Economic analysis in individual project selection Using net present value analysis instead of the rate of return will

treat investment scale as one of the key value drivers, and will help engineers select money-making projects.
06-18-2012 00:13 By: Steve Kihm, CFA, and Scott Hackel, PE, Energy Center of Wisconsin, Madison, WI

Consulting engineers are always under pressure to deliver the most cost-effective project possible for their client, whether it is for a simple replacement pump selection or a full HVAC system selection on a large building. This is no small feat, as cost effectiveness depends not only on the upfront cost of a project, but also on its impact on future operational and other costs. Most engineers will use some type of lifecycle cost estimate to make these types of decisions, to balance upfront and future costs for a client. This analysis might include consideration of any of the following measures:

The projects payback ratio (simple payback) Its internal rate of return The net present value of its cash flows.

The payback ratio is an ad hoc measure that, while easy to apply, can provide misleading signals. The finance literature supports the internal rate of return and net present value metrics as the more proper tools for general economic analysis. Nevertheless, when a specific problem involves mutually exclusive investments, analysts should employ only the net present value measure, and not the rate of return. When projects compete directly against each other for capital, it is important that differences in investment scale factor into the analysis. The internal rate of return measures only return per dollar of capital invested, thereby eliminating the impact of scale in specific project analysis. Finance principles make it clear that firms should maximize wealth, which can be measured only in dollars. Unlike rates of return, which are percentages, the net present value result is dollar based, aligning more properly with finance principles in that regard. We demonstrate these points using theoretical finance examples, then end with a real-world example showing that a large-scale geothermal heating and cooling system is economically superior to a smaller-scale conventional HVAC design, even though the conventional system has a quicker payback and a higher rate of return. Problems with the payback ratio While the payback ratio can provide some useful information about a project, it is at best an incomplete measure of economic attractiveness. Applying a strict payback criterion (e.g., all projects must have a payback of 2 years or less) can in many cases steer us away from economically attractive capital investments.

The payback ratio tells us how long it takes for the cumulative cash flows generated by an investment to cover the upfront capital cost of the project. That is all that it tells us. For example, if an energy recovery unit costs $50,000 to install, and it produces annual energy savings of $20,000, the payback is:

Note that if our criterion required a 2-year payback, we would reject this project. It is difficult to know whether that is a proper economic decision because the payback ratio ignores critical information, such as the expected life of the project, the cost of capital, and other ancillary effects such as changes in cash flow due to inflation. One big problem with the payback ratio is that it ignores cash flows that occur past the point of capital recovery. Returning to our example, note that the payback ratio for the energy recovery unit is 2.5 years whether the equipment lasts 3, 10, or 30 years. Assuming a 10% discount rate, the net present value (to be discussed in a moment) of the 3-year version of the equipment is negative (meaning the project destroys economic value rather than creating it), the 10-year version is worth about $70,000, and the 30-year version is worth about $140,000. The payback ratio provides no hint that the economic value varies to this extent depending on the useful life of the measure. Financially sound metrics: Is one as good as the other? Both the internal rate of return and net present value metrics rest on the same simple, but powerful, notion: If the project earns more than it costs to finance it, it creates economic value. The internal rate of return measures the result in percentage terms (i.e., in the form of an interest rate); the net present value calculation provides the result in terms of wealth (i.e., dollars). When analyzing a project in isolation, the internal rate of return and the net present value approaches provide the same signal as to whether to invest. That is, if a project produces a rate of return in excess of the cost of capital, it will also produce a positive net present value result. This suggests to many that one can use either the internal rate of return or the net present value measure to select projects, regardless of the circumstances. That conclusion is incorrect. We encounter problems with the internal rate of return metric when selecting among competing, mutually exclusive projects (projects in which multiple options exist, but only one can be chosen). In that realm, the net present value measure is superior to the internal rate of return. That is to say that firms will be better off financially if they consistently select from

among mutually exclusive projects using the net present value criterion rather than the internal rate of return. Project evaluation using financial metrics We demonstrate all these financial metrics using data for two hypothetical, mutually exclusive projects, as presented in a standard financial management text (Robert C. Higgins, Analysis for Financial Management, Irwin, 1989). In this case lets assume two different renewable energy installations, one being about twice the size of the other. Project engineers can recreate our calculations for their own projects quite easily in a spreadsheet. Project Small requires an upfront investment of $522,000 and produces annual cash flows of $100,000 for each of the next 10 years. Project Large requires an upfront investment of $1.1 million and produces annual cash flows of $195,000 over the same period. The property owner can raise capital to finance either project at an annual cost rate of 10%. The payback ratios for the projects in question are:

We see that we recover our upfront capital slightly faster under Project Small than we do under Project Large. If speed of capital recovery is our guide, then Project Small wins this contest, albeit only by a slight margin. But speed of capital recovery is not linked directly to wealth creation, which should be the ultimate objective of any for-profit firm. One calculates the internal rate of return by setting the discounted present value of the project cash flows equal to the upfront cost. The internal rate of return is the discount rate (r) that solves the equation.

As noted above, a project creates value if its return exceeds the cost of capital (10% in this example). The internal rates of return for both projects meet that criterion, suggesting that both create value. If these were independent projects, the owner should invest in both. This might be possible if the owner had two separate pieces of property upon which to place a renewable installation, but here we assume he has only one. As such, the projects truly are mutually exclusive. If we build the smaller version of the installation, we then forego the opportunity to simultaneously build the larger one at that same site. Under those conditions, if maximizing the rate of return is our guide, then Project Small is clearly the winner, this time by a more noticeable margin. But maximizing rates of return is not the proper objective of a financially oriented business maximizing wealth is the proper objective. We can measure wealth in one and only one formdollars. The amount of wealth a project creates depends on the simultaneous interaction of three key variables: 1. The rate of return 2. The cost of capital 3. The investment scale. Note that none of these measures, when viewed in isolation, provides particularly useful information. Projects with high rates of return might not create much wealth if the investment scale is small or if the cost of capital for the project is high. On the other hand, projects with low rates of return can create large amounts of wealth even if the return exceeds the cost of capital only by a small margin, as long as the investment scale is large enough. Of course, one should not reject all high-return, small-scale projects. Nor should one invest in all low-return, large-scale projects. It is the specific interaction of the three key variables shown above that determines which project creates the most wealth. This leads us to the net present value measure, which simultaneously considers all three key value drivers. For this metric, instead of solving for r as we did when calculating the rate of return, we rearrange the terms and substitute the cost of capital (10% or 0.10) for the return.

