Data centers, hospitals, and manufacturers can’t lose power for even a minute. The same can be said for financial institutions. Unfortunately, public power infrastructure in cities across the United States is aging. And as it does, power failures are becoming more common.
To combat this, a growing number of building owners—in fields ranging from data storage and financial services to healthcare and manufacturing—are installing their own onsite power systems. The systems these owners are choosing come in a variety of styles, with some choosing basic backup generators and others turning to gas-fueled continuous power systems.
Others are choosing to install complete microgrids in their facilities. These microgrids, which resemble miniature public power grids, are made up of a combination of different onsite power sources—everything from combined heat and power (CHP) systems, uninterruptible power systems, and backup generators to solar cells and energy storage.
Expect the issue of energy security to only grow in importance. In 2013, the US Department of Energy reported that the US electric grid loses power 285% more frequently than it did in 1984. The department reported that these outages cost US businesses about $150 billion a year.
With numbers like this, it’s little wonder that more owners and managers are choosing to protect themselves with onsite power generation and energy storage.
There’s no doubt that onsite power generation greatly increases a building’s power security. But the key is for owners to choose the right onsite system, one that makes the most sense for their particular data center, hospital, financial institution, or factory.
Building owners, then, have to consider a host of factors when choosing the right combination of onsite power generation and energy storage for their facilities. And the manufacturers of onsite power systems? Their job isn’t just to build and sell their generators, CHP systems, and uninterruptible power supplies. They also need to help their potential customers analyze their facilities, study their power needs, and then guide these customers to the right combination of power generation and storage.
By providing this guidance, the manufacturers of onsite power systems will do their part to continue the growth of their business.
Ryan Wartena, president and co-founder of San Francisco-based Growing Energy Labs, Inc.—better known as Geli—says that the owners of commercial buildings, medical centers, warehouses, and financial institutions are increasingly open to exploring new onsite energy solutions, including combinations of systems, as long as this investment pays off in greater energy security and more efficient buildings.
‘People want microgrids today,” says Wartena. “They might have generators already. But what people are increasingly realizing is that the different onsite options are building blocks. The use of these building blocks can get them 80% of the way to where they really want. They want that resilience to power outages. And they are willing to explore different ways to get there today.”
This, of course, opens new opportunities for the makers of generators, CHP systems, and continuous power systems.
Mark Jentges, corporate accounts manager with MTU Onsite Power, says that he is seeing a steady increase in the number of building owners and facility managers who are turning to onsite power generation and energy storage to boost the energy security of their data centers, distribution facilities, offices, and hospitals.
“Sometimes they turn to onsite power to eliminate the downtime caused by emergencies or outages,” says Jentges. “There is an increased interest level in generators on that end as more businesses can’t have even a momentary stoppage in power. There are some other owners who are interested in continuous power applications. The interest is increasing in all of the different applications you can have for onsite power.”
Gary Farmer, MTU regional sales manager for gas power systems in North America, also points to security as a reason why the demand for generators and other onsite power systems has increased.
Farmer says that on the East Coast, the memory of superstorm Sandy remains with business owners. Many buildings lost power during that storm when the public grid failed.
“That was a warning that this can happen, whether from natural or man-made disasters,” says Farmer. “You might no longer have access to the outside power that you have always depended on. How do I deal with that? Do I do it with a standby generator or a continuous operating system? What solution do I rely on so that I always have two sources of power?”
The superstorm Sandy example is especially meaningful today when so many businesses can lose considerable money with just a blip in their power. Then there are medical centers and hospitals, where a power failure, even the shortest of them, can result in serious harm or death to patients.
“You can monetize anything. If you are operating a trading floor, you can lose millions of dollars on a power loss that lasts seconds,” says Farmer. “A hospital can lose a certain dollar amount if someone is on the operating table and power goes out. Insurance companies can put a dollar amount on that. In an office building, you could lose whatever document you are working on. That might seem minor compared to these other losses, but it is important to you as the immediate user.”
Wartena, though, says that there is still the human factor at play here. While most building owners and managers recognize how important energy security is, many don’t take a long look at their systems—and whether they are the best fits for their buildings—until a large outage hits their area.
It’s only then that many owners and managers are spurred into taking a closer look at their energy security, or the lack of it.
“Every time there is a storm on the East Coast, Home Depot runs out of generators in that area,” says Wartena. “Sometimes, that is what it takes to inspire people to take action.”
Backing Up Data in Portland
The operators of data centers are branching out today, moving away from the Silicon Valley to other major markets that offer lower housing costs, more financial incentives, and strong labor pools. Portland, OR, is benefitting from this trend, with several data centers popping up in what is now being called the Silicon Forest.
Infomart Data Centers, a builder, operator, and owner of data centers, in 2011 chose the Portland market when it opened a 345,000-square-foot data center in the suburb of Hillsboro. Business social media site LinkedIn soon took up space here, leasing 8 megawatts of scalable data space from Infomart.
