Now Is the Time to Convert Your Electrically Heated Building to Gas

We’ve been approached by several apartment and office building owners that have been pulling their hair out looking at the hydro bills for their electrically heated buildings. They work very closely with their tenants to try to keep temperature setpoints within reason and they have already tackled all the retrofits they could think of, such as Variable Frequency Drives, LED lights, etc. And yet, their electricity utility cost is still one of the highest parts of their operating budget, and climbing!

Electrically heated buildings are typically heated through either electric baseboard radiators or, god forbid (as most of my clients say), PTACs, which stands for Packaged Terminal Air Conditioning units, with electric element heating. Technically, the electric heating is 95-99% efficient. It sounds “great and green”, as Premier Wynne likes to say, but then your utility bill doesn’t look so great and you are probably losing a lot of ‘green’.

There’s a larger discussion on the cost of electricity that involves understanding what the global adjustment is, why delivery is so costly and the government’s mistakes along the way with regards to electricity procurement and delivery, but I try to be positive and focus on solutions (I guess that’s what engineers do!).

The most important fact in the discussion is the past, current and future cost of electricity, which can also be translated into the cost of energy, because all space heating is essentially conversion of a resource (such as gas, electricity, oil, etc) to heat through energy conversion. If you plotted the cost of electricity against the cost of gas, you could see that in recent history the cost of gas is quite low, while electricity is high and still rising. Furthermore, you could see that we are currently at the largest deviation in cost per MJ of energy in recent history.

What does this mean? It means that it is 75% cheaper to heat your building using gas versus electricity, regardless of terminal units.

In order to help our clients realize this opportunity, we’ve been converting their heating systems from electric baseboard radiators or PTACs to hydronic baseboard radiators or hydronic fan coil units. This type of project is typically called a “fuel conversion”, as the hydronic baseboard radiators or hydronic fan coil units will be fed by gas-fired boilers. The process typically starts with an energy audit, which is 50% funded by the government, to identify the feasibility of a fuel conversion as well as the capital cost, estimated savings, incentives, and various scenarios for consideration. If the energy audit results in a positive and feasible outcome, then we typically sign a Letter of Intent with the client so that we can proceed with detailed engineering and product selection.

The engineering for these retrofits is very complex and detailed. We need to design a new boiler room and provide all the services (gas, electricity, water, etc.) to this room. We need to find an acceptable route for a new hydronic distribution system on every floor and every suite. We need to select a radiator or fan coil that will fit in the suites with minimal loss of space and minimal need for repairs. On top of all that, we still need to make sure the system won’t cost too much and be efficient enough to justify the payback time. Sometimes we can also tie-in the Domestic Hot Water (DHW) system to promote more energy efficiency and eliminate the need to retrofit that system in the future. In other cases, we include a cooling system; this can justify higher rents, remove the need for “window shakers” and can be enabled on a suite by suite basis as they turnover or sign new leases.

Once the engineering is complete, the client has an opportunity for final input before the final contract is agreed upon. Then the fun begins.

Our experienced gas-fitters, plumbers and electricians will start by building the new boiler room and preparing the out of suite work. Then they will go into every suite over the course of 1-2 days and complete all in-suite work, including painting and patching as needed. This is the key to making this retrofit work: minimizing tenant disruption. Our goal is not to turn the tenants against the owners, but to promote the fact that the tenants are getting a better, more comfortable and more efficient heating system. So far, we’ve had very positive feedback from tenants and no serious complaints.

After all the hard work is complete, we commission and balance the systems to ensure proper operation, in conjunction with the new building automation system (BAS) that we’ve installed. We typically maintain and monitor the buildings within the first year (if not longer) to ensure the client realizes the savings that we promised. The savings can be 20-50% heating cost reduction.

Unfortunately, neither the electricity distribution company nor the gas company provides incentives for fuel conversion. However, the strong economics still justify the payback and ROI, which typically range in the 4-7 year (payback) and 14-25% range (ROI).

Lee Hodgkinson is an expert at engineering and energy management for all types of buildings. Lee designs, builds and commissions his projects. Lee manages a highly trained team that ensures all your projects, big or small, are successful. Mann Engineering is your one-stop shop for your energy management and engineering needs. Use the experts to protect your investment. Since 1988, we’ve completed thousands of heating, cooling, ventilation, lighting, plumbing and energy management projects, including fuel conversion and suite conversions. Contact us today for a free assessment. Lee can be reached at lee@mannengineering.com or 416 819 0336.