Energy efficiency measures - Commercial - Supermarket - Retrofit - Heat recovery / Canada
Introduction
Improvements to an existing supermarket aiming at significantly reducing energy costs are proposed. They consist of integrating the refrigeration system with the existing store heating ventilation and air conditioning (HVAC) and water heating systems. The RETScreen Software Energy Efficient Arena & Supermarket Project Model (Version 3.1) has been used to verify that these measures make sense, before proceeding with a feasibility study.
Building information
The supermarket is located in the Ottawa area. It offers fruits and vegetables, fresh meats, dairy products, beauty products, electronics, cut flowers, bed and bath products, house wares, indoor and outdoor seasonal departments, as well as the services of a bakery and delicatessen. It has a floor area of 11,600 m². The building is open 12 hours a day, 7 days per week, and accommodates up to 500 people at the busiest times of the year, although typically occupants number roughly a quarter of that.
The building, constructed only a few years ago, is moderately well-insulated and has 8 m high ceilings. At full occupancy, fresh ventilation air of 0.6 L/s (2.16 m³/h) per m² of floor area is introduced into the building; the fresh air ventilation rate varies with the occupancy. The building will be kept at 20ºC during heating season and 21ºC and a maximum of 45% relative humidity during cooling season.
Lighting of 25W/m² of floor space is used during occupied hours. During unoccupied hours, lighting levels are reduced to ten percent of this. Approximately 10,000 L/d of hot water is required for washing, domestic use, and kitchens. During occupied hours, the bakery's ovens, various grills and appliances, and IT equipment together consume about 300 kW of electricity and dissipate around 200 kW of heat within the building. At other times, these loads consume and dissipate as heat about 70 kW.
Display cases
The 200 m of medium temperature (MT) display cases are cooled by a secondary loop air coil. The 150 m of low temperature (LT) display cases are cooled by a direct expansion air coil. The design parameters of the display cases are summarized in the following table:
Introduction
Improvements to an existing supermarket aiming at significantly reducing energy costs are proposed. They consist of integrating the refrigeration system with the existing store heating ventilation and air conditioning (HVAC) and water heating systems. The RETScreen Software Energy Efficient Arena & Supermarket Project Model (Version 3.1) has been used to verify that these measures make sense, before proceeding with a feasibility study.
Building information
The supermarket is located in the Ottawa area. It offers fruits and vegetables, fresh meats, dairy products, beauty products, electronics, cut flowers, bed and bath products, house wares, indoor and outdoor seasonal departments, as well as the services of a bakery and delicatessen. It has a floor area of 11,600 m². The building is open 12 hours a day, 7 days per week, and accommodates up to 500 people at the busiest times of the year, although typically occupants number roughly a quarter of that.
The building, constructed only a few years ago, is moderately well-insulated and has 8 m high ceilings. At full occupancy, fresh ventilation air of 0.6 L/s (2.16 m³/h) per m² of floor area is introduced into the building; the fresh air ventilation rate varies with the occupancy. The building will be kept at 20ºC during heating season and 21ºC and a maximum of 45% relative humidity during cooling season.
Lighting of 25W/m² of floor space is used during occupied hours. During unoccupied hours, lighting levels are reduced to ten percent of this. Approximately 10,000 L/d of hot water is required for washing, domestic use, and kitchens. During occupied hours, the bakery's ovens, various grills and appliances, and IT equipment together consume about 300 kW of electricity and dissipate around 200 kW of heat within the building. At other times, these loads consume and dissipate as heat about 70 kW.
Display cases
The 200 m of medium temperature (MT) display cases are cooled by a secondary loop air coil. The 150 m of low temperature (LT) display cases are cooled by a direct expansion air coil. The design parameters of the display cases are summarized in the following table:
Anti-sweat heaters are used 100% of the time during three humid summer months and 20% of the time during the rest of the year.
Refrigeration system
The refrigeration system of the supermarket is composed of a 100 RT medium temperature (MT) compressor rack with a design coefficient of performance (COP) of 2.0, and a 50 RT low temperature (LT) compressor rack with a design COP of 1.7.
The LT rack is a typical DX system where the refrigerant flows from the mechanical room to the frozen product display cases. The refrigerant evaporating temperature is -29ºC. The MT compressor rack uses a secondary fluid loop to supply refrigeration to the refrigerated product display cases. The evaporating temperature of the refrigerant is -9ºC and the secondary fluid leaves the evaporator at approximately -5ºC.
The refrigeration system rejects heat at 40ºC (at the condenser), much higher than maximum air temperatures, which rarely exceeds 35ºC in the Ottawa area.
Heating and air conditioning system
A natural gas boiler provides space heating and domestic hot water. A conventional vapour compression cycle air-conditioning system will provide cooling when outside air temperatures are too high to permit sufficient free cooling. The air conditioning system has a 700 kW capacity and a seasonal COP of 5.5.
