CHICAGO - The Building Owners and Managers Association of Chicago (BOMA/Chicago) has entered into a memorandum of understanding with the Korean Smart Grid Association and two of South Korea’s largest energy and technology companies, KT Corp. and LG Electronics, to develop a commercial smart grid pilot program involving nearly a dozen office buildings in downtown Chicago. BOMA/Chicago said the pilot program will pioneer the construction of a virtual generator using buildings as electric grid resources and will be the first smart grid pilot program of its kind in the United States.

The commercial smart grid pilot program is part of a larger umbrella effort between BOMA/Chicago, the Korean Smart Grid Association, the Illinois Science and Technology Coalition (ISTC), and the Citizens Utility Board (CUB) to promote smart grid deployments at both commercial and residential buildings in Chicago. BOMA/Chicago will manage the commercial pilot program, while CUB will oversee the residential pilot.

The pilot program will be funded by a coalition of private sector technology companies associated with the Korean Smart Grid Association, including KT Corp., LG Electronics, and several other Korea-based companies that offer smart grid technologies and expertise. The parties will select between six to 14 commercial and residential buildings for participation in the pilot program, with a Korean investment likely to total between $20 and $30 million.

Buildings will be selected for the pilot program based upon preliminary assessments of each candidate building’s energy management systems, HVAC equipment, supply contract terms, ownership and tenant needs, and other factors. Once the pilot buildings are selected, more extensive technical assessments are slated to begin within the next 90 days. Retrofit work and system programming will commence shortly thereafter, with the goal of conducting initial transactions by the end of the year, with the pilot becoming fully functional by summer 2011.

“BOMA/Chicago’s collaboration with the Korean Smart Grid Association and the ISTC further advances Chicago’s position as a global smart grid leader,” said Michael Cornicelli, executive vice president of BOMA/Chicago. “We’re excited to leverage the expertise and resources of our program partners to create the first commercial smart grid pilot in the United States, and set in motion the construction of a clean, virtual generator in downtown Chicago.”

BOMA/Chicago said its commercial smart grid pilot program will enable participating buildings to manage their electricity consumption more effectively and gain cost savings. Through the use of smart grid technologies, such as smart meters, variable speed drives, and digital controls, building managers will have greater operational control of their energy systems. This, in turn, will enable them to curtail or reschedule energy usage in ways that will not adversely impact tenant comfort.

The pilot program will also include the creation of a Network Operating Center (NOC), which will interpret wholesale electricity market signals from PJM Interconnection, the grid operator, and convey them to the participating buildings. The buildings will then be able to respond to market signals by scheduling and implementing curtailment strategies that will both provide cost savings and enhance grid performance. Participation in these demand response programs will be handled for the buildings through the NOC.

“This will be the first-ever test of the ability of large commercial and residential buildings to effectively aggregate their efforts in a large-scale demand response program. The success of this program will show that a green virtual generator can be created through those collaborative effects, eliminating the need to build yet another expensive generating facility,” said Cornicelli.

The long-term goal of the program is to expand its size and scope to include BOMA/Chicago’s 260-plus member buildings. These buildings represent more than 80 percent of the square footage and an estimated 1,000 megawatts of peak demand in Chicago’s central business district. BOMA/Chicago estimates that 20 percent of that peak demand, or 200 megawatts, could be curtailed through effective participation in its program, which is estimated to equal the output of a mid-sized coal-fired power plant and eliminate its need.

Publication date:08/23/2010