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In the Loop for Energy Savings Hamilton Opts for District Cooling for Downtown Facilities
October, 2008
By Barbara Carss
Coinciding schedules for replacing the chillers serving major municipal facilities presents the City of Hamilton with an opportunity to develop a district cooling system that could enlist private sector customers in the future. Hamilton City Council recently endorsed an $8.5-million, three-stage project that will begin this fall with installation of new high-efficiency chillers at the downtown central utility plant (CUP).
A short cooling loop already connects the CUP to the nearby performing arts venue, Hamilton Place, the Hamilton Wentworth District School Board headquarters and a provincial government building for which the City is contracted to supply cooling. The second phase of the project, set for 2009-10, will extend that underground loop to six other public buildings and link into the revamped cooling plant at Copps Coliseum, which will serve as the other anchor of the district cooling system.
Ultimately, 11 chillers will replace the 14 now in operation, and obsolete equipment will be removed from City Hall. The district cooling system is projected to use 41% less energy than the chillers it replaces, resulting in $181,000 in annual savings and a 556-tonne yearly reduction in carbon dioxide (CO2) emissions.
"It falls perfectly in line with what we are trying to accomplish with our corporate energy policy," says Geoff Lupton, Manager of Energy Initiatives for the City of Hamilton. In 2007, City Council set a target to reduce energy consumption in municipal buildings and facilities by 20% by 2020.
Municipal facilities operators also look forward to the centralized system's redundant capacity to provide cooling even if a chiller is taken out of service. "That's a big bonus for us because we had a case a few years ago when the chiller quit at Copps Coliseum just when a big convention was coming into town," Lupton recalls.
Capital costs are expected to be about $1.5 million more than for simply replacing existing chillers in situ, with most of that extra cost related to building the underground loop to carry the chilled water to its various destinations. Factoring in the annual gain in energy savings from the district cooling approach and potential capital grants of up to $500,000 from the Ontario Power Authority, Hamilton's local electricity/water utility, Horizon Utilities Inc., and the Federation of Canadian Municipalities' Green Municipal Fund, City administrators project a six-year payback, at maximum, on the incremental extra cost of the system.
REFRIGERANT PHASE-OUT FORCES DECISIONS
Looming deadlines for the elimination of chlorofluorocarbons (CFCs) and phase-out of hydrochlorofluorocarbons (HCFCs) also helped make the business case. Owners of chillers still using the CFC refrigerants R-11 and R-12 have little more than two years to come up with an alternative as the January 1, 2011 deadline for a total prohibition rapidly approaches.
Meanwhile, Canada's Ozone-depleting Substances Regulations, 1999, also set a schedule for a phased reduction of HCFCs entering the marketplace, gradually moving toward a prohibition of the manufacture and importation of almost all HCFC refrigerants by January 1, 2020.
January 1, 2010 heralds new restrictions that will cut the previously allowable amount of HCFCs by nearly 47% - representing a 65% reduction from the available volume on January 1, 1996. In addition, cooling equipment that uses one of the more prevalent HCFC refrigerants, R-22, can no longer be manufactured in or imported into Canada as of that date.
All but one of the existing chillers in Hamilton's downtown facilities are more than 30 years old so replacement now makes more economic sense than refurbishing them to switch over to another refrigerant. A 10-year-old chiller at City Hall will be removed and installed in another municipal building in the future, but this will be less disruptive than it might otherwise have been since a major renovation is underway at City Hall, and Council and staff have vacated the building until at least 2010.
"The timing with construction of the district cooling system will work out quite well," Lupton notes. "We will have the pipe at the doorstep when they need it."
City officials have now opted for chillers that use the R-134a refrigerant, which doesn't have a stipulated phase-out date. They also foresee potential customers beyond the initial nine municipal facilities from both existing buildings and new development.
"Hamilton has quite an old core, just like Toronto does, that has a lot of people within the area trying to figure out what they are going to do with cooling systems," Lupton says. "When we did the design for the piping system, we wanted to make sure we put in a large enough pipe so it would give us capacity for future opportunities. Once we get our basic system in, expansion can really be driven on a case-by-case basis."
PROSPECTS FOR EXPANDED CUSTOMER BASE
The timing is not so expedient for one of the city's largest commercial landlords, however. "We just put new chillers in our buildings and upgraded for energy efficiency so we wouldn't receive any benefit at all from switching," reports David Blanchard, Vice President of Wilson Blanchard Management Inc., which oversees approximately ?-square-feet of space in several office buildings in downtown Hamilton. "For building owners who haven't done work recently, it would probably make some sense."
Proposals for a new district school board building, downtown hotels and the redevelopment of a long abandoned heritage property known as the Lister Block are counted among prospective new projects that might eventually link into the district cooling loop. Although actual new development is currently scant, industry experts suggest it should be an easy market for district cooling providers to crack.
"If I were building new, my default would always be to outsource everything I can. Why buy a chiller if you can buy chilled water through pipes just like your gas?" observes Ted Aldcroft, a Senior Operations Manager with a major Toronto office tower and a member of the board of directors of Refrigerant Management Canada, the Extended Producer Responsibility
Organization for the disposal of ozone depleting substances. "For a brand new building, the decision should be already 75 to 80% weighted to outsourcing it. With an existing building, the question becomes: how much am I going to save by outsourcing it?"
Since chillers typically have a service life of more than 30 years, very few owners would opt to abandon one at an earlier stage of its lifecycle. When replacement is required, decision makers would have to project the long-term costs of an in-house chiller versus a contract for chilled water supply.
For cooling providers - and their customers - plants with associated reservoirs or storage space in close proximity to the cooling load are particularly well positioned to take advantage of low electricity costs during off-peak hours. Ice can be made and stored overnight then used during the day when electricity prices typically rise.
"Occasionally generators of electricity will offer to supply off-peak power to the Independent Electricity System Operator at a rate that is less than one cent per kilowatt-hour - a benefit that is automatically passed on to the end user. That would result in low operating costs for a central plant that is designed to take advantage of those off-peak rates," Aldcroft says. "Where the negative side is, is in the energy required to move energy. With chilled water, big pumps are required to move it, and the cost of the pumping to move the water to the buildings can be considerable."
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