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POWER OUTAGES: GRID RELIABILITY
8/20/2019 12:00:00 AM
On July 13, 2019, a blackout in Manhattan shut down subways, Times Square’s marquees and caused Broadway plays to be called off. The outage lasted for over 5 hours and according to the utility company, Con Edison, at the height of the outage, 72,000 customers were in the dark. Con Edison said it could take months to investigate why the outage happened, but it could have been worse. That night, the outages were an inconvenience, but it does show the problems associated with an increasingly vulnerable power grid. Facility managers are seeing a need to increase their resilience, emergency preparedness and backup power plans in such times of outages.
It’s not a matter of it, it’s a matter of when will the power go out. Power outages happen for several reasons. According to the Edison Electric Institute, 70-percent of power outages in the U.S. are weather related, but other causes include vehicle accidents, equipment failure, animals and an overworked power grid. Peak energy demand is when electrical power is expected to be provided for a sustained period at a significantly higher than average supply level. When maximum supply levels are surpassed, power outages can happen.
Demand response (DR) is one way to secure grid reliability or financial gain. DR programs reduce demand on the utility supply in the event of a utility grid emergency. They do this by allowing the local electric utility, typically an Independent System Operator (ISO) or regional electric utility company, to automatically and remotely use an organization’s on-site generators, transferring some or all of a facility’s load from the grid to the generator. They also trigger load reduction through commercial and industrial building automation systems that act on lighting, HVAC and other mechanical loads. DR programs provide a no-risk, no-cost opportunity for organizations to help offset the capital and operational cost of a stationary generator set. Participants can earn money, save on energy costs and help maintain reliable electricity throughout their city, thereby avoiding blackouts or brownouts.
DR is most viable for natural gas generators rather than diesel generators, as the costs for achieving diesel emissions compliance in a nonemergency application often exceed the potential benefits of participating in a DR program. For example, in 2013 the U.S. Environmental Protection Agency (EPA) put forth rules to allow diesel generators to operate for 100 hours per year for DR purposes. A group of environmental regulators and advocates along with centralized generation interests appealed the rule to the U.S. Court of Appeals, which overturned the 100-hour limit in 2015. As a result, diesel generators must undergo costly upgrades to meet the emissions standards to run in DR applications.
DR program participants receive recurring capacity payments for agreeing to allow their local utility to curtail their utility power consumption in response to abnormally high electricity demand. They also receive additional energy payments based on their performance during dispatches. Financial incentives vary, but DR can significantly offset the capex and opex of a generator system that would otherwise be viewed as just an insurance policy. For example, a 300 kW natural gas generator with approximately 200 kW of “enrolled load” would earn the customer $4,000 at enrollment and up to $3,000 per year for the peak energy generated.
Additionally, program participants usually pay less for electricity, whether they sign up for mandatory, voluntary or price-responsive programs. Rates may include a combination of credits, penalties or time-of-use charges, but they are generally lower overall for program participants.
For answers to all your power outage questions and more, download our
Power Outage fact sheet
and start preparing your business today.
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