The interaction between the key value drivers over the 10-year investment horizon reveals that investing in the larger project creates more economic wealth than does investing in the smaller one, even though the larger project produces a lower internal rate of return, as we saw earlier. As a standard corporate finance text suggests, if you want to feel good about making great percentage returns, select projects based on the internal rate of return. If you want to get rich, use net present value. Net present value and excess returns Letting scale influence the result as it does in this case may seem counterintuitive to manydont we want to use the rate of return to select projects because it eliminates the differences in scale, allowing for a more-balanced comparison? The answer is an unequivocal no. If we are interested in measuring wealth creation, which can be expressed only in absolute dollars, not percentages, we need to let scale shine through in the analysis, not be eliminated as it is in the rate of return calculation. The internal rate of return fails to provide the proper signal here because it is insensitive to the scale of the investment, and scale is one of the primary wealth drivers. The net present value represents the excess dollar amount, that over and above the funds that flow to the capital providers. If the owner builds the smaller installation, it will produce a 14% return, the funds from which he uses to pay 10% to the capital providers, leaving him with the equivalent of $92,500 in excess funds; if he builds the larger installation, it will produce a 12% return, the funds from which he uses to pay 10% to the capital providers, leaving him with the equivalent of $98,250 in excess funds. The choice here is clear. We purchase goods and services with dollars, not percentages. In the end, the owner can earn more dollars on the 2 percentage point spread (12% to 10%) for the larger installation than he can on the 4 percentage

point spread (14% to 10%) on the smaller installation. How can he make more money on the smaller spread? Its all about differences in investment scale. Application: a geothermal heat pump system

The discussion above would be well represented by a more concrete example. Lets take a common building engineering challenge: an aging HVAC system. An engineer is brought in to a 350,000-sq-ft hospital in the mid-Atlantic to determine the best course of action in dealing with an aging boiler/chiller central plant that seemed to the owner to be a potential spot for an energy-efficiency upgrade. The engineer initially considers replacing the old boilers and chillers, and installing new high-efficiency units, pumps, and controls. This will certainly save the hospital energy and maintenance cost over time. But recently he has also attained some experience with geothermal systems, and decides to consider a much bigger change to a central plant geothermal system. He must use financial analysis to determine which of these two options will be more effective. Replacing the boilers, chillers, pumps, and ancillary equipment is estimated to cost $4.30/sq ft, or $1.5 million. It will save approximately $85,000 per year in electricity, $63,000 per year in natural gas, and $15,000 per year in maintenance. The capital expenditure for the geothermal system is, of course, much more expensive. Though the inside equipment is actually somewhat similar (heat recovery chillers are installed in place of chillers, and only a small backup boiler is necessary), the geothermal system is much more expensive because a ground heat exchanger must be drilled in the field outside the hospital; the retrofit cost is estimated at $9.00/sq ft. But energy analysis indicates that the loads of the hospital are well suited to geothermal, and this technology will actually break even on electricity usage, while completely eliminating the hospitals $265,000 natural gas

bill; maintenance savings is estimated to be a little larger at $31,000 per year. The geothermal option also does not require replacement of cooling towers and boilers over time, saving the hospital $300,000 every 20 years. The engineer takes all of those project details and calculates the financial metrics in the manner described above (see Table 1). We ask you to consider this information to make the call as to the better investment option. (Note: The hospitals cost of capital is 7%.)
Table 1: Financial metrics for hospital HVAC projects
Project Simple payback Internal rate of return Net present value of cash flows $439,900 $523,100

Boiler/chiller Geothermal system

9 years 11 years

9.5% 8.6%

Before you answer this question, consider another question: If you could receive a gift today of either $439,900 or $523,100, with no strings attached, which would you prefer? That is essentially the same question we ask here. The net present value calculation tells us how much wealth we create in todays dollars after adjusting for risk and the timing of the cash flows, and after paying back both the principal and the required returns to those who provide the capital necessary to install the equipment. After considering all costs, including the capital costs, the hospital will increase its net worth in todays dollars by $439,900 if it chooses the boiler/chiller; it will increase it by $523,100 if it chooses the geothermal system. It is true that the geothermal system has a slower payback and a lower rate of return. But those metrics are nothing more than distractions for mutually exclusive projects. The only metric that matters when we choose from between investments of this nature in the net present value result and the geothermal system wins hands down by that measure. Key takeaways As a matter of practical advice to engineers, this analysis suggests that payback is a poor tool under most circumstances. It further suggests that we take a harder look at the scale of project options in our consulting assignments. Perhaps some of those larger projects are more valuable than we might have initially thought, especially if we were screening based on rates of return. Using net present value analysis instead of the rate of return will treat investment scale as one of the key value drivers, and will help us select wealth-maximizing projects.

Why maximizing NPV works for privately held firms

Some claim that while maximizing net present value may make sense for publicly traded firms that raise capital in the financial markets, privately held firms operate under different financial circumstances that make the net present value rule less applicable. As we shall see, such is not the case.
Assume a single-owner firm that has $25,000 of cash available for investment. The firm has two mutually exclusive, 1-year projects. Project A requires a $10,000 upfront investment and produces a $20,000 cash flow at the end of the year (a 100% internal rate of return); Project B requires a $20,000 upfront investment and produces a $35,000 cash flow at the end of the year (an 80% internal rate of return). If the firm wanted to raise capital to fund these projects, it would need to pay capital providers a 10% return. When we conduct proper financial analysis, whether the firm actually uses external funds is not importantthe cost of capital measures the opportunity cost of raising those funds. If you are skeptical, stay with us. The net present value metric is only a tool to guide us to wealth maximization. We will demonstrate that following that rule leads to greater wealth for the private firm, even if the firm uses internal funds to finance its projects. Using the opportunity cost concept, we have enough information to calculate the net present values for the projects:

So if we use internal rate of return, we would select Project A (100% rate of return); if we use net present value, we would select Project B (net present value of $11,818). But how does this mathematical analysis translate into firm performance? We can see the effect by examining the impact of each project on the firms wealth. Neither project uses the entire $25,000 cash balance. We assume for the sake of simplicity that the unused cash amount sits idle in the firms checking account. We show below the firms cash flow trail over the year for each project: Project A: $25,000 beginning cash balance - $10,000 investment + $20,000 cash inflow = $35,000 ending cash balance Project B: $25,000 beginning cash balance - $20,000 investment + $35,000 cash inflow = $40,000 ending cash balance If you think $40,000 is better than $35,000, then you want to use net present value, and not internal rate of return, to select projects. That notion holds for all for-profit firms, regardless of ownership structure. Portions of this example come from Brealey, Myers and Allen, Principles of Corporate Finance, McGraw-Hill Irwin, 2006.