Proposed improvements
The following retrofit is being considered:
1. Recovery of heat rejected by the refrigeration system: It is proposed to recover the heat currently being rejected by the refrigeration system to the outside air at two temperature levels:
- Refrigerant superheat energy of the MT compressor rack, which would be sufficient to cover the supermarket hot water requirements. This involves the installation of a desuperheater at the output of the compressors.
- Refrigerant condensing energy from both MT and LT compressor racks, to be transferred, by the means of heat recovery condensers, to secondary fluid loops. The MT heat recovery loop would provide heat to the existing air coil located in a rooftop unit where the cold fresh supply air (representing approximately 70% of the total supermarket fresh airflow) and the space return air of the sales area are mixed. The LT heat recovery loop would provide heat to a bank of heat pumps that would raise the temperature as required for the storage areas and other non-sales spaces. The heat pumps would have a combined capacity of 250 kW and a seasonal coefficient of performance of 3.5. Excess heat in both secondary loops would be rejected outside by the means of fluid coolers. The design parameters of the heat recovery loops are summarized in the following table:
2. Floating head pressure: It is proposed to operate the refrigeration system so as to take advantage of the Canadian climate by modulating the pressure head in response to the outdoor air temperature and the heating requirements within the building. The condensing temperature would be permitted to fall as low as 25 ºC for the MT compressor rack and 15 ºC for the LT compressor rack.
Financial information
Implementation costs of improvements
The implementation of the proposed heat recovery system requires the retrofit of the refrigeration system (MT and LT compressor racks): the integration of heat exchangers (heat recovery condensers, desuperheater) and auxiliary equipments (secondary fluid pumps and tank, control system), and the replacement of the existing air condenser by a rooftop fluid cooler. The cost to purchase and install of the heat pumps must also be added. Because of the physical constraints of the supermarket, it is estimated that costly structural steel roof reinforcement and steel beam supports as well as electrical work would be required.
A breakdown of the incremental costs is given in the following table:
The cost related to implementation of a floating head option alone is considered to be negligible.
Operating costs
The impact of the improvements on maintenance costs is estimated to be negligible and can be ignored in this pre-feasibility study.
The supermarket uses the following energy costs for the financial analysis:
- Electricity: $0.09 /kWh
- Natural gas: $0.35/m³
Other financial information
Inflation is expected to average 2% over the twenty year life of this project, but energy costs are expected to escalate at around 3%.
The supermarket would borrow half the funds for this project at an interest rate of 7%, paid back over at 15 year term. The company applies a 10% discount rate to projects of this nature.
The company's effective income tax rate is 20%. The capital costs of the project could be depreciated according to a declining balance method at 10% per year.
A local utility has a program to support energy efficiency measures related to refrigeration systems and the proposed improvements could qualify for a $100,000 grant.
Solution
Click here to download the worked-out solution (711 KB).
Analysis of RETScreen results
All financial indicators suggest that this is a very profitable project. The after-tax IRR on equity is higher than 50%, far exceeding the minimum 10% return established as the threshold for profitability by the discount rate. Indeed, the after-tax IRR on assets, of nearly 25%, also greatly exceeds the 10% discount rate, suggesting that this project does not even require the leverage of debt in order to be profitable. Not that there would be any problem getting debt financing: with a debt service coverage of about 4, the project generates ample revenues to service the debt payments at all times, and lenders would be reassured that the debt would be repaid. Note that the project would be profitable even without the $100,000 subsidy.
The one indicator that does not appear extremely positive is the simple payback period. There are organizations that might want to see a simple payback period shorter than 3 years, and therefore hesitate to invest in this package of efficiency measures. If their cashflow situation were extraordinarily tight, this fixation on a quick return would be warranted. But companies that are not in this situation would, by looking at the simple payback period, miss a chance to invest in a very profitable project that would generate revenues for them over 20 years. It is important to remember that the simple payback ignores the leveraging of debt and all the revenues earned after the project investment costs have been paid back by savings: it is a measure of how quickly the project pays for itself, not of profitability. While the equity payback is not a measure of profitability either, it at least accounts for the impact of debt financing, and is consequently more useful than the simple payback. The equity payback of less than 2 years for this project points to an attractive investment opportunity.
Notes on parameter selection
- Hours of lighting per week: 92.4 hours has been entered to take into account 25 W/m² of lighting during occupied hours and ten percent of this during unoccupied hours.
- Miscellaneous heating source: 135 kW has been entered to take into account the portion of dissipated energy as heat within the building of the ovens, appliances and IT equipment being operated during occupied hours and 70 kW dissipated for the remainder of the time.
- Display cases anti-sweat usage factor: 40% usage factor was entered as an average over one year.
- Superheat recovery rate - proposed case: the superheat recovery rate was set such that the heating energy required by the domestic water heating system becomes zero.
- Incremental cost for condensing heat recovery: 66% of the total cost was attributed to the MT and 34% to the LT refrigeration system, according to the respective refrigeration capacities.
- Lighting & miscellaneous electricity consumption: A value of 1,621 MWh has been entered to take into account the 300 kW of ovens, appliances and IT equipment being operated for 12 hours a day and 70 kW of loads for the remainder of the time.
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