The confluence of the unanticipated financial crisis caused by COVID-19 and the long term planned need for decentralized, digitized, decarbonized, resilient, scalable, and clean on-site power generation have created a conundrum for airport senior executives. The virus has drastically reduced traffic has strained your capital and operational reserves.
Yet, you know that an independent, ultra-reliable source of energy is an absolute requirement for your facility. All risk models show that a loss of power in the future is both likely to happen and catastrophic to safety/operations. Your financial team, inside and external, make it clear that the current cash flow would not sustain such a strategic investment.
The answer to your enigma may be a public-private partnership (P3). This construct is currently in play at the JFK Terminal One Redevelopment Project in New York City, where a private consortium is implementing a microgrid-based energy solution to achieve aggressive renewable targets, ensures compliance with local laws, and enables the ability to innovate for business continuity.
The case for a P3 approach for an airport’s capital need to create a critical energy utility:
Between 2017 and 2019, severe weather events cost the U.S. over $450 billion, and 2020 is on a record pace. Airports that suffer massive power outages face operational nightmares and serious cost impacts – think the 2017 Hartsfield-Jackson Atlanta International Airport blackout, or when Hurricane Sandy ravaged airports in New York and New Jersey.
Amid these growing challenges, many airports are seriously considering going off the grid with their own resilient, scalable, and clean on-site power generation. Airport CEOs and operational executives are being called upon to put forth proactive and fortified plans to keep themselves out of the headlines and avoid all the negativity and organizational backlash that comes with power outages. At the same time, the need for a shift to sustainable energy sources is becoming more pronounced, driven by pressures from passengers, corporates, and governments.
Responding directly to this call to action is AlphaStruxure, a joint venture between The Carlyle Group and Schneider Electric whose mandate is to deliver turnkey Energy as a Service (EaaS) microgrids. On-site microgrid energy systems deliver a decentralized, digitized and decarbonized alternative, optimized for integrated benefits and reducing risk.
What’s a Microgrid
Improved economics and technology have made microgrids a viable solution to deliver digitized, decarbonized, and decentralized backup power. In fact, supply-chain disruptions resulting from the COVID-19 pandemic have only underscored the importance of microgrids’ ability to provide onsite renewable generation.
“One reason renewable energy is so important is because it doesn’t require fuel,” said Feasel. “We can point to many cases, like the hurricanes in Puerto Rico, where fuel supply lines were disrupted. People were without power because they couldn’t get access to diesel, which is why diversity of fuel supply is a key tenet of resilience.”
Microgrids can also be built quickly and customized to the needs of businesses and municipalities. For example, Mark Feasel, president of smart grid for Schneider Electric North America says step one in designing a microgrid is to understand the nature of the load. “Some of the loads are nice-to-haves, like a soda machine, but nobody would notice if they were off for a week or two. Others, such as general service water pumps, can be cycled on and off and operate at times when solar generation is highest,” he said. “Then you have loads that can’t take an outage at all like an MRI machine. The knowledge of the load is a key driver in how we design the right solution.”
Customers still need to prioritize cost, resilience and sustainability. For manufacturers and food processors, eliminating production stoppages stemming from blackouts may be most important, though a nuanced mix of factors drives most decisions. For example, Montgomery County in Maryland opted for a microgrid in the wake of a 2012 storm that caused extended power outages. But cost and sustainability were also important criteria.
“Montgomery County believes it’s a place where businesses and people locate because they care about sustainability and reducing their carbon footprint,” said Feasel. “But it also prioritized resiliency and didn’t want to pay more for energy than it had been paying before.”
AlphaStruxure begins the process with extensive consultation and advisory with airport clients. After reaching an agreement and defining key project parameters, AlphaStruxure designs, builds, finances, owns, operates and maintains an optimized microgrid that gives airports the sustainability and resilience they need.
Through the AlphaStruxure JV, Schneider Electric provides the energy technology and engineering support to ensure project success. The Carlyle Group provides the capital investment and contract structure for the energy infrastructure, so the airport makes no upfront payment for the system. Rather, airports can continue to pay for energy through the existing OpEx budget rather than through a burdensome capital expenditure, while also gaining the benefits of enhance resilience, reliability, and sustainability.
As mentioned above the example of Energy as a Service in action is as part of the JFK Terminal One Redevelopment Project in New York City, where AlphaStruxure is committed to implement a microgrid-based energy solution that achieves aggressive renewable targets, ensures compliance with local laws, and enables the ability to innovate for business continuity. And in preparation of future Hurricane Sandy-like events, the microgrid system will maintain terminal operations and resilience during extended periods of grid outages.
AlphaStruxure’s Engagement Director and major advocate for airport infrastructure upgrades, Jason Dodier stated “We expect more airports across the country to follow the examples of JFK and Pittsburgh, especially with climate change being at the forefront of everyone’s mind. Airports are facing major energy challenges, and strict golden operational guidelines around reduced carbon emissions and resilience must be implemented and adhered to as a centerpiece of any airport project criteria.”
CEO of AlphaStruxure Juan Macias added, “With a directive to focus on enhanced usage of renewables, resilience of power systems, reduction of source energy, digitization of infrastructure and electrification of ground support equipment and light vehicles, AlphaStruxure and our parent companies The Carlyle Group and Schneider Electric are helping enable the future of airport development,”
Taking on projects of this magnitude and integrating new technologies requires being in a constant state of flexibility and openness to stay ahead. AlphaStruxure is working with airports to collectively reduce carbon footprint, accommodate changes in airport utilization, and safeguard power requirements. At the same time, AlphaStruxure projects enable high speed networks, mitigate security threats, and provide technologies like infrared thermal scanning that can help address the current COVID-19 pandemic. AlphaStruxure will take the complexity out of building a state-of-the-art airport microgrid that your community deserves and needs, now more than ever.
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