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Area Development - Site Selection, Facility Planning and Workforce Development

Power-Intensive Site Selection

Manufacturers should prioritize accuracy in their load schedule, as there’s a downside to both underestimating and overestimating load requirements.

Q3 2023
An ongoing industrial revolution fueled by digitalization, decarbonization, and electrification has changed the conversation on energy and prompted a race to the grid in many parts of the country. Fast-tracked industrial projects are now the norm as project teams navigate increased construction costs, inflationary financing, supply chain challenges, and increased competition. Speed is currency. Yet, hastily engineered timelines and ravenous electricity specifications can come at a cost, including the elimination of good sites and project delays.

“Fast is fine, but accuracy is everything.” — Wyatt Earp
When siting a new manufacturing facility, best-guessing load requirements can often lead to delayed schedules and potential production setbacks. Electrical equipment lead time, engineering backlogs, as well as transmission and capacity constraints make underestimating load requirements in today’s environment particularly unforgiving.

Less obvious, however, are the opportunity costs associated with overestimating your load schedule. Inflated power demands have the potential to pull the reigns on your speed-to-market strategy by discounting infrastructure and locations that can scale with your needs. Similarly, overly aggressive load schedules and service delivery timelines eliminate otherwise viable locations prematurely in the site selection process.

Hastily engineered timelines and ravenous electricity specifications can come at a cost. One other, perhaps less considered, impact of overestimating electric loads is the potentially conflicting effect that such practices can have on the host utility’s decarbonization efforts. New generation goes through a multi-year load forecasting process. If that process is front-end loaded with artificially large loads, generation investments can be skewed, resulting in potentially escalated costs and higher carbon content.

Accuracy, not conservative estimates, should be prioritized at the outset of the project by first collecting a list of the expected electrical loads of the facility including mechanical equipment involved in production, as well as secondary loads such as HVAC and other utility systems. For many industries, this may require project teams to build load schedules for different investment and operating scenarios. These schedules will serve as the basis for sizing the transformers that will ultimately need to be secured by your power company, along with the switchgear the end user will need for the facility.

While it’s common for electric utilities to be asked to confirm an 18-month service delivery in the early stages of site selection, the reality is that only carefully design-engineered electrical loads will stand the chance of traversing today’s headwinds to meet these timeframes. Just a few years ago, this might not have been the case. A great site combined with a not yet blindsided supply chain stood a real chance. Today, however, lead times for equipment are broadsiding the development community.

Inflated power demands have the potential to pull the reigns on your speed-to-market strategy. Transformers across most voltage classes are still up more than 300 percent from their 2020 lead times, some taking 36 months or more from order to delivery. Switchgear is being quoted up to 75 weeks, with lead times getting longer. Wire and cable, panel boards, circuit breakers, and other electrical supplies are still experiencing record demand as growth industries such as data centers and energy storage manufacturers double down on long-term procurement strategies to meet customer obligations. For much of this equipment, it will be years before supply chains begin to stabilize.

Wyatt Earp, a gunslinger, lawman and gambler of the American West was quoted as saying, “Fast is fine, but accuracy is everything”. When it comes to electric service delivery, early, transparent, and frequent project communication with utility providers wins the day. Do not let overly eager electricity demands and construction schedules slow the draw on your next site.

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