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Private Sector Microgrids – Has Their Time Come?

image credit: Julia Freeman-woolpert |

Most countries are structured around national grids and large-scale operations by utilities: that is the way the industry has grown up since the 1890s. What we discern as the orthodoxy was set up by big players a long time ago. However the deployment of private sector microgrids may become a significant part of the power ecosystem as we move into a new era of distributed power. It may be more feasible to build them in the private sector for a number of reasons. A microgrid can help a private entity both by reducing its energy costs, and by ensuring that the company avoids significant losses of revenue or productivity during a grid outage, which is becoming an ongoing problem as climate change uncertainties and issues continue to create stresses on our infrastructure.

Companies that have experienced significant revenue losses due to a major outages often have a clear sense of the value of resiliency to their organization of their own power systems, as Delta Airlines learned when it lost $150 million in an outage at the Atlanta airport in 2017, with over 1000 flights having to be cancelled.

By having their own microgrids companies with such mission-critical power needs can have redundancy and backup for their systems. Some of the most advanced microgrids in the USA have been deployed by the military. Although the demands of military facilities is different from a private business or manufacturing plant, military bases can be useful in pioneering these systems, as they have complex integration challenges, given their advanced technologies, national importance, and diverse energy demands.

The planned microgrid at the Portsmouth Naval Shipyard in Kittery, Maine, is intended to reduce costs and avoided disruptions due to local grid issues, while reducing emissions. Its primary purpose is to repair submarines. It is a large industrial plant which operates heavy duty machinery round-the-clock. The microgrid consists of dual 5.2 MW gas turbines paired with heat recovery and hot water, a new microgrid control system with Fast Load Shed (FLS) capability to ensure that the most important machinery will continue to perform during grid outages. Because the shipyard is on the end of a transmission line, the local grid often suffers from blackouts. When the new microgrid is completed, the yard will be able to toggle over to on-site power seamlessly and avoid disruptions to its most mission-critical operations. The microgrid and other energy improvements are expected to save the Navy $175 million over the 22-year performance term and improve the facility’s energy security.

Although this is a specific setup for the military, the potential benefits from similar systems can be readily employed at all kinds of large private sector industrial, manufacturing and health-care operations which might be experiencing high incidences of grid outages, or other difficulties with power delivery or stability which might create unnecessary risk.

One of the other key differences which make this attractive to the private sector is that most corporate practices often have swifter decision-making processes than the public sector. Now that companies attach a higher priority to clean, distributed generation, and costs become competitive with power from the main grid, across broad geographies, the advantages are obvious. Low natural gas prices make it financially advantageous for on-site natural gas generation or combined heat-and-power (CHP), and falling prices for solar and energy storage are making the solar-plus-storage solution an attractive option for delivering a business's base load power. Given that Electric Vehicles (EVs) will also become part of the energy mix soon, there is will be a financial case to be put to stakeholders that this is the way forward. Instead of simply consuming power as a cost of operation, while delivering its core products or services to its clientele, the business will also generate power and sell it back to the utility. In an uncertain future de-risking your core business and diversifying income streams looks like a wise move.


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Julian Jackson's picture

Thank Julian for the Post!

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