Energy management strategies for Industrial facilities in the U.S.

A. Halbe, D. Yeaman
M+W Group,
United States

Keywords: industrial facilities, storage, demand charges, energy management

Summary:

Cost efficiency and sustainability are the key drivers of innovation in energy supply and management for Industrial Facilities. Demand-side Energy Efficiency, PV, and Energy Storage are assets Industrial facilities can provide to the grid in a mutually beneficial way. M+W took a macroscopic view of the grid in the US to understand how electricity flows through the transmission and distribution networks. Conventional power plants provide power to the ISOs through contracts to meet the demand. The net-metered incoming solar offsets the demand from the conventional power plants and reduces the net load on the electricity system. In the evening hours (peak demand), power is supplied by the peaker plants to meet the increased demand. It is expensive to run these plants, and the extra costs are passed onto the distribution utilities and the consumers. A 20-30% rise in demand charges (year-on-year) has been observed lately. These demand charges are paid by commercial and industrial customers (>50% of their electricity bill is in demand charges). Storage has a strong value proposition to offset demand charges. Storage can also provide valuable grid services (like frequency regulation, voltage support etc.) that can create additional value streams for the asset owners. Regulations prevent the unlocking of such ‘grid-services’ today. M+W characterized loads from an industrial facility (a hi-tech manufacturing fab), and found that the fab generated loads in several MW per day (50-90MW). These loads were a reflection of major facilities equipment like chillers, HVAC units, cooling towers, etc. In fact, the facility systems load profile roughly follows the aggregated load profile from the factory. M+W collected demand data at 5 minute intervals for a calendar year from the facility. The summer periods exhibited significant demand swings over the 24-hour day compared to winter and fall periods. There was a difference of >4MW in the minimum and maximum load data over the 24-hour period. M+W analyzed the data through an economic model developed specifically to evaluate payback for storage to offset demand charge costs. M+W picked a utility in California where such a facility would be located. A time-of-use tariff that represented an industrial facility was picked for such a study. The economic model computed by assuming a 25MW solar farm co-located with 15MW/ 30MWh of advanced battery storage resulted in yearly savings in $3M-$6M per year with healthy payback periods (~4 years). Although the results were promising, storage may need to be combined with other forms of energy supply and management strategies to create a meaningful impact on the utility bills for such power consuming industrial facilities. Energy efficiency has a good potential to reduce energy consumption by directly reducing the demand from of the facility systems. Furthermore, Solar PV can provide cheap, renewable electricity at very low PPA prices. Future work will involve completing a sensitivity analysis (15-50 MW solar, 15-30 MW/ 30-45MWh storage) on the model that was evaluated. Different geographies around the U.S. will also be assessed to determine corresponding payback.