Navigant Research Blog

Data Centers Drive Market for DC Distribution Networks

— July 15, 2015

The market for direct current (DC) distribution networks is not a single, cohesive market. Rather, it encompasses several disparate opportunities—telecommunications towers, data centers, grid-tied commercial buildings, and off-grid military networks—that revolve around different market assumptions, dynamics, and drivers.

Given the expense of current existing redundant alternating current (AC) uninterruptible power supply (UPS) systems, DC data centers would appear to be a no-brainer from an engineering point of view. Despite this, energy remains a small portion of the overall operations budget of data centers. As a result, the value proposition to conservative operations managers may still be a hard sell in the near term. However, DC microgrids can actually offer higher reliability than status quo AC solutions, so validating early adopter DC microgrids is a critical step forward for this market opportunity. The ABB 1 MW DC data center located in Zurich, Switzerland, is just one example of how this application is gaining momentum.

Distributing DC enables replacement of AC-DC converters within individual devices with a smaller number of larger, more efficient converters. LED lighting installations that run on 24V DC lines, for example, require up to 15% less energy than the same lights running on fixture-level rectifiers. Nevertheless, losses in the linings limit 24V DC distributions to just 10 meters, so manufacturers are developing 380V DC wiring to extend comparable benefits to entire data centers and other commercial buildings. Asia Pacific is expected to lead this market in both the near and long-term, with China alone having already deployed hundreds of DC data centers.

DC Data Center Network Implementation Revenue by Region,
Base Scenario, World Markets: 2015-2024

DC Data Network Implementation Revenue

(Source: Navigant Research)

The core challenge facing DC distribution networks lies with the need for standards and open grid architectures that can help integrate the increasing diversity of resources being plugged into retail power grids. Even DC advocates maintain that distribution networks operating at the municipal level may always remain AC systems. The efficiency gains accrued by sticking with DC instead of converting to AC (and then back to DC) are not as great at this higher voltage level. This may remain the sweet spot for AC technology, serving the vital role of interconnecting large wholesale transfers from high-voltage DC (HVDC). In fact, DC microgrids and nanogrids could, ironically enough, extend the life of the incumbent AC distribution system by taking loads off that system in an intelligent and dynamic way.

The focus of the industry, working through the efforts of the EMerge Alliance, is currently medium-voltage DC distribution networks. These systems are mostly concentrated on the data center market segment, but can also apply to commercial buildings—especially those of considerable scale, such as big box retailers (Costco, Walmart, etc.). At present, the majority of progress in developing DC-based technologies has occurred at either the high-voltage (more than 1,000V) or low-voltage (less than 100V) level of electricity service. Since microgrids and building-scale nanogrids typically operate at medium-voltage (roughly 380V to 400V), much work needs to be done to bridge this voltage innovation gap, and this goal is the focus of companies such as ABB, Bosch, Emerson Network Power, and others.

As noted in a previous blog, Bosch is encountering a few regulatory issues when it comes to deploying DC microgrids, primarily an artifact of assumptions that distributed renewables and energy storage are interconnected to the alternating current utility grid. But surprisingly, DC fits in well with AC infrastructure, and is especially accommodating for integrating cutting-edge distributed energy resources.

 

Northern Power Opts for Elegance, Simplicity in Microgrid Controls Platform

— June 19, 2015

Founded in 1974, Northern Power Systems (NPS) of Barre, Vermont, is returning to its microgrid roots, strengthening its market-leading position as the wind turbine of choice for microgrids with recent partnership arrangements on systems controls and energy storage integration.

NPS designs, manufactures, and sells 60 kW and 100 kW wind turbines globally, a scale that appears to be ideally suited to microgrids, which often integrate other diverse generation sources ranging from traditional diesel generators to solar PV.  The company went public in April 2014 on the Toronto Stock Exchange. Since NPS has deployed over 500 of its wind turbines in the field, it is the market leader today in remote microgrids such as those deployed in Alaska.

