A new special report from Microgrid Knowledge explores how retail businesses use microgrids to reduce costs and enhance resiliency and reliability. From the related article series, this entry explores how retailers can ramp up electrical reliability using tools like microgrids.
With threats to electric reliability increasing, it is easy to understand why power outages worry retailers. So what are the solutions?
The most obvious is a backup generator. While this may seem like an expedient solution, procuring backup generators is costly and complex. Their purchase requires sizing analysis, engineering, building permits, construction, and routine maintenance that includes inspection, loaded testing, and fuel conditioning if they use diesel.
Failure to adequately maintain backup generators will create operational problems that a retailer may not discover until it is too late. Backup generators sit idle for most of the year, only running during emergency operations. Because of this infrequent operation, maintenance is sometimes skipped, making backup generators less likely to work when needed and far less reliable than a microgrid. In contrast, microgrids frequently interact with the grid, so they undergo constant testing and conditioning, increasing the likelihood they will work during an emergency.
The heart of a microgrid
It is important to understand what a microgrid is and how it functions, and how is can contribute to electrical reliability. As the name suggests, a microgrid is a smaller version of the electric power grid installed on-site at the user’s facility.
A microgrid can serve a single building, a business campus, a college campus, a military base or even a community. A microgrid’s defining characteristic is its ability to operate in isolation from the surrounding grid.
When designed for resiliency, a microgrid’s defining characteristic—what makes a microgrid a microgrid—is its ability to operate in isolation from the surrounding grid. A grid-connected microgrid ‘islands’ from the central grid when it senses a disruption, such as a power outage. The microgrid then activates its system to supplant the lost grid electricity.
Islanding occurs via a microgrid controller, the technology at the heart of the microgrid, which allows the microgrid to interact with the central grid. When it senses a problem on the grid, the controller sets up the activities to ensure power flows to its host from the on-site system. Retailers are able to maintain continuous operations, despite severe weather or other grid threats.
A microgrid also can provide advantages to a retailer by interacting with the grid during non-emergencies. For example, the microgrid may sell services to the grid or leverage changes in pricing, which can produce a revenue stream or offset microgrid costs.
The size of a microgrids depends on the host’s need for critical power supply. A microgrid can serve a single building, a business campus, a college campus, a military base, or even a community, like the Bronzeville microgrid in Chicago.
Microgrids can be powered by a variety of energy sources. It is common for them to employ some combination of solar panels, wind turbines, energy storage, combined heat and power, and backup generators. The microgrid’s use or purpose dictates the type of resources incorporated. Each resource has its pros and cons.
For example, if a microgrid is built predominantly to achieve renewable energy goals, solar panels with batteries are a common power source. However, these systems present limitations when it comes to electric reliability. During a storm-caused outage, cloud coverage can prevent solar panels from generating electricity. For example, Kauai in Hawaii has a growing array of solar farms. On July 21, 2019, the island experienced an outage when a cable on a diesel generator failed. Due to lack of sunlight, they struggled to meet demand for backup power.
Battery storage can provide backup power, but it is limited. Most batteries are designed to discharge for two to four hours, and batteries with discharge capabilities above four hours are incrementally more expensive.
But including solar-storage within a microgrid, coupled with other resources, offers a way to overcome its reliability drawbacks.
Another drawback of batteries—one often not considered—is the extensive space required to house them.
Diesel engines have been the traditional choice for backup generation. Their portability, scale and durability make them an attractive option, but they also have drawbacks. For example, they are expensive to buy and difficult to maintain. If maintenance is not done properly and consistently, they fail to start when needed. Diesel engines create more noise and pollution than alternatives, emitting higher levels of carbon dioxide, nitrogen oxide (NOx), sulphur dioxide and particulate matter. The diesel supply chain can become extremely challenged during severe weather events. Limited supply amid increased demand, coupled with the hazards of flooding or downed trees, can prevent diesel delivery trucks from reaching customer sites.
Modern generators fired by natural gas, on the other hand, provide the benefits of a diesel engine while avoiding the pitfalls. For example, natural gas is delivered through robust underground infrastructure that remains unaffected by above-ground risks and disturbances. Other benefits of natural gas generators include being durable, able to scale, and flexible. Some natural gas generators easily ramp up and down to meet fluctuations in load without harming the engine. Additionally, gas-fired combustion produces less carbon, less NOx, and lower particulates than diesel combustion. Natural gas generators are quieter to operate, so can be located in close proximity to businesses or neighborhoods.
Microgrids made easy for retailers
Some retailers rightfully worry that owning and operating a microgrid forces them into a business they are not familiar with—the power industry. Fortunately, the microgrid industry has devised ownership models that address this problem. The microgrid-as-a-service approach gives retailers the reliability benefits of a microgrid while relieving them of the ongoing maintenance and operational requirements.
In the same way the microgrid controller makes microgrid operations seamless and smooth, the Microgrid-as-a-Service model alleviates the burden of microgrid ownership for the retailer.
The next chapter in this Microgrid Knowledge special report explores microgrid-as-a-service more fully.
Also, if you missed the first installment of the microgrid retail special report article series, see below to catch up:
Download the full report, “Microgrids for the Retail Sector: Your competition is in the dark, but you’ve got power,” courtesy of Enchanted Rock, to explore how businesses use retail microgrids to increase electric reliability and manage costs.