Retail and logistics distribution centers are the backbone of efficient supply chains, ensuring the timely delivery of goods to store shelves. Distribution centers have grown significantly over the past few years as regional refrigerated and temperature-controlled facilities support regional supply chains.
To protect automated systems and perishable goods, energy resiliency has become a critical asset for retail distribution centers.
Downtime from power outages can disrupt operations, cause revenue losses, and damage an organization’s reputation. Until power is restored, operations can’t resume at a distribution center, leading to delayed shipments and dissatisfied customers. Even when power is restored, your team will have to make up for the lost hours, and it might take some time before they’re back on schedule.
Disruptions to operations can also have a significant financial cost, particularly when the power outage lasts for multiple days. For example, Ingles estimated they lost $35 to $55 million in property damage and lost inventory due to Hurricane Helene, which caused widespread power outages at stores and distribution centers. In the U.S. alone, power outages cost U.S. businesses around $150 billion annually. Downtime from power outages can also erode customer trust and hurt a brand’s reputation, resulting in even more lost revenue in the long term.
Distribution centers face a number of threats that could affect the energy grids they rely on for power. The primary threats facing energy resilience at distribution centers include:
Did you know one of the top reasons for power outages? Animals. Whether it is a snake or a storm, they can both be a critical threat to energy resiliency at distribution centers. For example, when Hurricane Milton landed in Florida, power outages at distribution centers without generators were significantly impacted, affecting the distribution of food and supplies. Similarly, Hurricane Helene knocked out Basset Furniture’s distribution center in North Carolina for two days, delaying shipments for two weeks.
Between 2000 and 2021, 83% of major power outages in the U.S. were caused by weather-related events, underscoring the need for distribution centers to be prepared for outages caused by weather.
In the U.S., 70% of transmission lines are over 25 years old, and a portion of these lines are nearing the end of their 50-80-year lifecycle. While many utility companies understand the need to modernize their grids and are taking action to update them, distribution centers often don’t want to rely solely on an external energy provider’s infrastructure for their energy needs.
In the event of a grid outage, a distribution center with a state-of-the-art microgrid can produce and store its own energy, preventing outages while the main grid infrastructure is repaired.
While retail distribution centers are at risk of power loss, they can protect themselves with an energy resilience strategy that includes backup power systems and energy management systems:
Energy management systems play a complementary role to microgrids, helping to monitor and optimize energy usage. During a main grid failure, you can monitor where electricity from your microgrid is going and ensure you’re not wasting energy on unnecessary equipment, devices, and/or lighting.
You can also use these systems when the costs of electricity from the main grid are highest. With this information, you could have your distribution center switch from the main grid to your microgrid when costs are higher to keep your energy expenses lower.
Uninterruptible power supply (UPS) systems and backup generators are crucial for maintaining operations during power outages, as they prevent costly disruptions and revenue losses at logistics and retail distribution centers. UPS systems provide an immediate, short-term supply of backup power that bridges the gap until generators activate, ensuring critical systems remain functional.
The most energy-resilient distribution centers will utilize a microgrid that can run in both parallel with and islanded from the utility grid. An islanded microgrid enhances energy resilience by allowing distribution centers to operate independently from the main grid during outages or system disturbances.
These localized energy networks can also integrate renewable sources and energy storage, which can be helpful when new supplies of gas or diesel can’t be safely transported to an affected facility. As a reliable, flexible solution, microgrids minimize downtime and safeguard supply chain continuity during grid outages.
At PowerSecure, we’re proud to help retail and logistics distribution centers enhance their energy resilience with tailored microgrids. When you come to us for a microgrid, we’ll ensure it has the systems and energy you need to receive uninterrupted power.
Since we know the importance of maintaining power at distribution centers, we’re dedicated to staying ahead with cutting-edge energy solutions that increase energy resilience at our clients’ facilities. Alongside designing, installing, and monitoring microgrids, PowerSecure offers Energy Efficiency Services that help organizations transition to renewable energy sources and reduce their overall energy costs.