SLIDE 1: RETScreen Heating and Cooling Projects
RETScreen can be used to rapidly determine the technical and financial viability of a wide range of heating and cooling projects. For example, RETScreen can help analyse district heating projects, in which heat is distributed from a central plant to distributed buildings using insulated pipes, seen in the photo on the left of this slide. It can also analyse chillers, such as the one in the photo on the right. This presentation will show how to analyse heating and cooling projects with the RETScreen software.

SLIDE 2: Overview of Heating and Cooling Projects
Heating and cooling projects vary greatly in their scale and the technology they employ. The figure at the bottom left of this slide shows a ground-source heat pump for a single-family home. The heat pump cools the house in summer by transferring excess heat from the house to the ground, and in winter it heats the house by the reverse process. The heat pump itself requires power, in the form of electricity, in order to operate.

The photo at the top left shows a solar water heating system on the roof of an apartment building in Uganda. This equipment heats water for the multiple units of this building by directly capturing the sun’s radiant energy.

An absorption chiller is seen at the top right. This unit might supply cooling for a commercial or institutional building or for an industrial process. Unlike the heat pump, an absorption chiller does not rely on electricity to achieve its cooling effect. Rather, and somewhat surprisingly, it makes use of heat, which may even be the waste heat rejected from a power plant or industrial process.

The photo at the bottom right shows part of the district heating system that supplies heat to the city of Copenhagen. Through a 1,300 km network of pipes, heat is distributed to homes and businesses around the city, providing 97% of the city’s total heating needs. The heat originates from waste incinerators, thermal power plants, and dedicated boilers. Much of this heat would otherwise be wasted.

RETScreen can be used to study the viability of a variety of technologies for space, ventilation, and process heating and cooling, employed in single family homes, multi-unit residential buildings, commercial, institutional, and industrial buildings, and district heating and cooling systems.

SLIDE 3: Heating Technologies
Many different technologies are used to provide heat. Boilers and furnaces are perhaps the best known. In a boiler, a liquid is heated in a closed, usually pressurized vessel. Often the liquid is water and the boiler generates pressurized steam or pressurized hot water. This can be used for space heating, industrial processes, or power generation. Unpressurized hot water heaters are sometimes called boilers, but they are quite different from true boilers. Boilers often rely on the combustion of a fuel to provide heat, although electricity, nuclear fission, and other sources of heat are common. Considered over an entire season of use, a boiler generally converts fuel energy into useful heat with an efficiency of 55 to 95%, depending on the design and application.

A furnace is similar to a boiler, in that it can heat a fluid. In most applications, however, the fluid is air, not water, and therefore there is no boiling, or transition from liquid to gaseous phase. Furthermore, the fluid is generally at or near atmospheric pressure. For example, in North America the term commonly refers to the gas and oil fired devices utilized in forced air residential heating systems. The term “furnace” is also used for the equipment that directly supplies heat for metallurgical processes like smelting, melting, and heat-treating, and for industrial processes, such as causing chemical reactions. Although electric furnaces exist, in most furnaces heat is supplied by combustion of some fuel. Forced air furnaces are comparable in efficiency to boilers.

Natural gas fuels many boilers and furnaces. Since hydrogen is a significant constituent of natural gas, the exhaust gases of natural gas combustion contain much water vapour. One way to improve the efficiency of natural gas combustion systems is to extract the heat from this water vapour to the point that it condenses. For typical condensing gas furnaces and boilers, this occurs at temperatures around 55°C, so this approach only makes sense when there is a use for low-temperature heat. Since space heating does not require high temperatures “condensing” natural gas furnaces, achieving steady state efficiencies of up to 97%, are increasingly common. The exhaust condensate is particularly corrosive, so any metal components of the exhaust system must be of a special grade of steel. On the other hand, the exhaust may be so cool that plastic components can be used. Condensing oil furnaces also exist, but fuel oil exhaust contains less water vapour, and this vapour condenses at lower temperatures, typically around 45°C, so this is a less attractive proposition.

A thermal fluid heater, also known as a “hot oil system,” is a type of industrial furnace and heat distribution system. A specialized heat transfer fluid is circulated at low pressure between an industrial apparatus or process and a fired heat exchanger or electric heater, which maintains the fluid at some desired temperature, typically in the range of 100 to 400 degrees Celsius. Thermal fluid heaters are often used in industrial presses, such as circuit board, plywood, plastic moulding, and laminating presses. They offer the high temperatures possible with steam without the challenges of high-pressure operation.

While most boilers and furnaces combust fossil fuels, it is possible and increasingly common to use biomass fuels. These fuels, composed of plant matter, can be cheaper than fossil fuels, especially when they are available as by-products of forestry or agriculture, and therefore can be had for little or nothing more than the cost of transport. Variability in the composition of these fuels requires special equipment, however, particularly for fuel handling. If harvested sustainably, they are an environmentally friendly source of energy with little or no net greenhouse gas effect.

Heat pumps provide both heating and cooling using the same vapour compression cycle that is found in a household refrigerator. Although heat normally flows only from warm to cold places, this cycle permits low-temperature heat to be taken from a cool outside environment and have its temperature raised above the desired interior temperature, such that it provides useful heating. The temperature is raised not by adding heat, but rather by employing an electrically powered compressor to raise the pressure of the heat transfer fluid, or “refrigerant.” Since the heat comes mainly from the outside air or, in a ground-source heat pump, the soil or groundwater, heat pumps can have efficiencies of 130 to 350%, in terms of the heat they provide versus the input of electrical energy.

Thermal power plants employing gas and steam turbines as well as some industrial processes require heat above a certain temperature. Heat below this temperature is generally of no use to the thermal plant or industrial process and is rejected to the environment. With investment in heat recovery and distribution equipment, it is often possible to make at least seasonal use of this heat for some unrelated application, such as space or water heating, that does not require heat at a high temperature. When exhaust gases are very hot, a special type of boiler, called a heat recovery steam generator, can even produce steam using this waste heat.

