Guest Column | June 18, 2024

How Microgrids Can Reduce The Energy Pressures On Water Infrastructure

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By Jim Dankowski

Sustainable and resilient water treatment and delivery is central to every aspect of life. For large cities and small municipalities alike, the main goal of water departments is to improve the health of the public and the planet. But as the safe collection and treatment of wastewater is disrupted by increasingly frequent extreme weather events, system operators need to find new ways to reduce the vulnerabilities and environmental impact of their systems. 

This challenge is only made more complex by tightened budgets and steadily rising energy demands. According to the U.S. EPA, drinking water and wastewater plants are typically a municipality’ largest energy consumers, and electricity alone can constitute 25–40% of a wastewater treatment plant’s annual operating budget. This means finding ways to use energy more wisely can have a major payoff.

But how do you optimize energy systems to improve energy resilience and reduce overall energy spend? With the ability to isolate from the primary grid, maximize the full potential of onsite distributed energy resources (DERs), and intelligently manage onsite energy loads, microgrids have emerged as an ideal solution to help water departments modernize operations for the energy demands of today and tomorrow.

The power that runs through your plant should be a strategic, integrated asset that can be managed — and improved upon — throughout its life cycle. There has never been a better time to transform the energy infrastructure powering water facilities by leveraging breakout technologies like microgrids that take advantage of new energy dynamics at play — helping improve energy resilience, sustainability and affordability.

Microgrids Can Enable More Resilient, Sustainable Water Infrastructure

The energy transition created a new energy paradigm in which power is no longer restricted to only flowing in one direction, from a centralized power plant to your facility. Now, energy flows through the grid in more directions, and DERs can provide water and wastewater treatment plants with new ways to meet sustainability goals, power operations and control energy costs.

By adding onsite generation through renewables, energy storage systems and intelligent microgrid controls, water systems can ensure resilient, reliable operations even when the utility power is down. By balancing where, when, and how electricity is consumed, microgrids are instrumental in supporting resilience, sustainability and efficiency. They can also help maintain operational continuity by preventing downtime, reducing energy costs, and accelerating decarbonization.

In simple terms: When there is a power outage, a microgrid can isolate onsite generators or renewable energy resources from the grid and continue to operate in “island-mode”, providing power to critical loads in the facility to keep the water flowing.

And when it comes to creating more sustainable water infrastructure, microgrids can help manage distributed generation sources by providing optimal control, dynamic stability, and balancing energy demand with power generation on a small but critical scale. 

New Opportunities For Sustainable, Affordable Energy Supplies

Microgrids can be configured to use existing onsite generation such as diesel generators, but you can also reduce the cost and use of fossil-fuel generators by incorporating renewable energy alternatives that are now proven in critical applications, including:

  • Integrated battery storage: The microgrid we helped develop in Columbus uses a battery energy storage system that can supply drinking water for 1–2 days without grid power, with the potential to extend backup for many days using energy supplied by the solar panels.
  • Fuel cells: Today, some water facilities have implemented a fuel cell system that collects anaerobic digester gas so that the fuel cell plant can run directly from it. As a result, the system can efficiently produce renewable energy from direct biogas. 
  • Methane capture: Methane can be captured during the water treatment process and used to produce renewable natural gas (RNG) or generate renewable electricity for the plant's onsite energy needs.

These innovations enabling wastewater plants to produce renewable energy can help organizations become more climate friendly while creating new forms of revenue and offsetting energy costs. Further, many electric utilities offer incentives for participating in demand response programs to reduce a site’s energy usage during peak demand periods, or frequency regulation programs that utilize the flexibility of onsite energy storage systems to help balance the grid. 

No matter what onsite energy source you are integrating, microgrid controllers are the important piece of the puzzle. The controller is the brains of the microgrid system — automatically transitioning from grid power to onsite power sources when it senses an outage. It maintains overall system stability while dynamically managing generating assets and critical site loads by controlling where, when, and how energy is produced and consumed.

In normal grid-connected operation, a microgrid controller can also dynamically source power from onsite solar or battery storage instead of using grid power when utility prices are highest. This “peak shaving” capability reduces the costly demand charges on your utility bill.

In addition to providing resilience and sustainability benefits, microgrids also enable more flexibility from distributed generation assets to provide economic benefits. For example, installing a microgrid with solar and energy storage can offer an alternative to costly grid substation upgrades when a site’s electrical capacity needed to be expanded. 

A key consideration for maximizing the value of your microgrid is ensuring its control system is programmed and configured according to your organizational goals. This allows a water facility to utilize the most effective energy source at any given time, whether from the utility or through onsite generation sources. For example, clean energy resources will be prioritized if your goal is to decrease emissions.

Federal Funding Can Help Bring Your Microgrid To Life

Federal funding programs such as the Inflation Reduction Act (IRA) and the EPA’s Clean and Drinking Water State Revolving Funds present opportunities for water departments to invest in clean energy infrastructure. These initiatives incentivize the adoption of microgrids, battery storage systems, and renewable energy sources, empowering communities to build resilient and sustainable water infrastructure.

