Unreliable power supply and prices are causing companies to seek the latest active energy management technologies to enhance energy security, says Darren Farrar, customer marketing manager at Schneider Electric
The rise of renewable energy and the omnidirectional flow of power means our energy networks are more decentralised than ever before. In this brave new world, grid operation becomes more complex, and resilience and reliability more important. Severe weather events, value chain disruption and unreliable power supply and prices are causing many companies to seek the latest technologies to enhance energy security and responsiveness to bolster operations for the future.
Reliability under review
Reliability of power supply is a real – and growing – concern. A recent survey of 250 energy managers indicated that 25 per cent of companies experience regular power outages. These power disruptions can be costly: 18 per cent 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 ageing grid. For instance, in India, where more than 240 million people still lack access to power, 50 per cent 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 eight years have not increased the overall health of the UK’s distribution network and ageing 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 centres.
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 maximise 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.
Variety is the key
By addressing operational efficiency, enabled by digitisation 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 maximising continuity. Investing in new energy opportunities and distributed energy resources (DERs) — 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 centre, 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. DERs continue to drive savings by allowing organisations 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 DERs, it is inevitable that there will be a growth in the deployment of microgrids to achieve grid autonomy. A self-contained, localised 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 DERs makes 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 backup 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.
Active Energy Management has proven highly effective in boosting grid reliability and resilience. However, implementation sadly lags behind corporate intentions. While the majority prioritise energy efficiency programmes for the money they save, many companies are missing out on the advantages of strengthening the energy network. We cannot achieve real progress in transforming how we generate and consume energy until we manage to combine both these strategies into one.
Darren Farrar is customer marketing manager at Schneider Electric