When PV Isn’t Enough: Why you need a power management strategy
Because of their high operating expenses, in particular their high energy costs, it’s no secret that solar power can generate savings for grocery stores. That’s part of the reason we’re already seeing major grocery chains, such as Whole Foods and Walmart, install solar arrays at many of their stores. However, a PV solution by itself lowers building load for only a fraction of the day, leaving supermarkets vulnerable to high demand charges after the sun has set. Demand charges, based on the highest 15-minute kW load of the month, can account for up to 60% of a supermarket’s energy bill, and this percentage has been rising in recent years. Because of these increasing demand charges, load flexibility — which supermarkets have historically had very little of — has become one of the keys to unlocking the majority of the electricity bill.
To make matters worse, as more solar power enters the grid, utilities are using whatever levers they have available to encourage people and businesses to use power during periods of lower overall grid demand. One measure utilities use to encourage their desired demand patterns from their customers is shifting their peak hours, which are the times where systemwide demand is highest and utilities charge higher fees. For example, peak energy ($/kWh) and demand ($/kW) prices in California have traditionally occurred from 12:00 - 6:00 pm, but with the growing amount of solar on the grid, this period has shifted to 3:00 - 8:00 pm for some utilities and will shift to 4:00 - 9:00 pm for others. While this shift was (and is being) made to ensure prices match increased net demand during these hours, it also means that a large portion of solar production will occur during mid- or off-peak periods - when both energy and demand charges are lower.
As we mentioned in our last blog post, supermarkets must start to install power management systems in their buildings if they are to keep their electricity costs under control. Now more than ever, a solution grocery stores should be looking into is adding energy storage technology alongside their PV systems. By adopting energy storage alongside solar, supermarkets will have the opportunity to store energy, shift demand to off-peak hours, and reduce costs even further.
What storage technology works best for the needs of grocery stores?
In the growing energy storage market, lithium-ion batteries are typically the top-of-mind solution for driving cost reductions for utilities and effectively responding to short duration (<4 hours) fluctuations on the grid. However, grocery stores are not standard buildings because refrigeration compressors and condensers require large amounts of power throughout the entire day, and especially during periods of warmer temperatures. The always-on nature of large loads at supermarkets necessitates longer duration storage technologies to bridge the gap between sunset and sunrise and mitigate costly demand charges.
Long duration solutions, such as thermal storage, can offset 150+ kW of refrigeration load for six to eight hours, allowing supermarkets to shift much more energy than they would be able to with only a traditional Li-ion system. Such solutions are ideal for the constant energy requirements of grocery stores, and a great complement to solar power systems. To illustrate our point, the following is a short case study showing how Axiom’s Refrigeration Battery (RB) solution can shift load at a supermarket that has already installed a PV system.
Rate plan basic info (PG&E E-19 - Medium General Demand-Metered TOU Service)
Effective Date: March 1, 2019
Season during case study: Summer (May 1 through October 31)
Peak period: 12:00 noon to 6:00 pm, Monday through Friday
Demand charge: $20.97/kW peak + $19.53 maximum (non-coincidental)
Energy price: $0.16484/kWh
Mid-peak period: 8:30 am to 12:00 noon AND 6:00 pm to 9:30 pm, Monday through Friday
Demand charge: $5.81/kW mid-peak + $19.53 maximum (non-coincidental)
Energy price: $0.11883/kWh
Off-peak period: 9:30 pm to 8:30 am, Monday through Friday
Demand charge: $0.00/kW off-peak + $19.53 maximum (non-coincidental)
Energy price: $0.08837/kWh
Sample 24 hour sequence of events:
June 14, 2018 00:00:00 - As the temperature and building load are dropping for the night, the RB shifts from discharge mode (DCHG) to charge mode (CHG) to take advantage of higher compressor efficiencies and lower energy prices
June 14, 2018 10:00:00 - Once the sun comes out and solar generation comes online, the RB shifts into dormant mode (DMT) and allows the building’s net load to naturally decrease
June 14, 2018 15:00:00 - In the middle of the peak period, when energy prices are at their highest, the RB begins a DCHG, even with solar still online, to take advantage of the price differential between on and off-peak energy prices
June 14, 2018 19:00:00 - Solar generation goes offline for the night, and after a brief period of CHG the RB goes into DCHG mode to prevent the ~5 hour peak that would naturally occur due to relatively warm temperatures and high store traffic
June 14, 2018 23:00:00 - Once temperatures have dropped again and traffic in the store decreases, the RB shifts into CHG mode for the rest of the night to prepare for the following day
Baseline Building Load (kWe) (without RB) - Blue
Actual Building Load (kWe) (with RB) - Green
RB State of Charge (kWhth) - Orange
Outdoor Ambient Temperature (oF) - Red (bottom graph)
As you can see, over the three days shown above, solar PV and Axiom’s RB are able to work together at this site to flatten or lower the building’s load profile around the clock, thus significantly reducing demand charges, enabling energy arbitrage, and in some cases unlocking grid services revenue from programs like California’s Demand Response Auction Mechanism (DRAM). With solar alone, this supermarket would have no way to reduce the evening peaks that occur after the sun has set, and monthly demand charges would likely be similar whether or not the PV system had been installed. On the other hand, without solar reducing the building’s net load for much of the day, the Refrigeration Battery would have much more energy to shift and would have to settle for a demand threshold higher than the 619.2 kW seen in this case study.
In addition to converting inflexible refrigeration assets into flexible ones, thermal storage can provide resiliency in the form of backup refrigeration services, allowing supermarkets to avoid food spoilage during planned or unplanned power outages. Because they are currently lacking this resiliency, most supermarkets have to make the costly decision of either calling in backup generators immediately when an outage begins or moving food into walk-in freezers and hoping they can passively keep food cold until power returns. When coupled with a small lithium-ion solution for powering the lights and other auxiliary systems, thermal storage could even allow stores to maintain food temperature stability during extended blackouts, thus protecting food from spoilage and enabling them to stay open while the rest of the neighborhood is in the dark.
In conclusion, because utilities and their rate plans are rapidly changing, supermarkets now require an energy strategy that includes active building load management if they are going to keep their energy bills manageable. Solar goes a long way toward offsetting energy consumption, but with the changing utility rate schedules, it is not sufficient to deal with the rising demand charges that customers continue to face. Now more than ever, supermarkets need energy storage to keep energy costs down and also take advantage of additional revenue streams that may be available to them.
If you’re interested in learning how to optimize your grocery store or refrigerated warehouse (using the Axiom Cloud with or without the Refrigeration Battery), contact us today.
Turner is an Application Engineer at Axiom Exergy.