By Darren Farrar, Contributor
The whole energy landscape has, in only ten years, changed beyond all recognition. The popularity of using responsible and renewable energy sources is growing. And the movement is being backed by new remits for distribution operators that allow, amongst other things, more green energy to be integrated into the grid.
The adoption of renewable energy and the rise of omnidirectional distribution means that our energy network is more decentralized than ever. In this new environment, grid operation becomes more complex, and resilience and reliability all-important. Faced with challenges such as severe weather events, value chain disruption and fluctuating power supply and price, many companies are seeking the latest technologies to improve energy security and responsiveness to future-proof operations.
The New Reliability
Reliability of power supply is a real — and growing —concern. A recent survey of 250 energy managers indicated that 25 percent of companies experience regular power outages. These power disruptions can be costly: 18 percent of responding companies had experienced an outage that cost the equivalent of £70,000 or more.
The key barrier to achieving reliable power supply is either an immature or aging grid. For instance, in India, where more than 240 million people still lack access to power, 50 percent of electricity generation is wasted due to poor transmission to rural areas, as well as power theft. In the UK this may be seen by some as irrelevant due to our mature grid and regulated networks.
However, the millions and millions pumped into asset replacement by the DNOs over the past 8 years have not increased the overall health of the UK’s distribution network and aging assets are still a major concern. On top of this our electricity network was designed many years ago to carry power in one direction from large coal plants in rural areas to population centers.
The key to the reliability problem is an integrated, active approach to energy management that enables resilience with its diversity of supply and demand. Active energy management is a holistic view of the strategies, data and resources needed to reduce consumption, drive innovation and maximize savings. Rather than treating the procurement, dispensation and evolution of energy as disparate activities, the active energy management approach assumes that these activities are interdependent and indispensable.
Diversifying and Harmonizing
By addressing operational efficiency, enabled by digitization and technology, operators can reduce susceptibility to outages and potential downtime. Strategically sourcing energy supply from a diverse portfolio that includes renewable generation reduces risk while maximizing continuity. Investing in new energy opportunities and distributed energy resources (DER) — like demand response, battery storage, smart grid technologies, fuel cells, combined heat and power, and distributed solar — can further the development of corporate assets that are responsive, agile, and reliable.
The result is both cost and carbon savings. Reductions in resource consumption from efficiency projects lower carbon emissions and the money saved can be used to fund sustainability projects. Once a cost center, clean, green and renewable electricity is now cheaper than conventional generation in more than 60 countries, and will be the most inexpensive source of power everywhere by 2020. DER continue to drive savings by allowing organizations to store power to use during peak load times and by reducing transmission utility charges.
The Future Is Micro
As more entities embark on the active energy management journey and explore the flexibility of DER, it is inevitable that there will be a growth in the deployment of microgrids to achieve grid autonomy. A self-contained, localized grid that typically includes a combination of generation and storage assets, microgrids can both integrate with existing grids or operate independently in “island mode.” This flexibility and reliance on DER make them the epitome of true energy resilience.
Microgrids can be used as stand-alone power generation sources — as they are in both rural or off-grid electrification, or disconnected, remote geographies — or, as back-up power stations that ensure continuity of critical systems. And new financing models, such as microgrids-as-a-service, mean that companies can invest in a system without any upfront costs.
Despite the advantages of active energy management and its role in improving reliability and resilience, implementation is still far behind corporate intentions. Whereas energy efficiency programs are a top priority, some companies are missing out on the benefits of enhancing grid resilience. Yet it is only through changing our priorities to combine these two strategies that we can truly revolutionize the way we generate and consume energy.
Darren Farrar is the customer marketing manager at Schneider Electric.