As seen earlier in this presentation, solar energy can be used directly as a source of heat. In so-called “passive” designs, solar energy is admitted to a building through appropriately oriented, high-performance windows, providing heating during winter without causing overheating during summer. In “active” systems, dark-coloured collectors are warmed by incident sunshine, and transfer its radiant heat to water or air. Although certain types of collectors concentrate the sun’s rays, permitting high temperatures to be attained, most operate at temperatures of 80 degrees Celsius or less. Glazed collectors, which cover the absorbing surface with glass in order to reduce convection heat losses, can heat water to temperatures sufficient for domestic use, space heating, and commercial or industrial cleaning applications. Collectors lacking glazing supply heat at a temperature only 5 to 25 degrees Celsius above the outside air temperature and are used for swimming pool heating and to supply warm air for crop drying and ventilation. Because sunshine is not available at night, and can be weaker in winter, many active solar systems do not supplant conventional heat sources entirely, but simply reduce their consumption of electricity or fuel.

SLIDE 4: Cooling Technologies
Equipment for cooling buildings, refrigeration, freezing, and industrial processes can take a number of forms. Let’s divide the equipment into groups on the basis of their energy requirements, and start with technologies requiring an input of mechanical or electrical power.

Most cooling equipment makes use of the vapour compression cycle, which requires power to drive a compressor. The compressor changes the state of a refrigerant from a relatively cool, low-pressure gas to a much higher pressure, and consequently hotter, gas. The hot refrigerant exiting the compressor passes through a heat exchanger called a condenser, where it returns to its liquid phase and gives off heat. This heat must be transferred to the environment, for example, by means of a rooftop cooling tower, or a very low temperature heating load. The liquid from the condenser then encounters an expansion valve, where its pressure abruptly drops. Due to the drop in pressure, some liquid evaporates, cooling the remaining mixture to a temperature below the desired temperature for cooling. At a heat exchanger known as an evaporator, a flow of air, water, or other fluid in need of cooling transfers heat to the colder refrigerant mixture. This heat causes the remaining liquid refrigerant to evaporate. This low pressure, low temperature refrigerant gas then re-enters the compressor.

Since the compressor raises the temperature of the refrigerant by adjusting its pressure, rather than adding heat, efficiency can be well in excess of 100%. Efficiency is reduced when the difference in temperature between the condenser and the evaporator increases and, for most technologies, when the equipment operates at part load. Different types of compressors exist; the most efficient vapour compression cycle equipment can achieve efficiencies of 700% under ideal operating conditions.

Typical heat pumps, mentioned earlier, make use of the vapour compression cycle. They differ from conventional compressor cooling systems mainly in that they must be able to provide both heating and cooling. Because the evaporator during cooling becomes the condenser during heating, and vice-versa, compromises in the design of these heat exchangers result in efficiencies slightly lower than those of compressor-based systems optimized for cooling alone, all other factors being equal.

It is possible to achieve cooling without running a compressor or having another source of input energy, but this “free cooling” requires cold outdoor air or a source of cool water. For example, in certain circumstances, such as buildings with high internal heat gains, cooling will be required even when outdoor air temperatures are relatively low. If the temperature of the environment is several degrees or more below the desired cooling temperature, then heat can be dumped directly to the environment. Opening a window to cool down a room or maximizing the use of cool fresh air in a ventilation system are examples of free cooling, but the term is generally reserved for automated mechanical systems employing one of a number of different approaches. In one approach, a heat transfer fluid is simply circulated between the cooling load and a cooling tower or other heat exchanger where the fluid can give up some of its heat to the environment, perhaps via a piped flow of cold lake or sea water. Another approach involves letting the refrigerant of a vapour-compression cycle system circulate naturally under the force of pressure gradients and gravity: gaseous refrigerant tends to migrate towards the coolest point of a system, the condenser, where it will be turned back to liquid. This then flows back down towards the evaporator. Free cooling may not be truly free, since additional controls and heat exchangers add to capital costs and some electricity may be required to operate auxiliary pumps, valves, and controls; it remains, nevertheless, a potentially attractive option.

SLIDE 5: Cooling Technologies (Continued)
In the last slide, we looked at cooling technologies that required either a cold exterior environment or an input of mechanical or electric power. Somewhat surprisingly, there are cooling technologies that instead utilize heat to produce cooling. Two of these technologies are desiccant cooling and absorption cooling.

A desiccant is a material that collects moisture, either by accumulating it in a film on its surface or by permitting it to diffuse into the desiccant’s volume. Desiccant cooling is the removal of moisture from the air using a desiccant. Humid indoor air is brought into contact with the dry desiccant, which dries the air. As the desiccant accumulates water, it becomes less effective, and needs to be regenerated, or dried out. This is accomplished by adding heat to outside air, and bringing this hot air stream into contact with the desiccant. The hot moist air is then exhausted. Because the air is less humid, the indoor environment feels more comfortable and air quality is improved. Desiccant cooling can be supplemented by evaporative cooling if the output air is sufficiently dry: the air is passed through a fine mist of water, which evaporates and extracts sensible heat from the air.

One approach for continually regenerating the desiccant is the desiccant wheel, shown at the bottom of this slide. A disk of solid desiccant spins such that a given slice of the disk rotates out of the stream of moist indoor air, into the stream of hot outdoor air, and back into the stream of humid indoor air. Other approaches, such as spraying a liquid desiccant first through one air stream and then through another, or alternating the airstreams passing through a desiccant tower, are also utilized.

