle and bustle of the afternoon, when most people are switching on lights, tinkering with thermostats, or typing away at their computers, there’s a spike in power demand. This peak interval is usually between the hours of noon and 6 p.m., according to the U.S. Energy Administration. The demand for power drops as we ease into the evening, when we power down our devices and tuck into bed. Fluctuations in power demand are also affected by what day of the week it is. Energy consumption during holidays and weekends is usually much less compared to energy consumption on a given weekday since many businesses are closed, and therefore don’t need nearly as much power. 

Peak power demand intervals prompt utility companies to designate peak and off-peak hours to determine how they price their energy plans for their customers. Prices of energy are higher when demand is higher, so energy usage during peak hours would be subjected to surge pricing. Conversely, energy consumption during off-peak hours would be fairly cheap in comparison. That peak/off-peak principle might tempt a handful of extremely frugal facility managers to avoid power usage during peak hours altogether, but unfortunately that’s not possible. Businesses typically operate during the daytime, so people need electricity during peak hours. 

There are a variety of factors that contribute to what makes energy consumption predictions for an individual building. “The goal is to forecast consumption accurately,” said Tam Nguyen, Senior Consultant of Integration, an IT services management company ​​specializing in analytics and SAP technology for the utilities and energy sector. According to Nguyen, those factors include “historical building consumption data, historical weather data, and weather forecast for one or a few places geographically close to the building.” Nguyen also mentions that calendar data (as in identifying working and off days), and meta-data about the building, like whether the building is a retail or office space, is also relevant. 

It’s now or weather

Weather is by far the main external factor affecting energy consumption, especially once you realize that 35 percent of the total energy consumption in a building is gobbled up by its HVAC system. Sudden drops in temperature prompt building occupants to turn up the heat, which draws in more energy that the building must consume. The same could be said during scorching heat waves when building occupants need to crank up the air conditioning to cool down. Energy efficiency by way of forecasting is intended to be a means for buildings to solve the problem of climate change, but in an ironic twist, wild shifts in weather pose the biggest obstacle to energy efficiency. 

You might be surprised to find out how much of energy optimization comes down to thermodynamics. While energy forecasting is primarily focused on finding areas of energy consumption that can be trimmed down, “one thing that can never be compromised is the occupant’s health and comfort,” according to Faisal Sihabudeen, Senior Building Analyst at Peak Power. That said, energy forecasting plays a role in taking advantage of a building occupant’s perception of temperature, which, according to Sihabudeen, is a common strategy that any building can employ.

For example, let’s take a sweltering day where it’s 90 degrees outside, and you walk into a building that’s maintained at a cool 72 degrees. Even though 72 degrees is a fairly moderate temperature, you feel like you’ve slipped into a tundra because you are stepping away from an environment that’s extremely hot. “In those instances,” explains Sihabudeen, “we actually advise the building operators to relax their indoor temperature set points and allow the indoor temperature to warm up by a degree or two. It sounds counterintuitive because you’re essentially making the space warmer in the summer, but because the occupants are coming from the outside environment where it’s so much hotter, they don’t feel the discomfort of abruptly shifting to a drastically different temperature.” Sihabudeen went on to say that this strategy is especially effective in retail spaces or common spaces where the occupants are transient.

Again, a building’s HVAC system takes a formidable chunk of the total energy consumption of a building, so following the counterintuitive temperature principle is going to result in massive savings in both cost and energy consumption. When there’s a sudden change in temperature outside, like when a swift rainfall brings the temperature down 15 degrees, energy forecasting technology can adjust the building’s HVAC setting in real-time in order to keep costs and energy consumptions down. This keeps money in the budget and spares building occupants undue discomfort, all in the name of energy efficiency.

When it comes to optimizing building management, forecasting enables facility managers to schedule certain tasks to coincide with peak or off-peak hours to spread energy use as evenly as possible throughout the day. This strategic planning reduces energy load during peak hours, when power is most expensive, reducing energy costs and maximizing savings. Energy forecasting is unique to each building because of factors like geographic location (as distance from a power source has a direct impact on energy costs), the ongoing weather outside the building, and the building’s function (whether or not it’s an office building, a retail space, a multifamily unit, etc.). So facility managers need to be proactive with energy forecasting to devise the most efficient way to maximize their financial savings as well as lower their carbon footprint.

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