Generators supply auxiliary electric power during outages of power supply from the local electricity distribution company. This is done by using input mechanical energy to initiate combustion of fuel and converting the energy released to electrical energy. Please read this article for more information on how a generator creates electricity.  If no fuel is available to the generator during power outages then the purpose of the generator is lost. Hence it is essential to store fuel so that such an eventuality does not arise. The fuel is stored in specially designed fuel tanks. Several factors need to be considered while selecting and installing the appropriate generator fuel tank.

Determining the Fuel Tank Capacity

You will first need to determine how much fuel you need to store as this will determine the capacity of your fuel tank. Calculate the minimum storage capacity by first estimating the following three parameters.
(1) Emergency Stock: How much fuel would you require to allow for delays in supplies or excessive consumption needs?
(2) Lead-Time for Supply: What is the lead-time required to purchase fuel from the vendor to the generator site?
(3) Lead-Time Stock: How much fuel would you require to operate your generator during the lead-time?

Based on the above three parameters, the minimum storage requirement is determined as –
Minimum storage capacity = Emergency Stock + Lead-time Stock

What level of fuel storage capacity is best suited for you?

In the case of power outages that are infrequent or of short durations, a smaller storage tank would suffice for your fuel requirements. However, you will need to purchase fuel more frequently in smaller lots to refill your tank. While you incur low initial investments (capital costs) in setting up your storage tank and low maintenance costs, the per unit delivery cost of fuel would be higher.

Large storage tanks are required when the generator is used to support large commercial establishments or where power outages are frequent and last for long periods of time. In this case, you can purchase the fuel less frequently and in larger lots. However, you will incur higher initial expenditure (capital costs) in setting up your storage tank. The maintenance costs will also be high in the long run. On the other hand, the per unit delivery cost of fuel is reduced since you can order large quantities of fuel to be delivered in one go. However, you will also need to account for the hidden costs arising from the hazards of storing a larger quantity of fuel.

Before finalizing the storage capacity, it is essential to finalize the contract for the supply of fuel with the vendor. The vendor’s capacity to supply the required quantity at the required frequency should be assessed and penalties for default should be incorporated in the contract