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With annual energy costs for the hospitality sector reported at around £1.3 billion, and carbon emissions in excess of eight million tonnes a year, it’s no wonder that hotels are looking for ways to drastically cut power consumption and increase efficiency as hikes in energy prices continue. Any savings go straight to the bottom line creating increased revenue without having to increase sales. In other words, saving energy is one of the simplest ways to increase profits; particularly if there are no upfront costs.
With UN reports predicting more years of climate disruption, the hospitality industry has its part to play in helping to reduce the environmental impact of carbon emissions.
The Carbon Trust reports that hospitality is a rapidly growing industry with a corresponding inevitable rise in energy consumption unless positive steps are taken to reduce it and improve energy efficiency.
What if there was a way for facility managers to create an immediate risk-free revenue stream simply by managing a hotel’s energy consumption more effectively? What if that scheme required no upfront investment, ensured guests remained unaware of any changes to their environment and didn't impact day-to-day operations and comfort levels? Revenue generated from such a scheme could be re-invested into more costly energy efficiency measures.
The demand response process can be fully automated and managed remotely. Systems, such as lighting, heating, refrigeration and air conditioning can be temporarily turned down when the electricity network is under stress due to an imbalance of supply and demand.
Several international hotel chains throughout London recently took part in successful trials aimed at reducing energy demand during times of grid stress. There are no upfront costs to implement and substantial financial payments are made each time hotels participate. Additionally, each hotel gained greater insight into its energy usage using an energy management application with real time monitoring and alerting functions, enabling further efficiencies to be made.
Over three months last summer, advance notice of 30 minutes was given to participating hotels asking if they would be willing to undergo a drop in power. If the hotels decided to participate then an automated or manual turn down of non-essential systems took place. This event lasted for a short period of time, usually only an hour.
Site personnel decide if the hotel is able to participate, and then either activate the strategy through a BMS (Building Management System), manually turn the plant off or authorise the Demand Response partner to remotely activate the pre-agreed strategy.
The process is called demand response (DR) or demand-side management (DSM). When several sites, whether hotels, hospitals, airports or retail distribution centres, all agree to participate, then several megawatts (MW) of aggregated power can be removed from a congested electricity network. This allows grid operators to avoid bringing polluting power stations fully online in order to provide extra capacity, or prevents the need to import expensive energy from abroad.
Funded by Ofgem’s Low Carbon Network Fund, Low Carbon London is a £28.3m pioneering learning and demonstration programme, which is using London as a test bed to support the development of a smarter electricity network.
Demand response is a way of altering industrial and commercial consumers’ electricity demand by offering financial incentives through aggregators such as KiWi Power. This commercial approach encourages users to consume less energy during peak periods, enabling power companies to manage the network requirements more efficiently.
Marriott International was the first international hotel group to adopt KiWi Power’s demand response programme in four of its London-based hotels. These trials formed part of Marriott’s energy saving initiatives announced in July 2012 to lower carbon emissions across its portfolio of European hotels.
Marriott International has been at the forefront of demand response having first implemented the energy saving programme two years ago in the US.
During the UK trials, Marriott International’s London hotels allowed KiWi Power to take control of their chiller and air handling equipment. The air conditioning system is operated through a grid of chilled water pipes, with fans blowing air across them to keep guest rooms cool.
During one particular one-hour event the power to the chillers was turned off while the fans continued to blow air across the cold pipes. This resulted in a 2°C rise in temperature from 4°C to 6°C and saved around 30–40 kilowatt hours (kWh) in energy. With participation payments of around £5,000 a quarter, Marriott International could benefit from a significant new revenue stream across its portfolio, as well as reducing energy costs.
John Conlon, senior director facilities and project management for Marriott International Europe, said, “Through participation, we have gained deeper insight into our energy use through KiWi Power’s smart meters and software. We have successfully been able to turn down some of our non-essential systems for up to an hour without any negative impact on business operations or customer comfort levels. We are now looking to increase participation in demand response across our portfolio and hope to roll out the programme to all of our UK hotels.”
Hilton Worldwide signed up five of its London-based hotels, including Hilton Hotels and Resorts and DoubleTree by Hilton properties, to take part in the demand response trials with KiWi Power. Over the 90 days in which they took part, the hotels made over 500kW of demand available to the trial. A number of services throughout the hotel were identified as appropriate for inclusion in the project, including chillers, air handling units, pumps and other high-energy consuming equipment. Importantly, hotel operations were unaffected by the trial and the portfolio successfully met and exceeded its demand response whenever called.
Ed Gray, director of energy and utilities for Europe at Hilton Worldwide said, “Demand response not only reduces our hotel's overall consumption of electricity, but also focuses our attention on costly wastage during periods of high demand and grid stress. This in turn allows us to be more strategic in the control of our energy for our buildings and delivery of superior comfort for our guests during their stay. It is one of the many ways we are demonstrating our commitment to living sustainably as a company, as part of our wider Travel with Purpose CR strategy.”
Park Plaza Hotels & Resorts
Park Plaza Hotels & Resorts, part of the Carlson Rezidor Hotel Group, will be participating in trials during winter 2013. Park Plaza Westminster Bridge is the company’s largest London branch and will be trialling demand response to see whether it could extend to other hotels in the group.
A turndown demand response approach will be provided to the hotel, ensuring there will be no change to business operations or comfort levels. A BMS has been implemented to allow manual turndown of all chillers when required.
Keen to promote its dedication towards the hotel’s green business credentials, Park Plaza will also allow other services to be manually turned off during a demand response event, including laundry room equipment and its onsite water bottling system.
Daniel Pedreschi, general manager from Park Plaza Westminster Bridge London commented, "Working with KiWi Power to identify a turn-down strategy was a simple process. The strategy identified not only allows the hotel to maintain its high standards in customer comfort, but also to save energy and take part in a green initiative that helps to secure the electricity supply for the local community, reduce carbon footprint whilst being cost effective."
Demand response trials deliver essential learning for participating organisations. The trial allows hotel managers to uncover opportunities to manage energy consumption more intelligently and deliver significant savings and revenues all year around. Understanding how, and if, businesses can respond to these types of notifications will help shape their growth strategy, and can potentially achieve a competitive advantage over their closest rivals.