Kihm is research director and Hackel is senior energy engineer at Energy Center of Wisconsin. Kihm evaluates energy-efficiency programs and develops, analyzes, and critiques energy policy. He was a 2011 Career Smart Engineers Conference presenter. Hackel consults with architects and engineers on energy-efficient building designs and systems. He conducts applied research on energy efficiency technologies and assists utilities in developing efficiency programs. He was a 2011 40 Under 40 award winner.

Saving energy in water heating systems Increased domestic water heating equipment efficiencies and numerous system configurations offer design professionals more tools to save energy and meet the building and client requirements.
07-18-2012 01:09 By: By Matt Dolan, PE, LEED AP BD+C, JBA Consulting Engineers, Las Vegas

In todays era of U.S. Green Building Council LEED certification, planet preservation, and green markets and mandates, the overall trend has been toward saving energy within buildings wherever possible and creating more sustainable construction methods and equipment. Many of these new technologies and designs have been centered around visible building systems (e.g., high-performance glazing or wall/roof structures, and low-VOC carpeting, paints, and millwork) or highly documented energy users (e.g., variable frequency drives on central plant pumps, chillers, energy-efficient LED or CFL lighting, and condensing type boiler systems with low supply water temperatures and large temperature differentials). These systems have generated many design philosophies and implementations and have helped contribute to numerous LEED certifications and considerable energy savings. Domestic water heating has not seen the same renaissance of system designs as these other systems. This has not been for lack of energy-efficient equipment or

new technology, but more due to limitations centered on hot water supply temperatures and health concerns. Water heating design considerations Domestic water heating accounts for approximately 15% to 35% of the total commercial building fuel usage (figures provided by the Ernesto Orlando Lawrence Berkeley National Laboratory report Technology Data Characterizing Water Heating in Commercial Buildings: Applications to End-Use Forecasting). Reducing the demand and standby energy consumption associated with this equipment has not been as great of a motivator within building system designs as the other items listed above. Commercial water heating typically requires a minimum supply temperature of 140 F to mitigate the presence of legionella bacteria, which causes Legionnaires disease through inhalation of bacteria-laden water (i.e., steam mist from a shower). According to the Centers for Disease Control and Prevention Patient Facts on Legionnaires disease, 8,000 to 18,000 people are hospitalized with this disease each year. A minimum of 140 F supply temperature for domestic hot water is always recommended, but it is not always required for distribution within commercial buildings. Once water is heated to this temperature, the legionella bacteria are effectively eliminated and this water can be safely distributed at any necessary temperature to the associated plumbing fixtures. Kitchens use 140 F to 180 F domestic water for dish/glass washing and sterilization, while standard hand sinks and lavatories may require a hot water temperature no higher than 105 F to 120 F. The 140 F minimum hot water supply temperature must not be overlooked by the system designer/engineer when selecting water heating equipment. When sizing a domestic water heating system, the first consideration is to determine the quantity of hot water required during the demand peak of the building. This is accomplished by first determining the quantities and types of plumbing fixtures to be placed within the building. For a standard office building, most of the hot water generation will be required for lavatories or break room sinks, though some offices also include shower/changing facilities. For hotel guestroom towers, domestic hot water will be required for a shower/bathtub (typically only one of these fixtures is in use at a time, which allows a diversity to be used on a system level) and lavatory faucets. From these fixture counts the associated cold water and hot water fixture units can be assigned. (The required fixture units associated with a given plumbing fixture are listed within the Uniform and International Plumbing Codes.) The hot water fixture units are typically determined from a 75% factor of the total cold water fixture unit count; this percentage is used to account for hot water mixing to produce the required discharge temperature at each fixture.

Fixture units do not directly correlate to a gallon per minute (gpm) flow rate for sizing equipment. Instead, the hot water fixture unit value is combined with Hunters Curve to ascertain the estimated hot water flow rate with a given level of diversity. A demand peak of 1 or 2 hours (which equates to a specific flow rate for the given length of time) is then used to size the required water heating equipment. Water heater designs have become increasingly energy efficient with the use of condensing type gas water heaters (both tank type and tankless), electric tankless point-of-use units (as well as large electric tankless units), and hybrid boiler/water heater systems. Each system has advantages and disadvantages, and these should be taken into account when considering which types of buildings are most appropriate for installation. Tank type water heaters

Tank type water heaters have remained the standard design type used within buildings for an extended period of time. These heaters rely on a heated storage tank anywhere from about 5- to 150-gal in size along with a heating element (either gas or electric service) to provide domestic hot water to the building as required. By using a storage tank, these units can be supplied with smaller heating elements or heat sources to reduce the electrical or gas infrastructure cost (electrical wire size, disconnects, gas meter, gas pressure regulator, piping, etc.). The energy penalty paid for using this type of water heater is in the form of standby losses. These are the losses associated with maintaining the hot water tank at a set temperature while it is continually losing energy to the surrounding space. Newer tank type water heaters have employed

thicker insulation with lower conductivity factors to help reduce such losses as much as possible. Tank type units are available in a variety of efficiencies from the 80% energy code minimum up to approximately 96% to 98%. The high-efficiency units use condensing type heat exchangers that allow the exhaust gases to cool and condense prior to being expelled from the unit, which in turn draws additional energy from the gas fuel source to raise their overall efficiency. The condensation produced through this process is slightly acidic in nature. Because of this, the heat exchanger must be designed to account for this corrosion factor, as well as provide a means for condensate to drain from the combustion chamber. Sizing a tank type water heater for a commercial building is accomplished by first determining the quantity of hot water required based upon the attached fixtures. For showers, lavatories, and other fixtures that have the ability to operate continuously, a timed use must be established (12 sec for each use of a lavatory faucet, 5 to 10 min for a shower, etc.). Once the total hot water demand (in gallons per hour, gph) has been established, a demand factor and a storage factor can be applied to this value to account for the peak demand flow rate required along with the expected duration of use. Demand factors typically vary between facility types, from 0.25 for a hotel to 0.40 for a school. Storage factors typically vary between 0.60 for a hospital and 2.00 for an office building. (Demand and storage factors have been taken from chapter 50 of the 2011 ASHRAE Applications handbook.) An 80% acceptance factor of the overall storage tank volume for hot water must be included. This is to account for water mixing within the tank to help ensure that water drawn from the storage tank is maintained at the required supply temperature. The demand factor is multiplied against the required gph to give the expected demand flow per hour. The storage factor is multiplied against the demand gph (from the previous calculation) to determine the quantity of storage required for the system (in gallons). From this point a tank type water heater can be selected to meet the gph demand for recovery and tank size to meet the storage requirements. One item to note is that tank type water heaters do not have a minimum flow rate required for their use. They are sized to maintain a given water temperature within the tank and for a specific gph recovery rate. Tankless water heaters There has been an increase in the demand for tankless water heaters in recent years. This has stemmed from energy-efficiency measures and rebates associated with their installation. These water heaters rely on a much larger burner/heating element (either gas or electric service) to deliver a constant volume of water at a specified temperature rise, which results in a given hot water supply temperature based upon the incoming ground water temperature mixed with any hot water return (if provided within the plumbing design). Many of these designs employ stages of heating to allow turndown of the burners and associated hot water flow to

