If you manage a large commercial property that uses chillers for space cooling, they are likely to have a higher energy consumption than any other electrical device in the building. A central chiller is more efficient than multiple window-type or packaged terminal air conditioners, but this does not mean running a chiller is cheap - a more suitable term would be “less expensive”.

The compressor is the chiller component responsible for most of the unit’s electricity consumption. Modern compressors can adjust their speed to match the cooling needs of a building, which is more efficient that the ON-OFF operation of older models. However, a chiller only achieves maximum performance if complementary installations are well-designed: selecting the right water pumps, air handlers and cooling towers is very important.


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An innovative concept is complementing the chiller with an ice storage system, which basically allows the storage of air conditioning capacity. There are many ways in which this concept offers savings for property owners.

Avoiding High Electricity Prices in Time-Of-Day Tariffs

Many energy consumers are subject to time-of-day (TOD) electricity tariffs, where the kilowatt-hour price changes throughout the day.

  • During low-demand hours, utility companies can operate only with the cheapest power plants, and kilowatt-hour prices reach their lowest point.
  • During high-demand hours, on the other hand, the most expensive power plants must be brought online. As a result, kilowatt-hour prices are at their highest point.

If a TOD tariff is applied, any cooling equipment running during high-demand hours can cause a drastic increase in power bills. Unfortunately, switching off the space cooling systems is not an option for a full building in a hot summer day. With ice storage, however, a chiller can reduce its output while the required space cooling is obtained by melting ice.

  1. When electricity prices are low, the chiller is operated at full capacity to produce ice.
  2. When electricity prices are high, on the other hand, ice is used to deliver as much cooling as possible. The chiller is only used for any additional cooling capacity that cannot be delivered by the ice tank.

In TOD tariffs, off-peak electricity prices are often below 50% of peak prices. As a result, there are massive potential savings from shifting consumption to off-peak hours, and ice storage provides a way to achieve this for space cooling systems.

Avoiding Capacity Charges

Commercial and industrial energy consumers not only pay for the total amount of energy used. There is also a capacity charge, which is calculated based on the highest kilowatt demand measured over a specified billing period. As a result, two consumers that use the same number of kilowatt-hours can have very different power bills, based on how their demand behaves.

Just like ice storage can take advantage of cheap off-peak electricity TOD tariffs, it can trim down the portion of peak demand that comes from space cooling systems. Electricity demand can be monitored to determine the hours when demand peaks occur. Then, the cooling system can be programmed to use ice during demand peaks.

  • Assuming a chiller consumes 0.60 kW/ton and total building load is 500 tons, the power consumption at peak load is 300 kW.
  • If 200 tons of cooling can be provided with ice storage, the chiller must only provide the remaining 300 tons and power consumption is 180 kW.
  • Capacity charges exceed $20/kW in many tariffs. In this example, the 120-kW load reduction translates into savings of over $2,400/month.

Note that TOD tariffs are time-sensitive, but capacity charges are not. You are only charged high kWh prices during some hours under a TOD tariff, but demand peaks raise your capacity charge regardless of when they occur.

Some electricity tariffs combine the concept of TOD prices and capacity charges: your individual demand peak is charged at a higher rate if it occurs during hours when total network demand is already high. To find the best strategy for mitigating your electricity bills, an energy audit of your building is strongly recommended.

Bonus: Ice Storage May Allow a Reduced Chiller Capacity

Chillers only work at full capacity when your building requires it, which may only happen for a few hours each day. If you can meet this cooling load peak with a combination of ice storage and chiller operation, it may be possible to specify a smaller chiller. The main advantage of this is a reduced upfront cost, which makes complementary ice storage easier to afford.

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