Microgrids Positioned for a Bright Future
Microgrids are popping up in the strangest places – such as a small upstate New York town and a commercial dairy.
Earlier this month, the Associated Press profiled the energy activities of Nassau, NY, which is which is near Albany. The town was buffeted by ice storms in 2008 and 2009. The genesis of the move to a microgrid was the fact that when the grid went down during one of the storms the small backup generator couldn’t open the garage doors to let the sand trucks get on the streets. A front loader had to be brought in to do the lifting.
The story says that New York is open to microgrids. The state is in the first round of winnowing down 83 proposals that could collectively be supported by as much as $40 million in state money. The goal, the story says, is to have multiple microgrid projects underway next year. The move on microgrids is part of New York’s Reforming the Energy Vision (REV). The initiative, which is a response to Superstorm Sandy and other storms that paralyzed parts of the state in recent years, is aimed at reforming New York’s energy industry and regulatory practices. This will lead to deployment of energy technologies that are more efficient and utilize renewable sources. Distributed technologies such as microgrids and onsite storage are key to the plan.
Microgrids are not just hot in New York. Utility Dive reported this week on a big research effort by GTM Research on the distributed energy. Microgrids – which are systems that provide electricity to campuses or groups of buildings independent of but generally in coordination with the traditional grid – are one of the sectors covered. The story says that the researchers found that microgrids are a bit behind the energy storage market in its evolution. It is doing all it can to catch up, however: GTM expects it to grow 267 percent between last year and 2020, when it will be worth $829 million.
Despite the growth, the story says, barriers include high upfront and financing costs and difficult to quantify reliability and resilience benefits. In addition, the piece points to legacy rules and regulations that make it difficult for non-utilities to get rights of way. The picture is gradually brightening as microgrids become an accepted platform and more vendors jump in and potential customers look at the technology.
The concept is not new – but it is gaining a new generation of adherents. “Industrials/large commercials have been doing this for many, many years, and not calling it microgrids. They use words like onsite generation, backup power, etc. For them, this is part of a continuous improvement process, increasing sophistication in order to gain productivity benefits such as lower energy density and lower cost, of course,” wrote Mike Overturf, the CEO of ZF Energy Development in response to questions from Energy Manager Today. “New entrants are municipalities and townships — particularly those with disaster trauma — who are under pressure to ensure that their citizens have a place to go or access to basics under duress. But all are hampered by cost question.”
The technology also is evolving, which makes things exciting – but also may lead some potential users to hesitate. “Things are changing in two ways: The digital space — sometimes packed under the moniker ‘Internet’ — and maturing markets,” according to Overturf. “The markets in questions are the independent service operators and natural gas markets. The latter is the most open and competitive on the planet.”
The bottom line is that microgrids are a platform that is well positioned for the future. This is how Siemens, which aims to be a major player in this sector, puts it:
Many large energy users – military bases, universities, commercial campuses, etc. – are looking to invest in on-site generation and infrastructure due to the significant value of increased resiliency and energy security of having their power source nearby that they can control independently from the serving utility. Microgrid design and software control easily integrates and optimizes existing energy infrastructure, renewable generation, and load sources while providing a scalable infrastructure for future expansion.
It’s always that way with technologies that offer multiple benefits. Microgrids provide resiliency in case of short or long-term outages and are a key way for users to integrate more fully into the far more flexible and bi-directional nature of emerging energy distribution platforms.
Indeed, the economic benefits may be a long time driver that has not even come into focus yet. “Right now resilience [is the main driver],” wrote Overturf. “As the awareness of economic benefits, while substantial, are not yet widely known. However we are in the initial quartile of that long wave shift.”
The picture of a sector that is still fluid is completed by an unsettled supplier ecosystem. “Some are just starting (SPP, Cenace), some are a global model (PJM) and some are still dazed and confused by the Enron body blow (CAISO),” Overturf wrote.
Despite the uncertainty, microgrids appear to be gaining traction – and often in surprising places. A good example was reported this week by Microgrid Knowledge. HP Hood is a diary that relies on a 150 million-gallon processing facility in Winchester, VA. If the power goes down – even briefly — regulations require sterilization of the equipment. That takes hours – and obviously carries a big cost.
That ever present danger drove the firm’s decision to build a 15 MW microgrid. The story does a good job of describing the options considered by HP Hood, which included a biomass-fed cogeneration system without a microgrid. Eventually, Z-Fed installed a natural gas-fed microgrid that was as large as the electrical system could support.
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