A new kind of storm is brewing in the heart of America’s manufacturing landscape. But this one, located in the PJM Interconnection region spanning 13 states, including Ohio, Illinois, Pennsylvania, and New Jersey, doesn’t involve a catastrophic weather event, but rather a growing imbalance between electricity supply and demand that threatens the lifeblood of the manufacturing industry.

The PJM Region Special Report – Navigating the Manufacturing Power Crisis, produced by Bloom Energy, examines the conflicting forces underlying energy challenges in the region, a critical area serving 65 million people.

The report also provides important information on outage resilience, power quality and other key factors to help manufacturers successfully navigate energy solutions.

Various Factors Underlie Energy Gaps

Surging power needs, an aging U.S. utility grid badly in need of expansion, along with the retirement of coal and gas facilities, have produced an escalating mismatchbetween electricity demand and supply in both the PJM region and nationwide. While utility providers are working to expand the grid, demand is rising much faster than their construction timelines can accommodate. That difference could translate into financial pressure for manufacturers and other customers as reflected in recent PJM capacity auctions, where costs escalated from $2.2 billion to $14.7 billion, a 570% increase.

Manufacturing Downtime Carries a High Price Tag

Downtime carries a price, and in manufacturing, that price adds up fast. Known as the Value of Lost Load (VoLL), this metric quantifies the economic impact of power interruptions, based on various industry factors, including lost production hours or product, and varies across industries. For example, industrial customers face an average VoLL of $10 to $20 per kilowatt, while in manufacturing, the impact can be more severe. Studies estimate VoLL costs for manufacturers ranging from $12,000 to $25,000 per MWh.

When Unstable Power Disrupts Production

Power quality is another critical, often overlooked, aspect of manufacturing challenges. In fact, poor power quality can have devastating effects on manufacturing operations, particularly in highly automated environments. Harmonics, caused by non-linear loads, voltage variations and other quality issues, can lead to overheating and premature failure of key equipment along with disrupted automated assembly lines and damage to sensitive electronics.

For U.S. industries, the cost is steep, a staggering $145 billion annually, with manufacturing sectors bearing a significant burden. Implementing power quality solutions is essential to protect equipment, enhance maintenance efficiency and ensure the longevity of manufacturing operations.

Why Manufacturers Are Investing in Their Own Energy

As grid constraints grow and manufacturers navigate the complexities of these challenges, an increasing number are prioritizing access to power through on-site power solutions. On-site power, also referred to as decentralized or distributed power, generates electricity directly at the location where it is used rather than relying solely on the electrical grid. It can work alongside grid power or operate independently in islanded mode. Common on-site power technologies include solar panels, small gas turbines, fuel cells and diesel generators.

On-site power is gaining popularity for numerous reasons, including fast lead times, reliable power and stand-alone power capabilities.

Case in Point: Manufacturing Leaders Achieve Deployment Speed and Reliability with Fuel Cells

Major manufacturers Quanta Computer Inc. (TWSE: 2382.TW), a leading Taiwanese electronics manufacturer specializing in high-powered AI servers, and a global semiconductor manufacturer located in the U.S., both faced time-to-power delays for critical expansion plans because their respective utilities could not provide power fast enough to meet requested timelines.

Both companies found their solution through Bloom Energy, a global leader in solid oxide fuel cell technology. Bloom helped both brands quickly deploy a scalable, reliable on-site energy solution that operates with or without the utility grid.

With solid oxide fuel cells (SOFCs), the Bloom Energy Server® uses an electrochemical process to generate clean, reliable, and highly efficient power while significantly reducing carbon emissions, a significant advantage for the heavily regulated manufacturing industry.

At the global semiconductor manufacturer, which was looking to expand production with two new facilities, Bloom delivered more than 11 MW of advanced microgrid fuel cells across three sites in the northeastern U.S.  

Quanta’s Bloom solution helped meet client deadlines and accelerate AI infrastructure delivery at its expanding Fremont, CA, site. It featured a fully islanded microgrid, which will power operations around the clock, 24/7, 365 days a year. By leveraging Bloom’s modular microgrid solution, Quanta is circumventing the lengthy delays and conditions associated with traditional utility constraints to maintain its competitive edge in the fast-paced Silicon Valley market.

After announcing the partnership in April 2024, Quanta expanded the Bloom agreement later that year, increasing the power capacity of Quanta’s existing Bloom SOFC installation by more than 150 percent to meet its rapidly expanding production needs.

Interested in Learning More?

If you’d like to learn more about how Bloom’s sustainable energy solution can ensure ready and reliable power access for your manufacturing business, please visit: bloomenergy.com/industries/manufacturing-energy.