Experiences with Cooling Towers
Introduction
What looks like a cooling tower may or may not be a cooling tower. While much of the equipment we encounter appears quite similar from the outside, and indeed many vendors lazily use terms like "cooling tower" generically, certain equipment differs enough that building owners need to adjust their maintenance strategies according to their building's specific equipment.
As a real estate investor, I need a good working understanding of the systems within my portfolio. I don't claim to have detailed technical expertise on every component, but I do try to educate myself on an asset's equipment when I acquire property. Recently, I encountered serious problems with a system and reached out to other owners for advice. I was surprised to realize that most didn't understand how these systems operate. Furthermore, HVAC vendors were using ambiguous language that led me to believe that they too hadn't educated themselves on the core system when working on peripheral components.
From these experiences, I was inspired to re-enforce my knowledge of these systems and share a specific circumstance where knowing the difference impacted a maintenance strategy. This isn't a technical discussion, but rather an experiential one.
Different Systems
The cooling tower-like systems I encounter are essentially evaporative coolers. There are other means of heat transfer, such as with the use of chillers, etc., but I mostly see systems that move water. Cool water is pumped throughout the building where water source heat pumps (WSHPs) extract heat from the air and transfer this energy to the water where hot water is then returned to the tower. In the tower yard, evaporative heat exchange occurs where the heat is then discharged into the atmosphere.
These systems are simple. Cold water is circulated within the structure and hot water is returned. What happens in the tower yard can differ. What comes to mind for a traditional cooling tower, the hot water returned from the building is sprayed onto a "fill," which is basically a material the water percolates through allowing heat to be expelled through evaporation. When the water settles in the collection basic, it has cooled a bit and is then pumped back into the building where the process begins again.
A variant of this you'll likely encounter is the closed-circuit cooling tower. Instead of spraying the hot water returned from the building onto fill, the return water is circulated through coils for cooling. Water is then sprayed onto those coils and once again you're exchanging heat through evaporative cooling. But the nuance is material. You have a closed system where the building water is never exposed to the atmosphere.
The primary benefit of the closed-circuit system is your building water stays cleaner because it's not normally exposed to outside air and contaminates that can enter your system. The hope is that the closed system circulating cleaner water will lead to lower maintenance costs down the road. Your coils in the WSHPs are less likely to be fouled, etc. A downside to this approach is the heat exchange process is less energy efficient. Essentially, you're trying to balance higher energy demand in exchange for lower maintenance costs. If these equate, you should be indifferent between the systems.
Why This Matters
I encountered a problem, which occurred during the summer, peak system load period, where a considerable number of a building's WSHPs were shutting off. The WSHP will shut down when the conditions in which it is operating exceed certain thresholds, pressure, temperature, etc. When the system works too hard, the breaker flips. When a significant number of your heat pumps shut off at once, you know your issue is systemic and not isolated to that heat pump.
But diagnosing system-wide problems can be challenging. Especially considering how much of the system isn't readily accessible. The first suspicion was fouling existed in the circuit somewhere, causing pressure to rise as water is forced through smaller orifices. However, at the tower yard, we had a clean main filter. Having clean water and filters doesn't necessarily mean your pipes aren't clogged. But it would be a nice confirming condition, so you know you're on the track. Still, check your chemicals.
What we ultimately found the problem to be was air had become trapped in the system. Because of this, the pump was working harder to move the water through the circuit. Discharge pressure was higher and return pressure was lower. The elevated discharge pressure was causing the breakers to trip. Resetting the breakers carried a substantial personnel cost. Even relatively modest office properties may contain hundreds of these pumps. Now imagine resetting even a small percentage of these every day during peak load.
The air had become trapped in the system due to recent repairs. Following repairs, the vendors should have bled the system to remove this air. I suspect a contributing factor to this is that open-circuit cooling towers handle air in the lines more gracefully. When the hot water is returned and spared onto the fill, here the air can escape into the atmosphere. The water discharged will contain significantly less air so long as the water level in the catch basin is sufficient to cover the pumps intake. Of course you'll always have some air since fluids may contain dissolved gases. But the open circuit does a good job at purging air when the water is returned.
The closed-circuit cousin doesn’t share this benefit. Instead, the air has nowhere to escape if it isn't deliberately vented. If your vendors aren't careful to identify the type of system they're working with, perhaps they'll assume that venting air isn't a necessary step. Such a small mistake led to considerable disruption on my property, understandably upset tenants, costs in trying to identify the problem, and so forth. Perhaps more critically, air pockets causing your system to operate at higher pressures will make your water lines susceptible to blow out. Water lines for HVAC systems can cause significant flooding in a very short amount of time.
Why Owners Should Care
This seems like vendor and, or property management concern. And, operationally, it is to an extent. However, at the end of the day it's the responsibility of ownership to ensure the right decisions are being made. We can't be everywhere at once, but we should monitor for certain issues, such as these, and provide input when necessary.
In situations like these, I find vendors can be too close to problems to properly diagnose problems. For cooling tower systems, you may have multiple vendor types: vendors for water treatment, tower, plumbing, heat pumps, and so on. A vendor will tend to offer you guidance relative to their specialty. It's our job to bring all this information, sometimes conflicting information, together and make a big picture judgement.
I'd like to say we can rely on property managers for this judgement, but in my experience that's not the case. The industry structure is such that property managers maintain close relationships with vendors. Often closer than their relationships with ownership. Does that speak to bias and conflict with our property managers? Definitely. But this is reasonable as they tend to engage with their vendors more often than owners. Still, this can lead to property managers deferring to their vendors' recommendations. Our property managers perform a key function in maintaining operations, but supervision is absolutely needed.
Due Diligence
The above circumstance tells a story of a recent challenge I encountered operationally. As an investor, though, much of my impact occurs during transactions. While we rely on third-party reports as well as more intrusive inspection by trusted vendors, principals need to get their hands dirty when assessing a property. When I walk a target property, the tower yard is must see. I want to see if the cooling tower is open or closed circuit. If I have a closed-circuit system, I'll ask building engineering where the valves for venting are located and I'll visually inspect them. I want to see that these valves are in an accessible location. Furthermore, it’s a good way to test the building knowledge of the incumbent onsite personnel. If the responses to your interview questions are awkward or uninformed, consider whether additional research is needed to determine how well the system has been maintained.
Final Remarks
As principals, we're responsible for our investments. Through the years, I've felt myself gradually drifting towards operations. Partly, because you're exposed to this information, and you absorb what you can. But also due to operations being increasingly critical to investment performance as costs rise and become more unpredictable. In a perfect world, we'd rely on the people and firms we higher to manage the operations of our investments. But ownership-level supervision will always be necessary. If at the very least, to bring a larger perspective to the discussion and ask the questions that need to be asked. You can certainly destroy an investment opportunity with a poor acquisition. But don't lose sight of what occurs between transaction dates either.