A vapour compression cycle system also removes moisture from indoor air, by causing the moisture to condense on the outside of the evaporator. To increase the amount of moisture removed, the temperature of the evaporator must be lowered, often to temperatures well below the desired indoor air temperature. This decreases efficiency and makes it more difficult to maintain a comfortable indoor environment.

Desiccant cooling separates the task of controlling humidity from that of controlling temperature. With a desiccant system removing the moisture, a compressor or heat pump is left only the task of adjusting the temperature to the desired level.

Absorption cooling is in some ways similar to vapour compression cooling. In both, a liquid refrigerant that boils at a low temperature absorbs heat and turns to gas within an evaporator, thus providing cooling. The difference lies in how this gaseous refrigerant is returned to its liquid state. In a vapour compression system, a compressor and condenser do this job. In an absorption cooling system, the refrigerant is combined with a second fluid, called an absorbent, heat is used to evaporate the refrigerant out of the absorbent, and a condenser cools off the refrigerant and turns it back to liquid. Two common refrigerant-absorbent combinations are the ammonia-water and water-lithium bromide pairs.

Consider an absorption chiller utilising ammonia and water. Ammonia at low pressure vaporizes in the evaporator, providing the cooling. It then passes into an absorber, a reservoir of liquid water where it is absorbed. This liquid solution of water and ammonia is then driven to high pressure by an electric pump. While this appears similar to the compressor in a vapour compression cycle, note that here we are not compressing a gas, but rather pumping an incompressible liquid. This requires far less work. The high-pressure liquid enters a generator, where large quantities of heat are added in order to boil the ammonia out of the liquid water, thus regenerating the refrigerant. To ensure that no droplets of liquid water are carried with it, the refrigerant gas exits the generator via a separator, a maze of partially obstructed tubes that catches the liquid water. Now we are left with high temperature, high-pressure gaseous ammonia. In the condenser, this is returned to liquid ammonia via the extraction of heat. Between the condenser and the evaporator, an expansion valve lowers the pressure of the refrigerant, facilitating its vaporization at the low temperatures desired.

The majority of the input energy for this cycle comes from heat supplied at the generator—it is usually about 100 times the work done by the pump. Indeed, some very small systems employ a modified absorption cycle that requires no pumping or electric input whatsoever. Note that both the heat from the cooling load as well as the heat added in the generator must be rejected, so absorption cooling requires more capacity in cooling towers or other heat rejection equipment than the vapour compression cycle.

Absorption cooling tends to be around 50 to 70% efficient—an order of magnitude lower than the best compressor-based equipment. On the other hand, the input energy is heat, which may be available for free, either in the exhaust stream of power generation equipment, or in the form of heat rejected from an industrial process. Advanced, “double-effect” absorption systems achieving efficiencies of 100 to 120% are becoming more common, but the higher temperatures required by these systems necessitate a supply of steam or even direct firing.

RETScreen facilitates the comparison of different cooling technologies, including heat pumps, dedicated compressor-based cooling systems, desiccant cooling and absorption cooling.

SLIDE 6: Types of Fuels
RETScreen accommodates the myriad fuels utilized by heating projects. In the RETScreen “fuel type” cell, the user finds an extensive drop-down list of choices for fuel. These include, for fossil fuels, coal, diesel, gasoline, kerosene, oil, and propane. The choice of biomass fuels is even more varied, with biodiesel, biogas, bio-oil, ethanol, methanol, various woods and barks, peat, various types of straw, bagasse, switchgrass, hemp and other agricultural outputs, and many others. The waste fuels found in the list cover a surprising range of possibilities, such as tires, landfill gas, food waste, wood waste, yard waste, coffee refuse, compost, leather, Christmas trees, telephone poles, poultry litter, and packaging waste. For completeness, the list also includes energy carriers like hydrogen and electricity, and a user-defined fuel.

When “solar air heater” or “solar water heater” is selected as the technology, RETScreen automatically draws on its built-in climate database and solar resource calculator to help deal with solar energy as a “fuel.” Similarly, the use of the air or ground as a heat source is implicit when heat pump is chosen as the technology.

Vapour-compression cycle cooling generally requires electricity, which is found in the RETScreen “fuel type” drop down list. Absorption and desiccant cooling require heat, which can be supplied by a number of fuels. If, on the Start page of RETScreen, the user selects “Cooling” as the project type, then the list of fuels permitted by RETScreen will include the common fossil fuels, electricity, and biomass. To select from among the previously described more extensive list of fuels, the user chooses “Combined heating and cooling” or “Combined cooling, heating and power” as the project type. Then the absorption cooling system will automatically use heat from the heating system, which can make use of any of the above-mentioned fuels.

Selecting “Combined heating and power” or “Combined cooling, heating and power” as the project type permits the use of waste heat from a power project to be used either for heating, or, via the heating system, for cooling in an absorption or desiccant cooling system.

When specifying efficiencies, it is important to keep in mind that the energy content of a combustible fuel can be considered to either include or exclude the heat liberated when the water vapour in the exhaust gases cools and condenses. The convention to include this latent heat of vaporization is called the Higher Heating Value, and is employed in North America. The rest of the world has adopted the Lower Heating Value convention, which excludes this latent heat of vaporization. The Higher Heating Value convention has been assumed for all efficiencies mentioned in this presentation; for example, when it was stated that condensing gas furnaces can achieve efficiencies as high as 97%, this was with respect to the Higher Heating Value. Under the Lower Heating Value convention, condensing gas furnaces and boilers can achieve efficiencies in excess of 100%, demonstrating the importance of verifying the convention assumed by, for example, manufacturer’s specification sheets. The user can instruct RETScreen to adopt either convention.

SLIDE 7: Base, Intermediate, and Peak Load Systems
Often heating and cooling loads vary in time. For example, space-heating loads are higher in winter than during summer. There must be sufficient capacity to meet the maximum heating and cooling loads that will occur over the course of the year. On the other hand, much of this capacity will sit idle most of the time.

