Campus Microgrids Emerge as Solution to Energy Challenges in Higher Education

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When it comes to choosing among energy supply options, colleges and universities have three primary goals:

1. Gain greater resiliency in an era of electrical grid power outages.

2. Lower energy costs.

3. Reduce carbon dioxide emissions.

Let’s start by examining each of these goals and the challenges they present to energy decision-makers in higher education.

1. Gain greater resiliency in an era of electrical grid power outages

Colleges and universities must increasingly weigh power outages in financial risk assessments because catastrophic events are on the rise. In total, the U.S. experienced 14 separate billion-dollar disasters in 2019, which was the fifth consecutive year to have 10 or more separate billion-dollar disasters, according to the National Oceanic and Atmospheric Administration’s (NOAA) National Centers for Environmental Information (NCEI).

Indeed, 2020 began ominously with an earthquake in Puerto Rico that caused an island-wide blackout, reminiscent of Hurricane Maria’s damage in 2017, which destroyed the electric grid, leaving many without power for over a year. Then, just a few months later, the COVID-19 pandemic put new pressure on hospitals and other critical facilities, underscoring society’s need for highly reliable energy.

Power outages are expensive. Exactly how expensive depends on who they affect and their duration. But to get a sense of the financial ramifications, consider that:

• Delta Airlines lost $50 million after equipment failure knocked out power to the world’s busiest airport, Hartsfield-Jackson in Atlanta for 11 hours on December 17, 2017
• Esource looked at eight major industries and found that outages as short as four hours cost, on average, $10,000 to $20,000 per organization.
• A 48-hour power shutoff to 800,000 California utility customers dealt a $2.5 billion blow to the state’s economy in October 2019.

Higher education is particularly risk adverse to power outages for several reasons. For example, higher education hosts $80 billion annually in research and development, much of it heavily dependent on electricity. A multi-hour outage could destroy research years in the making.

Colleges that offer room and board have a responsibility to ensure their students’ safety and comfort. If they cannot do this when an extended power outage occurs, they face difficult options. Send students home and interrupt the educational program? Take on the expense of arranging for alternative housing? As we have seen this past Spring, a crisis that shuts down a campus can also result in the refunding of housing and dining fees, as well as liabilities associated with student security and safety.

Meanwhile, the risk of power outages at colleges grows for two reasons. First, we’ve fallen behind in improving our nation’s utility and electric grid infrastructure, and now it requires massive investment. Second, campus infrastructure is aging. With deferred maintenance costs now averaging near $100 per gross square foot, many facilities have become vulnerable to equipment related failures. Higher education leaders are becoming increasingly aware of campus vulnerability to power outages and the need for greater resilience, particularly given the accelerating impact of climate change. To that end, more than 100 schools have signed a resilience commitment to overcome their vulnerability.

This map denotes the approximate location for each of the 14 separate billion-dollar weather and climate disasters that impacted the United States during 2019. Source NOAA.

2. Lowering energy costs as financial pressures mount

Higher education faces tremendous pressure to find ways to reduce costs, given the rising expenses for salaries and benefits as well as a large backlog in maintenance expenses. Colleges and universities also face shrinking net revenue, a situation brought about by a combination of factors. Student enrollment is declining in much of the country, and colleges discount tuition as a means to compete for students and assist struggling families.

The COVID-19 crisis has added to the financial challenges and uncertainties facing our institutions of higher learning. Beyond the near-term impact of housing and dining refunds and new investments in on-line learning, longer term uncertainties associated with recruiting, foreign student enrollment, affordability, distance learning, sports revenue, and the potential recurrence of the pandemic are also weighing heavily. Significant credit rating downgrades have occurred year-to-date, and the credit rating outlook for the sector has turned much more negative of late. Hence, financial resiliency is the top priority for many administrators today.

Energy is a big-ticket expense for campuses. U.S. colleges spend $14 billion on energy annually, according to the U.S. Environmental Protection Agency, with 80% attributable to buildings. Campuses are addressing this problem by making buildings more energy efficient and using advanced building automation and analytics to optimize building and campus operations. In doing so, many are reducing their energy usage and spend. But that’s just the start when it comes to “smart campus” energy management.

7,000 institutions of higher education and networks that represent them, from six continents, announced in July 2019 that they are declaring a climate emergency.

3. Reducing carbon dioxide emissions

Higher education institutions act as societal leaders in demonstrating paths to overcome climate challenges and reduce greenhouse gas emissions. Many colleges have sustainability and renewable energy goals; some are even striving for 100% renewables, such as the University of California system, which has set a 2025 goal for this.

In addition, 7,000 institutions of higher education and networks that represent them, from six continents, announced in July 2019 that they are declaring a climate emergency. They agreed to undertake a three-point plan that included going carbon neutral by 2030, or 2050, at the very latest. U.S. higher education, lacking federal leadership, support, or even recognition of the climate crisis, is demonstrating leadership and showcasing the tools available to address climate change. A key parameter involves being more resilient to climate-related challenges and involves focusing on both minimizing energy consumption and provision of reliable, clean energy supplies. To achieve their climate commitments, campuses must be able to manage both on- and off-site renewable and clean energy supply sources.

Most recognize that renewable energy is not inherently resilient. Facility managers understand that their solar panels will not independently meet their energy requirements if the utility grid fails. In fact, in a grid failure, the solar panels will cease to produce power for safety reasons, unless the facility has a microgrid and advanced inverters. So, campuses that center their energy plan solely around renewable energy will find that they may meet climate aspirations but not resilience goals.

In this chapter, we’ve pointed out three significant energy challenges facing higher education: increase energy reliability, reduce costs and decarbonize. The next three chapters explore one technology that can address all three problems: the advanced microgrid.

In the coming weeks this Special Report series will explore the following topics surrounding campus microgrids: 

• What Microgrids are and What They are Not

• Why Microgrids Make Financial Sense

• How Microgrids Boost Decarbonization Efforts

• Microgrids Acting as Teaching Tools and Community Partners

Download the full report, “The Genius of Microgrids in Higher Education,” courtesy of Siemens, to further explore the potential of microgrids on college and university campuses.