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Logistics microgrids: a macro-opportunity
Director, Sustainability and ESG, Barny Evans highlights the transformative role of microgrids in the logistics sector and explores their potential to revolutionise energy management, reduce CO2 emissions and drive forward sustainable development.
Microgrids are a huge opportunity for the logistics sector. Using private electrical networks across logistics parks enables them to reduce CO2 emissions, energy bills and the capital expenditure on construction.
The energy management challenge in logistics
New logistics sheds increasingly feature large solar roofs, which cost a lot of money and often generate so much energy that they have to export it onto the grid, typically at little benefit. At the same time, there are electric vehicles (EVs) that need charging and other sheds on the site have considerable demands that cannot be met, such as chilled food facilities, for example. Often one is importing a lot of electricity whilst the other is exporting, increasing costs and CO2 emissions.
The microgrid model
A microgrid addresses these issues by operating a whole park as a single electrical system, able to share energy across buildings and EV charging, even using batteries to provide collective storage. This reduces the overall energy costs. By using a third-party provider, or parcelling the investment in solar, EV charging and network as a separate business investment, costs are further reduced or even provide a return on investment.
Despite the scale of the opportunity, there are still only a few sites operating on the principles of a microgrid, but this is beginning to change. I am involved in several projects where the client is embedding these solutions from the earliest stages, understanding the broad opportunity offered.
Accelerating change
Two developments that are turbocharging this change are the need for electric heavy goods vehicle (HGV) charging and changes to the building regulations, known as the “Future Homes and Building Standards”, due to take effect in 2025.
Electric HGV charging
EV charging, up to now, has focused on cars and light goods vehicles. In most cases, slower chargers from 22-50kW could provide a reasonable rate of charge, as batteries are typically 50kWhs to 100kWhs. As HGVs are electrifying, this rate of charge is too slow. Even electric HGVs that have batteries sufficient for only 100 miles may have batteries of 200kWhs capacity. Notably, Mercedes’ eActros Longhaul is equipped with a 600kWh battery and the Tesla truck has a battery of 500kWh for its shorter range model and 800kWh for the longer range vehicle. This is great for CO2 emissions and air quality.
It is early days, but these vehicles are coming fast and anyone planning a new logistics development needs to be ready for them. The longer range will mean they need to charge less frequently, but when they do, they are going to need a lot of juice, fast. The industry is gravitating towards charging rates of 350kW. To put that in perspective, 350kW is about the grid connection required for a 100,000 sq ft shed. Imagine if you want two or three on connected to your shed!
The answer is to have a dedicated charging hub for the entire site, catering for HGVs and other vehicles. That way, instead of every shed having the burden of a huge connection, just in case, the approach allows for a more manageable and shared connection across the site. This means you also need to have an organisation that deploys and manages the facility’s charging infrastructure, ideally one that can use all that surplus solar power being exported.
Future building standards
On that note, the Government has recently published the Future Homes and Buildings Standards consultation. These are the new regulations set to take effect in 2025. In the consultation, the Government’s recommended option suggests that new regulations will require solar modules equivalent to 75% of a building’s footprint. For sheds, that effectively means that the whole roof that isn’t rooflights will be solar panels, including the pitch not facing south, meaning most sheds will operationally export a lot of electricity. For the developer, the cost of integrating solar could represent 6%-7% of the total cost of a new build, just for it to be given to the tenant (and the grid) for little value.
The imperative for microgrid integration
This combination of factors means it is an environmental imperative and a commercial opportunity that development is set up as a microgrid. We are making progress, but as an industry we need to fully grasp the opportunity now, as it is difficult to retrofit.
Contact Barny Evans to continue the conversation on microgrids or to arrange to meet at MIPIM 2024.
1 March 2024