What’s Driving the Increasing Use of Microgrids in Manufacturing?

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More manufacturing companies are gaining interest in deploying microgrids to help them operate through power outages and serve as community stewards.

microgrids for manufacturing

Tor Anderson, Power Engineers

In the past, industries were looking for on-site generation, often through combined heat and power (CHP). These include companies such as food and beverage manufacturers, refineries and tire manufacturers, for example.

Now, these industries have more goals. They want to integrate technologies such as solar and batteries so they’re capable of disconnecting from the grid and creating resilience. They’re also interested in being seen as good stewards of their local communities, said Tor Anderson, vice president of engineering for Power Engineers’ generation division, in the Microgrid Knowledge Executive Interview Series.

“Industries are very interested in having projects that they can be proud of, those that reduce carbon and improve their reliability and operations,” he said.

As a result, more and more projects that start as CHP become microgrids. This trend is happening in many areas of the country, even those that have historically had low electric prices, based on coal, natural gas or hydro.

“We expect to see this trend growing and create opportunities for microgrid implementation. Companies that are making products and don’t see themselves as power generators are becoming more receptive to sustainability initiatives, whether it’s coming from the plant needs or from corporate directives,” said Anderson.

Superstorm Sandy in 2012 and the Texas storm in February that crippled the state’s power system created more interest in microgrids. In addition, some companies have had a hard time accessing natural gas supplies for their boilers and generators as a result of storms and wildfires. Industries are now seeing the technology as more sensible and economical.

“We’re seeing that a lot of things are coming together to create an interest in microgrids. There’s continuing awareness that if you lose power it’s costly. The economics are getting better. And people are trying to reach their sustainability goals,” said Anderson. Companies also want to know that their investments are good for their future and for their communities.

As a result of these benefits, perception of microgrids is changing. Companies see that the technology can help them meet their core mission — producing their products as efficiently as possible.

Meanwhile, avoiding outages has become more and more important.

Placing a value on resilience is simpler for manufacturers who can calculate the hourly cost of downtime when a grid outage occurs. For other types of businesses, it’s not always as simple, and there’s an ongoing effort in California and other states to create a technique for calculating the value of resilience.

Power Engineers, an engineering firm, is often involved in a microgrid project from its conception through commissioning and operations. The company will identify technology, provide cost estimates, complete a design, and support contractors. One of its microgrid projects was for Marathon Petroleum, which needed to provide reliable power to its Mandan Refinery in North Dakota and continue operating during power outages. The refinery relied on a single line for power, leading to numerous expensive outages. Power Engineers created a better connection to the utility and a microgrid that could island.

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Power Engineers conducted a feasibility level study and cost estimate before performing detailed engineering on the microgrid.

Convincing potential clients of the benefits of such microgrid projects has become easier in recent years, said Anderson.

“Customers just have to be convinced that it’s a good deal for their operation, for their future and for their community,” he said.

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Comments

  1. “Now, these industries have more goals. They want to integrate technologies such as solar and batteries so they’re capable of disconnecting from the grid and creating resilience. They’re also interested in being seen as good stewards of their local communities, said Tor Anderson, vice president of engineering for Power Engineers’ generation division, in the Microgrid Knowledge Executive Interview Series.”

    What is that old adage: “What goes around, comes around”. At one time the C&I entities rode the grid to keep their prosperity alive. Now with tiered block electricity rates, TOU rate spiking periods and PSPS events that take power down to prevent wildfires from growing is creating a new direction of energy generation and use. When the naysayers of 15 years ago said solar PV didn’t “pencil out”, they were lying when electricity became $0.12/kWh. Today there are few enclaves left where electricity is $0.12/kWh. California is famous for it’s over priced electricity model. Now in many service areas the (average) cost per kWh of electricity in California is around $0.20/kWh to $0.25/kWh and it has been predicted that between 2025 and 2030 electricity costs will probably rise to $0.30/kWh to $0.35/kWh in that time period. The IOU utilities have chosen consistently dividends over O&M for decades now, crying their way to the CPUC to regularly raise electricity rates, until California has some of the highest rates in the modern World and it’s still not enough for these “regulated monopolies”. Now, technology is being pushed from the standard of grid tied solar PV system with a net metering PPA towards solar PV plus energy storage and going the extra dollars to install grid interactive ESS units that allow the ratepayer to generate, store and use energy for their benefit, not the utility’s benefit.

    Yeah, the rote electric utilities hired some Mariachi bands back in the early 1990’s and did their “hat dance” on the notion of the utility death spiral, now one can still hear the band and also see the death spiral continue.