Infomart would struggle to attract tenants such as LinkedIn if it couldn’t guarantee 100% uptime. That’s why the data center operator began working with Pacific Power Group, an MTU Onsite Energy distributor. Pacific Power Group and Infomart designed a three-phased project that included the delivery of 14 MTU Onsite Energy Series 4000 DS generator-set units that delivered 2 and 2.25 megawatts of power.
The gensets include onboard paralleling capabilities, custom enclosures, and a 100% rated circuit breaker with ground-fault indicator. All 14 units are now installed.
“Power system priorities for Infomart Portland were low fuel consumption, low sub-transient reactance, 85% load factor, and flexibility for future growth,” says John Sheputis, president of Infomart Data Centers, in a statement. “MTU checked every box and then some.”
Doug Shotwell, solutions architect at Infomart says that the Hillsboro site has experienced a handful of power outages since the installation. During each of these outages, though, the 14 generators have done their job, keeping the data center powered until the public grid came back online.
When deciding what type of onsite power generating and storage system in which to invest, building owners must consider a host of factors.
The first and most important are the legal requirements governing their business.
“It’s not always about the convenience of having a backup power supply, but a contractual obligation or regulatory obligation,” says Farmer. “You have to provide operations with a certain consistency and reliability. Maybe you’re running a casino. The gaming commission requires that you have power. You have to provide the backup power to meet those regulations.”
Then there are the uptime requirements. Ryan Murphy, business development manager for mission critical services at MTU, says that owners and facilities managers need to consider how important constant uptime is to their sites.
“There is a difference between a hospital and a trading floor, which are also different than an office building,” says Murphy. “In an office building, a lack of uptime might just be an inconvenience. But for a hospital, it can be life or death. Defining your uptime will have a considerable impact on what type of generator you need and how much redundancy you need on the site.”
Tom Drake, regional sales manager of gas power systems at MTU, says the type of building that owners are powering and the industry in which they work matters too.
“An industrial customer has different requirements than a commercial or an IT customer,” says Drake.
Chad Forbes, director of energy with Beloit, Wisconsin-based Fairbanks Morse Engine, says that customers, especially those in the industrial space, are frequently trying to balance cost, performance, and flexibility when they choose their onsite power generation and storage systems.
The goal is to wean themselves off their public utility—at least in part—while still providing the power security their facilities need. The challenge lies in leaving the utility behind completely: there is plenty of risk with that approach, risk that makes many users nervous.
“Getting away from the utility is like leaving your house when you go to college. You still want your parents to be there to help you, but you also want to be on your own,” says Forbes. “Larger industrial customers have a lot of pull with utilities. Utilities don’t want to lose them because if they do, they lose a lot of revenue. What you often see, then, is that industrial users are negotiating better prices with utilities at the same time they are working to separate themselves at least in part from the grid.”
A far smaller number of clients, then, are working on a hybrid approach when it comes to onsite power generation and storage, Forbes says. If 100% of these clients’ load is 3 megawatts, they’ll buy 2 megawatts of power from their public utility while generating one megawatt on their own.
Those that want to go completely off the grid? These users must be certain that they can operate on their own without any future hiccups, Forbes says.
“They have to be sure that they’ll have the fuel they need to go on their own,” says Forbes. “They have to be sure they won’t see demand grow too quickly down the road. That’s why so many of these users maintain at least some relationship with the utility or let the utility provide some percentage of their capacity.”
Farmer says that the range of customers seeking backup power, and the type of power systems in which they are interested, is constantly evolving.
Traditionally, most commercial building owners were interested in standby generators. Today, though, more are investigating the benefits of continuous power systems.
Farmer says that industrial operators are especially interested in continuous systems.
“These industrial users need to have power at all times,” says Farmer. “A chicken-processing plant needs the right temperature all the time. They need hot water and steam. You can’t pluck a chicken without hot water. So the definition of backup power has expanded considerably in just the past 10 years. The definition differs depending on the customer and what their operation is.”
Geli provides its clients with software that helps them design, automate, and manage their own intelligent energy storage solutions. Wartena says that the key to helping clients find the right energy storage solution is for Geli to first study the spaces in which these clients operate and their onsite power needs. Then Geli can help them come up with the right combination of power generation and energy storage solutions, along with the software needed to monitor and control these pieces.
“It’s not about building a new converter or battery, but about coordinating all of the pieces that can make up a power system,” says Wartena. “We cover more than 60 different assets, everything from generator controllers to transfer switches, meters, and chiller controls. We are here to help developers take their next steps. We want to help them all the way through the process of developing their first or their 50th energy service project.”
Wartena says that the demand for services such as those that Geli offers will only rise. He points to the more than 6 million commercial buildings dotting the United States. All of these, he says, are going to want some type of energy storage system either now or in the near future.
