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Energy Management Systems, Restaurants, and ROI – Part 2

Energy Management Systems, Restaurants, and ROI – Part 2By Jay Fiske, VP of Business Development & Jason Roeder, Director of Energy Products & Services, Powerhouse Dynamics

In last week’s post, we introduced some of the benefits for deploying an energy management system across a restaurant’s operations.  We also described three critical questions that need to be addressed in order for a business to extract the maximum value from an energy management system:

•    Who should be involved in the use of these systems?
•    Where are the opportunities for saving money?
•    When should the customer expect to reap savings?

In last week’s post, we focused on the first question.  In this week’s post, we will focus on the second question:

Where are the opportunities for saving money?

An energy management system can be a very effective tool for identifying and eliminating areas of excessive energy spending, and there are a number of different categories of wasteful consumption where the platform can make a significant impact.

Off-hours consumption

In a typical restaurant operation, the “off-hours” period can be an opportunity for cutting back on excessive energy spending.  It is not uncommon for expensive loads, such as make-up air and exhaust fans, to frequently be left running all night when the restaurant is closed.  Some of the staff may be new or have not yet had proper training on all aspects of restaurant operations.  Managers have multiple competing demands for their attention.  People forget.  Ineffective off-hours management of even a modest number of devices in a restaurant can result in thousands of dollars in lost profits every year per store.

A modern energy management system can provide insight into energy consumption patterns, can calculate the costs of running equipment in the off-hours to highlight the magnitude of the waste, and can send alerts to management when equipment has been left running too late or is turned on too early.  By bringing this level of visibility into off-hours consumption, a modern energy management system can greatly facilitate implementation of robust operational practices that ensure equipment is only running when it needs to be.

Management of equipment use versus business volumes

As with off-hours energy consumption, there are many pieces of energy-intensive equipment in the restaurant’s kitchen, such as heat lamps, toasters, and Panini presses that can be turned down or turned off during quiet periods.  An energy management system can help evaluate consumption patterns and target the most cost-effective pieces of equipment to manage during lulls over the course of the day.

Inefficient HVAC and Refrigeration Equipment

A recent survey of commercial HVAC equipment revealed that more often than not, HVAC equipment is not operating as efficiently as it could be, due to faults in a variety of components, including:Energy Management Systems, Restaurants, and ROI – Part 2

•    Refrigerant circuit
•    Economizer
•    Air flow
•    Thermostat
•    Sensors

An energy management system can reveal problems with HVAC and refrigeration systems by identifying problematic operating patterns, such as compressor short-cycling, continuous operation of compressors, compressor failure, and by finding aberrations in expected supply and return duct air temperatures.

Inefficient Programming of Thermostats

Installing programmable thermostats and keeping on top of the different heating and cooling set points across each day and between seasons is the single most cost-effective way to automate energy savings.  Heating and cooling costs are typically a restaurant’s largest energy cost, and programmable thermostats are substantially less expensive than any other kind of energy automation.

Unfortunately, many restaurants use their programmable thermostats the same way many people use them at home: they don’t program them.  Programming the thermostat can be cumbersome, so it can be difficult to implement schedule changes or seasonal changes.  Set points are constantly over-ridden, with a tug-of-war between the staff’s desired temperature settings and the customers’ desired settings.    The result is HVAC equipment typically running harder and longer than necessary, wasting precious profits.

Having a staff trained on the use of the programmable thermostats and having a thermostat that is convenient (e.g., internet connected for remote control) and intuitive to can go a long way to optimizing the use of heating and cooling systems, balancing comfort and energy savings.

Early warnings of equipment problems

Equipment can reveal much about its performance through its energy consumption patterns.  If there are problems – e.g., a broken belt on a fan or a clogged vent in an exhaust system – equipment may use substantially more or substantially less energy than it was designed to consume.  An energy management system can be configured to automatically recognize aberrations in consumption patterns and proactively send out text and email alerts to management.  Because of this, an energy management system’s on-going analysis can help prevent “black swan” events — catastrophic failure of critical equipment.

Management of energy demand spikes

Most commercial properties, including restaurants, incur so-called “demand charges” from their electric utilities.  Demand charges are established when electricity consumption spikes, usually for 15 to 30 minutes.  The utility will charge based on the magnitude of the customers’ demand spikes, as measured in kilowatts, not kilowatt-hours.  The greater the spike, the greater the demand charge. (See here for a more detailed explanation.)

An energy management system can detect spikes in electricity consumption and either send out warnings with enough time for restaurant managers to do something to reduce the magnitude of the spike or, more likely, reveal overtime what changes could be made on a daily basis to systematically reduce the likelihood of higher demand charges.  For example, managers may set the thermostat back by 2 degrees or turn off their ice machine from 3pm to 4pm during the summer to reduce the total demand from the restaurant for the duration of the spike.

Modeling the savings

How do these different opportunities break-down in terms of savings potential?  Below is a model of a typical restaurant with a range of typical expected savings for each category of savings opportunity:

Energy Management Systems, Restaurants, and ROI – Part 2

These savings can range by +/- 50%, meaning the savings range is 8-18% in direct energy savings. These savings do not reflect potential savings in gas consumption due to more effective use of thermostats and more efficient operation of HVAC equipment.

There are other savings opportunities as well.  Savings from maintenance calls that are avoided due to the remote diagnostics and equipment performance monitoring could add another $1,000 a year in direct savings (benchmarks for service calls are about $350 per call). While the HVAC/R faults require an HVAC technician to resolve,  we find that those issues can be addressed with minimal incremental cost to the existing R&M contract that is already “bought and paid for”  in year 1 of the program. Other cost reduction modifications to that contract are possible in future years as well.

In summary, when deploying an energy management system, it is important to focus on the areas where the system can deliver substantial cost savings:

•    Off-hours energy consumption
•    Management of equipment use versus business volumes
•    Inefficient HVAC and refrigeration equipment
•    Inefficient programming of thermostats
•    Early warnings of equipment problems
•    Management of energy demand spikes

With the proper focus, an energy management system can deliver real, measurable, and impactful energy savings.

In next week’s blog posting, we will focus on the final critical question: When should the customer expect to achieve savings?

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