With more than 10 million cases of produce passing through its facilities in any given year, Guadalupe Cooling Co. finds the answer via demand response.

By Andrea Estrada

Based in the town of Guadalupe, about 50 miles north of Santa Barbara, CA, Guadalupe Cooling Co. adds shelf life to lettuce, broccoli, celery, strawberries, and a host of other fruits and vegetables grown on the central coast, by cooling them quickly and keeping them cold until trucks arrive to transport them to grocery stores and supermarkets around the country.

Keeping so much produce on ice takes a lot of energy, according to plant manager Danny Vincent, and, next to payroll, the electric bill is the company’s biggest expense. So when Seattle, WA–based Powerit Solutions suggested a way Guadalupe Cooling could reduce its energy costs without impacting productivity, Vincent was all ears. Even more intriguing was the idea that Pacific Gas and Electric (PG&E), the company’s energy provider would pick up the tab—in this case, $270,000.

Last December, Powerit Solutions installed an Energy Director Intellekt system that would allow Guadalupe Cooling to manage its overall energy consumption in a very precise way, and make adjustments within peak demands and limits. In return for PG&E’s financial support, Guadalupe Cooling signed on to a Direct Response program and agreed to decrease its own energy usage when PG&E was experiencing periods of extreme demand.

“Demand response is hypercritical to utility companies, because energy is so expensive,” says Bob Zak, president and general manager of Powerit Solutions. Powerit Solutions is a leading provider of intelligent demand control/demand response technologies for industry. Their systems provide an innovative solution for managing energy usage during periods of peak demand, and, thereby, save utilities and their industrial customers millions of dollars each year.

Utility companies, such as PG&E and Southern California Edison put a lot of effort into predicting what assets they must put in place, so a constant supply of energy is available to their customers. Occasionally, as Californians know from recent experience, supply doesn’t match the demand. When that happens, utility companies are forced to tap into additional—and costly—resources. In general, they have a couple of options, both of which are expensive: they can buy energy on the spot market, or they can keep generator plants on stand-by, and fire them up during periods of excess demand, or maintain spinning reserves, in which they get generators going in anticipation of increased need.

“With demand response, they bring together enough customers who have promised to decrease their own energy usage during these periods of excess demand,” Zak explains. “Added together, their conservation can equal enough power to match what other sources would provide; it’s a completely green solution. You’re not using more energy to make up the difference; you’re reallocating what’s already in use.”

Demand response programs are sprouting up all over the country, according to Zak, and, in California, incentives were created to encourage greater participation. For example, if a business agrees to a minimum level of participation, the utility company will pay for the equipment necessary to automate—and simplify—that business’s response. “These incentives are getting people off the dime, and they’re signing up for significant kilowatt savings,” Zak says. “If a business can demonstrate its demand response capability, the utility company will cover the cost of the equipment. That’s how Guadalupe Cooling got their entire system paid for.”

In addition to Guadalupe Cooling Co., Powerit Solutions customers include: Gallo and Paul Masson Wineries, Pacific Steel Castings, Frito Lay, Versacold, San Jose Mercury News, California Steel, and Patterson Frozen Foods. Powerit has recently been retained by Constellation Wines US, the world’s largest wine producer, to implement an expansive demand response system at two of their wine-production facilities, in California. The company has more than 600 installations worldwide.

Industry is the largest consumer of power in the United States, and, according to the 2005 Energy Information Administration Annual Energy Review, it used 29% of US electricity and 37% of US natural gas during that year. It consumed more energy than the entire economy of any other Group of Eight nation.

Given a choice, a utility would rather support conservation, and intelligent, reliable management of demand, than build additional power plants. Utilities in the US are concerned about their ability to meet instantaneous demand requirements of energy users. This relates to both the distribution capacity—i.e., infrastructure investment—required to serve the peak demand of any given customer, and also the capacity to serve communities of customers during peak usage periods, such as the middle of the day and during seasonal periods.

Utilities have limited and expensive options available to them as they try to meet these additional demand requirements. They can either build new, permanent power plants or temporary standby power plants, or they can buy incremental capacity in the wholesale market—all of which are expensive propositions. A more efficient—and greener—solution is to find ways to reduce demand during times of peak usage. These include financial assistance programs designed to help customers install technology solutions that create efficiency. In some cases, the end user is able to implement systems that take a substantial amount of kilowatts off the grid, and the cost of the technology is paid for by the utility.

“We intend to use the system on a daily basis,” Vincent says. “We’re intending to get daily savings of power. Flexibility designed into systems, such as Powerit Solutions’ Energy Director Intellekt, make such daily use possible. We’re a commercial cooler, which means we don’t own any of the produce we process and we don’t have any control over the harvest.” Vincent continues, “There’s no way for us to turn off the flow of produce coming into the cooler. So, we’re starting at 7:30 a.m. and peaking around noon. We stay at that peak for a while. We need a system like this to manage as efficiently as possible during the worst part of the day.”

Agriculture and food processing involves hundreds of energy-intensive operations. Because food products are perishable, many operations can’t shut down completely without having a significant negative impact. Energy Director offers an intelligent energy-demand management system, that automatically predicts, regulates, and lowers peak demand for industries without compromising the operation of connected equipment. It also provides a mechanism for users to respond to utility demand response needs, by automatically shedding loads according to a committed kilowatt level and their own load-shedding rules.

“There is only so much you can do by manually shutting down loads,” Zak says. “You don’t really have any idea of exactly how much you’re shaving. Our Energy Director system intelligently monitors all energy loads in real time within the plant and strategically changes their run status.”