help match the hot water generated with the hot water demand from the building plumbing fixtures. These units are available in a variety of efficiencies from the 80% energy code minimum up to approximately 96% to 98%. Most electric tankless units are found as under-counter-mounted water heaters serving a single faucet. These units are very effective at limiting all standby and piping losses, but they typically do not heat water beyond 110 F at a flow rate of 0.5 gpm for hand washing use. These small units are approximately 3 to 4 kW in electrical capacity. Large electric tankless units are available for special applications. Applications such as remote emergency eyewash/showers can benefit from units of this size due to the required 20 to 25 gpm flow rate of tepid water (60 F to 100 F mixed water temperature as defined by ANSI Z358.1-2009) for 15 minutes. These units can require 72 kW or more for the heating element and are typically impractical for most commercial buildings due to the electrical requirements. Sizing a tankless water heating system begins much in the same way as sizing a tank type unit. The same demand gph flow rate is calculated based upon the attached plumbing fixtures. This equates to the required gpm/hour flow rate of the water heating system. A diversity can be applied to this figure much like the demand factor noted for tank type units. Determining the exact level of diversity is up to the designer or owner based upon the expected level of coincident fixtures (and associated heating energy) in operation at one time. Because no storage tank is required within this system type, any standby losses associated with the tank are removed. For hot water recirculation systems combined with tankless water heaters, water continues to flow through the heat exchangers with return water being mixed with incoming cold water for makeup as needed to meet the hot water demands of the building. The tankless water heaters heat source energizes as needed to maintain a constant hot water supply temperature. Because water heaters rely on a minimum flow through their heat exchanger to maintain internal temperatures at proper levels, tankless units require a minimum flow rate through the unit to allow the heat source it to be enabled. This rate can be between approximately 0.1 and 0.5 gpm. The 0.1 gpm minimum flows typically require small internal buffer tanks to help the water heater meet low demands (from a single lavatory faucet or similar low-flow fixture) operated within a building. For tankless units, which require a higher minimum flow, there can be times when a slug of cold water can be passed through the unit before it is able to sense the call for heating (if no hot water recirculation system is in place). Hybrid boiler/water heaters Hybrid boiler/water heater systems rely on a mechanical boiler system to produce heating hot water or steam, which is passed through a heat exchanger to create domestic hot water. There are numerous heat exchanger designs that can fulfill this

role: plate and frame, shell and tube, brazed plate, and tube bundles within a storage tank. All of these designs can deliver domestic hot water using boiler water or steam as a heat source. This type of system allows for greater diversity among both the boiler and water heater systems due to block load calculations for domestic hot water demand as well as building heating demands. This system type is found more often in larger facilities where heating hot water or steam utility piping is routed from boilers located within the central plant throughout a network of buildings. Heat exchangers are placed as needed to serve hotel tower domestic water loads or those associated with kitchens and other venues. The efficiencies for this system are based upon how efficient the boiler system is minus the losses associated with the heat exchanger and, in the case of the boiler water source, the additional pumping horsepower. Boilers are available in similar efficiencies as gas-fired water heaters from the 80% energy code minimum up to approximately 96% to 98%. The typical heat exchanger approach temperature varies with each heat exchanger type, typically 2 to 5 F. Approach is the difference between the hot side entering temperature of the heat exchanger (where the boiler water is delivered) and the cold side leaving temperature (where the domestic hot water is supplied). This means that if 140 F domestic water is required for the building, the boiler water must be supplied at a minimum of 142 F to 145 F to maintain this condition. Sizing a hybrid boiler/water heater system is dependent upon the specific heat exchanger type that is used for a project. If a brazed plate, plate and frame, or shell and tube heat exchanger type is used, the sizing will be similar to the tankless water heater design criteria. If a tube bundle inside of a storage tank is used to make domestic hot water, the sizing will more closely follow the tank type water heater design criteria. To complicate matters further, storage tanks can be added to the brazed plate, plate and frame, and shell and tube heat exchangers to modify these tankless units, turning them into a hybrid tank type water heater. The hybrid system allows for the most variation in designs to achieve the same end result. Heat exchangers can be sized to accommodate any flow rate that a designer can dream up. The only limiting factor is the amount of boiler water or steam that can be supplied and at what temperature. These heat exchangers also allow for large amounts of turndown with the use of fully modulating control valves. There are some limitations and issues that need to be reviewed when deciding to use this system type. Redundancy is a key concern when using boiler water to serve space heating as well as domestic water heating. If boilers are down for service or repair, even if one or more are still in operation, they may not be adequate to meet the demands of the building. The system designer/engineer should work with the building owner/user to establish a reasonable level of redundancy. Some buildings may require 100% redundancy (N+1 up to N+N), while others are not affected if space heating or domestic hot water is unavailable for a short time. Hybrid systems may also result in a lower overall energy

efficiency than the tank type and tankless units presented above when concerned with strict energy usage. Though condensing type boilers can achieve very high energy efficiencies, the approach temperature difference for the heat exchangers results in a reduction in efficiency of approximately 5% to 12% when generating domestic hot water, depending upon the heat exchanger type used (based upon 2 to 5 F approach with a 40 F T for boiler water). This loss, along with piping losses discussed below, is the price paid for the versatility and level of reconfiguration available when combining boilers and domestic water heat exchangers. Hot water recirculation systems

