The vulnerability of power grids is growing worldwide, leading businesses to reevaluate their use of centralised power. With operational continuity front of mind, there is increasing exploration into strategies such as prosumerism and distributed energy resources (DERs) alongside energy storage solutions.
ABB Electrification Service’s global head of strategy, Matthew Wise, explains how businesses are navigating today’s shifting power landscape.
Matthew Wise (MW): Of course, the major outages in Spain and Portugal and Heathrow Airport remain front of mind as they highlight two different elements of grid vulnerability.
The substation at Heathrow was commissioned in the 1960s with two transformers. While transformers can last a long time in good condition, this draws attention to the fact that there is an enormous amount of ageing grid infrastructure out there. Equipment needs to be kept updated at a high level of maintenance with ongoing service interventions and continuous asset health monitoring.
The blackout in Spain and Portugal highlights the need for dynamic, smart and digitally enabled systems as it was caused by a dramatic frequency drop. As grids get more complex through local generation coming online, digital solutions can help manage this as we move away from a large, centralised, high-inertia and fossil fuel-driven power station model towards more DERs.
MW: What we are seeing now is companies increasingly looking at their energy systems as a critical operational piece on the same level as – or even more so than – digital transformation upgrades, which build up internal capabilities. This is a significant shift in mindset.
Data centres have been a catalyst. Power outages are the number one source of downtime, with the average cost of an incident for data centres just tipping over $1m. So, this is financially critical and businesses are taking it more seriously amongst volatile energy markets. Solutions are needed to ensure business continuity regardless of energy system evolution.
MW: We believe in battery energy storage systems (BESS) for commercial and industrial installations. BESS are being used to bring stability and inertia to the grid. There are enormous projects in development, such as the Edwards and Sanborn facility in California, which is going from strength to strength.
The beauty of battery solutions is that they address a range of energy challenges in concert. An on-site battery can kick in with uninterrupted power to support operations and avoid unplanned downtime. Batteries can also help businesses manage energy price volatility as they can be charged when energy is cheap and discharged when it is expensive. They help to stabilise the grid within ancillary services markets as well.
MW: It can be risky for businesses to delve into optimising batteries as understanding energy markets is difficult. For example, manufacturing facilities tend to have a limited level of awareness or engagement with building resilient power systems as part of their operational day-to-day work.
A lot of help is needed with not just installing and integrating batteries within existing power systems but also 24/7 management. If there isn’t in-house expertise, investing in a trusted partner will offer returns as they can bring the battery technology itself, the digital services and software, energy trading capabilities and uptime guarantees to derisk BESS.
MW: Being an active market participant can generate value streams as energy pricing can be optimised while bringing the benefit of resilience. In terms of BESS, battery cell prices will continue to drop as the technology scales up, making the business case even stronger. As we see more and more countries and regulatory areas becoming increasingly deregulated, thereby enabling market participation from prosumers, we see more opportunity.
If a business does play around with DERs, they have to get it right on the operations and maintenance side with digital systems. If there is no visibility of ongoing asset performance and health, then difficult situations can arise, such as committing to providing capacity to power grids for frequency regulation and then being fined if the business cannot do this.
Services are evolving in this space for partners to manage batteries and other power solutions to minimise risk. As such, the prosumer space is getting more sophisticated through new digital technologies and business models.
MW: It is an exciting time, but it is also easy to forget how critical power systems are. Things are only going to get more sophisticated and complex. A local microgrid can include batteries, solar, electric vehicle charging, heat pumps and more, and it comes down to the challenge of optimisation. Who knows how far AI is going to take us in enabling the next level of optimisation as we move towards these more complex microgrids.
Electricity will surpass hydrocarbons to become the biggest energy source by 2040. So, electrification is going ahead at full speed and the loads will be much higher, and with it increased pressures on legacy assets. Digital solutions and derisking through partnership will not only help businesses navigate these increasing complexities but also unlock economic opportunity.
“Q&A: ABB Electrification Service on securing grid resilience for businesses ” was originally created and published by Power Technologya GlobalData owned brand.
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