This situation has given rise to the practice of employing separate base, intermediate, and peak load heating sub-systems. The base load system, although having insufficient capacity to meet the peak load, supplies the majority of the heat over the year and is usually selected to provide heat with minimal operating costs. If waste heat is available, say from an industrial process or power system, it makes sense for the base load system to include heat recovery equipment, such as the heat recovery steam generator shown at the bottom left of this slide.

The intermediate load heating system is brought online when the base load system is insufficient to meet the load. On this slide, the intermediate load heating system is represented by the middle photo, showing a diesel fuel-fired boiler The peak load heating system is only required when the base and intermediate load systems cannot fully meet the load. Electric resistance heating, shown on this slide, is sometimes used for peak load heating.

Similarly, cooling systems often consist of multiple units, with base load units responsible for supplying the majority of the cooling over the year, and peak load units ensuring sufficient capacity to meet the peak load.

SLIDE 8: Equipment Sizing
The sizing and selection of base load, intermediate load and peak load equipment is important for a reliable heating or cooling system that balances capital and operating costs.

The base load system delivers the majority of the heating or cooling energy, as seen in the figure on this slide, even though it may supply only a fraction of the total capacity needed for the highest load of the year. It is generally worthwhile investing in efficient equipment that can utilise low cost fuels. On the other hand, the base load system may not need to have good partial load efficiency, since it will usually operate at or near capacity.

The peak load system operates when the heating or cooling load is so large that the combination of the base load and the intermediate load system is insufficient. Because this occurs but infrequently, it supplies only a modest fraction of the annual heat requirement, as seen in the figure. It makes sense, therefore, that this equipment be inexpensive on a per unit of capacity basis, even if this means that more expensive fuel or less efficient equipment is used. Rather than being replaced, aging equipment is sometimes kept for peak load purposes. Peak load equipment can also be considered a back-up system in case of failure of the base load or intermediate load systems.

The intermediate load system, which is not always included in a heating or cooling system, tends to fall between the base load and the peak load system in its attributes.

RETScreen does not require the user to specify a base, intermediate, and peak load heating system: if desired, the user can specify just a base load system, or a base load and a peak load system. For cooling equipment, the user may specify either a base load cooling system or a base load and peak load cooling system. RETScreen also allows for the inclusion of the capital costs for backup heating and cooling capacity.

In the figure on this slide, the combined base load and peak load capacity is perfectly matched to the expected maximum load that will occur over the year. This is not always the case, however. Sometimes the capacity will exceed 100% of the peak demand, perhaps due to the size of equipment that is available, required safety margins, or the need to anticipate future expansion. Note, however, that although the total capacity may exceed 100%, the energy delivered, as modelled by RETScreen, will not surpass 100%. The equipment is operated only as required by the load.

SLIDE 9: Heating and Cooling Projects with RETScreen
RETScreen evaluates the financial viability of a heating or cooling project in terms of a comparison between a proposed project and a base-case project. The proposed project usually implements a clean energy technology, and the base case generally relies on a conventional technology. RETScreen compares the incremental benefits and costs of the proposed project versus the base-case project.

There are a number of steps in a RETScreen analysis of a heating or cooling project.

First, the user specifies the heating and cooling loads for which the system is being designed. These are given in terms of one or more non-weather dependent loads plus a building space heating or cooling design load expressed on a per unit floor area basis. In the simplest case, the non-weather dependent loads can be expressed as a percentage of the total heating or cooling requirement. This non-weather dependent load has the effect of increasing the heating or cooling demand for each month. This is visualized in the monthly load characteristics graph. The “design load” is an estimate of the maximum load. RETScreen uses the climate data for the given location, specifically the design temperatures and the heating and cooling degree-days for each month, to determine the monthly heating and cooling loads. If the heating or cooling project is combined with a power project, it may be necessary to define the monthly power load, too.

Next the user supplies a few key parameters that describe the operating characteristics of the heating or cooling equipment, for both the base-case and proposed case projects. The costs of equipment and operation in both cases must also be provided.

For projects that combine heating or cooling with power generation, the operating strategy of the power generating equipment needs to be selected: does the equipment operate at full capacity all the time? Or does it just match some internal power load? Or is it only operated at the level where its waste heat does not exceed that required by the heating system?

At this point, the user reviews the findings of RETScreen’s energy model, which is given in a summary section for in-depth analyses. Following this, an optional greenhouse gas (GHG) analysis calculates the emissions reductions associated with the proposed project versus the base case project, according to a standardized methodology developed in collaboration with the United Nations Environment Programme and the World Bank’s Prototype Carbon Fund. And finally, a financial summary indicates whether the project is financially attractive, considering cash flows, taxation, incentives, and GHG emissions reductions credits. The financial analysis can include an optional sensitivity and risk analysis that reveals how changes in inputs affect the viability of the project, in part through a “Monte Carlo” simulation that reruns the analysis 500 times with random variations in key parameters.

To facilitate this analysis, RETScreen has been designed for ease of use. To this end, it runs under Microsoft Excel, which provides a familiar interface. Behind Excel, RETScreen contains over 70,000 lines of code, making it powerful and flexible.

RETScreen also assists in the selection of parameters for the analysis through built-in databases. RETScreen includes a global climate database with 4,700 ground locations. Furthermore, through long-term collaboration with NASA, global climate data derived from 20 years of satellite observations is built into RETScreen. In addition to RETScreen’s climate database, there is a product database of over 7,000 clean energy devices, ranging from boilers to heat pumps.

A thousand page context-sensitive help manual guides the user and explains clean energy technology. A host of tools performs detailed engineering calculations directly applicable to RETScreen—for example, calculating the performance of a ground heat exchanger—and helps with unit conversions, steam properties, GHG equivalencies and more.

