Fuel Selection & Supply
This depends on the type of fuel used by the generator. Natural gas is the most reliable because it is supplied by underground pipelines with various redundant paths to ensure delivery. The Department of Defense commissioned a study to determine the most reliable fuel for their military bases in the US. The report concluded that natural gas was far superior to all other fuels.
Diesel is readily available under most circumstances, but availability can be an issue during prolonged weather-based outages. This is due to two issues: First, weather-related outages typically are caused by downed power lines that may make roads impassable. Second, if the destruction is sufficiently severe, FEMA may be dispatched and enact diesel rationing to assure priority supply for the most life-threatening uses. Diesel availability issues have been a frequent problem for hurricane prone areas.
The type of fuel your backup system uses may determine the availability.
Natural gas, which is delivered via underground pipeline, is impervious to weather conditions and will continue to operate. Diesel and propane require delivery by truck and during an emergency, deliveries maybe impossible. A secondary consideration is alternative fuel use. If damage is wide spread, diesel fuel is often rationed in order to make sure of its availability for emergency vehicles and support crews. Many businesses with diesel backup generators were unable to keep operating because of an inability to obtain refueling service. This is one of the reasons that major brands often require their suppliers to have natural gas backup power rather than diesel.
In general, if pipeline natural gas is available nearby, this is often the best option. The generators tend to be more expensive but the reduced maintenance surety of fuel delivery and the ability to use the generators for grid support programs, such as demand response, makes them competitive with both diesel and propane with similar emission characteristics.
Many locations lack economical natural gas. Either it is unavailable completely or the pipeline is too distant to be economically viable to tap. In these cases, an on-site stored fuel such as diesel or propane is the only option.
If your operation is only interested in emergency backup, “grid outage” and the utility does not offer grid programs such as demand response and peak demand reduction, the least cost solution will be a Tier 2 or Tier 3 diesel running with renewable diesel in order to obtain an Investment Tax Credit.
The answer is complicated because there are numerous factors that go into calculating the delivered cost of renewable grid energy and onsite renewables. The short answer is “sometimes, but not always.” Despite being much smaller size/scale, on-site solar may provide lower-cost energy than buying renewables from the grid, but this is an artifact of how electric bills are determined, and thus requires considerable research to assess accurately. When you take into account demand and distribution charges (which can be 40% or more of your monthly electrical bill), these charges may or may not be reduced when you generate renewables onsite – It depends on whether your local utility permits a reduction in these non-energy charges. Also, tax incentives make this comparison confusing as well. Lastly, the availability of net metering, where your local utility provides you credits for excess onsite renewable energy delivered to the grid, will play a significant factor in the final calculation. Since electricity rates for commercial and industrial customers are lower than residential consumers, and as peak demand is shifting to early evening, we typically do not find that on-site solar is a wise investment for most companies. If you wish to reduce your electricity’s carbon footprint, purchasing grid renewable energy or renewable energy credits are both alternatives worth considering.