Leveraging 'Icebanking' To Combat Rising Energy Costs

Power generation and transition infrastructure are under unprecedented strain. The artificial intelligence data center boom, combined with a legacy shortfall in proactive investment in the grid, has pushed electricity prices to punitive levels for commercial real estate owners.

As a result, a growing number of building owners are turning to an engineering solution with a technical name that belies its simplicity: ice.

Thermal storage systems store energy not in lithium or another hard-to-extract mineral, but in frozen water, said Brendan Dowd, vice president at Boland, a commercial HVAC systems, services and energy solutions provider in the Washington, D.C., metro area

The systems act like batteries to more intelligently generate or distribute stored energy to meet cooling or heating needs while lowering the impact on the grid and the environment. The thermal battery charges when grid demand and energy costs are low or excess renewable energy is available.

“Most thermal energy storage systems have a large tank or tanks, storing water or ice, which is then used as needed by the building,” Dowd said. “Typically, they make ice at night, when energy is cheap, and then melt it for cooling during on-peak times.”

Flexibility = Savings

In most markets, power utilities apply a higher rate to electricity consumed during peak times, like summer afternoons, when it is more expensive for the utility to generate it, or when renewable energy sources aren’t available and utilities are burning fossil fuels.

That’s a problem for buildings that cannot easily adjust operations, such as offices, schools, museums and government facilities. 

“If you dig into your electric bill, you'll see that you're paying more for electricity during peak times of the day,” Dowd said. “This ‘demand charge’ could end up being up to 60% of an overall bill.”

Thermal energy storage systems flatten those peak consumption time spikes. And they allow building owners to capitalize on the times of day when cleaner, cheaper, renewable energy is abundant, Dowd said.

The technology is simple and old-fashioned, albeit with a sophisticated, modern analytics component.

“They melt the ice made during on-peak hours,” Dowd said. “A good portion of the cost, typically 20%, of energy supply is dependent on five peak demand events that take place each summer. With a thermal battery system, building owners can lower their demand on those days.”

Doing Well By Doing Good

While the technology generates savings calculated in dollars and cents, its ancillary benefit is that it reduces a given building’s carbon emissions.

“These systems are extremely green,” Dowd said. “Asset managers love them because they save money, but sustainability managers love them because they reduce the carbon footprint of the facility.”

Incentives: Available and Stackable

With many state and municipal governments ratcheting up their climate goals, there is a patchwork of rebates, grants, programs and other financial incentives building owners can leverage to reduce the cost of installing thermal energy storage systems.

“Rebates and incentives are available and they are stackable,” Dowd said.

The Inflation Reduction Act, or IRA, expanded the Section 48 Investment Tax Credit, or ITC, to include thermal energy storage. As a result, the technology has a lower “first cost” compared to conventional chilled water plants, Dowd said.

The IRA also expanded the Section 179D tax deduction for commercial buildings to include a new direct payment option for many tax-exempt entities, he said.

With current incentives in place, building owners who invest in thermal battery systems can recoup their initial investment in three years. For perspective, the typical life cycle of these systems is 30 years, Dowd said.

During a recent office building renovation project, which leveraged both Section 48 investment tax credits and local utility incentives, Boland installed a thermal battery system that shifted one megawatt of peak electricity demand and reduced on-peak energy usage by 2.15M kilowatt-hours per year.

Boland offers several variations of thermal energy storage, Dowd said. Full storage systems can cool an entire facility for the entirety of its working hours using just ice. Partial storage systems make less ice and simply trim energy consumption during the day when it is most expensive. Finally, thermal storage systems can be combined with heat pump systems for even greater efficiency.

A Universe of Data Points

With over 4,000 projects completed in 60 countries, Boland, in partnership with Trane, has the institutional knowledge to advise building owners, designers and contractors on how to customize system implementation to maximize benefits for any given facility, Dowd said.

“By combining what we know with a bigger universe of data points and the owners’ own knowledge of their assets, we can unlock energy usage savings and comfort with a great degree of precision,” he said.

The company’s connected mechanical service agreements, or CMSAs, integrate continuous data collection and remote monitoring with traditional on-site HVAC maintenance, offering enhanced transparency into asset performance.

“This approach provides 24/7 operational insights that support Boland Trane technicians in troubleshooting and maintaining equipment,” Dowd said. “Benefits of our CMSAs include lower total cost of ownership, improved equipment uptime and support for sustainability goals.”

This article was produced in collaboration between Boland and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.