Beyond software, RETScreen offers a comprehensive distance learning course, training material in many languages, a detailed textbook providing background information on both clean energy technologies and the algorithms behind RETScreen, case studies, and links to energy resource maps.

SLIDE 10: Types of Analyses
Because RETScreen is so flexible, the user must configure the software for the desired analysis. This configuration involves making a few selections from drop-down lists on the RETScreen Start sheet.

The Start sheet appears when RETScreen is opened. In it, the user specifies the project name and location, the climate data, and whether the higher or lower heating value convention is used for the energy content of fuels. Clicking on “show settings” reveals cells for selecting the language, the currency, and the unit system. The user chooses between “Method 1”, a simplified single spreadsheet analysis, and “Method 2”, a more detailed approach with separate sheets for the different elements of the analysis.

A key part of the configuration is the choice of project type. A drop down list provides a wide range of options, many of them relating to heating and cooling projects. If “Heating” is chosen, then the project is considered to include only a heating load. The technology used to supply the load in the proposed case is chosen from an extensive “Technology” drop-down list in the Start sheet. The list includes biomass system, boiler, furnace, heat pump, thermal fluid heater, solar air heater, solar water heater, and “other,” a catchall for projects that don’t fit neatly into any of the other categories. If “Cooling” is selected as the project type, then the technology list includes absorption, compressor, desiccant, free cooling, and heat pump choices. The technology selected refers to the base-load heating or cooling system; other technologies can be selected for the intermediate and peak load systems, if desired.

Since absorption and desiccant cooling systems require heat, it makes sense to be able to consider them in combination with a heating system. To facilitate this, RETScreen offers a “Combined Heating and Cooling” project type. For projects that make use of waste heat from a power project, the user will wish to select “Combined heating and power” as the project type. If a cooling system is a significant electrical load for the power project, then the user will find the “Combined cooling and power” project type useful. These two can be combined in a “Combined cooling, heating and power” project type, which even permits waste heat from the power project to be used for absorption cooling. The RETScreen training course includes more information on these technologies in the Combined Heat and Power Project Analysis presentation and the Power Projects presentation.

SLIDE 11: Load Characteristics
As mentioned earlier, the user specifies the heating and cooling load in terms of a weather-dependent space heating or cooling load plus a weather-independent load. In simplified Method 1 analyses, the weather independent heating load is considered to be domestic hot water heating; for cooling it is referred to as “non-weather dependent cooling.” The two figures on this page show the monthly heating and cooling loads for a particular system. In the base case, shown at bottom left, the heating load peaks in January and falls to zero for the summer. The cooling load exhibits the opposite tendency. In the proposed case, shown at right, the cooling load is met by an absorption chiller, resulting in a significant heat load through the summer.

In a Method 2 analysis, a Load & Network sheet is added to the RETScreen analysis, providing more flexibility in how the user specifies loads. To specify the loads in the same way as with a Method 1 analysis, “Space Heating” or “Space Cooling” is selected. If no weather dependent load is involved, then the user may instead choose “Process Heating” or “Process Cooling.” The process load may require the same energy every month, or may vary from month to month as indicated by the user. Furthermore, if so desired, the load can be specified as a combination of both “Space” and “Process” loads.

To this point, all the loads of a single building have been lumped together and specified in terms of their space and process components. With the Load & Network sheet, it is also possible to have spatially distributed loads. To lump all the loads together, “Single building” is chosen for the description of the heating or cooling system. If the building contains multiple zones, and the space and process loads of each zone need to be specified independently, then “Single building – multiple zones” is chosen. This permits up to 14 zones.

This approach to spatially distributed loads can be extended to district energy systems, such as the district heating system for the city of Copenhagen mentioned earlier. In a district energy system, heating and cooling from one or more central plants is distributed to geographically dispersed loads, such as buildings or clusters of buildings, through a network of insulated pipes carrying hot or chilled water or other fluid. When the user selects “Multiple buildings” in the heating or cooling system description, not only can the space and process loads of up to 14 buildings or clusters of buildings be specified independently, but RETScreen helps prepare a preliminary design and cost estimate for the district energy network interconnecting them to a central plant.

SLIDE 12: Important Parameters
In order for RETScreen to calculate the energy input, and therefore, fuel, required by a heating or cooling system, the user must specify the equipment’s efficiency. For boilers, furnaces, thermal fluid heaters, and biomass systems, the key parameter is the seasonal efficiency. The seasonal efficiency is the ratio of heating or cooling energy provided by the system and used by the load to the total energy input in the form of fuel, considered over the entire year. Thus, if on an annual basis a heating system consumes fuel containing 100 GJ of energy but produces only 55 GJ of heat, its seasonal efficiency is 55%. Note that because the system may operate at part load, cycle on-and-off, and otherwise be subject to non-ideal operating conditions, the seasonal efficiency is almost always lower than the “steady-state” efficiency found in manufacturer’s literature.

With cooling technologies, it is common to state the efficiency as a coefficient of performance, or COP, the ratio of heat removed to input energy. A COP of one corresponds to an efficiency of 100%. Because the power input to a compressor serves only to modulate the pressure of a refrigerant, such that it has low pressure and temperature where cooling is required and high pressure and temperature where heat can be rejected, coefficients of performance in excess of one are possible and in fact common. For example, a cooling system requiring 100 MWh of electricity over the course of a year in order to provide 300 MWh of cooling would have a COP of 3.0. RETScreen requires the seasonal COP, rather than the COP under design conditions.

