Session Details Challenges and Possibilities of Microgrid Development

Microgrids have suddenly become a hot topic, but why? The five speakers in Tuesday afternoon’s session titled “Tuning Microgrids for Optimized Power Generation” shed some light on why there is increased interest in microgrids by electric utilities and their customers. They talked about where they see microgrids going and the challenges and possibilities that are popping up along the way. The main take away from the session are that the changing electric energy landscape that includes the emergence of prosumers has created a need for microgrids and that collaboration between energy suppliers and energy consumers is a must.

Chris Dunlap of Schneider Electric was the first speaker out of the block.

“I want to start by saying I think the microgrid space is one of the most exciting areas of power generation,” Dunlap said. “It represents a new frontier.”

Prosumers are utility customers of all sizes who both produce and consume electricity. They are looking for one or more of three things, Dunlap explained. They need reliable and resilient electricity supply, a reasonable cost electricity supply and/or a sustainable source of electricity. Every prosumer is different, each has different supply and load, which makes each microgrid unique.

Dunlap also talked about the two business and delivery models for microgrids. When a company hires a supplier to develop and build the microgrid, but retains ownership of the facility and handles it operation and maintenance, that company has selected the CAPEX, or EPC, business model. If a company selects a supplier or partner to develop, build and own the microgrid, as well as operate and maintain it then buy the power from it through a power purchase agreement, that company has selected the OPEX, or microgrid as a service model.

“Microgid as a service is real,” he said. “A lot of money is being spent on this model.”

One of the biggest benefits of MGaaS is that it can be arranged so that the microgrid owner doesn’t have to pay much, if anything, upfront for the microgrid.

Fredrick Huff of Emerson Process Management, talked about the distributed control system (DCS) used to control microgrids. He pointed out that the term microgrid might be new, but the concept has been around for a long time. Microgrids have five main components: generation source, load, energy storage, point of common coupling (to grid) and a microgrid controller, Huff said.

He explained that a distributed control system is needed to understand and control the various components in a microgrid. It acts as a secondary microgrid controller and can talk to all the different devices from all the different vendors that are part of the microgrid.

Andy Kruse of Homer Energy, a company that originated from the National Renewable Energy Laboratory and has modeled more than 36,000 microgrid projects and proposed microgrid projects, backed up Huff’s declaration that microgrids are not new.

“One hundred years ago everything was a microgrid,” Kruse said. “Generators provided energy to specific loads.”

These generators and loads were islands and few were connected to one another.

“Today’s microgrids are a hybridization of various generation sources and supplies,” Kruse said.

Renewable energy and storage are driving the changes and the movement toward microgrids, he said.

“All of these are getting cheaper. Wind and solar have dropped in price and the cost of storage is continuing to fall. These sources are being coupled with other sources of energy like diesel and gas engines to create microgrids,” Kruse said.

Kruse expects microgrids to grow. He talked about Homer’s modelling work that helps those who are contemplating building a microgrid determine what will work best for them. Like Dunlap, he said every consumer’s need is different. He said what’s best depends on a number of factors, including available resources, size and variability of load, equipment price, equipment performance and maintenance requirements, whether the microgrid will be on- or off-grid and “on the ground” conditions like temperature and more.

Pricing must also be considered, he said.

Jeremy Bero of HDR Inc., an engineering and consulting firm that works with clients on microgrid projects, talked about how the recent hurricanes and other natural disasters have spotlighted the need for a more resilient critical infrastructure, including the electric grid. Storm hardening is needed and microgrids can help in that area, he explained.

Some industries like hospitals, campuses, data centers and military bases have owned microgrids for years for obvious reasons. Many of these microgrids have relied on diesel generators as their power supplies, but as they have grown, especially at large data centers, increasing the diesel-fueled generation has created some environmental issues and concerns. Bero said many of these facilities are beginning to consider the central utility model as an alternative.

While this model can work well, Bero pointed out that there are challenges to implementing microgrids. Grid interconnection, cost, regulations and unique tech requirements for the complex control systems are needed.

“Resilient energy for critical infrastructure is a topic of ever increasing importance,” Bero said. Microgrids must be part of that conversation.

Peter Jacobson of Panasonic closed out the session by telling the audience that the “business as usual siloed approach no longer works for utilities and customers.”

It is frequent practice for vertical developers to go through a design process with no input from utilities and for utilities to design their grids with no input from their customers. This is not a good process for either, he said.

Jacobson provided some details about the Pena Station Smart City, a smart city test bed near Denver that is being created through a collaboration that includes Xcel Energy and Panasonic. The project is proving that energy storage, renewable energy and microgrids are important to furthering future smart cities.

He said one of the main takeaways from the project so far has been the realization that collaboration between all players is required.

“The public and private sphere must come together to create smart cities,” Jacobson said.

The audience had many questions for the speakers. One that kept popping up had to do with the distributed energy resource management systems that must be created for grid operators to integrate microgrids. No one had a concise answer and the speakers as well as many in the audience decided it might be good to create a session on this topic for next year’s Power-Gen.

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