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To Cool Buildings More Efficiently, We Turn To An Ancient Technology: Ice

As we settle into winter, many of us may not be thinking of air conditioning in the Northern Hemisphere. But with labor shortages and supply chain snags still abundant, upgrades to cooling systems need to be planned months in advance. 

But for commercial real estate owners, a considerable portion of energy consumption in buildings is driven by air conditioning on the hottest days of the year, so cooling is something they need to plan for year-round. A large share of this energy in commercial buildings is sucked up by chillers that cool down the water and pump it throughout a building to lower temperatures. This very energy-intensive process makes it more challenging for building owners to reduce energy use and carbon emissions.

Energy consumption for cooling buildings has doubled worldwide over the past two decades as the world has warmed, according to the International Energy Agency. Air conditioners and electric fans account for about a fifth of total energy usage in buildings globally. In the decades ahead, air conditioning is poised to be one of the most significant drivers of global energy demand.

One of the best ways to provide a more efficient and climate-friendly approach to cooling buildings is through thermal energy storage. This is a technology that stores energy at a particular time and then makes it available later. Now engineers are finding ways to use ice for thermal energy storage as an attractive alternative to reduce the cost and carbon emissions of air conditioning dramatically.

Energy savings, on the rocks

Ice thermal energy storage has been around for centuries, and like many renewable energy technologies, it’s getting a second look today amid increased pressure on real estate owners to lower carbon emissions. The technology isn’t very complicated to understand when you break it down. A form of ice energy storage we can all comprehend is making ice cubes in a freezer to use in our drinks on a hot day. Buildings can also create and store ice at night that’s used the following day to cool buildings (instead of drinks).

The main benefit of ice storage is shifting electric consumption to off-peak hours and reducing peak energy demand. Ice storage takes advantage of cheaper off-peak electric rates and significantly reduces cooling costs. Ice thermal storage systems also provide additional cooling capacity for commercial HVAC systems. The ice tank is charged and placed on standby, waiting to discharge during high energy demand periods like sweltering summer days. They can also be a backup to critical systems, an energy resilience benefit in facilities like hospitals and data centers that often need uninterrupted power supplies.

Several companies offer ice thermal energy storage technology, all working around the same premise. The systems convert water to ice using energy at times of low demand, like at night, or when there’s a surplus of energy from renewables like wind or solar. During the daytime, the system discharges the energy by melting the ice and pumping cold water throughout the building until temperatures drop in the evening. The storage systems relieve the electric grid from the high energy demands of AC and lower energy costs for building owners. They also offer a storage solution for excess renewable energy that may otherwise go unused. Storing extra renewable energy is vital for balancing out the intermittent nature of it, such as wind, which often generates the most energy during the evening.

Most existing ice storage technologies today are based on tanks that use a tech called ice-on-coil. Since these tanks are so large, they can’t easily be retrofitted into most existing buildings. One recent innovation in the field is modular, Lego-like tank designs that enable putting the systems into existing buildings. They’re spread flat on a roof or along the side of a parking lot. Retrofitting and putting these systems into existing properties is vital since only about 1.5 percent of commercial real estate is new builds. More modern ice energy storage systems are controlled and monitored via energy management systems. This makes it easier for building owners to take advantage of computer modeling and analytics to respond to fluctuations in energy demand.

The price of ice energy storage systems depends on their size, though they can be expensive. Many large retrofit projects, including the installation and all system components, will start at around $1 million. However, it’s important to note that financing options and energy reduction tax credits can help shave off some of the costs. The return on investment can also be attractive in many cases. For example, energy storage systems in California typically pay for themselves within five years. Tax credits from the recently passed Inflation Reduction Act can also cover up to 40 percent of the total system cost.

A brisk market

Ice energy storage is already helping one of the world’s biggest corporate occupiers, Goldman Sachs. Since at least 2014, Goldman Sachs’ headquarters in New York City has maintained one of the country’s largest thermal energy storage systems, making about 1.7 million pounds of ice every night. Goldman runs chilled antifreeze through pipes connected to 11-ton tanks at night to freeze water inside when energy costs are lower. The company says the technology has made its 43-story HQ building about 30 percent more energy efficient, saving them $50,000 per month on summer energy bills.

Ice energy storage is popular with financial firms other than Goldman. Morgan Stanley uses an ice energy system at a location in New York’s Westchester County and another at the company’s 5th Avenue property in NYC. Credit Suisse cools its offices in the MetLife tower with 64 ice tanks and has considered installing the systems at its office locations worldwide. Ice energy storage is generally better suited for large corporate occupiers and properties with high energy demands. Because each ice tank ranges in cost from $15,000 to $30,000, the systems can sometimes be a hard sell for property owners. Estimates are that ice energy storage accounts for only about 1 percent of the U.S. air-conditioning market, with about 4,000 ice storage systems in America and 8,000 worldwide.

Despite the promise of the technology to lower energy bills, some companies specializing in ice energy storage have faced financial troubles in a relatively niche market. Ice Energy was one such company in California that developed a product known as the “Ice Bear” system for small to mid-sized commercial properties. Founded in 2003, the company seemed to have a bright future and even developed a version of the Ice Bear for single-family homes. Ice Energy won 16 contracts with Southern California Edison that paid enough to offer its product to commercial and residential building customers for free. However, in December 2019, the company filed for Chapter 7 bankruptcy, an abrupt change of fortune in which it chose to liquidate its assets rather than try to exit bankruptcy.

How Ice Energy ran out of money still isn’t very clear. The company’s assets were liquidated and acquired in 2020 by Thule Energy Storage, which has continued manufacturing the Ice Bear technology. This process isn’t uncommon, as storage tech companies tend to go broke and reappear in a different form. Nevertheless, the bankruptcy of one of the ice energy storage industry’s biggest providers highlights how the technology still hasn’t quite caught on. Even when utility contracts pay big money, finding customers and funds can be challenging, and convincing building owners to modify their HVAC systems isn’t always easy.

A safer alternative to batteries

Even if the business landscape for ice energy storage is challenging, many are calling for increased investment in energy storage tech. Making renewable energy easier to access when there’s not enough sun or wind is a critical goal for maintaining energy security and flexibility and lowering carbon emissions. Storage makes it much easier to rely more on renewables. Lithium-ion batteries are an obvious choice for storing surplus energy, but more options must be available. The International Energy Agency stressed in its 2050 roadmap to fight climate change the need to accelerate the development of forms of energy storage other than batteries. Ice-based thermal storage could be one of these options.

Some have also raised concerns about batteries, including building owners. “Building owners and operators are rejecting lithium-ion batteries due to safety concerns, dwindling availability, and rising costs,” said Yaron Ben Nun, Founder and CTO at Nostromo Energy, a company that provides ice-based thermal energy systems. “Ice-based energy storage offers a sustainable and safer alternative to batteries.” Lithium-ion batteries in small electric vehicles like scooters have caused an epidemic of fires in New York City recently. According to the NYC Fire Department, there were about 200 fires and six deaths attributed to batteries in the city in 2022. In November, an electric bike fire inside a Manhattan apartment became an inferno that injured nearly 40 people.

Ice-based storage could offer a safer alternative to building owners looking to reduce air conditioning costs and energy consumption. Building owners will need more energy storage tools to get the most out of renewables and help with the pesky challenge of decarbonizing air conditioning. Ice-based thermal energy storage has been around for decades and hasn’t had much market penetration, but it’s there as an option. The hottest days of the year will be here before we know it, and we’ll be talking about air conditioning again. Ice thermal energy storage may enter more conversations about ways to ensure AC units keep us cool without eating up too much energy.

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