Energy Self-Consumption: Industrial

In the first part of this post we introduced the concept of energy self-consumption, where we explained what kind of facilities exist and what benefits Pylon Network can offer to the owners of these assets.

In the second part, we talked about the types of self-consumers connected to the grid and how they affect (and are affected by) current legislation in Spain.

In the third part we are explained the energy self-consumption for the residential sector.

In the fourth and last article about energy self-onsumption topic, we are going to talk about Industrial sector.

Part 1 – Energy Self-consumption: Introduction.

Part 2 – Energy Self-consumption: Current state legislation and Types of self-consumers connected to the grid.

Part 3 – Energy Self-consumption: Residential.

Part 4 – Energy Self-consumption: Industrial.

Part 4 – Energy Self-consumption: Industrial.

To simplify, we understand as Industrial customer those facilities with a tariff 3.0 or higher, that is, with contracted power greater than 15 kW.

What does it consist of?

Self-consumption in the Industrial context, seeks to cover a major part of the energy demand through a self-owned generation facility, installed within the same location (Industry).

Steps to follow

Starting from scratch, these are the recommended steps to follow if you are thinking of investing on a photovoltaic self-consumption installation and going through the necessary legal and operational procedures. Note that this specific guide applies to the Spanish market:

Carry out a study to size the installation that best suits your consumption profile. It is advisable to rely on an energy consultant (accredited professional) in order to obtain a detailed and personalized feasibility study – rather that online tools or applications.
Installation of equipment by a qualified/official electrical installer. Work may also be necessary to fix the structure and facilitate wiring.
Legalization of the installation before the territorial organism and before the electric distributor. It is necessary that the installation complies with the RBT (Electrotechnical Regulation for Low Voltage) and the requirements/constraints set by the electrical distributor. It is necessary to prepare a Certificate of Electrical Installation (bulletin) and a technical report based on the power performance of the installation signed both by the electrical installer and engineer/consultant.
Start-up of the installation and configuration of the equipment.

Let’s look at the numbers

Let’s take a look on the economics of a photovoltaic self-consumption installation in our business. Does it make sense to invest?

To begin with, we must be aware that in order to find the best economic / investment savings ratio, we must find the installation whose power and generation characteristics allow us to maximize the energy generated – so that it is not lost. So, we will look for the installation that adapts best into our energy needs throughout the year. On the other hand, it will be very difficult to obtain profitability from an installation for a supply whose use is occasional (pubs or discos, beach bars, agricultural companies that work a few months…).

We will have costs that are directly proportional to the power to be installed – the photovoltaic modules and their structure – and other, indirect costs that do not vary proportionally – the inverter, the protections, the electrical installation, construction works and legalization.

For example, a 37-module installation costs between € 13.000 and € 15.000 Inc VAT and has a peak power of 10 kWp. On the other hand, a 68-module installation can cost between € 22.000 and € 24.000 with a peak power of 18 kWp. Despite having twice the power and producing twice the energy, the cost is not proportional. It has only proportionally increased for the number of modules and associated structure. However, the inverter, safety protections, electrical installation, work and legalization, practically cost the same for both installations.

Simulations Examples

Each installation is different, either due to the consumption profile (percentage of self consumptio) that will be more or less favorable to cover with the installation, or because of its architectural characteristics – possible integration of modules on sloping or horizontal roof, distance of wiring to point of connections …

For example, industrial warehouses with cold chambers, which maintain a constant consumption during the day, night and weekend.

Savings are conditioned by the price at which each company pays the kWh. While a company hosted by the 3.0 tariff can have an average price of around 0.092 € / kWh, a higher rate such as 6.1 can pay the kWh to 0.065 €. Therefore, the smallest tariffs have a greater potential for saving by not paying the kWh thanks to solar generation.

All these factors affect the costs and savings – and hence the payback period (ROI) can greatly vary depending on all aforementioned conditions. As seen on the table below, payback period can vary from 6, up to 15 years (or even more).Tipo de ConsumoTarifa

Consumo Anual (kWh)Potencia Solar (kWp)Generación Solar (kWh)% Generación sobre ConsumoCoste

InstalaciónAmortización (años)Nave Intermediaria de frutas y verduras

3.094832101710318,03%14.000€7,8Nave Intermediaria de frutas y verduras

3.09483218384230,58%24.000€7,26Gran Industria Quimica6.1290931023343451%27.600€9,95Gran Industria Quimica6.129093101141950137%130.000€9,75

The calculations on the above table, have been made with real consumption and generation readings with hourly accuracy, average energy prices and approximate costs of complete generation facilities for self-consumption completely installed and legalized, without taking into account any subsidies or favourable tariffs.

Subsidies and grants

There are many autonomous communities that try to encourage this type of facility, either by tax discounts, subsidies or financing. For example, in the Valencian Community it has 0% financing:

That is to say, an installation of solar self-consumption for a company “can be paid alone at cost 0” thanks to the fact that the saving for self-generated energy compensates the cost of the installation.

To accept these incentives it is necessary that the installation is correctly legalized.

Procedures and legalization

Self-consumption installation is an electrical installation and must comply with the regulations in order to certify it is safely and correctly operated. That is why it must be properly legalized before the official bodies and in the presence of the electrical distribution network.

Failing to follow this procedure will put your safety at risk, can cause the receipt of a fine, your installation may not work properly, you will not be able to claim any subsidies the self-consumption installation or even, receive higher bills, if the distributor “is non-compatible” with you self-consumption system.

Using the example of the Valencian Community procedure, it is necessary to:

– Legalize the installation before the territorial service of industry to obtain the Certificate of Electrical Installation of Self-consumption (similar to the low voltage bulletin).

– Deal with the distribution company responsible for the region, IBERDROLA DISTRIBUCIÓN ELÉCTRICA, for the connection of the installation to the network.

Conclusion

A self-consumption installation, mainly solar photovoltaic, is viable and allows us to save a considerable amount of the electricity bill, if our consumption profile is favorable. It is advisable to obtain a personalized, site-specific study and rely on electrical professionals for its sizing, installation, legalization, commissioning and participation in subsidies and incentive shemes.

Special thanks to co-author: Vicent Prats Feliu (Ing. Eléctrico) – http://pratsingenieria.com/