How To Get Started On Your Journey

  1. Determine how resilient you need to be

The first step is assessing the estimated impact of a power outage and how long you need to remain operational when one does occur. This requires quantifying the impact of power disruptions and the likelihood of them happening in the first place at your site.

It also requires calculating the “cost” of a power outage or interruption by measuring estimated community impact, revenue losses, related expenses, and increased emissions. Further, it is essential to benchmark the likelihood, duration, and anticipated impact of power outages. This can be accomplished by factoring in the local environment, anticipated impact of extreme weather events, aging infrastructure, and changing energy habits that can cause power disruptions.

  1. Perform a microgrid feasibility study

The economics of a microgrid or other energy infrastructure upgrades and updates need to make financial sense. A feasibility study provides an analysis of the risks, sizes, and types of DER assets, and other requirements for your energy system. It will zero in on opportunities to manage costs and deliver additional value from your energy assets, helping you figure out how to optimize your energy infrastructure today and support a modular approach, so you can make the adjustments you need in the years to come.

Additionally, a feasibility study will factor in available incentive programs that can help reduce or offset costs. With the Inflation Reduction Act, it’s likely that your microgrid will qualify for federal tax incentives. There may be additional local and state programs that can help you reduce the overall cost of your infrastructure updates.

  1. Decide how you will finance the microgrid

There are two typical models — direct purchase and power purchase agreements (PPAs) — to finance microgrid systems and DER projects. Both approaches have their benefits, and you should evaluate which makes the most sense for your building or community energy needs. Exploring both approaches is important and you can learn more about each in our article on microgrid financing. It is important to note that either approach allows you to take advantage of the incentives and credits.

The critical thing to know is these PPAs, also known as Energy as a Service financing, can help customers to install a microgrid without the upfront capital investment. This finance vehicle enables organizations to pay for clean energy as an operating expense through a 15–20-year power purchase agreement.

  1. Evaluate your energy assets to determine what is needed, and when

Adding a microgrid and other DERs should not require rebuilding your energy infrastructure from scratch. Rather, it’s about adding and modifying and managing all the tools you have to keep the power on, sustainably and affordably. That means it’s important to take stock of all available energy resources.

  1. Implement microgrid and energy resource controls 

A microgrid controller provides control and automation as the brains of the operation. It continuously monitors and controls onsite generation sources to pick up critical loads when the grid is down or energy prices are high, islanding from the grid. It can also automate decisions about energy generation and consumption, executing the most cost-effective and resilient energy-management strategy.

  1. Simulate how your microgrid will operate

Before you even break ground on your project, you can see how your microgrid will perform. By creating a digital twin or hardware-in-the-loop simulation, you can have confidence in the microgrid design. This powerful tool can show how your system will work under ordinary and even extraordinary circumstances.

  1. Ensure you’re getting the most out of your investments

When your energy infrastructure acts like a mini electric grid, you can also open new revenue streams from your investments. When utility prices are highest (during peak demand periods), microgrids can shift to onsite power resources. And when you have excess energy, you may be able to sell power back to the grid, depending on available local utility programs. Many utilities also offer incentives for frequency regulation programs that utilize the flexibility of your installed energy storage systems to help balance the grid.

  1. Build out the energy systems you need to power today and tomorrow

With the electrification of more processes, finding new approaches to keep the power on, reduce energy costs, and minimize our environmental footprint is a must. Unfortunately, there’s no easy button or one-size-fits-all solution for optimally powering water operations. The good news is that there are new tools to build the energy infrastructure you need and incentive programs to help them pencil out. 

There Has Never Been A Better Time To Improve U.S. Water Infrastructure

With the rise of extreme weather events and an aging centralized electric grid, extended power outages are a growing threat to the resilience of water infrastructure in our communities. At the same time, ambitious sustainability commitments and rising energy costs are creating pressure for many water departments to decarbonize their operations and use electricity more wisely. 

Microgrids are providing a proven solution to these challenges — delivering affordable and sustainable energy along with the ability to keep the power on and operate critical assets during a grid outage.

microgrids pave the way for the integration of renewable energy sources, enabling the water industry to embrace sustainability while reducing energy costs and generating new revenue streams. Through federal funding initiatives and strategic planning, communities can seize the opportunity to invest in resilient and sustainable water infrastructure, laying the foundation for a stronger, more resilient future.

As we navigate the complexities of modern energy systems, microgrids emerge as a vital tool in our collective efforts to enhance water infrastructure resilience, sustainability, and affordability. Now is the time to embrace the power of microgrids and pave the way for a brighter, more sustainable future for generations to come.

Jim Dankowski, Eaton’s Federal Government Marketing Director, oversees the strategic planning, value proposition development, and customer engagement for the government segment. With 44 years of experience in the electrical power distribution and control industry, his knowledge has delivered unique and creative solutions that support Eaton’s clients with their energy initiatives and facility/systems optimization efforts. Jim is leading the effort for the development and implementation of a strategic plan to address the American Rescue Plan Act (ARPA), Infrastructure Investment and Jobs Act (IIJA), and the Inflation Reduction Act (IRA).