Michelle Isenhouer Hanlin | Senior Project Lead, Smart & Distributed Energy, Reading | 25 October 2021
In times of climate crisis, community and campus microgrids can provide uninterrupted power and help businesses decarbonize.
With destructive wildfires and extreme weather events on the rise, widespread power blackouts and curtailments are becoming more common. As a result, governments and communities need more reliable ways to source their power.
Microgrids help solve this challenge. They offer stacked benefits for multiple stakeholders, including utilities, consumers and third-party providers. According to Global Market Insights, the market surpassed USD 8 billion in 2019. It will continue to grow at a compound rate of 25 percent in the coming years. And will surpass 5,000 MW by 2022 according to Guidehouse – a consulting firm specializing in public and commercial markets.
So, what exactly are microgrids and how do they keep the power on during a disruption?
A microgrid is a subsystem within an electrical grid. It has two or more interconnected loads operating in defined electrical and geographic boundaries, and can be disconnected from the macro grid to operate in isolation. When disconnected, a microgrid can automatically shed noncritical loads while supplying power to essential systems through distributed energy resources (DER) that are connected locally.
In a shift away from carbon-intensive technologies, microgrids use renewables as standalone sources of power or together with fossil fuels. Using smart technology, they’re capable of automation and efficient resource allocation. They can combine heat and power facilities, natural gas turbines, microturbines, solar panels, fuel cells and diesel generators. When these sources produce more power than is needed or are disrupted, microgrids can use energy storage technologies such as batteries to store and release energy.
In a shift away from carbon-intensive technologies, microgrids use renewables as standalone sources of power or together with fossil fuels. Using smart technology, they’re capable of automation and efficient resource allocation. They can combine heat and power facilities, natural gas turbines, microturbines, solar panels, fuel cells and diesel generators. When these sources produce more power than is needed or are disrupted, microgrids can use energy storage technologies such as batteries to store and release energy.
There are typically two types of microgrids – campus and community. Campus microgrids can feature several buildings that are already connected and owned by one entity. For example, university campuses. Community microgrids include facilities with different owners such as a hospital or fire department. They’re typically used by municipalities to make facilities more resilient.
Unpredictable and disruptive weather events typically result in power outages which makes emergency response hard to carry out.
Texas’ power biggest outage in 2021 stands as an example of the resilience offered by microgrids, as they helped keep the lights on for some. But Hurricane Sandy in 2012 was the catalyst for the community microgrid rush.
When it hit, many quickly found that their existing power grids couldn’t cope.
More than 8.1 million homes and businesses lost power, resulting in over USD 25 billion in lost business. Countless companies closed their doors permanently as a result.
New York state quickly responded to Hurricane Sandy with its Reforming the Energy Vision policy. It featured the NY Prize Community Microgrid Development Program, which was emulated by the Massachusetts Clean Energy Commission.
This kickstarted robust investment in the sector, bringing together the nation’s brightest minds.
Community microgrids can keep critical infrastructure in operation during events that cause grid failure. This allows emergency services, schools and day care centers to continue serving communities in times of crisis.
People can also continue to access running water, while water treatment plants and pumping stations safely provide water and dispose wastewater. The economy will also chug along as airports, grocery stores and gas stations remain open.
DERs also attract new businesses and stimulate economic growth, as they offer uninterrupted power. They allow residents and companies to go about their business, with some even offering places of refuge during disasters where people can congregate and stay safe.
Microgrids can present challenges beyond typical technical and cost considerations.
Infrastructure is the first hurdle. Microgrids must be able to connect to and disconnect from major grids without impacting other facilities on the distribution feeder. Additionally, setting up DERs in dense urban, underserved areas can be challenging because of space and noise constraints. Couple that with finding ways to allocate capital and operational costs across multiple entities, and the challenges start piling up.
It’s important for communities to understand the microgrid’s operating capabilities and local regulations. This knowledge can help optimize both the business model and technical solution. Selecting the right business model can also minimize costs and maximize returns. For example, some communities find it more favorable for third party service providers to own and operate microgrids on their behalf.
The ability to monetize a system can make or break investment opportunities. We outlined the concept of ‘value stacking’, which refers to incorporating multiple revenue streams such that the total value enhances project returns, in our recent energy storage paper. The same applies here as well. Services can range from management and ancillary services to power reliability and infrastructure services for the larger grid.
However, the most common uses in a commercial or industrial setting are power reliability, demand charge and peak power price avoidance. And streamlining the production of onsite solar power.
The success of microgrids will depend on the decisions we make now. These decisions will inform the standards and methodologies we use to optimize and simplify how we deploy renewable energy in the future. And supply communities with resilient and safe energy that supports economic growth, national security and public health and safety.
