Whether it is through homeowners that install rooftop solar panels or businesses that invest in wind farms, more of us will access electricity through decentralized technologies than direct connection to the grid by the mid-2020s, according to Bloomberg NEF. While most of us translate this outlook to simply implementing more solar panels and wind turbines, that is only half the story. Decentralization has much more profound impacts in our society, including presenting consumers and businesses a choice. A choice to decide how to source their energy needs. Decentralized technologies help enable that consumer choice.

Microgrids are a key part of these decentralized technologies. The term Microgrid can be intimidating, because it may mean different things to different people, so let’s break it down and highlight some of the benefits.

Let’s cover four common questions and answers about living on microgrids to boost your energy IQ.

No. #1: What is a microgrid?

A microgrid is a local energy system capable of producing, (potentially storing) and distributing energy to the facilities within the network. Microgrids can be made up of several different assets, also called distributed energy resources (DERs). Commonly used DERs to generate power are solar photovoltaics (PV), wind turbines and power generators. Energy storage systems, intelligent controls and management software are other elements of the system that provide further functionality to the microgrid. Microgrids can be connected to the centralized grid or completely off-grid and self-sustaining. With the obvious need for continuous, reliable power, healthcare facilities can be good applications for grid-connected microgrids. Remote mining sites that need a lot of energy, can be great applications for off-grid microgrids. 

No. #2: What is the difference between microgrids and centralized generation?

The difference can be summed up in two words;  Proximity and resiliency.

Microgrids are near facilities they power. On the other hand, electricity, in centralized power generation, is produced in central power plants that could be hundreds to thousands of miles away from facilities being powered. This proximity of microgrids reduces losses in energy transmission and the significant cost of installing new transmission and distribution networks.

Most microgrids deliver improved energy resiliency through redundant DERs, a combination of solar PV, natural gas or diesel power generators and energy storage systems. Depending upon the microgrid design, facilities can still be powered even if any of these DERs fail. In comparison, a failure in a power plant could put businesses in the dark.

No. #3: How does a microgrid work?

Intelligent controls and management software are at the core of microgrids. Many control systems can track the energy needs of the facility and determine how to supply the needed energy. These control systems consider and evaluate factors such as cost, fuel supply, weather and energy load required to decide which DERs to utilize.

As mentioned, microgrids can be made up of many different assets, these control systems are the key element to manage dispatching the best asset based on these factors. Finally, some microgrids also feature energy storage systems to capture the energy produced at one time for use later.

No. #4: Why do we need microgrids?

Sustainability

As more businesses focus on sustainability and deploy renewable energy sources such as solar PV, microgrids come to help by integrating these renewable sources into the energy infrastructure. These renewable sources become a physical part of the microgrid and the intelligent controls manage their utilization.

Economics

Microgrids feature intelligent controls that can help businesses save money and improve economics. These systems can monitor the cost of energy from different DERs and utilities, then make choices on activating the lowest cost option. They also maximize the contribution of different sources. For example, when the wind isn’t blowing, the energy storage system can be activated to utilize the energy stored from when it was blowing to meet the load. Microgrids also help businesses participate in demand response and demand charge management programs to lower their costs.

Resiliency

Microgrids improve the resiliency of the local energy infrastructure by adding redundant DERs, which provide energy to the businesses. For a grid-tied microgrid, this means local DERs, ranging from solar PV to power generators, can continue to power the businesses and facilities during a utility outage.

Cummins involvement in microgrids

Cummins is a leading provider of diesel and natural gas power generators, digital solutions and control systems; and has partnered with businesses ranging from greenhouses to healthcare facilities in their efforts to build microgrids. Recently, Cummins’ investments in energy storage and advanced microgrid control technologies has boosted its capability to provide critical microgrid components and deliver complete microgrids tailored for each business’ unique needs.

Microgrids will continue to play a key role in our energy future. Businesses can evaluate the relevancy of microgrids per their unique needs as a part of their broader energy management strategy.

Sign up below for Energy IQ to periodically receive relevant insights and trends about energy management. To learn more about distributed generation solutions Cummins offers, visit our webpage.

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Varegro, in Oostrozebeke, a small town in the province of West Flanders, has already been using the Cummins QSV91G gas generator series in their premises, and selected the new HSK78G to replace the existing generator installation and support the additional power requirements. Pricing, along with previous experience with Cummins offering complete aftermarket and sales/service support, were the main factors behind the customer’s choice to continue powering their greenhouse operations with Cummins.

The HSK78G generator installed offers 2 MW and an electrical efficiency of 44.2%, which leads to greater fuel savings by turning waste heat into productive energy. In this application, its total return is greater than 100%. The customer can use this reliable power source to flexibly meet their own energy needs – specifically, the electricity produced can be used for its lighting, CO2 and hot water. 

Thanks to its heat buffer, the customer can also influence the variable energy market and support the grid network. The generator is self-managed, which implies that it has a higher tolerance toward variable natural gas fuel qualities and resistance to any external environmental factors. As a result, the benefits of cogeneration will be even greater for the customer, providing higher efficiency compared to former installations. The surplus of the electricity being produced is sold back to the grid network, offering greater financial savings for the company. Upon the completion of the installation, the exhaust gas has been measured frequently to make sure that the generator’s service life is longer.

Cummins is supporting the project’s full maintenance. Thanks to highly qualified technicians and specialists working on a 24/7 basis, the installation runs continuously with limited downtime, which further increases the total profitability of the installation.

“Cummins provided a custom-made gas solution to offer maximum efficiency with the greatest possible cost savings to the customer,” said Stefan DeWit, Project Manager - Cummins Power Generation.

