Get all the news you need about Smart Buildings with the Memoori newsletter

Which research categories are you interested in?

According to the Rocky Mountain Institute corporate survey, nearly two-thirds of Fortune 100 companies and nearly half of Fortune 500 companies have set ambitious green energy targets. Some, like tech giants Google and Apple, have gone green by investing directly in vast renewable energy generation plants for their power-hungry data centers, but for the majority of businesses that kind of capital outlay is beyond their means and don’t always serve their business interests. More recently, businesses have been looking to Industrial Microgrids to make them greener but also more secure and more profitable.

Industrial microgrids have the ability to aggregate and control a variety of renewable resources by managing the intermittency of those generation streams with centralized baseload power or energy storage. In doing so, an industrial microgrid can combine enhanced reliability with a lower emissions profile and often lower cost energy.

“Unlike power supplied from a central station grid or a single renewable energy plant, a microgrid has the flexibility to use a wide range of energy sources increasing renewable energy supply options while improving resiliency,” says Michael Bakas, senior vice president at Ameresco, a prominent renewable energy company and energy efficiency company offering ESPC-funded energy solutions for public and private organizations.

A 5-MW Combined Heat and Power (CHP) plant is far more expensive to construct and operate than a 3-MW plant, he says. “If you can reduce your energy load (possibly through a self-funded approach like energy performance contracting) thereby directly lowering your construction, operational and fuel costs of the facility, along with any additional incremental volumes of energy purchased from the grid beyond the supply of the CHP facility, why wouldn’t you?”

There is potential for renewable energy almost anywhere in the world, when combined with storage and smart grid systems designed to balance demand and supply, there becomes potential for robust microgrids almost anywhere in the world. For industrial customers, in the widest sense, microgrids offer a range of benefits beyond simply “going green.”

“A microgrid can also give some control of its future back to a business,” says Bakas. “Building small local generators can be accomplished much more efficiently and in a shorter time frame than waiting for a power company to build a central power station or put in a new substation, and that gives a business much more flexibility to expand their plant on their own timeline.”

One of the most significant benefits that the industrial microgrid can provide can be a little more difficult to quantify. Microgrids can enable a business to weather catastrophes that might cripple the centralized power grid, meaning they can continue to run when the utility grid loses power. When these disasters strike, the value of resiliency and reliability rises astronomically but their unpredictability makes it hard to include such events in a business’s energy strategy.

“Placing a value on resiliency can make or break a business case,” says Bakas. “They cannot afford, nor will they tolerate, disruption of service; their product is their life line,” he adds. What’s true for a manufacturing facility is also true for a supermarket chain, as some US supermarkets learned during Hurricane Sandy in the summer of 2012. Losing power for just four hours could mean throwing away as much as $400,000 of food per supermarket, and that’s just one store in the vast areas that can be affected in such events.

Over in Europe, a deal has been struck between French energy management specialist Schneider Electric and German discount supermarket chain Lidl, in Finland. In the deal, signed this month, Schneider will deliver Finland’s largest industrial microgrid and an advanced IoT-enabled building automation system for Lidl’s new distribution center in Järvenpää, Finland. The unique distribution center will cover a surface of 60,000 m2, the largest in Finland, and will serve Southern Finland’s grocery stores when it begins full operations at the beginning of 2019.

The distribution center’s microgrid will work with a battery energy storage system. The storage will play an important role in equalizing consumption spikes and ensuring continuous power distribution. Should the national power grid become temporarily overburdened, the amount of grid electricity consumed by Lidl’s distribution center can be reduced by bringing the battery storage into action.

“During periods of very cold weather, Finland’s grid can experience peak loads,” explained Simo Siitonen, Energy Management Manager at Lidl Finland. “The battery energy storage system implemented at Lidl will enable us to react quickly to these consumption spikes, help reduce the load on the grid, and ensure there is sufficient electricity for everyone in Finland.”

A microgrid is essentially a network of buildings and if you’re trying to make your microgrid efficient you’d make sure those buildings are smart. The Lidl distribution center’s integrated building management system will be executed with Schneider Electric EcoStruxure Building Operation software. This integrates multiple systems for centralized, real-time control and management across one to many enterprise buildings. This installation includes full remote access as well as analytic services to further improve energy efficiency.

The software-as-a-service platform is designed to simplify the integration of distributed energy resource and allow operators to collect, forecast and automatically optimize the operation of onsite resources using real-time data and predictive machine learning algorithms. It will allow Lidl Energy Management Teams to monitor and manage: the microgrid control system, energy use optimization, power and heat demand response, energy storage, and a solar electricity system as well as a heating and cooling system. For real-time energy optimization, the system will consider utilization rate, price, consumption of electricity and weather.

“Given all of the benefits microgrids offer businesses, it’s little surprise that they are embracing the concept,” says Peter Maloney, writer for Microgrid Knowledge. “In fact, the commercial and industrial sector is poised to install microgrids faster than any other, surpassing even early adopters like the military. Data centers, manufacturers, hotels, mining, resorts, airports and railways are among those choosing a technology that offers sustainability, reliability, resiliency, efficiency and favorable economics.”