By Ryan Adelman
How prepared is your facility for a two-hour power outage? How about one that lasts a day or longer? Do you know what’s behind the disruption? Is it the grid or do you have internal, power infrastructure issues?
Energy resilience — the ability to keep vital operations running when the grid goes down — is critical for all types of organizations. However, lack of visibility and data underlying the causes of these disruptions tend to result in hurried, stop-gap measures. “Let’s just install a generator” is not a long-term strategy. Firstly, sizing backup generation to the “bloated” load of a facility that has not executed energy efficiency measures can be an oversized band-aid. Second, backup generators cannot address power quality concerns. Third, if a generator is poorly maintained there is a high likelihood that it will not be able to deliver when needed. Reducing the energy demand of the facility through bankable energy conservation measures and on-site generation is the logical and economic first step to becoming more energy resilient.
The status quo of enduring intermittent power outages is often accepted as a “cost of doing business” because companies overestimate the amount of capital and time required to plan and deploy holistic energy resilience measures. Additionally, many facility managers fail to consider the energy savings some measures could provide (such as solar and energy storage (batteries) to eliminate monthly peak demand charges) throughout the year in addition to providing resilience during outages.
According to the Eaton Blackout Tracker annual report, 92% of U.S. businesses experienced at least one power outage over the last 12 months. [Read more here.] On average, companies suffer about 15 power outages annually. The question is no longer what or how outages will impact business, it’s a matter of when, how disruptive they will be, and how much they will cost the business in terms of operations, lost perishable merchandise or sales.
Power outages and their associated costs are drawing increased scrutiny from lawmakers, as well. Aging infrastructure, increased impacts from severe weather, and “always open” expectations from consumers are the driving forces behind this trend in state legislatures. In 2017 alone, there were 16 weather and climate disaster events with losses exceeding $1 billion each across the United States.
In California, SB 1088 calls for utilities to submit a safety, reliability and resiliency plan every two years. Florida has a program to install solar and storage at schools for emergencies and passed SB 7028 requiring assisted living centers to add backup power to ensure that those being cared for don’t go without air conditioning. These efforts represent important first steps to increase the reliability of critical infrastructure.
Beyond Backup Generators
Historically, only critical environments like hospitals or data centers invested in resilience infrastructure due to regulations or strict service level agreements, while other commercial and industrial facilities only invested in backup generation to power emergency lighting and critical loads. However, this paradigm is changing — driven by increased awareness and demand for better business continuity, as well as innovations and cost improvements in distributed energy resources.
Energy analytics are the natural starting point to becoming energy resilient. These technologies can quickly and inexpensively uncloak the mystery of how to put an end to power disruption. For instance, a mid-sized manufacturer deployed the Panoramic Power energy monitoring solution at its manufacturing facility to better understand its energy usage at the device level. The business used small wireless energy insight sensors to track how individual systems and machinery use electricity, acquiring real-time data that allowed the customer to pinpoint specific areas/devices that were using energy inefficiently. They experienced a return on investment within the first 30 days of deployment. The path to energy resilience should always start by “right-sizing” the building load to be less dependent on utility power and reduce the size load you need to protect.
Where businesses once saw a drag on the bottom line, forward-thinking organizations are now leveraging energy as a strategic asset. Manufacturing plants, retail centers, grocery stores, warehouses, offices, and schools can now all benefit from energy resilience strategies that not only protect their operations and reputations, but also improve profitability and brand promise. Dramatic cost reductions in distributed energy technologies, like solar paired with storage or natural gas trigeneration combined with energy market mechanisms found in independent system operators like PJM and ERCOT, allow businesses to further monetize equipment by exporting power to the grid through net-metering programs while also managing time-of-use rates, to reduce expensive peak demand charges from the utility.
Energy Resilience In Action
Businesses around the country are adding resiliency to their operations at an accelerated pace. My company, Centrica Business Solutions, worked with a large New Jersey healthcare system to build an on-site trigeneration system at one of the network’s hospitals. Two 1,000-kW generators were installed to produce 60% of the system’s electricity needs, while using the waste heat to produce steam, hot water, and chilled water. Tri-generation, (also known as combined heat and power systems), offer facilities with large heating and cooling loads an efficient way to produce power and make use of what would normally be wasted heat, all while doubling as baseload generation when grid power is disrupted (known as “black start”). This resiliency effort reduced the hospital’s utility bills by about 35%, saving the organization $2 million a year, while additionally providing energy reliability when the grid fails. Just as important, onsite generation reduced the hospital’s carbon footprint by 20%.
In another example, we partnered with a U.S. university to build a trigeneration system to generate its own 2,454 MWh secure supply of electricity from three natural gas driven 160 kW trigeneration units — achieving more than twice the efficiency of conventional power generation. Together with the installation of a 269 kW solar photovoltaic system, this will reduce the university’s dependence on grid generated power. This highly efficient combined cooling, heat and power (CCHP) system, working in conjunction with a new 200 RT absorption chiller, will also supply 13,110 MM BTU of heat — generating hot water for winter heating, and chilled water for use in the air conditioning systems during the warmer summer months.The systems can be powered by a variety of different fuels including: natural gas, biogas, propane, biodiesel or pure plant oil (PPO). By generating its own electricity, the university is able to radically reduce carbon emissions and energy consumption costs by 30%.
Why wait for the next major power disruption to prove you need resiliency?
Energy quality, resilience, and costs have never been more important or more dynamic. While some steps have been taken to harden and modernize the grid, the business case exists today for companies to instal their own solutions to avoid service disruption and improve reliability. Businesses that want to stay competitive in an increasingly uncertain energy market, are treating energy not as an ever-escalating cost, but as a strategic asset that can be managed and optimized around operational needs.
It might not be today, or even tomorrow, but someday each facility executive will get “the call” that the power is out. Everyone from the CEO to the owner and investors will want to know the plan for reducing the costs of power outages and to match their fiercest competitors’ resilience capabilities. Now is the time for our market and regulatory environment to continue to encourage energy resilience and give all consumers, businesses and organizations the freedom to choose the energy technologies that meet their needs.
Adelman is executive sales director of distributed energy for Centrica Business Solutions. Prior to joining this provider of end-to-end distributed energy solutions, he was the chief commercial officer at Axiom Exergy, an energy storage technology provider and project developer. Adelman has over 18 years of experience across industries ranging from energy efficiency and building controls to renewable energy and energy storage. He has an MBA from the University of Chicago, Booth School of Business with concentrations in strategy and operations.