Facilities that have operational resilience can continue energy-reliant processes despite a grid outage. This type of resilience is enabled by installing some sort of resilience hardware and controls (e.g., islanding relays, microgrid controllers, switchgear panel) that can switch your energy source from the central grid to your on-site generation sources. Within this setup, there are a variety of different energy solutions that can help you secure operational resilience, offering a range of durations to meet the needs of differently-sized energy loads.
To select the operational resilience solution that best fits your needs and budget, you need to quantify your avoided costs of an outage – the losses you would have incurred without a resilience solution. To do this, you need to understand both the frequency and duration of potential outages – and the costs from every hour the facility is down. Beyond the obvious costs of lost revenue, there are also the harder-to-quantify costs like unproductive labor, scrap, and more. Here are some examples of potential impacts:
- If a cold storage facility loses power and cannot power refrigeration equipment, it could result in a failure to meet quality standards – plus wasted product, lost revenue, and even a tarnished brand reputation.
- If a manufacturing facility loses power and cannot keep operations running, it results in lost revenue since goods are not being delivered to plan.
- If a higher education institution loses power, they need to pay for alternative housing and could face decreased revenues from dining options and housing fees. Many institutions also invest heavily in research, and an outage could destroy years of work.
- If a wastewater plant loses power and cannot treat water, no water is being treated to remove pollutants, and the plant would fail to meet regulatory compliance.
- If a water plant doesn’t have power for pumps, the plant cannot keep wells filled to provide water to the community they serve.
- If emergency services like fire stations or shelters lose power, equipment could be compromised and result in safety issues for communities.
The size and duration of the energy resilience solution ultimately determine the overall cost of the solution. To optimally size your solution, you need to consider whether or not you need to back up the entirety of your normal load during power outages. If not, you can size the solution to your critical load – that is, the load needed to support systems that are absolutely required to continue operations during an outage. Determining your load requirements is essential to ensure non-negotiable systems are prioritized and energy isn’t wasted on systems that don’t need to run continuously during an outage.
Consider some typical examples of critical loads that will be supplied during outages:
- Food and beverage companies have temperature controls to prevent food waste.
- Local governments need to maintain emergency services to their constituents.
- Water supply organizations need to ensure pumps continue to run.
- Manufacturers need to wind down production in an orderly manner to prevent scrap.
- Chemical manufacturers need to safely wind down production to prevent safety issues.
Once the site’s critical load is determined, there are other considerations you need to make: how resilience aligns with the operational budget, what technology to implement, and compliance with any organizational sustainability targets.
Economic Resilience: How You Can Keep Energy Prices Stable Amid Volatility
Beyond power continuity, you should make sure your energy strategy is resilient to cost uncertainty and volatility. Some areas of the country, like California, have seen significant increases in tariff rates for large energy users over the past decade. Our below analysis of PG&E’s E-20/B-20 tariff rates since 2008 shows that while energy-related components of the bill (shown in blue) stayed relatively constant between 2008 and 2021, demand charges (pink) increased 66% after adjusting for inflation. How resilient is your organization to future energy cost increases?