Find out more on the HSK78G generator series here.

To find out more about Cummins cogeneration power solutions, visit cummins.com/cogeneration. 

Here are the three considerations to determine when is the best time for you to invest in a whole house generator.

If you know you will need it, buy it before you need it

You can buy a TV or a refrigerator and begin using them the day you need it. If there is a power outage and you need to get a generator, this might take several days to weeks, depending upon the severity of the outage. For instance, weather events such as hurricanes or wildfires could leave thousands to millions in the dark. Finding a local dealer to install your whole house generator, when thousands of others are looking for the same, would be a challenge.
If you live in an area where frequent power outages occur, don’t wait for the next power outage to persuade you to get a home generator. The cost of an extended power outage could exceed $14,000, and your investment in a whole house generator could pay for itself with that first power outage.

Consider the timing of severe weather events that might put lights out at your home

Severe weather events ranging from hurricanes to snowstorms are the number one reason for power outages. Most severe weather events take place at certain times of the year and impact specific geographies. Hurricanes tend to take place from May to November and impact eastern seaboard and south. Wildfires tend to happen during summer months and occur more frequently across the western half of the U.S. For instance, you would have a difficult time getting a whole house generator with a short notice during the summer months in Florida, since the hurricane activity increases the demand for generators.

Consider the severe weather events that might impact you and your family and get a whole house generator a few months in advance.

Be prepared for the unexpected, including squirrels

You can plan around hurricanes, snow storms or even wildfires. What about earthquakes or a squirrel like the one that has left hundreds in the dark including the local community hospital? Whether it is weather or other reasons, power outages are a part of our lives, and electricity customers in the U.S experienced an average of over seven hours without power due to outages in 2017. If you are seeking the ultimate peace of mind and no power interruptions, then the best time to invest in a generator is now, before you and your family experience the power outage.

Are you and your family prepared for power outages? Start your preparation by checking out What to Do Before, During and After a Power Outage. For more preparedness tips and to get valuable resources, consider signing up for the Cummins Home Generators newsletter.
 

Most successful companies have a marketing, product or supply chain strategy, but there is one more important but often overlooked area to consider when wanting to maximize profit: An energy management strategy. Today, a well-planned energy management strategy can position a company to take advantage of the recent trends shaping the energy markets.

"The days of considering energy costs as a given is long gone for most businesses," said Gino Butera, Vice President of Power Generation at Cummins. "A combination of five macro trends ranging from digitization and de-carbonization to electrification and de-regulation has created opportunities for businesses to be more pro-active with their energy costs." 

According to a 2019 Deloitte study, 88% of businesses have changed their view of energy procurement from simply a cost to the business to an opportunity to create value. Cummins has identified three benefits or values to be unlocked by an effective energy management strategy.

No. 1: Improving the company’s financials

Energy bills (electricity, heating and transportation fuel) are one of the major expenses for many businesses of any size. If you are simply paying the energy bills without seeking the opportunities to lower your bills, you might be leaving money on the table. 

When it comes to electricity and heating costs, there are opportunities ranging from demand response and demand charge management to combined heat and power for your business to lower costs. You can even create a competitive advantage for your business through an effective energy management strategy, depending upon your local cost of electricity. Hawaii's largest craft brewer has accomplished this and created its competitive edge with the ability to estimate the cost of electricity. 

An effective energy management strategy would integrate the latest technologies in intelligent controls and microgrids into your company’s infrastructure, enabling your business to take advantage of financial opportunities. 

No. 2: Protecting the core business from interruptions

Lives, money and reputation. In the case of certain healthcare facilities, interruptions in a business could have disastrous outcomes including putting lives at risk. Even in the least harmful case, an interruption caused by a power outage will still cost your business money in the form of lost business. Both instances could do irreversible damage to the company’s reputation.

Even the most reliable power grids are at risk to fail. For example, electricity customers in the U.S experienced an average of over seven hours without power due to outages in 2017. In some states such as Maine and Florida, customers experienced an average of over 30 hours without power due to outages during the same year. 

An effective energy management strategy would feature a diverse set of energy assets ranging from storage systems to emergency generators to minimize interruptions caused by power outages. A diversity of energy assets would increase the resiliency of your company’s energy infrastructure instead of relying solely on the grid. 

No. 3: Advancing the environmental sustainability efforts

Today, more businesses are not just talking about sustainability but are establishing environmental sustainability goals to keep themselves accountable. One might think this is a trend for large multinational corporations, but in fact increasing number of small businesses also have sustainability goals.  

A business’ environmental footprint gets impacted by a variety of factors ranging from how its facilities are built to how its products are disposed, yet the use of energy gets the spotlight due to its significant impact on overall environmental sustainability. 

An effective energy management strategy introduces new energy assets that produce less harmful pollutants to displace high-carbon sources such as coal. These new assets, including renewables and storage technologies, help businesses improve preservation of air, water and soil. 

Whether it is improved financials, continuity to serve customers or reducing environmental impact, an effective energy management strategy has multi-faceted benefits for any business. Building an effective strategy requires a consideration of both the company’s future goals and current operating realities. Check out this article outlining how you can start building an effective energy management strategy for your business.  If you are ready to take your energy strategy to the next steps, you can simply get in touch with an expert from Cummins to partner with you. 

Sign up below for Energy IQ to periodically receive relevant insights and trends about energy management. To learn more about distributed generation solutions Cummins offers, visit our webpage. 

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References:

1 Deloitte Insights (2019). Deloitte Resources 2019 Study [PDF file]. Retrieved from https://www2.deloitte.com