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As seen in
August 24, 2003
Independent Generators Are Generating
Interest
by JOHN HOLUSHA
Indepentent power generators? Major financial
services firms and telecommunications companies already have
them and a lot of other businesses are likely to want them in
the wake of last week's blackout and dire predictions about
the reliability of the nation's electrical grid, real estate
executives say.
"We have been getting feelers from existing tenants" about access
to backup power, said Gregg Popkin, a senior managing director
in charge of property management for CB Richard Ellis, a brokerage
and services company. "And for somebody negotiating a lease
for several hundred thousand square feet, it is now a requirement."
Modern office buildings in Manhattan are required to have a
landlord-owned emergency generator to power some lights, the
fire control system and limited elevator service. This helps
people to evacuate a building but is of little use for tenants
who find themselves out of business when their computer systems
are shut down.
Indeed, the city appears to be divided into haves and have-nots:
a handful of companies that sailed through the blackout with
lights blazing, air-conditioning humming and elevators operating
as usual and all the rest Ü those that had to send employees
out into the darkness and humidity.
"My clients were out of business for
a day and a half, and if it happens again, it could be worse,"
said James Meiskin, the president of Plymouth Partners, a brokerage
that specializes in representing tenants. "Building owners need
to add sophisticated technology to keep the power on for three
to five business days."
But others say that the expense of buying generators Ü which
cost about $2 million for a two-megawatt unit, enough to light
20,000 100-watt bulbs Ü the scarcity of suitable space in many
buildings and the cost and risks of installing fuel tanks and
a delivery system will prevent any rush to install backup power,
except in new buildings.
In addition, the noise and exhaust fumes produced by the diesel
engines that power most generators are likely to draw protests
from neighbors in populated areas.
There may be other obstacles as well. One of the most technologically
advanced structures in the city, the CondŽ Nast building, 4
Times Square, at 42nd Street and Broadway, was unable to operate
the two fuel cells it routinely uses to supplement power delivered
by Consolidated Edison. The cells, which produce power from
natural gas without burning it, would have been capable of providing
basic building services, including elevators, said Douglas Durst,
co-president of the Durst Organization, the building's owner.
But the company's agreement with Con Ed requires building managers
to turn off the cells in the event of a power failure, ostensibly
to protect utility workers. "To get the fuel cells approved,
we had to agree to shut them off in a blackout, which we thought
was pretty dumb," Mr. Durst said.
He said his company was under pressure to get the building,
the first of the recent new construction in Times Square, approved
in the mid-1990's. Mr. Durst said he had hoped to get approval
to install a switch that would prevent power from the cells
from flowing out onto the grid so that they could be used to
keep the building in operation during power interruptions.
A spokesman for Con Ed said that the developers of the building
had designed their own electrical power plans and that utility
officials had only reviewed and approved the plans.
Fuel cells are among the technologies cited by electric industry
analysts as among the most promising to reduce dependence on
complex power grids by generating power where it is needed.
The Dursts also included power-generating photovoltaic panels
in the skin of the 48-story, 1.6 million-square-foot building
but concede they have made little contribution because of the
way they were installed.
Until new forms of distributed generation arrive as a significant
factor, backup power is likely to come from generators powered
by internal combustion engines. Installing them in an existing
building is described as "a difficult but not insurmountable
task" by John Santora, an executive vice president of Cushman
& Wakefield, a brokerage and services company that manages 70
million square feet of space in the metropolitan area.
f the generator is being added on, the most likely location
is on the roof or on a loading dock, he said. If one or more
are being designed into a new building, they may be installed
near other equipment on a mechanical floor in the middle of
the building.
The fuel tank, however, will almost certainly be on the ground
floor or in a basement for several reasons, Mr. Santora added.
One is that the fuel tanks on the fifth, seventh and eight floors
of the old 7 World Trade Center are thought to have contributed
to its collapse in a fire after the Sept. 11 terrorist attack.
A lower location also makes it easier to accept deliveries of
fuel, and the weight of a massive fuel tank is better supported
in the lower part of a building.
The fuel is underground at 111 Eighth Avenue, a 2.8 million-square-foot
building that occupies the block bounded by 15th and 16th Streets
and Eighth and Ninth Avenues and is the home of many telecommunications
companies. "We have telecom tenants in 1.2 million square feet,"
said Andrew J. Nick, a principal in Taconic Investment Partners,
which owns the hulking structure.
Thirty-seven generators occupy the roof and setback levels of
the building; 15 are owned by the landlord and the rest belong
to tenants.
"We sell capacity in our system to our tenants," Mr. Nick said.
"Some tenants have their own generators and some use both as
a precaution."
He said that the building was fully in operation throughout
the blackout and said it appeared that the building could have
continued in operation for 10 days without refueling.
Mr. Popkin said third-party managers like his company have recommended
in the past that landlords install more backup generating capacity,
only to have the suggestion rejected. Now, he said, he expects
a more accommodating response. "We are drawing up capital budgets
now, and I expect we will have some extra line items this year,"
he said.
He said property managers often got calls to shed load Ü reduce
power consumption Ü when hot weather put a strain on the system.
"There is an inherent long-term weakness in the grid," he said.
"I think emergency generators will be a hot button this year."
The generators are useful even while the power grid is still
operating, Mr. Santora said, because they can supply the appropriate
level of power to sensitive computer and telecommunications
switching systems as high demand causes line voltages to drop.
Indeed, many backup generators are set to turn on when power
starts fluctuating, so they can take up the load almost instantly
if it fails. This helps protect equipment from damage caused
by a power crash.
"On hot days, those generators are on supplying clean power
and Con Ed is a backup," Mr. Santora said. "Even a 5 percent
reduction in power causes problems. We have a lot of buildings
that are on a lot."ÊÊ
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