This allows customers to save hundreds of thousands of dollars in peak demand charges, and, more importantly, it allows them to participate in their utility’s demand response programs. These savings offset most or all of the costs of installing our system. “Typical paybacks are way below two years,” Zak continues. “For companies, it’s a great investment. In a number of cases, the systems have paid for themselves in less than six months, based on the income they receive from their participation in a demand response program, or savings they receive from reducing peak demand charges.”

Powerit’s Energy Director creates ongoing reductions of 10% to 40% (20% on average) in peak demand charges, corresponding to a 7% to 15% reduction in overall electricity savings. The peak energy savings alone create a typical return on investment period of only six to 24 months. Vincent sees the system as a win-win proposition for both his company and the state of California. “The Powerit system does not affect production, and that’s the key,” he says. “It allows us to manipulate specific areas of our choosing at specific times. We’ll use it every day to cut our electrical costs, and we’ll use it for demand response when the State needs our help.”

According to Vincent, Guadalupe Cooling will go on a 30-minute plan, which means that he’ll get a demand response call 30 minutes prior to the time the utility needs him to take a certain number of kilowatts offline. “On the day of the problem or demand response, I’m going to know exactly what our load is and we can shut down a certain cooling item,” he says.

Guadalupe Cooling uses three cooling processes: ice injection, vacuum, and pressure. “The decrease can go from one piece of equipment to another during the period of the response,” Vincent adds.

“Guadalupe has tried to respond manually, but it’s too tricky,” Zak says. “The system, however, makes automatic decisions about what to shut down. Say Danny wants to achieve 500 kilowatts in reduction. He’s entered into the system what the everyday constraints are for that load. The system will use everything that’s available, up to those constraints, to cut down as much as possible. Depending on what produce he’s working with, he might need to take a certain piece of equipment out of the equation.”

Powerit Solutions brought the energy director technology to the US from Sweden in 2003. The energy management system relies on a combination of hardware and software. “The hardware is a necessary component, because there are electrical consuming loads involved and it’s necessary to interact with them,” Zak says. “No facility is either zero-percent automated or 100-percent automated. There’s going to be some combination of interfacing our system with an existing system, as well as connecting to loads that have no automation.”

Algorithms built into the software take real-time information from the meter and predict peak activity, and, hence, peak energy use. Rules can be assigned, that determine when and where energy usage can be decreased. At Guadalupe Cooling, for example, Vincent can take into account the kind of produce that’s being cooled at any given time, and identify which processes can be limited to achieve a kilowatt reduction.

“Trying to manage it manually is too difficult,” Zak says. “In a commercial building, you can make assignments as to what will be turned off to meet demand response. But in an industrial building, you can’t do that. What might have been critical last week isn’t this week, and vice versa. You can’t have a fixed system. It has to adjust to load requirements. We can set up demand response scenarios based on price or other factors.”

As to ease of use, Vincent likened system operation to, “a complicated light switch.” “A person trained in operating the system is only turning on and off light switches,” he says. “It’s like a garage door opener. It’s a complicated system, but, as long as it’s programmed correctly, all you have to do is push a button and it works.”

When Guadalupe Cooling installed its energy director system, Vincent joined an aggregator—in this case, EnerNOC (Network Operations Center). EnerNoc uses its network operations center to remotely manage and reduce electricity consumption across a network of commercial, institutional, and industrial customer sites, and make demand response capacity and energy available on demand to grid operators and utilities.

Signing up with an aggregator means his company has made a commitment to participate at a certain level during when PG&E calls with a Direct Response situation. “They’ll pay you a small amount just to be available,” Zak says. “Every month you’re earning money. When an event is called, you shut down our required amount and give it back to the utility. Once you’ve successfully done that, you earn a certain amount of money based on your compliance during the event.”

The value offered by aggregators is financial flexibility. If an event is called, but a member simply can’t participate for some reason, it won’t incur a penalty. If a business signs directly with a utility, but doesn’t participate in a called event, it can be charged a fee. Of course, businesses that belong to aggregators, but don’t comply in direct response situations, will find their memberships terminated, or, at the very least, not renewed. “Say you’ve made a commitment of 300 kilowatts,” Zak continues. “If you get 24 hours notice, you can look at your production level and other factors, and decide how much productivity you’re willing to cut into. You don’t have to shut down production, just dial it back for a while making sure the overall reduction is 300 kilowatts.”

Although Powerit Solutions has focused on industrial clients—and any industry is a good candidate—its energy director systems are applicable to any commercial operation. “Our technology happens to be well-suited for industry,” he adds. “We do a lot of food processing and foundry works. We’ve also done skating rinks and saw mills.”

In the US, Powerit Solutions has systems in place in California, Washington, Colorado, Ohio, Indiana, and Missouri. Systems also are in place in Canada and Mexico. “Our basis or operation has always been industrial,” Zak says. “You go into any manufacturing place, and they’ll tell you, ‘Our industry is very competitive. We have to watch costs and can’t afford to reduce productivity.’ That’s applicable no matter what they’re running. They’re heavy, intense users of electricity.”

As cool as energy savings sounds, and as green as they may want to be, businesses are measured on their profit margin, Zak adds, and how many widgets they put out. If they can put out the same number of widgets, spend less money doing it, and help conserve energy at the same time, everyone wins.

Frequent Contributor, Andrea Estrada submits technical articles to FORESTER MEDIA, INC..

DE - May/June 2008