Renewables for energy independence in manufacturing

An increasing number of businesses are using low-carbon microgrids to reduce their fossil fuel use and their carbon footprint.

Just like traditional microgrids, low-carbon ones can help firms meet their energy demands without depending solely on the national grid. Unlike traditional solutions, however, these eco-friendly microgrids are almost zero-emission.

What is a microgrid?

A microgrid is a localised group of energy sources and uses that can work both with and without the large-scale grid. The ability to work in island mode is what makes a microgrid different from other forms of on-site energy generation. Therefore, microgrids are a popular option among manufacturers. This is since manufacturers may wish to secure a steady supply of electricity without relying solely on their national grids.

A charge/discharge storage system, a source of energy, and a point of common coupling (PCC) combine to form a microgrid. Traditional microgrids rely on fossil fuels as sources of energy suppliers. However, low-carbon microgrids use renewable sources. For example, solar panels or wind turbines which generate a significant part or even all of their energy supply.

What are the benefits of a low-carbon microgrid?

1. Improved reliability

There are three situations where companies have used microgrids in the past and where low-carbon options are becoming more popular. These are: off-grid areas; areas with inadequate or intermittent grids; and areas with reliable grids but high security needs.

Off-grid areas are still common in some regions of Africa, small islands, and sparsely populated territories such as central Australia. Despite the lower levels of industrialisations, these areas are important in sectors such as the extractive industry. This is because they are rich in mineral resources.

In this case, low-carbon microgrids offer new ways to meet the energy needs of the sector. Also, these microgrids can reduce the damage that mineral extraction does to the environment.

Areas with insufficient or intermittent grids are still prevalent in many developing regions, such as Latin America and the Indian subcontinent. Normally, manufacturers in these regions use diesel generators as a back-up power solution. However, the price of diesel is subject to the fluctuations of the oil market. Therefore, these low-carbon microgrids represent a cheaper and a more sustainable option.

Industrialised nations install low-carbon microgrids in locations with a stable electrical supply and high security needs. For example, organisations such as hospitals, airports, data centres, and military bases.

2. More savings, less carbon

Recently, an increasing number of plants with reliable electricity supplies have turned to low-carbon microgrids. Plants are doing this to cut energy costs and to reduce their environmental impact.

The main benefit of implementing a solar or wind-based microgrid is economical. Which, is since the price of both renewable energies and modern storage solutions is dropping. According to a report by the World Business Council for Sustainable Development (WBCSD), the global cost of solar panels fell by more than 60 per cent between 2009 and 2015. Meanwhile, lithium-ion battery costs decreased by more than 50 per cent from 2013 to 2016.

In the future, the decrease in the cost of solar is to continue, while diesel prices are unlikely to drop. Moreover, firms can sign a Power Purchase Agreement (PPA) with an external provider of renewable energy solutions. This will give them access to a low energy price over a long period of time. By contrast, the cost of diesel will always depend on fluctuating oil prices.

Low-carbon microgrids are also an efficient way of reducing a firm’s carbon footprint and therefore, its environmental taxes. In areas with carbon pricing, such as the EU Emissions Trading System or the UK Carbon Price Floor, switching to a low-carbon microgrid can drastically cut a plant’s compliance costs. Moreover, reducing emissions can improve a firm’s Corporate Social Responsibility (CSR) rating and enhance its brand image.

Low-carbon microgrids are a smart way to achieve energy independence. As well as lowering energy bills and making the manufacturing industry less harmful to fragile ecosystems.

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