When a power system provides waste heat for heating or cooling, additional parameters are required. For many common power systems, the user of the RETScreen software specifies the efficiency in terms of the heat rate. This is the amount of energy, in the form of fuel, that is consumed by the project in order to generate a unit of electricity; it is measured in units of kJ per kWh or BTU per kWh. For example, a combined heat and power plant that consumed 100 kWh of fuel energy to produce 30 kWh of electricity would have a heat rate of 12,000 kJ/kWh, as calculated at the right hand side of this slide.

The difference between the energy that can be liberated from the fuel upon combustion and the energy output in electricity is assumed to be available as heat for other purposes. In a combined heat and power project, there is a load for a certain fraction of this heat, with the remainder being dissipated in the environment without any use being made of it. The fraction that can be used will depend on the temperature of the available heat versus the minimum temperature of the heat required by the load, the characteristics of the heat recovery equipment, and a range of complicating factors, such as the corrosivity of condensed exhaust gases, that will depend on the nature of the heat stream. The heat that is actually used is often dictated by whether the demand for heat coincides with its availability. In RETScreen, the fraction of available waste heat that is delivered to a load is called the “heat recovery efficiency.” In the example shown on this slide, once the 30 kWh of power has been subtracted from the 100 kWh of fuel, 70 kWh of heat is available for use. Since only 55 kWh of heat is supplied to the load, the heat recovery efficiency is 55 over 70, or 79%. More information can be found in the “Combined Heat and Power” presentation of the RETScreen training course.

SLIDE 13: Emissions Analysis and Financial Analysis
RETScreen’s Heating and Cooling Project Model employs the standard RETScreen Emissions Analysis and Financial Analysis. These simple but powerful tools are discussed in more depth in the “GHG Emissions Analysis” and “Financial and Risk Analysis” presentations in the RETScreen training course. For simplified analyses in a single spreadsheet, Method 1 is selected from the Start page. For more in-depth analyses with individual Emissions Analysis and Financial Summary Sheets, Method 2 is selected.

SLIDE 14: Example 1: Heating or Cooling
Let’s see how RETScreen can be used to determine the viability of heating and cooling projects by looking at a couple of examples. Let’s start by examining a simple and common system: a boiler combusting natural gas. We’ll compare a medium efficiency boiler to a high-efficiency, condensing boiler. The project database contains a case study for such a comparison. We open the project database, select the Case Studies tab, and look for the Boiler heating project for an office building in Vancouver, Canada. We can obtain a more detailed description of this project by clicking on the help button, labelled with a question mark, at the bottom right of the project database window. We retrieve the RETScreen analysis of the project by clicking on the green checkmark.

Once the case study has opened, we see that, as expected, RETScreen has been configured on the Start sheet for a Heating project utilizing a boiler. Note, too, that the Higher Heating Value convention for the energy content of fuel has been selected; this makes sense, since this convention is commonly used in North America. Climate data for Vancouver International Airport has been selected from the climate database. When we click on Show Data, we see that the heating design temperature for this mild location is
–4.5 degrees Celsius. That is, 99% of the time the outside temperature will be above
–4.5 degrees Celsius. We also see that while the heating degree-days peak in January, the heating degree-days for July and August are not zero; this reflects Vancouver’s maritime climate.

On the start page, a simplified Method 1 analysis has been selected. This means that only a minimum set of parameters need be entered in the Energy Model page. We turn to this sheet by clicking on the Energy Model Tab. The first half-dozen parameters are used to determine the load. The heated floor area of the building has been entered, and it has been indicated that at the design heating temperature the space-heating load for the building will be 55 W/m². If we needed to estimate this parameter, we could consult the help manual. Clicking on the Question Mark icon of the floating RETScreen toolbar, we open help and click through to the building heating load chart. Extrapolating the curves shown there to –4.5 degrees Celsius, we see that the specified 55 W/m² space heating load is reasonable for a building with medium insulation levels. Over the course of the year, domestic hot water requirements equal 10% of the total heating load for typical office buildings, so this has been included as a weather independent load. Based on the heating degree-days, RETScreen calculates a total heating requirement of 1,072 MWh. The same load is used for both the base case and the proposed case; if a non-zero value were entered for efficiency measures applied to the proposed project, the load would no longer be the same in the two cases.

Next the base load heating system is specified. For the base case, it doesn’t really matter what equipment is being used: all we really need to know is how much fuel it consumes, how much this fuel costs, and the incremental cost of the proposed case system compared with this base case system. A natural gas boiler with an efficiency of 80% is entered for the base case. For the proposed case, 88% efficient condensing boilers with a combined capacity of 4.0 million BTU/h have been selected. The proposed case boilers cost $66,000 more than the base case boilers. In both cases, natural gas costs $9 per GJ.

Based on this information, RETScreen calculates that the system will annually consume 4,800 GJ of natural gas in the base case but under 4,400 GJ in the proposed case. Annual fuel costs will fall from $43,400 to $39,500.

Under the base load system section, there are cells for specifying the peak load system. Since our base load system is already sufficient to meet the peak load, RETScreen assumes that any peak load system would consume no fuel. Because of this, and because no incremental cost has been associated with a peak load system, it has no impact on the analysis.

The emission analysis calculates the net annual GHG emission reduction. In the base case, natural gas combustion results in nearly 240 tonnes of CO₂-equivalent gases to be emitted per year. In the proposed case, less gas is consumed, and emissions fall proportionately. The savings is around 20 tonnes of CO₂-equivalent per year. We can use the RETScreen equivalency calculator to help get a feeling for this figure. It tells us that the 22 tonnes of CO₂ equivalent per year are comparable to taking four to five cars and light trucks off the road, the effect of 22 North Americans reducing their energy use by 20%, or 45 barrels of crude oil not being burned.

