Guest Post by JLL

Resilience [ri-zil-yuhns]
noun

  1. The ability of a system or organization to respond to or recover from a crisis, disruptive process, etc.

Frigid winter storms crippled electric grids in large swaths of the central and southern U.S., leaving millions without power for days on end.

Texas was hit the hardest. The massive energy demand caused by the unprecedented storms caught the Electric Reliability Council of Texas (ERCOT), the non-profit that manages most of the state’s isolated power grid, off guard. As a result, ERCOT saw many of its gas-fueled power plants knocked offline, while others faced fuel shortages. Meanwhile, many of the state’s wind turbines, lacking the heating systems typical in colder-weather states, froze over.

While electric grid operators previously predicted worst-case weather scenarios through historical data, climate change has made that data set increasingly unreliable. This disaster, and its impacts on the lives and properties of millions of Texans, is underscoring the extreme need for resiliency planning.

“The business community has been hyper focused on the ESG — environmental, social and governance — framework for sustainability,” says Jennifer Hill, Global Product Owner, Sustainability Integration, JLL. “That’s excellent. However, the pandemic and this disaster have emphasized the need to add the R for ‘resilience,’ and make ESGR a focus. This crisis underscores the need for the real estate sector — in partnership with governments and utilities — to drive a robust and resilient energy infrastructure strategy.”

Microgrids 101

One way to prevent the blackouts in Texas from re-occurring is the creation of microgrids, which are smaller power grids specific to a particular property, community or area, made up of everything from on-site turbines to batteries located on a property’s parking lot.

If property owners incorporate their own microgrids, it creates “the ability to be independent from utilities and power their own operation through a combination of hardware and software technologies,” says Kyle Goehring, Executive Vice President, Energy Solutions, JLL.

Thomas Ryan Allison / Bloomberg / Getty Images

“If a commercial building has a microgrid, it can really help to keep the lights on in the event of a disaster,” Goehring says. “There is a community benefit as well. For example, the energy that would have powered that commercial building can then serve multiple residential customers, allowing many more people to benefit from that particular grid.”

The typical microgrid is a combination of energy generation, storage and software, he says.  Combined heat and power (known as cogeneration), fuel cells and solar photovoltaic modules are all examples of various heat and power generating systems. Storage will most often be some type of battery, which can be stored internally in a basement or even a locker. Meanwhile, software optimizes the entire system.

“There’s no better time to create a microgrid; solar power and storage is cheaper than ever,” Goehring says. “And, if you produce excess energy, you can sell it back to the grid for a profit. Many states, like California, even offer financial incentives.”

Since 2014, JLL has worked with the U.S. Army’s Office of Energy Initiatives (OEI) to help develop resilient microgrids incorporating firm generation, renewables, and storage. JLL also worked with Adventist Health to create a comprehensive renewable energy program which included a microgrid that came online in October, 2020.

“Adventist Health will save millions of dollars in year one, and tens of millions throughout the term of the program,” Goehring says. “The program’s already been so successful, Adventist plans to expand the onsite solar program to even more hospital sites. They are also evaluating other solutions, such as storage and cogeneration, further enhancing their operations with additional microgrids.”

Cheaper works, until it doesn’t

Texas’ electric grid runs mostly independent from the rest of the U.S. While experts are still reviewing what went wrong in this disaster, there is certainly conjecture about whether the state’s uniquely deregulated electricity system played a role, and how it could be corrected to encourage more backup energy storage in the future.

“Historically, the lowest cost of energy was prioritized over resiliency and did not include technology to winterize energy systems like natural gas transmission or wind turbines, to make the grid less vulnerable to ice storms,” Goehring says. “Texas has prided itself on being a deregulated market where you had greater than 70 providers to choose from. But if you are always looking for the lowest cost, there is no incentive to create more resilience. This is exactly what I tell clients who are resistant to the initial costs of microgrid creation: cheaper works, until it doesn’t.”

Texas has been historically isolated from other states due to its balance of diverse energy production and consumption but when all the energy producing assets are impacted, as well as the entire state, it may help to be connected with other states too, Goehring says.

“In a sense, Texas was a microgrid because it was an energy island, but it was not a well-designed microgrid,” he says. “It couldn’t rely on other networks nor could it handle peak consumption periods that occur a few times in the summer and now during historically cold, freezing winter events. An optimal microgrid combines onsite technologies including electrical and thermal energy generation, solar panels, batteries and a software overlay that brings it all together and allows the site to isolate or connect to other grids.”

The urgent need for resilience

recent study found that the Southeastern U.S. may need 35 percent more electric capacity by 2050 to deal with just the known hazards of climate change.

This requires a “fully sophisticated and well thought out energy plan,” Goehring says.

“Now is the time to plan and create a robust microgrid and energy storage solution because resiliency isn’t developed overnight,” he says. “Planning for the most unpredictable of worst-case scenarios—beyond what historical data shows, which most recently occurred in Texas—can literally mean the difference between life and death.”

Editor’s note: this post is based on an article originally published on the JLL website.