The Energy Grid Of Me

Guest Editors: Mike Nicoloro and Joan Fontaine, Sanborn, Head & Associates, Inc.

Independent Energy Districts use natural gas to provide owner controlled power.

Energy use has been a defining issue of the past 40 years. On a geopolitical level, it has driven our foreign policy—and the for­eign policy of most developed nations. Closer to home, it has an enormous impact on businesses of all types. Fluctuations in price and availability have a significant effect on the health of the econ­omy and the profitability of individual companies and institutions. Businesses and institutions need reliable access to stable, afford­able sources of energy. The unpredictability of long-term reliability and price stability are a common source of worry for corporate and institutional leaders that have to manage their energy supplies.

Fortunately, companies don’t have to remain hostage to the price and availability fluctuations of the energy markets. They can take control of their power needs, producing their own power and meet­ing their thermal needs with Independent Energy Districts.

Independent Energy Districts are small power plants that are lo­cated on a corporate campus or in a commercial development. They are sized to meet the specific energy needs of the businesses they serve, and they can be configured to operate on most fuel sources, including oil, natural gas, propane, or biofuels. They also provide a remarkable degree of flexibility because if the fuel source that’s being used experiences a spike in price or availability short­ages, Independent Energy Districts can be reconfigured to burn a different fuel.

Today, natural gas is the most attractive fuel for most companies and institutions because it combines afford­ability with availability and sustainability. Furthermore, natural gas prices are expected to stay relatively stable for the next decade or more. While natural gas is, admittedly, a fossil fuel, it is much cleaner-burning than oil and coal, and has less environmental impact.

Over the next generation, natural gas will serve as the essential “bridge fuel” that will help America transi­tion from fossil fuels to renewables.

Technology advances permitting the exploration of new domestic shale gas plays has resulted in significantly less expensive natural gas supplies, and promises to continue to provide low-cost natural gas for decades to come. The financial implications of the shale gas plays for manufacturers can’t be overstated. Because natural gas costs are so much lower—as little as 1/6th of the cost of oil (on a wholesale pricing basis)—Independent Energy Districts that oper­ate on natural gas have potential payback periods as low as a few years.

Natural gas offers flexibility because it is available in several forms. The most common, of course, is as pipeline gas. For companies with direct access to local gas distribution systems, pipeline natural gas can be the perfect fuel choice for an Independent Energy District. The gas is drawn directly from those pipelines, which are typically provided by local utilities, and used to meet the thermal loads and produce the power that’s needed for the particular facility.

For some, pipeline gas may not be readily available, or costs may not be sufficiently stable. For instance, companies in remote areas may have limited access to natural gas pipelines. Other areas may suffer from significant price spikes when infrastructure limitations make it difficult for local utilities to meet rising demand. That was the situation experienced by businesses in the northeast this winter when high demand caused such substantial price spikes that some businesses were forced to temporarily close down.


For companies that don’t have convenient and reliable access to pipelines, there are two alternatives, liquefied natural gas (LNG) and compressed natural gas (CNG), which can offer effective “por­table pipelines” options. In essence, they permit companies and institutions to create their own pipelines.

LNG is natural gas that has been cooled to minus 260 degrees Fahrenheit. This condenses the gas into a liquid and takes up to 600 times less space than in its gaseous state, making it more practical to transport over long distances. Also, when natural gas is liquefied, most of the common impurities—sulfur, carbon dioxide, mercury, and heavier hydrocarbons—are removed, which makes LNG a very clean and reliable fuel for cooling, heating, and power generation.

Utilizing LNG as a primary fuel source requires specific infrastruc­ture, including insulated storage tanks, vaporization systems to con­vert the LNG back to a gas form so it can be burned, and off-load pumps to transfer the LNG transport contents to storage tanks. Service pipes are also required to convey the vaporized LNG from storage to the end-use equipment. Also, because the liquefaction process removes the odorant present in the pipeline gas, an odor­ant injection system must also be installed downstream of the heat­ers and pipelines to make it possible to detect any natural gas leaks. Another potentially useful source of fuel for Independent Energy Districts is CNG. CNG is highly compressed natural gas that is pro­duced by compressing natural gas to approximately 3,600 psig, which permits it to be stored and transported in container trucks. CNG can be purchased from in­dependent suppliers or gas utilities, who deliver the gas in special tube trailers.

Like LNG, CNG facilities require their own infra­structure. A “mother” station (or compressor sta­tion) must be located where the CNG tube trailers can be loaded, and is managed by the CNG sup­plier. Additionally, a decompression — or ‘daugh­ter’ — station provides tube trailer off-load bays equipped with heaters to warm gas during the de-pressurization from 3,600 psig to the customer’s desired working pressure (typically around 50 to 100 psig). The off-load system is customized equipment that is also provided by the CNG supplier. Finally, a piping system is required. The piping system connects the daughter station to the rest of the apparatus, and distributes the natural gas that is used throughout the Independent Energy District’s network.

Recouping Installation

While the creation of the infrastructure required to develop an Independent Energy District can necessitate a significant up-front capital expenditure, those costs can be recouped very quickly—in as little as a couple of years. Since Independent Energy Districts are designed to operate for many years, they can deliver significant cost savings to manufacturers for an extended period.

No company or institution can afford wild fluctuations in the price of the fuel they use to power and heat operations. By taking control of their own power and thermal needs with Independent Energy Districts, companies can eliminate energy uncertainty, assuring reliable and affordable access to the energy they need.

Guest Editors: 

Mike Nicoloro is senior vice president and Joan Fontaine is vice president at Sanborn, Head & Associates, Inc. Together, they manage Sanborn Head’s Energy division.