Microgrids, sometimes called distributed energy resources (DER), are decentralized energy systems that can operate independently or in tandem with the main grid. They typically produce electricity from renewable sources such as wind and solar, but they can also be powered by hydro, natural gas, hydrogen, or even small modular nuclear reactors.
HDT's equipment editor, Jim Park spoke with Joshua Goldman, vice president of e-mobility at microgrid and DER deployment advisor, Xendee. Goldman says off-grid energy sources offer resiliency from power outages while helping to level the cost of electricity supplied by utility companies. Could privately owned microgrids be the solution fleets are looking for? This Q&A features highlights from that interview. You can listen to the full episode here.
This transcript has been edited for brevity and clarity.
HDT: When it comes to grid connections and infrastructure installation, some utility companies aren't playing in the same sandbox as the trucking industry. Microgrids have been discussed as a possible solution to this problem. Could you explain how microgrids might provide at least some relief to this problem?
Goldman: Sure. A microgrid is essentially a local grid, usually on your site that includes the loads, as well as on-site generation. People usually think of backup generators at hospitals, for example. That's a microgrid. Now we're looking at solar too. It works great when the sun shines, but when it's not shining, we rely upon the utility.
One of the main reasons people look at these DERs (distributed energy resources) is for that resiliency, But, as we look towards the future, we want to have more green solutions, lower carbon solutions, so a lot of people are looking at solar coupled with battery storage to be a microgrid of the future.
And there are other means of power generation too. We have fuel cells, powered by natural gas or hydrogen for microgrid support and even small modular nuclear reactors are being considered. These are typically found at the research level today, but potentially at the commercial level tomorrow for these on-site loads so that you're not always dependent upon the grid.
HDT: You mentioned harvesting solar energy during the day while the sun shines and charging batteries. Could you then charge trucks from those batteries overnight when there's no solar available? Or sell the stored energy you don't need back to the grid?
Goldman: Most microgrids are for the actual loads on site. Let's say you're a cold storage facility outside Los Angeles, you might already have solar onboard because it made economic sense for you to do so years ago. Under early versions of what's called NEM, or net electric metering, you could sell every kilowatt you generated back to the grid, and you got paid at the same price that you would have had to pay to consume that electricity. Today, there's so much solar on the grid the utility companies don't want to pay as much for it anymore. So, NEM 2, you get about half of that price. Today, under NEM 3 utilities are paying no more than the commercial generation rates, maybe 6 cents per kilowatt/hour. This means solar is really not penciling out in the same way that it used to.
But when you couple solar with batteries, you're able to have your sunshine during the day, going into your onsite storage with the battery, and then use your battery in the late evening when electricity can be most expensive, especially here in the southwest. Without battery storage, you can still do it.
It's called arbitrage. That's where you can levelize your load using your own self-generation or stored energy during the day, and then recharge that battery at night when it's cheapest to do so, or during the next day when the sun is shining.
Or maybe both, depending on your energy management system strategy. It looks at all the costs, as well as other metrics like carbon intensity, or reliability to decide how we want to optimize the operation of your microgrid.
HDT: Is it practical for a truck fleet to establish its own microgrid using solar or wind generation?
Goldman: It is possibly practical. This is the nuance when you've got 2,000 different utility companies here in North America and 2,000 different types of tariff equations to solve for to see if it makes sense. Here in California, where tariffs are extremely expensive in the afternoon in the summertime, it can make a lot of sense. But if you're in the Midwest, where you have a pretty level cost of electricity and pretty clean carbon-free energy coming from hydro or nuclear, it might not make as much sense from a cost or from an operating perspective. Where it often does make sense is in resiliency. With the strain the grids are under, it's great to have on-site options to get you through power outages.
HDT: If I'm a small truck fleet with capacity to charge 10-15 trucks, but I don't use all of that overnight, could I sell some of that stored energy back to the grid to recover some of my costs, or even earn a profit from it?
Goldman: That's right. One of the things we do Xendee is help model these different scenarios for fleets looking at the various demand response programs in different regions. We can help people understand what the potential value of an on-site grid storage battery that could make you hundreds of thousands of dollars a year in just a handful of days in those demand response events. As a fleet, you can make a choice during those times. Does it make more sense to make money carrying packages, or more sense making money helping the grid?
HDT: Everybody tells fleets they need plan ahead plan for future growth. That's difficult at the best of times. If you're a 50-truck fleet today and you want to grow to 100 or 200, your energy demand is going to increase by two to four times. How do you how do you plan for that? Not just the consumption but the installation of the infrastructure necessary chargers cabling connections to the grid, etc. You don't want to dig up your parking lot every couple of years when you add 20 more trucks.
Goldman: One of our software features is the multi-year approach, where you can look at the scale of your fleet from 10 to 50 to 100 trucks. You can see what the power levels are. And then we have another software feature tool called the Power Flow Analysis. It looks at the actual electrons flowing from transformers, through switchgear, through conduits, and cabling. This helps right-size the equipment all the way through. And even though today you might only need 1000 kilowatts or 1 megawatt for that site, we can tell you the future demand might be five megawatts. That can help you decide, for example, to go with larger conduit than you presently need so that you can pull bigger cables through later. Or, to start with this size transformer now and in five years, go to that size transformer.
In a lot of cases, the biggest constraint to growth is the utility. We hear this over and over again at these electric conferences I've been attending. But you can take some of this into your own hands with what I call a phased approach to electrification. Maybe you start with a transportable genset or battery storage device to power your trucks while you're waiting on the utility service drop for that megawatt load. Maybe you got 10 megawatts of load and they need a substation upgrade at the distribution level. That could take five to seven years. With the phased approach, you can plan the equipment that you can run today, then add temporary on-site generation.
Then, you move that equipment to your next site, which might be further along the timeline for your capacity integration from the utility substation feed. Somewhere along the way, you could add solar and batteries. Or maybe you put those in right away so you can control your own destiny with your own distributed energy resources and not have to wait on the utilities' timeline for all that equipment.
HDT: What advice would you have for the CEO of a 50-truck fleet planning to electrify in the next two to five years?
Goldman: Well, first and most important, I'd want to know all about the operation and what the fleet plan is. I'd want to know his or her thoughts on conversion from combustion fuels to electrification. Then I'd suggest a detailed study of the plan. Does it look like it has solar on top? Are you thinking of battery storage? Are you thinking about electrifying other equipment at the site besides the trucks, such as pumps, forklifts, and maybe yard tractors. As you build out anything with the tailpipe today, there are likely grants available to help you make that thing, electric or zero-emission hydrogen, right now.
A fleet can save millions of dollars in the future by studying this move first. Find companies that are willing to help you in this journey. And of course, contact your utility, and start building relationships there, just like your relationship with your fuel providers today. I always recommend investigating the carrot approach before the stick comes. Because it could be much more affordable to do so now than when you're forced to do it later.