Installing on-site power generation and considering other energy management options can deliver more than just simple financial benefits; these kind of behind-the-meter solutions also provide an opportunity to reduce dependence on the grid, increase resiliency and further embed sustainability goals into operations.
As individuals, companies and society at large take steps toward a net-zero future, demand for electricity is expected to soar around the world. This is likely to be the case not just through developing economies’ growth but also in developed economies, as, for instance, electric vehicles replace those using internal combustion engines.
The need for electricity to run daily activities and business operations is critical, and having consistent and reliable supply is integral to business success across sectors and geographies. Organizations should always consider what their “Plan B” is when facing potential disruptions such as extreme weather and other natural events, emergency situations or outages that might have detrimental repercussions to business operations. On-site power generation and storage as well as other behind-the-meter solutions are one of the options to consider when planning for and protecting against both planned and unplanned outages.
As a provider of on-site power generation, storage and behind-the-meter solutions, Shell understands the challenges and opportunities in this space. Around the world the company is taking concrete steps within its own operations to evolve its business model and position itself to support and provide for a lower carbon future. It is looking to do the same for its customers.
Keeping money in your pocket
For organizations everywhere, power can be one of the biggest financial burdens. On-site energy storage, generation and behind-the-meter solutions can help both commercial and industrial consumers manage their energy bills. By decreasing the amount of electricity their facilities consume from the grid during peak use periods, reducing on-site energy usage generally though various upgraded installations and potentially including generation in the form of microgrids (on-site solar facilities), companies can significantly impact their energy usage and costs.
Customers will also occasionally find themselves in unique positions with regard to their energy consumption. If located at the end of the transmission line, for example, organizations drawing power from the grid may find that they are paying so much to ensure reliability – or are experiencing such a lack of reliability – that on-site solutions may become the best way of ensuring a stable power supply. This resiliency is another key benefit when considering on-site power generation, behind-the-meter solutions and energy storage.
Keeping things operational
Examples of how the various solutions can make a difference are evident across the U.S. In San Diego, Shell Energy has financed and is operating eight microgrids that support critical municipal facilities: police stations, libraries, recreation centers that serve as Red Cross centers and more. Not only do these organizations need power to see out unplanned outages – an ever more frequent occurrence in California – but also to continue operations through planned outages that are built into the sectoral landscape in that state due to the state-mandated Public Safety Power Shutoff.
The full microgrid battery storage system deployed at the Shell Technology Center Houston is another example of resiliency in action. The microgrid supported operations without downtime during the state’s several recent extreme weather events. This microgrid also reduced peak demand charges year-on-year (also known as 4CP) for a co-located warehouse, thereby also reducing costs to both customers and grid operators, on top of ensuring the center remained operational.
Addressing emissions
Consumers no longer want to choose between affordability and sustainability. Brands across all sectors and at all price points know that their sustainability credentials are likely to be a major reason why many new customers decide to join them. In a recent study of 10,000 respondents around the globe, 50% said that they only buy from brands that “try to be eco-friendly.”
In heavy industry sectors, the decarbonization journey is both the most urgent and the hardest. With ESG now top of mind in boardrooms across the world, an organization’s impact on the environment is being factored into many investors’ decision-making process. Proactively moving power generation on-site can have the dual benefit of putting less demand on the local power grid and helping to address company sustainability goals. Utilities, third-party energy providers and other organizations may feel the pressure to follow suit and reduce their own carbon footprints; this, in turn, may have the effect of moving global power supply to more renewable and sustainable options.
And this doesn’t only apply to private industry. In 2015, San Diego put in place a Climate Action Plan, which aims to reduce by half the city’s greenhouse gas emissions by 2035. By adopting on-site renewable generation, and using battery backed microgrids, San Diego moved much closer to its emissions reduction target as well as generating cost savings estimated at $6 million over the next 25 years.
Where to next?
Conventional fuel sources will remain an integral part of the energy system into the future, but renewables are expected to grow from approximately 1 percent to 40-50 percent of the total system during the next few decades. On-site storage, generation and behind-the-meter solutions are going to have a fundamental part to play in this transition.
But there can be barriers to businesses considering these options, such as complexity and capital costs. However, taking steps such as standardizing microgrid components to reduce soft costs for customers, and integrating newly installed systems with energy markets, have the potential to improve the value delivered across the board.
For those looking for support as they consider their sustainability goals Shell Energy can act as a single-source provider to configure and procure, then install and operate a suite of options. This means users get access to expertise and solutions without the need for in-house technical or energy expertise. Shell Energy can also finance the system and offer energy-as-a-service (EaaS) options, which helps manage present and future financial stability.
When other benefits are factored in – such as resiliency, cost-certainty, and reduced barriers to further electrification (like EV charging) – considering how on-site generation, energy storage and other behind-the-meter solutions become a compelling option for those looking ahead to their sustainability future.
To find out more, visit ShellEnergy.com/business