Hot water recirculation systems have been implemented widely to maintain the flow of hot water throughout a building and deliver the necessary hot water temperature at each fixture within the required time constraints given by the health district and associated codes. Recirculation systems help reduce the quantity of potable water wasted by users who run sinks, showers, and other fixtures until the water reaches a suitable temperature for use. Buildings such as hotel guestroom towers and restaurants benefit greatly from recirculating hot water. These buildings have significant hot water demands under load conditions and longer piping system lengths that can allow hot water to cool down to room temperature while remaining stagnant if this water is not recirculated. Hot water recirculation has a price. It may result in reduced potable water waste and is recommended to meet health department requirements for hot water availability within kitchens in certain jurisdictions, but it also results in increased energy usage within the entire system. The energy loss is due to heat transfer from the heated water into the surrounding air, even though all of the hot water recirculation piping must be insulated based upon code minimums. This energy loss is governed by the standard heat transfer equation for radial geometry: Q=[k*t*A2*(T1-T2)]/[12*r2*ln(r2/r1)]

(This equation is from chapter 23 of the 2009 ASHRAE fundamentals handbook and has been modified to account for the insulation thickness in inches.) Q is the rate of heat flow in BTU/hour. k is the thermal conductivity of the insulation surrounding the pipe, which is typically between 0.19 and 0.28 BTU*in/hr*ft 2*F. t is the insulation thickness in inches. ASHRAE 90.1-2007 requires a minimum of inch of insulation with a k factor of 0.28 at 100 F mean temperature for domestic hot water piping less than 1- inches in diameter and 1 inch insulation thickness for all larger pipe sizes. A2 is the area of the outer surface in ft2. T1 is the supply water temperature (typically 120-140 F), while T2 is the temperature of the surrounding air, which is approximately 70 F for interior plenums during the winter season. r2*ln(r2/r1) is referred to as the equivalent thickness of the insulation layer.

This equation indicates that by increasing the insulation thickness or reducing its thermal conductivity, the overall quantity of heat lost from each linear foot of piping is decreased. In addition, if the temperature differential between the water and air temperatures is reduced, so is the associated heat transfer. This means that using a higher performance insulation in excess of the code minimums will reduce the energy loss within the hot water piping system. Table 1 shows the theoretical heat transfer differences for given insulation types and thicknesses for nominal pipe sizes from in. through 6 in. for Type L copper piping with 140 F hot water and 70 F ambient temperature.

It should be noted that as with many high-performance products there is an additional cost associated with low k factor insulations as well with increasing the insulation thickness throughout the piping systems. Code minimum insulation is typically fiberglass type piping insulation with a k factor of approximately 0.28. Phenolic or polyisocyanurate insulation is necessary to achieve a k factor of 0.19 or less due to its material properties, though phenolic or fiberglass insulations are more acceptable in Type 1A buildings (noncombustible construction as defined by the International Building Code) due to their low flame spread and smoke developed ratings (less than the required 25/50 rating for this building type based on ASTM E84 testing). Polyisocyanurate insulations have difficulty maintaining the 25/50 requirements and should be reviewed thoroughly if being considered for use within Type 1A buildings. In addition, fiberglass, phenolic, and polyisocyanurate insulation types can be constructed free of CFCs or HCFCs. Even with the most energy-efficient products and designs, using greater insulation thicknesses, high-efficiency water heaters, and low-flow plumbing fixtures, there can be adverse effects on the planet. Of course, looking at the microcosm of a single building, we can believe that we are preserving the human environment and creating a more sustainable future for our grandchildren. But if we are not able to look outside of our projects and see what effect our choices have on the markets and conditions in the rest of the world, we can end up doing more harm than good. Retrofitting old buildings with new equipment requires resources for manufacture and distribution. Many insulation types are nonbiodegradable and have limited recyclable properties. Design professionals should look at all aspects of the design and understand the impact of each piece of equipment and product selection to ensure that the correct choices are made for each specific project. Rules of thumb and copy/paste design methodologies should typically be avoided because what worked for one building may not be suitable for another. As an engineering mentor of mine always reiterated, you should understand everything before you do anything. Design professionals should keep in mind how they impact not only their building but also the community so that they can truly be trusted advisors.

Dolan is a project engineer with JBA Consulting Engineers. His expertise is in designing complex HVAC and plumbing systems for various building types, such as commercial offices, healthcare facilities, and hospitality complexes including high-rise guestroom towers and numerous restaurants.

HVAC: documenting ASHRAE 62.1 compliance Standard 62.1 specifies minimum ventilation rates and other measures intended to provide IAQ to building occupants.

04-16-2012 00:00 By: J. Patrick Banse, PE, Smith Seckman Reid Inc., Houston ANSI/ASHRAE Standard 62.1-2010, Ventilation for Acceptable Indoor Air Quality, including normative Appendix A and approved addenda a, c, d, and e contained in the 2011 Supplement, form the current version of the standard. The standard is noted by ANSI as a consensus standard, meaning it was developed and approved by concurrence of more than a simple majority that reached a substantial agreement by directly and materially affected interest categories. The standard also contains Appendixes B, C, D, E, F, G, H, I, and J, which are termed informative and are not part of the standard. However, these appendixes contain valuable information regarding methods of compliance and documentation required by the standard. As with any code or standard, it must be read in its entirety to determine the applicability to the specific project or task at hand. The standard by itself is not a code nor is it enforceable, unless it has been adopted by reference by an authority having jurisdiction (AHJ). Portions of this standard, such as ventilation rate tables and formulas, have already been incorporated into some of the model building codes. As with any code or standard incorporated by reference, it is incumbent upon the designer to discuss the requirements and applicability with the AHJ. The purpose of the standard is to specify minimum ventilation rates and other measures intended to provide indoor air quality (IAQ) that is acceptable to human occupants and that minimizes adverse health effects. It applies to most all occupancy and use types of new buildings, additions to existing buildings, and changes to existing buildings as identified in the standard. It defines requirements and air-cleaning system design, installation, and operation and maintenance (O&M). Other codes and standards may have ventilation requirements that should also be considered. Documentation of all aspects of the project ventilation is required as it is defined within the standard. The documentation is required to be formal and is specifically listed in Sections 4 (Outdoor Air Quality), 5 (Systems and Equipment), 6 (Procedures: Ventilation Rate Procedure; IAQ Procedure; Natural Ventilation Procedure); and 7 (Construction and Startup). Section 4 requires that the outdoor air quality be investigated by the designer and both the regional air quality (geographic) and the local air quality (building site) be documented and discussed with the building owner or representative. Conclusions regarding the discussion and acceptability should remain in the project file. Section 5 relates to the systems and equipment in the project and requires the design documents to specify minimum requirements for air balance and testing.