Though the company launched a PowerRouter microgrid testbed in 2002 and was involved with the pioneering concept of droop frequency that fell under the umbrella of the Consortium for Electric Reliability Technology (CERTS), it steered away from microgrids when its parent corporation Distributed Energy Systems declared bankruptcy in 2008. A newly independent NPS returned to the market that year with fresh investors and a focus on its wind turbine product line. It is now refocusing on microgrids as a business opportunity and offering its next-generation bidirectional FlexPhase power converters for a variety of microgrid and other energy storage applications.

With sophisticated controls provided via its power conversion technology (PCS), which helps relieve stress on the microgrid, NPS’s small wind turbines are ideally suited for remote microgrid applications.  In addition, the NPS 60/100’s ability to control reactive power independent of wind speed is also a plus.  Among other unique features is a simplified turbine architecture that utilizes a unique combination of a permanent magnet generator and a direct-drive design.

Partnering for Success

Two new partnerships enhance its microgrid offer. The most important was announced this month: a non-exclusive strategic partnership with MCM Energy Labs srl (MSM), a company that is part of the Italian industrial group ELVI. By integrating its FlexPhase converters with MCM’s hybrid power controls, integration and project deployment expertise, Northern Power is shining a spotlight on a fascinating debate within the microgrid community: What is the best approach to optimizing distributed energy resources (DER) within a microgrid?

Larger technology companies tend to shrink down what they do on the macrogrid down to a microgrid, with sophisticated metering and sensors and complex communication IT systems often requiring substantial customized engineering. The approach now being embraced by Northern Power— as well as other smaller market entrants—is an elegant solution that typically relies upon droop frequency, a concept that is a longstanding principle embedded in generation controls of the macrogrid, but which has profound implications for microgrids. In essence, it is a self-regulating, peer-to-peer approach revolving around simple physics: that frequency modulates (ever so slightly) when different DER are integrated into a single system (i.e., a microgrid.) There is no need for resources to talk to each other; they naturally adjust to keep the required 60 Hz (or 50 Hz) necessary for grid stabilization.

Just last month, Northern Power also announced a partnership with FIAMM Energy Storage Solutions, which manufactures a sodium nickel chloride battery. When linked to Northern’s PCS, FIAMM’s batteries are able to provide load shifting and seamless islanding services, as well as voltage and frequency controls for either direct current (DC) or alternating current (AC) microgrid or utility grid applications. With the incorporation of MCM’s microgrid controller and FIAMM’s battery solutions, NPS has positioned itself as offering a lower cost controls platform for microgrids than many of its competitors.

 

Novel Microgrid Architectures Face Regulatory Hurdles – Even in New York and California

— June 4, 2015

If I had to pick two states that are leading the charge on reinventing electric utilities, they would be New York and California. Yet, even in these state laboratories of regulatory reform, novel forms of distribution networks (often referred to as microgrids) that rely upon the inherent advantages of direct current (DC) are facing obstacles.

The core challenge facing DC distribution networks lies with the need for standards and open grid architectures that can help integrate the increasing diversity of resources being plugged into retail power grids. This, among other issues, is the focus of the first major conference sponsored by the Institute of Electrical and Electronics Engineers (IEEE) on DC distribution networks. The conference will take place in Atlanta, Georgia, from June 7 through June 10.

In New York, Pareto Energy of Washington, D.C. obtained preliminary engineering approval from Consolidated Edison (and a $2 million grant from the New York State Energy Research and Development Authority [NYSERDA]) to install its patented GridLink microgrid controller at the 12.8 MW combined heat and power (CHP) plant that serves Kings Plaza Shopping Center on the Brooklyn waterfront.  GridLink converts power from each generation source (including grid power) from alternating current (AC) to DC, collects all the power on a common DC bus, converts that DC power back to AC, and distributes power to any load (including those on the utility grid).  All the while, each power source is electrically isolated. In short, GridLink creates a non-synchronous plug-and-play microgrid.

Although Kings Plaza has never been connected to Consolidated Edison’s grid, it provides electric and thermal energy to the center at costs less than half of equivalent utility services. Under the plan, 8 MW of low-cost power from Kings Plaza’s CHP unit will be exported to the utility grid, which may be utilized to serve nearby low-income communities during a major power outage. Despite these potential benefits, some regulatory snags have delayed the project. Pareto has also filed a petition with the New York Public Service Commission, claiming discrimination against its lower cost option to traditional power delivery infrastructure to meet contingency requirements for reliability within the Consolidated Edison service territory.

