Growing Trend of Microgrids
- Jun 15, 2021 10:08 pm GMT
Historically, microgrids consisted of prime mover electric generation equipment located at one site, a microgrid island. The latest trend is nested microgrids acting as networked nodes. While not physically interconnected to each other, they are embedded in the distribution system of a local utility. A microgrid network operations center (NOC) operates each nested microgrid node separately or collectively. Being aware of microgrid trends will help your utility provide customers resilient operations at the lowest cost. Let’s explore the microgrid landscape and identify a few more trends.
Microgrids can be powered by distributed generators (diesel fuel or natural gas), battery energy storage and renewable sources, such as solar and wind energy. Microgrids are still primarily fossil-fuel driven, though, with 86% of 2019 microgrid new capacity powered by diesel fuel and natural gas according to Wood McKenzie. However, forecasters expect renewable power sources (solar, wind and hydropower) to drive 35% of new microgrid capacity by 2025.
While a record number of microgrids (546) were installed in the United States during 2019, the first half of 2020 was the slowest for the U.S. microgrid market since 2016 according to Wood McKenzie. The pandemic is to blame but disruption is expected to ease in late 2021 especially due to reinstated federal tax credits for solar PV systems (and accompanied energy storage), common components of microgrids. Also, FERC Order 2222 is paving the way for aggregated distributed energy resources (DERs) to compete with traditional power plants in wholesale markets. Third-party ownership of microgrids is another driving force for the development of microgrids. Another trend is smaller (below 5 MW) replicable modular systems.
Microgrid controls are the magic sauce of microgrid performance. An industry trend has been moving from a top-down (on-premise centralized) to a bottom-up (cloud-based decentralized) controls architecture. Due to concern about cloud resiliency, however, a hybrid approach is leading the way. Guidehouse Insights’ Leaderboard methodology was used to identify the top 15 microgrid controls vendors with respect to a dozen criteria. Schweitzer Engineering Laboratories (low-cost solution), Schneider Electric (energy as a service) and Opus One Solutions (smart grid) were the top ranked suppliers.
Microgrids have several advantages over standalone generators:
Efficient sizing. Power resources are shared across many buildings, which reduces the volume of power needed to back up critical loads.
Maintainability. Only a few, large generation units – typically with standardized features – are required, making it easier and less expensive to maintain.
Reliability. A high level of reliability is possible because of a networked structure, which ensures that if any single generation unit fails, another can instantly take its place.
Flexibility. Because microgrids are networked, they can respond to changes in electricity needs at no cost and integrate the power from renewable energy sources.
Coverage. Excess generation is almost always available and can serve any load connected to the microgrid because it's sized to meet peak loads.
Utility Response to Microgrids
Some utilities embrace microgrids while others see them as a potential threat. There are several tools available from Lawrence Berkeley National Laboratory’s (LBNL’s) Grid Integration Group to help utilities properly evaluate microgrids. LBNL’s Distributed Energy Resources Customer Adoption Model (DER-CAM) can be used to find the optimal portfolio, sizing, placement, and dispatch of a wide range of distributed energy resource (DER) investments in the context of either buildings or multi-energy microgrids. The goal is to minimizes costs while ensuring resiliency targets.
LBNL's Integrated Modeling Tool (IMT) models the interactions between consumers’ adoption of DERs, utility grid planning, and utility rate design. The IMT aims to answer the following questions:
- How to influence consumers’ adoption of DERs through electricity rates (or other incentives, e.g. rebates) in ways that benefit the distribution grid?
- How can utilities combine rate design with grid investments to accommodate mass deployment of DERs and decrease costs?
- How to recover grid costs in scenarios of mass deployment of DERs?
Commercially available tools are also available such as HOMER Pro (smaller 100 kW to 10 MW capacities) and Bentley Systems’ OpenUtilities which help utilities integrate microgrids into the larger grid.
The benefits of microgrids to utilities are anything but micro. Microgrids can improve the operation and stability of the regional electric grid and provide increased resiliency to critical operations customers like hospitals and military bases. Plus, they can shore up aging utility infrastructure and decrease peak demand. For energy utilities, thinking small has its advantages.
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