The case study assumes that the building operator is not compensated for these GHG emissions reductions; the credit rate has been entered as $0 per tonne of CO₂ equivalent. In much larger projects, or projects that group together a number of smaller projects, it might be possible to earn substantial revenue from selling GHG reductions at, for example, $20 per tonne. But with such a small project, the GHG emissions would earn only around $400 per year, which would hardly be worth the hassle of organizing their sale. Nevertheless, putting a figure on these emissions reductions at least acknowledges the environmental impact of the project and facilitates comparisons.

In the Financial Analysis, we see that a number of financial parameters, like the inflation rate, project life, and debt ratio are given. Operation and maintenance costs are zero, reflecting the assumption that these costs will be the same in the proposed and base cases. Indeed, it is typical that only the difference in costs be specified, avoiding a comprehensive accounting of the costs for each case.

As seen in the cash flow graph, this is a marginal project. RETScreen calculates that the simple payback period is over 15 years, and the project has a pre-tax internal rate of return of only 5%.

That is all that is required for a Method 1 RETScreen analysis. But there are many ways this simple analysis can be changed to investigate different options and scenarios. For example, imagine that the base case was an oil boiler and the price of oil was $0.60 per litre. We can very rapidly determine that such a project would be far more attractive than the one we just looked at, with a pre-tax IRR, or “Internal Rate of Return” of 57% and simple payback of 1.9 years.

Now let’s examine a cooling project. Ice skating arenas consume significant quantities of energy in the cooling systems they use to keep the ice surface frozen. One would suspect, therefore, that an improvement in the COP of these systems would substantially reduce costs. One way to improve the COP of compressor-based systems is to permit the compressor discharge pressure to vary, or “float.”

In many cooling systems, the compressor always drives the refrigerant to the same pressure. This pressure dictates the temperature of the condenser, where the heat that has been extracted from the cooling load is rejected to the outside air. In order for the condenser to be able to reject this heat, its temperature must be well above the outside temperature. As a result, the compressor discharge pressure must be fixed sufficiently high that heat rejection will occur on the warmest day of the year during which the system operates.

In some systems, the compressor discharge pressure is not fixed, but is adjusted on the basis of the outdoor air temperature. When it’s cooler outside, the condenser need not be so warm, and the compressor need not raise the pressure of the refrigerant so high. Since compressing a gas takes a lot of work, this improves the COP of the system.

Let’s investigate this for an ice rink in Madison, Wisconsin; we can find a case study for this comparison in the RETScreen project database. This rink operates from mid-September to May, totalling about 5,500 h per year. The peak cooling load is 80 kW, and electricity costs $0.10 per kWh. It is estimated that changing from a fixed to a floating compressor discharge pressure will raise the COP from 1.75 to around 2.8. Of course, this requires a more sophisticated control system, to ensure that the pressure does not drop too low, and this control system will cost just under $1,000.

When we open this case study, we immediately note that a Method 2 analysis is being used. This more detailed level of analysis, necessary for this more complicated project, includes separate sheets for the energy model, cost analysis, emission analysis, and financial analysis. It has also added a Load & Network sheet. Let’s click on this tab.

The base case cooling system cell indicates that we will model this load not as a space cooling load, but as a process load. We assume on this basis that the typical cooling load will not be far off the peak cooling load. For the base case system, the COP of 1.75, the capacity of 80 kW, and the cost of electricity have been entered. Since we indicate that we want to enter “Detailed” process cooling load characteristics, RETScreen allows us to enter, for each month, the fraction of the time that the cooling system is operating. We fill out 100% for the months of October through April, 0% for the summer months, and 50% for September. The cooling load is shown in the graph; it is the same for the base case and the proposed case. RETScreen confirms that this equals 5,500 hours of operation annually, and reports that the total cooling of 440 MWh requires 252 MWh of electricity annually and will cost $25,152 in electricity.

The parameters describing the proposed case system are found in the Energy Model sheet. The only difference, compared to the base case system, is the COP of 2.83. Now the summary shows the electricity consumption is only 156 MWh annually.

In the separate Cost Analysis page, $840 in additional costs for the control system have been entered as a line item denoted “Energy efficiency measures—condenser”.

In the Emission Analysis, average emissions for grid electricity in the United States of America have been used to estimate how the reduced consumption of electricity translates into GHG emissions reductions. RETScreen shows us that under this assumption, GHG emissions are reduced by 56 tonnes of CO₂-equivalent per year.

The financial analysis page reveals that this is phenomenally profitable project, as would be expected for such a significant improvement in COP stemming from a low cost modification.

As with the heating example, we’ve just scratched the surface of the types of scenarios that can be investigated with RETScreen. For example, let’s compare this base-case system against a fairly unconventional option, an ammonia/water absorption refrigeration system using natural gas combustion as the source of heat. Assume natural gas is priced at $9 per GJ. Imagine that we want to replace the existing equipment, and that the absorption unit has a COP of 0.6 and costs $200 per kW of refrigerating capacity.

Going to the Emissions Analysis page, we see that now the proposed case emissions are based not on the emissions factor for electricity in the USA, but rather on that for natural gas combustion. Emissions have still been reduced, but by less than before.

The financial analysis page shows, however, that this is not a terribly attractive project. Perhaps it would be better in the case that we were not replacing existing equipment, but were comparing installing either a compressor-based system or an absorption system. Let’s assume that the cost per unit capacity of the two systems is roughly the same, such that in the cost analysis we enter 0 as the incremental cost of capacity. Of course, if we were going to install a new compressor-based system, we would make sure it had floating head pressure. So we’ll change the base case COP to 2.83 in the Load & Network Sheet.

Returning to the Financial Analysis page, we discover that this absorption project looks even worse. One might wonder why one would ever use an absorption system. On the next slide, we’ll show one case where it may make sense.

SLIDE 15: Example 2: Heating and Cooling
We’ve been looking at cooling systems through a detailed, Method 2 analysis. Let’s see if we can simplify things by moving to a Method 1 analysis. Immediately we notice a problem: the Load & Network sheet has disappeared. This was the sheet that let us specify the cooling requirement as a process load.

