A microgrid is a local energy grid with control capability. It can be connected to the grid or not, but it has the ability to be disconnected to the grid and operate independently. By its very definition, it works well with energy storage, and due to the decreasing cost of energy storage, microgrids with battery storage are becoming much more commonplace.
Some uses for microgrids are rural communities, military bases, farms, telecommunication centers, healthcare centers, hospitals and more. An example of a microgrid installation is the military base in San Antonio, Texas (US), which was installed by Ameresco. Energy that powers the microgrid comes from solar as well as gas-fired generators, all of which are connected to a battery backup system. In the event of a power outage, the microgrid can become an island via its control system, and provide off-grid power to the facility.
Trends in microgrids
Microgrids have been around for along time, but not necessarily getting their power from renewable energy sources or having backup battery storage. According to Will Agate, VP, Microgrid Services at Ameresco said, “One of the newest positive considerations in considering a microgrid solution for a given application, is the fact that the pricing of storage has already dropped to levels that are making the combination of storage and other on-site forms of generation, such as solar, reach parity with connecting to the traditional big grid.”
Jacqueline DeRosa, VP, Battery Energy Storage Systems at Ameresco said that with the price of lithium ion energy storage dropping about 80% since 2010, “we’re now seeing microgrids with storage as reality.” As a result, the energy storage can be paired with distributed resources to lower the customer’s utility bill as well as achieve higher resiliency. Energy storage provides multiple services for the microgrid, including instantaneous backup power for when the grid goes down, load following, and power quality services. As DeRosa stated, “When we have storage, we can do more with a microgrid than without it.”
The utility challenge
One of the challenges to widespread adoption of microgrids with storage is how they are perceived by the local utility in the region. There is still confusion and push back from some public utility commissions, because they see the microgrid as not benefitting the entire rate base. It’s hard to get across to them that a microgrid with storage is actually an asset to the utility rather than a challenge. A microgrid really can be a win-win for a utility. DeRosa noted that microgrids can also benefit the utility by helping to reduce peak load, avoid distribution or transmission upgrades, and achieve environmental goals. “It can be a win-win for the utility as well as for the customer,” DeRosa said.
In addition to saving money, the key benefit to microgrids with storage is resiliency. When a business with mission critical operations is connected to the grid, and the grid goes down, the business suffers. In recent years there have been numerous accounts of weather-related power outages that have created life-threatening situations for some as well as business hardships and added costs for others. The advantage of a microgrid with energy storage is the ability to access backup power instantly.
Certainly, sustainability and security are further benefits. A lot of customers are concerned with sustainability and want to know that their power comes from a green source. By providing a community or business with a microgrid powered with renewable energy, those customers are assured that they’re relying on clean energy. And, as far as security goes, the reality is that today there are ever-increasing concerns about cyberattack. Regarding considerations of grid security and potential cyber-attacks, Ameresco’s Agate pointed out, “This is another reason that microgrids are becoming attractive options since they can be designed to be separated from the big grid, so that malicious hackers can’t take control. This is an area that was not a concern when microgrids were first in use, but in today’s world environment, microgrid solutions include significant advances in addressing cybersecurity.”
Prime markets for microgrids plus storage include large real estate developments, healthcare facilities, colleges, universities, communities —and anywhere else that you can put a price on resilience and sustainability. "As market designs and rate structures evolve, many more opportunities will open up," DeRosa said.
“It is candidly too early to tell how long it will take for the microgrid solution to scale to its full potential as it takes people time to understand the value proposition,” Agate notes, “this is a similar dynamic to the early days of personal computers and the internet of things, but as we continue to push for transparency around actual costs of reducing microgrid costs and in connecting to the grid, while at the same time educating people about the potential and demonstrating best practices, many will come to understand the tremendous value proposition, and life without microgrids will become history of the past.”
Written by Anne Fischer, Managing Editor, Solar Novus Today