Podcast: Microgrids in manufacturing — Enhancing reliability and reducing energy costs

Jana Gerber is president of Schneider Electric's North American microgrid business. Jana is responsible for growing the commercial microgrid business in North America and supporting customers in their sustainability and resilience journeys. Rod Walton is managing editor of Microgrid Knowledge. He has spent the last 15 years covering the energy industry as a newspaper and trade journalist. David Paganie is content director for Endeavor Business Media’s Energy Group and the upcoming Microgrid Knowledge Conference. He has been involved in the energy industry for over 26 years as an offshore operations professional, analyst, and journalist. Jana, Rod, and David recently spoke with IndustryWeek editor in chief Robert Schoenberger about what microgrids are, why they're growing, and what to expect in the near term.

Below is an excerpt from the podcast:

IW: So, for those of us who aren't aware of what microgrids are or are not as well versed as others, can we start by just defining some terms? Jana, if you could start, what is a microgrid? How do you define a microgrid versus something like cogeneration or some of the other things that manufacturers have been doing for years?

JG: I often like to use the Department of Energy definition on this one. A microgrid is a local electrical distribution network with distributed energy resources. Those distributed energy resources could be anything from solar, landfill gas, fuel cells, any other type of generating asset that's primarily using or leveraging those renewable elements. It also has some sort of generation, storage and then those flexible loads that are interconnected and coordinated from both the generation and the supply side, as well as the load side. A microgrid really provides a decentralized, digitized, and decarbonized alternative to some of the other elements out there.

I actually recently put a microgrid in my home. I have solar on my roof, a battery in my garage, and then an intelligent management system to know when the grid is up and when the grid is down. And then I can leverage the solar when the sun is shining and the battery when the sun is not available.

IW: We've seen in manufacturing for years the idea of cogeneration, where some, especially larger, facilities will put in their own either natural gas or solar or wind or some other energy asset. One of our Best Plants winners last year here in the Chicago area, a plastics injection molding facility, has a very large natural gas generation facility on site, and they work with their utilities. So, they will sometimes flex power to the grid when the South Elgin, Illinois, area needs more power. Is that the sort of thing we’re talking about? So, is microgrid just a newer way of thinking about some of these things that manufacturers have been doing for a while?

JG: Yeah. It's really a behind the meter power plant that's virtualized. And to your point, it can operate grid tide in conjunction with the grid to help provide energy cost savings and renewable energy sources. But it can also really operate without the grid as well. So, when the grid is down, it provides that resiliency through those renewable generation assets.

IW: Rod, you've been writing about microgrids for a little while now. How do you define them, beyond what Jana described here when it comes to the technical definitions? What are some of the aspects that you consider important to a microgrid?

RW: So, I think with microgrids, it's a term that's very definite now where, like Jana said, it's close to the load resources, they're sort of connected by a controller, a management system, that balances it out. As you know, electricity is not like a fuel like gasoline, where you can just pump it into a tank and leave it there until you need it. It's got to move at a certain frequency. It's got to operate at a certain voltage, depending on the equipment you're using. So, it's a pretty well-regulated distributed energy resource that might include several resources. These can be generators, gen sets, whether they're diesel or natural gas. They can be solar. They can be battery storage.

I think that definition is going to broaden over time as we look at things like cogeneration from landfill gas and maybe even geothermal down the road as it scales up. But right now, I would say close to the load, mission critical, where you’ve got to have a backup plan. But it's more than backup. It's actually a source that can be used as essentially base load power.

IW: So, what sort of interest are you seeing in the industrial manufacturing space to add these sorts of grids to facilities? Is this only happening in green fields? Are you seeing people going into existing plants and installing these microgrids? What are the trends that you're seeing in the market?

RW: I'm going to blend the commercial and industrial sectors into this, because you're going to have industries which kind of bleed over to both. One, obviously, is manufacturing. As you look at the grid that the American Society of Civil Engineers has been telling us for years is in desperate need of upgrading, you're going to see with the data centers coming online in the next few years and the reshoring of manufacturing that we have a utility grid where the utility planners five years ago were saying, “We're going to have flat load growth, so we don't really need to prepare for a whole lot of extra generation on any wide scale.” Oh, that's all changed now.

AI happened. Cloud-based and hyper-scaling data centers are happening, and I think you're going to see more of that. With the grid being in the situation it is, you've got the industrial customers, manufacturers, I'll broaden this to food processors, cold storage, and Jenna can speak to pharmaceuticals better than I can, but they're saying, “Downtime outages are not an option. We have to have reliable, flexible power to our load.” And so you're seeing more and more investment in that.

About the Podcast
Great Question: A Manufacturing Podcast offers news and information for the people who make, store and move things and those who manage and maintain the facilities where that work gets done. Manufacturers from chemical producers to automakers to machine shops can listen for critical insights into the technologies, economic conditions and best practices that can influence how to best run facilities to reach operational excellence.