Design assumptions with respect to ventilation rates and air distribution and effectiveness (clarified by Addendum a) must be clearly stated within the design documentation. A personal preference is to show these design criteria on the mechanical project cover sheet. Additionally, mechanical ventilation system controls (clarified in Addendum e) and sequences must clearly show that minimum outdoor airflow is provided at all times as required by Section 6 under any load conditions. Air cleaning, outdoor air intake locations, minimization of rain intrusion, exfiltration (building pressurization) clarified in Addendum c, drain pans, access for cleaning and maintenance, air distribution systems, air classification as noted in the ventilation standard tables, and the supply, return, and exhaust systems and construction requirements must be clearly shown and documented. When required, a summary of each HVAC system may be necessary to show compliance. Ventilation procedures There are three ventilation procedures described in Section 6: the Ventilation Rate Procedure (VRP), the IAQ Procedure, and the Natural Ventilation Procedure. Any of these procedures may be used to satisfy the ventilation required as each have specific requirements and are viewed as being a valid basis of design as long as they are properly documented. In each case, the exhaust requirements of section 6.5 (clarified in Addendum d) must be met. The VRP is a prescriptive method based on minimum ventilation rates in the breathing zone based on occupancy type, number of occupants, quality of outdoor air, distribution effectiveness, and class of air. Formulas in the standard are used to determine the breathing zone ventilation air of each space and occupancy density. Table H-3 in the Appendix identifies a clear way to document the ventilation airflow for each space. Documentation for this method by the designer requires that a written description of the equipment, methods, control sequences, setpoints, and the intended operational function shall be provided. A table showing minimum and maximum outdoor air intake airflow for each system shall also be provided. Documentation for the IAQ procedure requires the design documents to include: contaminants of concern considered, sources and emission rates, concentration limits and exposure periods, and the analytical approach used to determine ventilation rates and air cleaning. Contaminant monitoring and evaluation plans must also be included. The IAQ procedure may be combined with the VRP and documented as to how the ventilation rates and air-cleaning were achieved. Table H-4 in the Appendix may be used to properly show the IAQ procedure with the requirements of Section 6.3. The Natural Ventilation Procedure is required to be designed in accordance with proper opening sizes and locations as well as to the minimum ventilation rates required by Section 6.2 and/or 6.3 of the standard. The documentation for this

procedure must include all design criteria and assumptions as well as system operation requirements to achieve the required outdoor airflow. Section 7 identifies requirements during the construction and system start-up phases of the project. Items included in this section are protective measures, cleanliness, air filters, HVAC test and balance, and drain pan testing. The contractor is required to provide this documentation to the building owner or representative that consists of O&M manuals, HVAC control system description with schematics and sequences, air balance report, construction drawings, and design criteria and assumptions. Section 8 of the standard is concerned with O&M and the requirements apply to buildings and their ventilation systems and components constructed or renovated after adoption of this section. The engineer and facility manager should discuss these requirements with the AHJ to determine if and how compliance with this section may be required. Inclusion of this standard through reference by an AHJ will require both the designer and contractor to provide detailed information both on the design drawings and after installation is complete to show not only compliance, but methods used to achieve and maintain the requirements during building operation. Rethinking how information is presented on drawings and what additional information is required post-construction may reduce the potential anxiety of 62.12010 compliance.

Analyze the lifecycle of HVAC systems Performing a series of cost analyses when designing HVAC systems is an economically justifiable method to selecting the appropriate design solution.
03-21-2012 00:00 By: Cole Roberts, Andrew Rhodes, and Alexander Hespe, Arup

In too many of today's new and retrofit projects, short-term thinking and lack of rigorous financial assessments result in the irrevocable loss of opportunity for sound financial returns. Although not all high-performance strategies will have a financial basis, many that do are often overlooked. Returns that range from 10%

(7-year payback) to 30% (2-year payback) are available at risk levels far below investments offering comparable returns (e.g., the stock market's 9% historical return and venture capital's historical 30% return). The challenge is that such positive returns often come in the form of new ideas, technologies, or processes that cost more upfront, hence the need for a return. Clients and investors are often concerned by such innovative ideas because of their increased upfront costs. As a result, designers are called on to inform clients of design options from a performance and financial perspective. Lifecycle cost analysis (LCCA) provides a method of quantifying the performance over the design lifetime. It also provides an insight into the secondary benefits of a proposed design, for example, reduced maintenance, complementary systems, improved environmental quality, and so on. It is a powerful and flexible tool that takes time and expertise to extract value. For all its positive potential, in the wrong hands, it can make a good investment look bad. Or perhaps worse, make a bad investment look good. Typically, when used in design, LCCA is performed early in the process to assist in determining the appropriate design solution. At this stage of the process, the information available is generally not detailed or fully developed. The common adage thus applies; the output of an analysis is only as good as the assumptions that are used to develop it. Therefore, the real power of LCCA is in the ability to compare different solutions for a set of given assumptions. The fruit of this comparative analysis is typically a set of discounted cash flows over a given period time. Analysis can range from a simple study with very few variables to a complex analysis with hundreds of variables in a parametric study. Even in the most detailed of studies some intangibles cannot be adequately evaluated. So often answers are given as a range, and thought must go into the decisions as well as the analysis. Technologies that would have previously required an LCCA but are now commonplace include variable frequency motor drives, spectrally selective double glazing, economizer cycles, florescent light bulbs, and further afield Hybrid Drive technology on cars. Technology that might fall into that category as prices drop includes solar technologies, LED lighting, radiant heating and cooling, and carbon fiber structures. As with almost everything, the more complex the problem, the greater effort required to keep the conclusions simple. The best outputs are the ones that are most transparent. KISS: Keep it short and simple. LCCA basics

Weve avoided writing too much detail on LCCA since there are such excellent books on the topic. However, we did feel that it would be beneficial to summarize some of the key terms and concepts as a refresher for those already familiar and as an introduction for those just getting their feet wet. Lifecycle analysis (LCA): The LCA process considers all costs and benefits (economic, social, and environmental) over the course of an investment life. It is generally accepted as different from a lifecycle assessment, which is a technique to assess environmental impacts associated with all the stages of a product's life from cradle to grave. LCA includes LCCA. LCCA: LCCA focuses on economic costs over the course of the investment life and includes a variety of methods for determining if an alternative is economically justified. The methods of LCCA include:

Lifecycle costing (LCC): LCC is a present value sum of all the costs incurred over the life of an investment. Alternatives must be mutually exclusive (e.g., solar hot water system versus an on-demand hot water heater system), and a first-cost budget may constrain selection of the optimal investment. Net savings (NS): NS is a current value expressing the net lifecycle benefit after costs are subtracted. Alternatives must be mutually exclusive, and a first-cost budget may constrain selection of the optimal investment. NS will return the same optimum selection as LCC, but a defined baseline is needed on which to base the net calculation. Savings to investment ratio (SIR): SIR is a ratio expressing the multiplier by which savings exceed the cost of investment (i.e., an SIR of 1.1 indicates that savings exceeded the cost of investment by 10%). SIR may be used to rank non-mutually-exclusive alternatives (e.g., high-performance glazing, improved insulation, efficient air distribution, etc.) Return on investment (IRR or AIRR): A measure of annual percentage yield from an investment. ROI and SIR are the optimal methods used to rank nonmutually-exclusive projects. Discounted payback (DPB): The time required for an investment to be fully recovered. Discounted payback incorporates the time value of money (i.e., future money is worth less than present money, and must therefore be discounted to present value). DPB is best used for screening multiple alternatives. It should not be used for final selection. Simple payback (SPB): The time required for an investment to be fully recovered. Simple payback does not incorporate the time value of money and is often inaccurate. Although used for back-of-the-napkin discussions and rough comparisons, it should not be used for final selection.

LCCA nuances

There are many methods for helping a decision maker navigate the myriad of options in a project. LCCA is the only method that can assess the economic return of a given strategy and begin to form the basis for investment grade analysis. It is typically used on a small set of options that have reasonably detailed cost and savings estimates. Due to the effort typically involved, it is generally reserved for high cost/value decisions where the cost of analysis is equal to or less than the first year potential savings. Since the quality of the analysis is shaped by the degree of detailed information available, judgment is needed to determine how early or late in a design process the analysis should occur. Too early, and the quality of information is inadequate. Too late, and the critical path of decision making is impacted. More than any other method, LCCA can be misused and misinterpreted. Knowing when to apply LCCA As with any tool, knowing when to apply LCCA is critical to success. The potential savings should be great enough to justify the analysis costs, which can vary significantly across projects. There should also be adequate information and expertise to assure the output is valid. The decision as to what type of LCCA method is most appropriate is also necessary. As discussed elsewhere in this article, the various methods, such as LCC, NS, AIRR, SIR, DPB, and SPB, each have their own strengths, weaknesses, and limitations. Often, clients have preferred methods. The dangers of payback Too many buildings are constructed with only a cursory review of the payback of an investment. Although many of these decisions may be good onesa fast payback is often a good investmenta significant percentage will not result in an optimized return for the owner due to inaccuracies in the analysis. More worrisome still is that many investments that have a longer payback are often discarded, despite being financially attractive. The reason for this failing is that payback calculations look only for the date at which break-even occurs, a full recovery of the investment. They do not consider costs and benefits that may occur preceding or following this break-even point, nor do they consider the budgetary implications. As the graph demonstrates, the best investment may not be the one with the fastest payback. Protecting your return It is critical in any LCCA that some discussion of sensitivity takes place. The discussion becomes all the more important for those decisions that show a potential for significant costs or that are perceived to be of elevated risk.

Sensitivity analysis can take a number of forms:

Testing of the impact when input variables are modified Testing optimistic and pessimistic scenarios Testing maximum and minimum values for variables in order to establish a likely range of potential outcomes.

Offsetting

Considering the building as a whole, a collection of systems dependent on and interacting with one another, gives rise to the strategy of offsetting costs. This is especially true of systems that are eliminated from the building due to the increased efficiency of other systems. Through system elimination, the first cost can actually be reduced. Examples include tile roofing displaced by a photovoltaic system, reduced floor-to-floor height due to a radiant conditioning system, or reduced ductwork and MEP system capacity due to natural ventilation. A single budget

The importance of connecting the capital pool assigned to construction with that assigned to ongoing maintenance and operation (at least in concept if not in accounting practice) is a critical first step to assuring potential investments are not missed. Without it, short-term first-cost priorities will outweigh the value of long-term savings. Minimum acceptable return and risk Investors vary greatly in their financial expectations, reflected in their minimum acceptable rate of return (MARR). The catch is that all too often the MARR that

people quote (also often called the discount rate) is not the one they should quote, because they forget that a MARR is qualified by the risk or uncertainty of the anticipated future cash flows. For a risky investment, the MARR should be high. For a low-risk investment, the MARR should be low. Unfortunately, the minimum return used to determine project feasibility is often set inappropriately high, leading to the undesirable elimination of otherwise attractive investments. Fortunately, many investments in HVAC systems are actually low risk. Energy efficiency is correspondingly certain when compared to investing in new equipment, products, or businesses.

The real MARR for energy conservation measures (ECMs) should typically be in the 3% to 7% range unless third-party financing costs push it higher. Other possible topics The above are only a few of the nuances of effective LCCA. At the conclusion of this article, additional reading is recommended, which includes discussion of a variety of topics, including:

Comparing designs that have different lifetimes The impact of tax liability and third-party financing on investments Constant versus current dollars and nominal versus real interest and escalation rates.

Conclusion

As demonstrated by the examples above, LCCA can provide a valuable tool in assessing the appropriate technologies and techniques for maximizing the value of a project. It can help ensure an investment is secured in the options that are most likely to result in the largest returns for the extra investment. Accuracy and diligence in the selection of software and inputting the variables to be considered can ensure that a transparent auditable calculation is produced. However, even the most rigorous results are not infallible predictions of future performance. Results have inherent limits of precision that should prompt questioning. The end goal is for information that is approximately correct rather than precisely wrong. Particular attention should be paid to single answer results or results that contradict the instincts or previous work on the subject matter. While errors are possible, changes in technology, pricing, and subsidies may have made alternates that were even recently unpalatable, the best investment for your project. Who knows, you might be reading this article in an LED-lit, radiant cooled, solar powered building, wondering why all buildings havent always had these features. Roberts is an associate principal and energy and resources business leader in Arups San Francisco office. His experience ranges from climate-responsive building engineering and consulting to community energy systems, net-zero energy, and climate-positive design. Rhodes is a senior engineer in Arups San Francisco office, specializing in high-performance mechanical system design and energy monitoring. Hespe is a senior energy and sustainability designer in Arups San Francisco office, specializing in passive and ecological building design.

