Energy resilience & grid shutdowns: How to ensure operational continuity
Fair weather or not, potential power outages are an undeniable risk to operations. Read about options for ensuring your facilities’ power supply through energy resilience.
The snow and ice might have thawed out in Texas, but some businesses can still feel the chill of the state’s recent operational freeze. While the record-breaking (and business-halting) power grid phenomenon might be sitting securely in the past, the key to protecting your business from similar issues could depend on actions you take now.
Below we take you through some lessons learned from the Texas energy crisis, the reality behind energy resilience for businesses, and options to keep your operations running regardless of the weather forecast.
A surprising twist in energy supply & demand.
Last month, a culmination of severe winter weather created an unprecedented demand on the Texas energy grid – and an unexpected power outage.
As most residential customers cranked up the heat in their under-winterized homes, the natural gas (NG) reserves for commercial establishments and industries (calculated by historic supply and demand) collapsed under the pressure. Moreover, as subsequent electricity demand rose, most energy producers needed to close the gap by clearing out the state’s NG reserves designated for industrial use.
In line with its Lone Star nickname, Texas has its own, standalone power grid: The Electric Reliability Council of Texas (ERCOT) Interconnection. Decentralized, deregulated, and disconnected from the US national grid, any fluctuation in ERCOT’s supply-demand ratio must be resolved within the state itself. This is unlike multi-state power supplies, such as the Western Interconnection. This shared energy grid interconnection allowed Utah to meet California’s energy demands during an unprecedented heatwave that allegedly led to the 2020 western wildfires.
Without NG from ERCOT (or energy from any other state), companies in carbon-dependent industries had to shut off the lights (literally) – as they shut down their Texas-based operations. Now, while the rest of the world’s businesses wonder, “How can we keep this from happening to us?” The common answer – alternative fuels – comes with its own complicated challenges.
Giving up natural gas: Real-world challenges in decarbonization.
Few companies, entities, or industries are outside of the global shift towards sustainability. With increasing focus on climate change (and expanding goals for carbon reduction), initiatives such as the European Green Deal and the Paris Agreement are guiding our collective to global carbon neutrality. As such, the spotlight on businesses’ roles to make progress in this area is progressively more intense.
Even though they’re well-intentioned – and sometimes even well incentivized – targets for reducing carbon emissions can be very challenging for some industries. While some companies are exploring innovative solutions with biofuels and hydrogen mixes, other businesses can’t easily implement alternatives for their heavy industrial processes. The reality for many industries is that making a full switch to alternative fuels means a significant overhaul to infrastructure.
Industrial applications, such as high heat thermal inputs for operating machinery, are the largest consumers of NG – using more than even the power sector. As such, for companies with heavy carbon-dependent operations, the desire to reduce carbon emissions can come easier than doing it.
Almost instant energy resilience: What your business can do to protect itself now.
No matter where your business finds itself in the biofuels vs fossil fuels (vs other alternatives) matrix, the fact remains that dependence on NG can put your operations in a delicate power-supply position. If extenuating circumstances create an insatiable demand for energy in your region, your company might be facing a similar freeze to its operations.
For businesses on the fence about overhauling infrastructures, the answer might be less about a “re-do” and more about adding reinforcements. You can protect your operations from downtime due to dwindling power supply with immediate (more affordable) options in energy resilience. These options offer – relatively – instant gratification in reducing your dependency on NG and even save money along the way.
- Reduce weather worries:
Weatherizing facilities can be a relatively quick win for a business’s bottom line. Taking steps to avoid heat or cold air losses during both cold and hot months reduces the use of energy thereby preventing the depletion of its sources and power needed for operations. Guidance documents, such as the DC Law 22-257. Clean Energy, DC Omnibus Amendment Act of 2018, offer recommendations for this process. Additionally, companies can benefit from incentives for their weatherizing efforts. For example, the Energy Policy Act of 2005 (EPACT) and the Emergency Economic Stabilization Act of 2008 offer US businesses tax deductions for the costs of improving the energy efficiency of commercial buildings, including weatherization of new facilities and retrofitting of existing facilities. Following these guidelines helps to lessen preventable depletion of energy sources and consistently maintain power for operations even during unforeseen demand surges.
- Leverage energy storage:
Businesses can install battery storage systems to establish more autonomy from unpredictable power sources. These systems use rechargeable batteries that store energy from solar arrays or the electric grid, providing it to operations when needed. Companies can see big gains with onsite battery storage systems meeting peak needs during seasons of high demand for NG. The bi-partisan Better Energy Storage Technology (BEST) Act, introduced and approved by the US Senate in 2020, aims to expand the potential of these solutions, supporting grid-scale energy storage research and development.
- Reserve NG only for required use:
Even without overhauling your entire infrastructure to run on alternative fuels, adapting select portions of it can be advantageous for your business. Evaluate where your business must use NG and implement “mini” infrastructure changes to use alternatives elsewhere. For instance, use electricity to cool units and water heaters to reserve NG for when it’s necessary and where no other alternatives exist.
The future of energy resilience: Moving forward with what works for your business.
The shock felt from the recent Texan energy crisis has given more fodder to the discussion around biofuels and alternative energy sources. Many believe that businesses should bite the proverbial bullet and invest in less carbon-intensive infrastructures. However, the solution is unfortunately not always that simple.
For many industries, cutting out NG isn’t only unrealistic – it’s often out of reach. A first step can be focusing on energy resilience through solutions. Small(er) adaptations such as energy storage, alternative fuels, and only using NG where needed can offer your business big advantages keeping operations running in times of rise in NG demand.
Mid-century net-zero considerations aside, it’s clear that businesses must stay on top of the future extreme weather patterns and the challenges they will bring. Among the most impactful of these topics is the need to reduce their NG dependency – not only to protect our world but also to protect their work in it.