But in the case of our absorption system analysis, this is not really a problem. The absorption system must take heat from somewhere, so let’s not consider the cooling system in isolation from the heating system. Going to the Start page, we select “Combined heating & cooling” as the project type. This has a nice side-benefit: the increased complexity of a heating and cooling project warrants a Load & Network sheet, even in a Method 1 analysis. Our base case cooling system and load is already defined there.

There’s another nice surprise: when we turn to the Energy Model page, the proposed case absorption system has automatically recognized that it will be getting heat from the heating system. This allows us to draw on RETScreen’s data for a vast range of fuels, offered in the fuel type drop-down menu. We are no longer restricted to a single fuel, either: up to three can be used, with their use specified on a monthly or percentage basis. We can choose to make use of an intermediate load system in addition to a base load system.

So let’s consider the case where the ice rink, no longer in Madison, but in a smaller town nearby, was located next to a school, community centre, or other institutional building. It might make sense to link the heating and cooling plants of the two buildings. The heating system would provide the space heating for the institutional building as well as the heat required for the absorption cooling system, which in turn would meet the process cooling load of the arena and the space cooling requirements of the institutional building.

Furthermore, let’s assume that near this town there is forest industry whose waste by-products of sawdust and bark can be obtained at low or no cost. For the proposed case, we will burn these waste products in a biomass combustion system. Since such systems are expensive, we will want to operate it at or near capacity as much as possible. It makes sense that this would be our base load system, therefore. For intermediate load and peak load capacity, we will rely on natural gas. For our base case system, we will rely entirely on natural gas heating and compressor-based cooling.

We start out in the Load & Network Sheet, where we define the load and the base case heating and cooling system. Assume the institutional building has a heated floor area of 3,000 m². In the base case, we’ll use an 80% efficient boiler. We can estimate the per unit floor area heating load for the building to be around 60 W/m² based on the heating design temperature of –20 deg Celsius and the Building Heating Load charge found in the RETScreen help. Domestic hot water demand is expected to equal 10% of the space-heating requirement on an annual basis.

We’ll add the institutional building’s space cooling load into the arena’s process cooling load. Based on a design cooling temperature of 30 degrees Celsius, the cooling load is estimated at 40 W/m². We inspect the base case system load characteristics graph to ensure that our space cooling load has been included; it shows up during those months when the arena is shut down.

Next, on the Energy Model page, we define the proposed case system. The absorption unit can supply over 97% of the required cooling, so we’ll ignore RETScreen’s suggestion that a peak system is required. That’s a fair comparison, since we have 80 kW of cooling capacity in both the base case and the proposed case. Up to now, we’ve assumed that the cost of cooling capacity is about the same for absorption and compressor systems. In reality, the absorption system is considerably more expensive. Here we’ll assume that the incremental cost of the absorption system versus the compressor system is $200 per kW of capacity.

For the proposed case heating system, we’ll use base, intermediate, and peak load systems. The base load system is biomass. We assume that 50% of its fuel is sawdust and 50% of it wood bark; we can enter these both by selecting “Multiple fuels-percentage” for the fuel selection method. For the moment, let’s assume that both sawdust and wood bark are available for free.

Now we must specify the capacity of our base load biomass system. Returning to the Load & Network page we inspect the Proposed case system load characteristics graph. If our biomass system capacity is 120 kW, it will operate at or above 80% of its nominal capacity in every month but May. We therefore enter 120 kW as the capacity on the energy model page, and assume an efficiency of 75%. We also assume that the additional cost of this biomass capacity, compared to the natural gas capacity that we would otherwise need, will be around $500 per kW.

For the intermediate load heating system a natural gas boiler will be used. Let’s select a capacity of 70 kW and a seasonal efficiency of 75%, just a bit lower than what we would have in the base case. Since this capacity is required in both the base case and the proposed case, its incremental cost is 0.

A proposed case peak load heating system is necessary. RETScreen tells us that our base and intermediate load systems, with a combined capacity of 190 kW, fall short by 123 kW. We enter a peak load capacity of 130 kW. Note that this capacity is not required in the base case system, which needs only 180 kW of heating capacity. Therefore, we must enter an incremental cost for this capacity. The system design graphs shows that although the peak load system represents 40% of the capacity of our system, it supplies less than 8% of the total heat required. So let’s use something inexpensive, even though it may not be very efficient: we’ll put in a 55% efficient natural gas heater that costs only $50 per kW of capacity.

Skipping to the financial analysis, we enter 2.0% for inflation, a 25 year project life, 50% for the debt ratio, 7% for the debt interest rate, and 15 years for the debt term. Our project is very attractive: it provides a pre-tax internal rate of return of nearly 35% on the 50% equity investment. Despite this, its simple payback is relatively long, over 4 years. This demonstrates how very profitable projects can be missed when a quick return is preferred to a good return.

We assumed that wood waste is free. That’s not very realistic. Let’s see what price we could pay for purchasing and transporting wood waste while still generating a return on equity in excess of 15%. First, we set the fuel rate for wood bark equal to that for sawdust, using an Excel formula. Next we use Excel’s goal seek function, available on the floating RETScreen toolbar, to determine the fuel rate for sawdust that generates an IRR of 15%. This reveals that we could afford to pay over $35 per tonne of wood waste and still have an attractive project. One conclusion we could draw from this is that absorption cooling can be attractive when there is a low-cost source of heat.

The system we have looked at here is not common, and perhaps not even terribly realistic. That’s okay: our goal was to illustrate RETScreen’s features, and how they permit rapid comparisons of a wide variety of heating and cooling scenarios.

SLIDE 16: Questions?
This completes this presentation on Heating and Cooling Project analysis with RETScreen.