It’s no secret that recovering global and national economies are still putting businesses under a lot of strain. I’m sure most CEOs have two things top-of-mind every day: rebuilding profits and cutting costs. One of the biggest areas of opportunity to trim operating costs is in managing electrical energy consumption which, depending on your business, can be one of your largest expenses.
And electricity costs continue to rise in most parts of the globe. For example, France and Germany will have expected increases of 19.6 and 21.5 percent, respectively, over the next five years . This is pushing many businesses to become energy ‘prosumers’ by investing in onsite energy production. This can include solar panels, wind turbines, combined-heat-and-power systems, or diesel or gas engine-generators. Building this kind of local microgrid can not only offset the cost of buying energy from the central grid, but if you install a renewable energy source such as solar it can also reduce your carbon footprint and boost your image as a ‘green’ corporate citizen.
At the same time, power utilities and grid operators in some regions are introducing smart grid programs to encourage commercial and industrial consumers to use energy management best practices, especially during peak times when there are risks of grid blackouts. You might have access to demand response programs that will pay you for agreeing to reduce your energy consumption when required. There may also be some form of advanced tariffs being offered, but it requires you to react quickly by either turning on your local generation or turning off some of your loads when the price goes up. This could potentially put some of your processes at risk.
Gain more control over your local energy production
These are all good ways to start optimizing your energy bill. But the payback you get is going to be limited by when and how much energy your onsite generation can produce. Solar panels only produce when the sun is shining, and wind generators when the wind is blowing. So to get the most out of these assets, you need to have more control over when and how you use the energy you’re generating.
The answer is in electrical energy storage systems (EESS). New large-scale battery and power conversion technologies are now helping make onsite generation a far more flexible and, in turn, far more valuable resource. When integrated with your power, building, and process systems, an intelligent EESS can help you get more out of your generation assets and take full advantage of the smart grid.
Energy storage helps you cut costs and ride through outages
First, being able to store the energy you produce can help increase your self-consumption of that energy. This can be improved by up to 100%, depending on the capacity of your energy storage system, and your production and consumption profiles. You can generate and store energy at any time it’s optimal to do so, and then consume it when you need it the most. The energy is never wasted.
Being able to store energy also gives you more control over your energy profile. By having control over when you use self-generated energy, you can supply some of your building’s load during peak hours when grid energy costs are higher. This will reduce your base energy costs as well as avoid peak demand penalties. Your grid operator may even offer you opportunities to sell your stored energy back to the grid when it’s needed, typically when prices are high.
A complete EESS solution will also include intelligent communication and control capabilities. If you’re taking part in a demand response program, the system can automatically coordinate requests from the grid operator. It will also track and forecast the status of your energy resources, and help you decide on, and execute, the best course of action. Depending on how the grid operator needs to balance demand at any given time, this could include reducing your consumption from the grid by using stored energy, or even increasing your consumption by using energy from the grid to charge your batteries. It could also include turning off or on some non-critical loads — such as temporarily reducing heating or cooling — through coordination with your power distribution, building management, and process automation systems.
And a great side benefit of having a facility-based EESS is its ability to help you ride through power fluctuations or grid blackouts. You’ll be able to avoid costly interruptions to your business using a power backup system supplied by low-cost ‘green’ energy instead of burning fossil fuel.
Fully monetize all of your energy assets
Ultimately, an EESS gives you a way to monetize all of your energy assets by maximizing their flexibility. This kind of flexibility is of high value to grid operators everywhere, and many are willing to pay you to gain access to it. This puts you in a strong bargaining position with your energy provider. It also gives you another powerful tool as an energy prosumer for managing your energy-related operating costs and ensuring long-term business sustainability.
Next time we’ll look at how to select the best EESS for your particular needs, and what key features and support services to look for.
In the meantime, if you want to learn more about electrical energy storage systems and other smart grid solutions, come meet our experts at the Smart Grids Paris conference from June 4th to 6th.
10 years ago
It is important to stress that you do not need to have a big storage (ie huge and expensive batteries) to reap big benefits by shedding your power demand peaks to the network (lowering your power subscription), and increasing your self-consumption.
10 years ago
Store the energy I produce. Hmmm. It sounds like a good time to check on the economics of the renewable energy propositions. I’m wondering what the payback on solar panels is these days (without subsidies). Same for wind generated electricity. And what happens to these numbers if I now invest in on-site electricity storage to go with? How many years will this gear last? I mean it all sounds so appealing but don’t we need to provide a bit of economic context?
10 years ago
The return on investment of your storage system will rely on different operational characteristics, including power conversion and energy storage capacity, and the size of your generation assets (solar panels, CHP system). It will, of course, also depend on the status of the energy market in terms of grid electricity price, feed-in tariff, etc.
The stars begin to align for a country like Germany, where the electricity price is quite high (22ct€/kWh), the grid parity has been reached, and subsidies have been set in place ). Regarding specific expected savings from a solar panel + storage solution, some interesting studies have been done by several companies. For example, IHS recently presented a webinar ) in which they calculated that, for a 20 years solution lifetime expectancy, a German household would save around $25k on a global $50k electricity bill (equivalent US dollars). Without the subsidies, the savings are about $18k.
Another aspect to keep in mind is that the price of Lithium-Ion batteries is expected to decrease in the coming years.
10 years ago
it s that easy , nobody is asking about UPS systems for lights and Serverrooms it is essential so no one is asking.
Having the same for on site power just makes sense as you can also get rid of peak demands (like aircondition units etc etc ).
Solarpower is and always was the answer ON or OFF Grid.