Advanced Energy Design Guide for large hospitals The AEDG for large hospitals is design to provide recommendations for achieving 50% energy savings by going beyond the minimum code requirements.
05-03-2012 16:30

The newest Advanced Energy Design Guide (AEDG) for large hospitals is the fourth in the series. It is designed to provide recommendations for achieving 50% energy savings when compared with the minimum code requirements of ANSI/ASHRAE/IESNA Standard 90.1-2004, Energy Standard for Buildings Except Low-Rise Residential Buildings. The book was developed by a committee representing a diverse group of energy professionals drawn from ASHRAE, the American Institute of Architects (AIA), the Illuminating Engineering Society (IES), the Dept. of Energy (DOE) and the U.S. Green Building Council (USGBC). Most important in the Advanced Energy Design Guide for Large Hospitals is the recognition that patient outcomes, safety and experience trump all cost- and energy-saving strategies, Shanti Pless, chair of committee that wrote the guide, said. However, a well designed, constructed, operated and maintained facility is a major contributor to the environment of care and can improve patient outcomes, safety and comfort. The Guide focuses on standard mid-to-large-size hospitals that would typically be at least 100,000 sq ft in size but the strategies apply to all sizes and classifications of large hospitals. Space types covered include conference, lobby, lounge and office areas; reception/waiting areas and examination and treatment rooms; clean and soiled workrooms; nurse stations, nurseries, patient rooms; operating rooms, procedure rooms, recovery rooms and sterilizer equipment areas; pharmacies and laboratories; triage, trauma and emergency rooms; physical therapy and radiology/imaging rooms; and storage, receiving and mechanical/electrical/telecom rooms. Included in the Guide are recommendations for the design of the building opaque envelope; fenestration; lighting systems; HVAC systems; building automation and controls; outdoor air requirements; service water heating; measurement and verification; and plug and process loads, including kitchen equipment. Along with whole building and technology case studies, the Guide highlights that existing reliable technologies and design philosophies can be used to reduce energy, according to Pless. Some of the technologies and philosophies highlighted in the book include:

Use of shape and form to give access to daylighting in spaces that usually have no windows; Daylighting of staff areas and public spaces while at the same time specifying proper glazing to control solar gain; Elimination of reheat, which is the largest energy saver from the HVAC system. Other HVAC savings comes from the de-coupling of ventilation air treatment and space conditioning and the elimination of steam boilers;

Recommendations to reduce and control plug and process loads including commercial kitchen equipment; Reductions in interior and exterior lighting; Recommendations involving LED surgery lights, which have the added benefit of allowing surgeons to set the thermostat higher in the operating rooms; Measurement and verification recommendations to demonstrate savings are being realized with the added benefit of helping solve operational issues.

The 50% Advanced Energy Design Guide series follows an earlier series that provided guidance to achieve 30% savings. The ultimate goal is to provide guidance to achieve net zero energy buildings. Related News: Nonresidential building LEED certification surpasses 2 billion sq ft 30.07.2012 10:45 Boiler systems: Economics and efficiencies - 19.06.2012 02:02 ASHRAE Handbook offers guidance on variable refrigerant flow 05.06.2012 10:18 LEED 2012 ballot held open - 05.06.2012 09:54 Increasing use of smart pumps to help drive down Never Events 15.05.2012 14:56 GSA retrofits to create integrated, intelligent buildings - 15.05.2012 14:48 NFPA 99: New healthcare facility code requirements - 15.05.2012 00:00 LEED 2012 anticipated changes - 13.03.2012 00:00 How Standard 90.1-2010 will affect HVAC designs - 13.01.2012 10:49 Commissioning hospital electrical systems - 18.11.2011 00:00

ASHRAE Handbook offers guidance on variable refrigerant flow The 2012 ASHRAE Handbook features a chapter on new guidance for variable refrigerant flow (VRF) systems.
06-05-2012 10:18

The 2012 ASHRAE Handbook HVAC Systems and Equipment discusses systems and the equipment that comprises these systems, including features and differences. It is designed to help system designers and building operators select and use equipment. It contains 52 chapters. Chapter 18, Variable Refrigerant Flow (VRF) Systems, describes these systems, their components, and applicable standards in detail, and includes a system design example and important guidance on costs, controls, and safety. In previous volumes, VRF was covered in the unitary products section. This new chapter covers the A to Z of variable refrigerant flow from application of VRF to understanding how VRF works and from analyzing a building load in terms of VRF to zoning with VRF, Paul Doppel, chair of ASHRAEs technical committee on variable refrigerant flow that wrote the chapter, said. The chapter offers an excellent overview of VRF technology, including discussion about 2-pipe and 3-pipe system performance during heating operations. The chapter also includes a section that lays out a process for designing with VRF including a load analysis, as well as discussions regarding system expansion and designing systems to meet ASHRAE standard requirements. Related News: Additional compliance path proposed for ASHRAE/IES energy standard - 27.11.2012 11:20 ASHRAE releases datacom equipment power trends book - 13.06.2012 12:21 Fan efficiency standard approved - 01.06.2012 14:15 Advanced Energy Design Guide for large hospitals - 03.05.2012 16:30 Implementing variable refrigerant flow systems - 30.11.2011 00:00

ASHRAE Handbook offers guidance on variable refrigerant flow The 2012 ASHRAE Handbook features a chapter on new guidance for variable refrigerant flow (VRF) systems.
06-05-2012 10:18

The 2012 ASHRAE Handbook HVAC Systems and Equipment discusses systems and the equipment that comprises these systems, including features and differences. It is designed to help system designers and building operators select and use equipment. It contains 52 chapters. Chapter 18, Variable Refrigerant Flow (VRF) Systems, describes these systems, their components, and applicable standards in detail, and includes a system design example and important guidance on costs, controls, and safety. In previous volumes, VRF was covered in the unitary products section. This new chapter covers the A to Z of variable refrigerant flow from application of VRF to understanding how VRF works and from analyzing a building load in terms of VRF to zoning with VRF, Paul Doppel, chair of ASHRAEs technical committee on variable refrigerant flow that wrote the chapter, said. The chapter offers an excellent overview of VRF technology, including discussion about 2-pipe and 3-pipe system performance during heating operations. The chapter also includes a section that lays out a process for designing with VRF including a load analysis, as well as discussions regarding system expansion and designing systems to meet ASHRAE standard requirements. Related News: Additional compliance path proposed for ASHRAE/IES energy standard - 27.11.2012 11:20 ASHRAE releases datacom equipment power trends book - 13.06.2012 12:21 Fan efficiency standard approved - 01.06.2012 14:15 Advanced Energy Design Guide for large hospitals - 03.05.2012 16:30 Implementing variable refrigerant flow systems - 30.11.2011 00:00