The View from the Other Coast

In California, the issues are different, but they also involve DC. One case involves Bosch, which was awarded a California Energy Commission grant of $2.8 million grant to develop a high-penetration solar PV DC microgrid at an American Honda Motor Co. parts distribution center in Southern California. The project is designed to validate the efficiency performance benefits of a patented system allowing it to directly connect DC power flowing from solar PV to LED lighting and DC ventilation systems located within the building, as well as a DC energy storage device. The benefits of DC attached to this project include lower installation and operating costs. In addition, this project is pioneering the application of a DC distribution network within existing building codes in order to boost reliability.

While Bosch observes it has not run into any problems with building codes or other such potential obstacles to its DC building grid business model, it has identified an interesting dilemma. Since state subsidies for both solar PV and energy storage are linked to the size of the inverter interconnecting with the AC grid, it appears DC technologies are being discriminated against, despite the fact they are more efficient and reliable.

In both cases, the status quo is being challenged by new technology revolving around a nonsynchronous microgrid incorporating the advantages of DC.  This is the subject of my next report, Direct Current Distribution Networks, expected to publish later this month.

 

Cutting-Edge Microgrid Projects Still Popping up in the United States

— May 26, 2015

The current edition of Navigant Research’s Microgrid Deployment Tracker gives credence to the idea that the Asia Pacific region may emerge as the market leader over the long term, with data collected from projects and project portfolios representing 47% of total global capacity as compared to North America’s 44% total global capacity market share. At present, however, North America remains king when it comes to actual operating projects. If looking at microgrids currently online, North America still leads by holding a nearly identical market share (66%) compared with data presented in the 2Q 2014 Tracker update (65%).

I want to highlight two project entries that show how the United States, due in part to new programs promoting community resilience, is pushing the envelope on both technology and business models.

Blazing the Trail

The first project, located on the East Coast, is a transportation microgrid known as NJ TransitGrid and located in the New Jersey Transit system’s service area. Beyond being America’s third-largest transportation system and serving nearly 900,000 passengers daily, the stretch of rail covered by the project is both an important access point to Manhattan and New York and is one of the most at risk for flooding. Existing railroad right-of-ways could be used to connect distributed generation (DG) from small wind, solar PV, and fuel cells to elevated power substations and energy storage. All of these components will be managed by smart grid technologies to integrate renewables and island the entire system during harsh storms such as Hurricane Sandy. It is anticipated that the system’s total generation capacity will eventually reach 104 MW, making it one of the largest microgrids in the world. New Jersey state officials expect the project to have sufficient capacity to power up rail stations between the cities of Newark and Hoboken, which are approximately 10 miles apart.

The second project is on the West Coast and is known as the Salem Smart Power Center. This project is an example of a partnership approach to development with an investor-owned utility (Portland General Electric) looking to vendors such as Eaton to help integrate battery energy storage solutions to help address the impacts of customer-owned solar PV on the utility’s distribution grid. The project, which incorporates 5 MW of conventional DG, solar PV, and a 5 MW battery, also sought to increase reliability for a mix of business (data center), institutional (National Guard), and residential customers. The resulting energy storage system from Eaton provides seamless support for loads in the event of an upstream outage. The intelligent energy storage system works with standby generators to create a high-reliability zone consisting of a feeder supplying community customers. The energy storage system supports the microgrid for several minutes while generators are started, creating a backup power supply, with tests showing the capability of carrying the entire load during transition to island mode.

Unlike the majority of microgrids deployed to date in the United States, which tend to focus on campus operations, the Power Center is instead seeking to bolster the utility’s reliability. As such, it is classified as a utility distribution microgrid (UDM). One noteworthy factoid derived from the newly published Microgrid Deployment Tracker is that such UDMs now represent 16% of total microgrid operating, planned, and proposed capacity, a segment category ranking only behind remote systems, which are largely deployed in the developing world and unique markets such as Alaska.

 

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