“Everyone is looking for a better way to increase energy security,” says Wartena. “Cost is everything, especially for businesses that make things. Energy is a big factor in that cost. If you can fix that energy cost, you are taking away a lot of uncertainty. If you can do it in a renewable and green way, you’ll get bonus points. There are incentives for renewables coming from multiple directions. Renewable energy is going to be considered a long-term asset.”
End-users must evaluate their own personnel, too, Forbes says. Many end-users don’t have key engineering staffers on their payroll, Forbes says.
Such users might choose instead to work with a packager or OEM such as Fairbanks, according to Forbes.
“To produce a whole power plant, you need to look at the construction, infrastructure, and equipment side,” says Forbes. “Do you have the ability in-house to manage that extra scope?”
Smarter Building Owners
Drake says that building owners today are also savvier when it comes to reducing their power bills and managing their power systems.
“They have a better understanding of their electricity bill and the power requirements that they need to operate on a daily basis,” Drake said. “When customers come to us, they come to us with an energy problem. Their utility might be charging them too much because of the processes they need energy for.
Or maybe they’ll lose a batch of data if they lose power. They come to us looking for a partnership in which we can help them solve whatever energy problems they might have.”
There was a time, not too long ago, when building owners or facility managers would approach their public utilities with their power needs and then ask these utilities what they’d have to pay to receive the power they needed.
This has changed, thanks largely to deregulation and the greater number of choices power customers have today.
“The customers have become more sophisticated and have greater knowledge about what is out there for them,” says Farmer. “They know how much energy they need. Then they work out a plan on how to get it. They might consider whether they can not only get that power but also use that power to become a supplier as a well as a consumer.”
A good example are data center operators, one of the biggest customers for generators, CHP systems, and continuous onsite power systems.
Jentges says that data centers constantly look at their center’s power usage effectiveness (PUE). PUE is a key metric for them, a measure of how efficiently their computer centers use energy. At its most basic, PUE measures the total amount of power that a data center consumes to the energy it delivers to its computing equipment.
This ratio separates the amount of energy a center’s computer systems consume versus the energy used by maintenance systems such as a building’s heating or cooling.
“They are extremely conscious of their efficiency, being such big power users,” says Jentges. “Data centers do not want to get a reputation as being wasteful.”
Jentges says that data center operators have a simple but challenging goal when it comes to PUE: they want to drive that ratio as close as possible to the number 1.
“The closer they can get to 1 or 1.1, the better the reputation they have, the more of a green and lean a facility they have,” says Jentges.
Data centers often turn to onsite power generation as a way to increase their overall energy efficiency, Jentges says. At the same time, onsite power generation offers more energy security.
Murphy says that data centers should keep companies like MTU busy for years to come. That’s because these centers are no longer operating just in top-tier markets in which baseload power is readily available. Some are opening in smaller markets where the public power might not be as reliable.
“That is leading to some interesting discussions around baseload power versus continuous onsite generated power,” says Murphy. “And it’s not just with data centers and e-commerce companies. We are seeing exponential growth in the number of companies and building owners that want to generate at least some power onsite. In the upcoming years, this growth will only increase.”
Some end-users are exploring energy storage as a way to increase their power security. This solution, though, is far from perfect today.
Forbes says that energy storage remains a challenge for all end-users. Batteries that are large and powerful enough to store significant amounts of energy are expensive.
But some users have found a way to effectively store thermal energy. At night, when power prices are less expensive, industrial producers run their prime mover to create chilled water, Forbes says. These users can then store this chilled water and use it during the day. Through this process, users gain access to chilled water without having to pay peak-time charges for it, Forbes says.
“It’s simply moving the peak,” says Forbes. “It’s a way to beat those higher energy prices.”
Keeping the Equipment Running
Installing an onsite energy system is a good step for companies and building owners who want to boost their energy security. But these systems won’t do much good if building staffers don’t maintain them properly.
Fortunately, generators and continuous power systems don’t need much maintenance. Maintenance staff just needs to keep the equipment clean and schedule preventative maintenance visits according to the schedule specified by the manufacturer of the systems.
“A lot depends on the type of system you have,” says Drake. “A diesel standby generator has different requirements than a continuous natural gas system.”
Murphy says that building managers and owners need to resist the temptation to ignore maintenance.
“We have all seen in this industry that between big events and major storms, especially during financial downturns, that generator maintenance might be overlooked or pushed to the backburner,” says Murphy. “People generally forget about maintenance until they need to use that generator. The key, then, is to not only define your maintenance plan but to continue to follow that plan.”
Farmer recommends that building owners and companies include the cost of preventative maintenance in their yearly operating budgets. That way, they’ll be less likely to skip needed repairs and scheduled tune-ups.
“It’s too easy otherwise to put it off,” says Farmer. “We all fall prey to that. You see your oil light flashing in your car but you drive for another 1,000 miles. It’s just human nature.”