Oct 13, 2022 | Andrew Hughes

Grocery and Cold Storage Industries -- Turn your cost center into a profit center

Diesel generators have long been a necessary evil for cold storage and other industrial facilities that require continuous power supply for 24/7 operations. During grid disruptions, generators are relied on to provide short-term backup power that prevents inventory from spoiling, critical processes from being disrupted, and other financial losses. 

But today, the reality is that generators are archaic, polluting appliances that drag down a business’s operating margin. For most of the year, generators accrue maintenance costs while sitting idle, require fuel to operate, and emit noxious emissions when in use. In short, generators are cost centers. And they’re clearly not doing enough: Even with generator support, the US food industry still suffers from billions of dollars in lost inventory from power outages every year. 

As electricity prices continue to reach staggering new highs and extreme weather events such as hurricanes increasingly threaten grid reliability, facility managers simply cannot afford to rely on a depreciating asset that offers limited backup power while also fighting inflating operating costs.

Enter: Microgrids. 

Drawing from on-site distributed energy assets like solar and battery energy storage, microgrids use advanced controls to help facilities achieve cost-effective resiliency today while future-proofing operations for a more sustainable tomorrow.  


Microgrids provide energy independence

Reliable, affordable energy can be a constant source of stress for cold storage facility managers, who must stretch limited budgets to contend with massive energy demands and climbing electricity prices. Every year, refrigerated warehouses require an average of almost 25 kilowatt-hours (kWh) of electricity per square foot, which is roughly four times the electricity demand of dry warehouses. In fact, refrigeration-related operations can comprise 75% or more of a cold storage facility’s total energy costs!

To make things worse, electricity prices have skyrocketed over the last few years, and they’re only predicted to keep rising. To put it in perspective, the average industrial retail price of electricity in the Middle Atlantic has increased almost 45% in less than two years, from 6.40 to 9.24 cents per kWh.

A microgrid is a multipurpose asset that, when not providing reliable backup power, can be operated daily to help a facility mitigate growing energy costs through energy independence. For example, if your microgrid is powered by a solar array, you can avoid paying high daytime utility prices by strategically consuming your own produced solar energy for free. Microgrid smart controls monitor electricity prices and your consumption patterns to ensure that your energy usage is optimized to reduce costs. Note that simply having solar onsite does not mean you can utilize solar power during grid outages, which is why incorporating microgrid controls are the better choice.

And depending on your utility and rate tariff, you may even be able to be compensated for any energy produced by your microgrid that is exported to the grid - which means another source of revenue for your facility. 


Microgrids cut operating costs while expanding back-up capacity

Backup diesel generators are often sized to back up only critical loads, which still leaves facilities vulnerable to significant losses when the grid goes down. By drawing on a number of on-site distributed energy resources, microgrids can be cost-effectively sized to back up a greater portion of a facility’s energy demand, thus reducing inventory loss and other financial risks during an outage. 

As an added bonus, the renewable energy sources that power a microgrid do not require any fuel, keeping the operational costs required to run the systems relatively low. Plus, through a convenient service agreement, you don’t have to worry about paying for upfront system costs and all the maintenance costs - they’re all managed by your microgrid provider.   


Microgrids help you prepare for the future 

Microgrids not only provide cross-functional value today; they also lay the groundwork for your business’s scalable, sustainable, and low-cost future. For example, your microgrid can help you make progress toward your organization’s emissions reduction and other sustainability goals. You can significantly reduce your facility’s carbon footprint by simply prioritizing daily consumption of your system’s emission-free renewable energy. 

Your system’s produced energy can also be used to power electric vehicle charging stations. 

By investing in on-site production, you can prepare to meet the increased electricity demand that comes with charging large commercial fleets and hedge against future electricity costs. 


So much more than backup power 

There’s no question that a diesel generator can provide backup power, but its support is limited and its fuel and maintenance requirements only add to the increasingly burdensome operational costs of a cold storage facility. On the other hand, microgrids help facility managers achieve true resiliency while also delivering energy and operational savings, a reduced carbon footprint, and long-term energy independence. 


Thanks to the Inflation Reduction Act’s microgrid incentives and tax provisions, there has never been a better time to upgrade from your diesel generator cost center to a microgrid profit center! Contact Scale at info@scalemicrogridsolutions.com to get started.