Combined heating & cooling - Heat pump - Ground-source - Office - Warehouse / Canada

Case study assignment

The local electric utility is facing growing competition in the commercial and institutional markets from the oil and gas industry. Market share is being lost, especially in the heating sector for medium and large commercial buildings. As a member of the commercial planning and programs division, you are responsible for identifying efficient electric-based heating solutions that can reverse this loss of market share. You have determined that ground-source heat pump (GSHP) systems are among the technologies best able to compete with gas and oil heating equipment. This technology is not well known in the region, however, and without a concrete, local demonstration of the capabilities and efficiency of the GSHP system, achieving significant market acceptance will be difficult.

You decide that a demonstration project will be required to promote GSHP systems. The utility is planning the construction of a new mixed-use office/warehouse building, and you wish to investigate the feasibility of using a GSHP technology to heat and cool this building. Since the target market is medium to large commercial buildings, you tend to favour a groundwater heat pump (GWHP), which is well adapted to larger buildings. You decide to compare a standard efficiency GWHP system to a conventional standard efficiency, variable air-volume, fully electric heating and cooling system.

Site information

The new utility office building will be located northeast of Moncton, New Brunswick, Canada. The nearest weather data is from Chatham, New Brunswick. The mean ground temperature is 7.8 °C and the temperature amplitude is 10 °C. The ground is light rock and poses no special difficulty to drilling. Wells in the same area have been able to yield continuous flow of up to 15 L/s when drilled to a depth of 40 to 50 m. There is ample land area available for the GSHP system.

The office floor area will be 745 m² while the warehouse will cover 785 m², both on a single floor. The entire building will be air-conditioned in the summer. It will be well-insulated and have an average level of fenestration.

Financial information

You will use standard financial figures currently used by the utility for project evaluation: inflation rate of 2.5%, fuel cost escalation rate of 2.5%, a debt ratio of 65%, a debt interest rate of 8%, a discount rate of 9%, and a debt term of 10 years. The GWHP system is assumed to last 20 years. The utility is a government-owned corporation and does not pay income tax.

Electricity rates are $0.065/kWh, with a peak load charge of $8.50/kW per month. The conventional system, consisting of variable air volume electric-heat rooftop units, variable air volume boxes and perimeter heating, will cost around $92,825, excluding control system. You expect that the maintenance costs for the GSHP system will be comparable to those of a conventional system. The internal air distribution system for the GSHP will cost around $55,000.

Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions from this analysis.

Solution

The worked-out solution is the data file selected from within the RETScreen Project Database. The user automatically downloads the Project Database file while downloading the RETScreen software.

Teacher's notes

• The costs of the feasibility study, development, and engineering for a conventional system are credited in the cost worksheet.
• The control system cost is not included for either the conventional or the GSHP system since it will be roughly the same in either case.

Real project

Results

In the early 1990s, New Brunswick Power (the provincial electricity utility in New Brunswick) decided to promote the use of ground-source heat pump (GSHP) systems. Their goal was to establish a province-wide base of expertise for the design, installation and maintenance of this technology. To achieve this objective, demonstration projects were built throughout the province, permitting local contractors to work on real systems. When plans were drawn up for a new district office in Tracadie, a groundwater system was selected as a demonstration project.

The new building was a single-story combined office and warehouse with 745 m² of office area and a gross floor area of 1,530 m². It was completed in January 1990.

The cost of the entire HVAC system, including the Building Energy Management System (BEMS), was estimated at $167,000. In comparison, a conventional system based on variable air volume rooftop units, with perimeter heating provided by baseboard electric heaters, was estimated at $119,000. The ground-source system cost was $14,000. The net annual reduction in operating cost is estimated at $7,000, resulting in a 7-year simple payback period.

System description

An open-loop groundwater system draws water from a 46 m deep supply well with a casing 0.15 m in diameter. An equivalent discharge well is used to return the groundwater to the aquifer. Groundwater is pumped using a 1.5 kW pump at a design flow rate of 2.5 L/s. The heat pump liquid loop and groundwater are separated by a flat plate heat exchanger.

The building loop serves nine heat pumps ranging from 3.5 to 17.6 kW of cooling capacity. Total installed capacity is 77.4 kW. A heat recovery ventilator is used to preheat the outside fresh air. An electric resistance heater is also installed in the fresh air duct for final pre-conditioning of the outside air.

Lessons learned

• The building loop initially used water, but this caused freezing damage to one of the heat pumps' evaporators. Methanol was added to the building loop to provide freeze protection down to -7 °C.
• The use of backup electric resistance heating resulted in some control problems, which took some time to resolve.
• Reducing internal gains in the building by using more energy efficient lighting and appliances can reduce peak cooling loads and annual costs while reducing the capital cost of the GSHP system.
• Injection wells may get clogged, adding to maintenance costs; this possibility should be considered at the onset of a project.

The big picture

With a 7-year payback period for this particular installation it was reasonably attractive to the commercial and institutional sector. Typically in Canada the institutional sector often accepts payback periods in the 5 to 10 year range. However, the commercial sector often requires a payback period of 5 years or less. Tactics for containing costs in GSHP systems should be used (Kavanaugh, 1997) in order to maximise the return on investment for these systems.

New Brunswick Power favours groundwater systems wherever groundwater supplies are sufficient. Compared to closed-loop systems, the initial costs are usually lower and the performance is often superior.