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Solutions for reducing facility electricity costs


Managing the costs associated with electricity consumption is becoming more difficult in the aged care and retirement living sector but there are some key ways to manage these costs without sacrificing comfort, writes Aaron Lei Liu.

Electricity is an essential service in the 21st century, but managing the costs associated with it is becoming more difficult. Aged care and retirement village communities are not immune from these challenges. For example, electricity prices in Queensland increased about 7 per cent per year between 2010 and 2015.

Aaron Lei Liu

To understand and solve these challenges, we studied a ‘typical’ aged care and retirement living facility in the Brisbane region.

The facility’s community building includes a dining and activity hall, kitchen, kitchenette, bathrooms, small activity and meeting rooms, offices and a swimming pool.

The monthly electricity bills for these communal facilities consist of a monthly consumption charge in kWh, which denotes how much electricity was consumed. And a demand charge in kW or kVA, which is the rate at which the electricity was consumed every half hour with the cost based on the highest 30 minute rate per month.

The rate at which electricity is consumed is very important because the design and construction of electricity transmission and distribution infrastructure – from generators to transformers to wires – is based on the peak demand. Managing peak demand can be a key solution to managing overall electricity costs.

How can communities manage peak demand?

Challenge one: understand the weather and its impact on electricity usage

Hot or cold days often result in residents using air conditioners or heaters to stay comfortable, however these items are large power consumers. For this community, peak demand was higher in summer than in winter, and was much higher on extremely hot days compared to normal summer days.

The increase in duration and intensity of heat waves (resulting from climate change) will tend to make this situation worse, as seen in this past summer. We need to understand the impact of hot weather on people, buildings, the electricity network and our budget.

Challenge 2: understand the impact of time of day on electricity usage

Data analysis of this Brisbane aged care and retirement community shows that over a four-year period, 82 per cent of daily peak demand occurred in the late afternoon between 4:30pm and 7pm. This is despite the main meal being cooked and served at lunch time.

This community’s peak time is highly correlated with regional and state peak demand timing and has a strong impact on the national electricity market and hence prices. Therefore, reducing peak demand in this period can help reduce this community’s peak demand charge as well as alleviate pressure on the national electricity network and electricity prices in general.

Key solutions

These two key challenges can be effectively managed in both existing and new communities and facilities through operational improvements.

  1. Conduct a site energy audit to know what appliances and equipment is being utilised, what state they are in, such as new or approaching replacement, and when they operate. Ensure that non-critical appliances do no operate during peak times, for example, storage hot water systems and pool equipment. Make sure new or replacement appliances and equipment are the most energy efficient models available for the particular task, paying particular attention to heating and cooling equipment , such as freezers and cold rooms, refrigerators, cooking appliances, hot water systems, air conditioners, and pool pumps.
  1. Lift air conditioning thermostat setting by 1-2 degrees in hot summer days. This option does not need any financial investment and it is the easiest to implement. It is also unlikely to negatively impact on occupant comfort and will reduce cooling demand. It can also reduce health risks for older people. Japanese scientists have found that older people have large blood pressure changes when exposed to significant changes in temperature, for example when walking from a hot outdoor environment into a cold air-conditioned community centre on hot summer days. Make sure doors and windows are closed if the air conditioner is operating, ensure unoccupied rooms are not cooled, and precool a building before peak time, for example 1-2 degrees colder than generally required, then switch it off during peak time.
  1. Check the community and residential buildings to ensure they are highly insulated, particularly the roof and ceiling. Insulation, roof colour, type of glass and shading can all impact on how hot, or cold, a building gets, and therefore how much cool or heat you have to buy to be comfortable. Improving the building can reduce electricity demand costs and consumption costs (kWh) as well as lead to actual long-term financial, health, social and environmental benefits.
  2. Solar photovoltaic (PV) panels can be good options for reducing energy consumption charges (kWh), however they do not generally help reduce late afternoon or early evening peak demand. While battery storage could be used at this time, its viability requires getting the timing of the battery charging and discharging right. A recent trial by Queensland power distribution company Energex revealed that without proper control, batteries may not add any financial saving. A robust control method should ensure sufficient charging, such as from solar during the day or from cheaper off-peak electricity in the early morning, for the expected evening discharge, for example, the energy required to deliver between 4.30pm and 7pm.

Demand charges are one preferred strategy of the electricity market and governments to ensure cost-reflective pricing. They are likely to be progressively implemented to all electricity customers over the next few years. These key solutions should help your community to manage these costs without sacrificing comfort.

Aaron Lei Liu is a PhD researcher at Queensland University of Technology working on energy investment decisions in aged care and retirement living communities. He co-authored the article with QUT senior researcher fellow Dr Wendy Miller and principal research fellow Professor Gerard Ledwich.

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