Energy Sources and Systems Analysis 40 South Lincoln Redevelopment District
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Energy Sources and Systems Analysis 40 South Lincoln Redevelopment District NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. 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Meeting Community- Wide Energy Needs with Renewable Energy Sources Builders, developers, and housing authorities are discovering that using The South Lincoln Project renewable energy to generate energy and Supported by a U.S. Department of Housing heating at the community level may help and Urban Development (HUD)/U.S. both the economy and the environment. Department of Transportation (DOT)/U.S. In addition, economies of scale may make Environmental Protection Agency (EPA) community-based energy system designs partnership, the Denver Housing Authority even more attractive. (DHA) is leading the redevelopment of the city’s La Alma/Lincoln Park neighborhood Traditionally, homes and businesses (South Lincoln). The project includes have been heated and cooled building by redeveloping 270 units of existing public building. But it is often easier and more housing, along with other sites nearby. When cost-effective to design larger “district” complete, the redevelopment project will (community-wide) energy systems. encompass more than 900 mixed-income Potential buyers or renters may also find residential units, commercial and retail communities powered by renewable properties, and open space. energy more attractive, enabling builders to market their offerings as “green” and As part of the project planning, the U.S. possibly command higher revenue from Department of Energy (DOE) National sales and rents. Finally, even if it may not Renewable Energy Laboratory (NREL) worked be economically feasible to build district with Group14 Engineering of Denver to systems at the outset, using “renewable- analyze district energy systems for their ready” designs allows renewable energy potential use in the project. to be added down the line, as the costs of renewables follow their current downward trends. The analysts estimated the hourly heating, cooling, domestic hot water, and electric loads District systems have a number of required by the community; investigated advantages. They are larger, they can potential district system technologies to meet capitalize on load diversity within the those needs; and researched available fuel community, they are reliable and easier sources to power such systems. To evaluate to maintain, they can potentially attain the economic and environmental viability high efficiencies by combining electrical of each system, the team used the following generation with heating or cooling or metrics: simple payback period (SPP), net both, and they may offer the community present value (NPV), and greenhouse gas autonomy in terms of the system’s fuel (GHG) reductions. source and operation. This case study outlines the appropriate approach to evaluating any district system, and presents selected results from one such analysis—the South Lincoln Redevelopment project in Denver, Colorado (see sidebar). 1 1 Assessing Community Energy Requirements When planning community energy projects, it’s important to start by predicting the hourly heating, cooling, domestic hot water (DHW), and electric energy load and requirements. For the South Lincoln analysis, the electric load includes all building- level uses except for those associated directly with heating and cooling. This includes lighting, plug loads, and HVAC fans. Load is a measure of heating, cooling, DHW, and/or electricity a community needs at any one instant in time. Estimating the community’s load enables analysts to predict the amount of fuel expected to be used in a typical year. Peak demand is the maximum hourly demand for the entire year. For instance, peak heating demand is the amount of heating required to meet the community’s needs on the coldest night of the year. Estimating maximum demand allows analysts to determine the appropriate size of a system that can keep up with the community’s needs during peak demand periods. To begin the South Lincoln analysis, the team created building energy models to simulate the expected energy usage of each type of building in the community. These simulations predict hourly energy load and demand for each building type. Simulation results were scaled up to represent the entire community’s usage. All the building areas in the redevelopment project were represented with three models—one of the high-rise residential spaces, one of the low and mid-rise flats (both of these building types were represented with one model), and one of the townhouse units. The team used information from DHA on floor area by space use, number of residential units, and number of bedrooms. Modeling results indicated that electricity and space heating are the largest community loads, each requiring approximately 5,000 megawatt-hours per year (MWh/yr). Cooling and DHW require approximately 2,500 MWh/yr apiece. The team’s results showed that space heating and DHW together represent the dominant thermal load. Economic Analysis Using federal guidelines for rates of discount, electricity escalation, and fuel escalation, the team conducted an economic analysis. The guidelines originated in the federal life-cycle costing requirements developed by the National Institute of Standards and Technology (NIST). The discount rates for 2010 were valid from April 1, 2010, to March 31, 2011. Using a tool called the Energy Escalation Rate Calculator, the team applied the appropriate escalation rates to natural gas and electricity rates. The values given in this tool are based on Energy Information Administration (EIA) projections. The escalation rates were calculated assuming the project would come online in 2012 and have a lifetime of 25 years. To calculate the electricity and natural gas rates, the team used a sampling of energy bills for the existing South Lincoln community. The DHA typically uses a commercial utility rate structure for its larger buildings and a residential utility rate for its smaller units. Because the South Lincoln redevelopment is expected to have buildings of both types, average rates were calculated to apply to the entire site. A federal investment tax credit (ITC) is available for photovoltaics (PV), solar hot water (SHW), biomass, cogeneration and trigeneration, and ground-source heat pump (GSHP) installations. Since DHA is a nonprofit organization, it is not able to directly take advantage of tax credits. However, DHA can still benefit by selling these tax credits on the market or if the systems are owned by a third party. For PV, SHW, 2 3 and systems powered by fuel cells, the credit is worth 30% of the initial cost of the system. For GSHPs, biomass, and cogeneration or trigeneration systems not powered by fuel cells, the credit is worth 10% of the initial cost of the system. For this analysis, the team looked at cases with and without these incentives. Artist’s rendering of the planned South Lincoln redevelopment project Greenhouse Gas Emissions Analysis To examine potential emissions, the team took electricity emissions data directly from the EIA’s publication of Colorado’s electricity profile. Natural gas emissions data are from the EPA’s Climate Leaders Program. Carbon dioxide (CO2) is by far the dominant GHG emission for both electricity and natural gas, and emissions associated with utility-supplied electricity were found to be nearly five times greater than those from natural gas. These facts play a major role in the final analysis results. Energy Sources The source of energy used in buildings and district systems affects the economics, environmental impact, and feasibility of any proposed project. To address local availability, economic implications, environmental considerations, and any pros or cons specific to this project, the team examined several energy source options. Utility-Supplied Electricity The existing utility grid will