Navigant Research Blog

Microgrid Controllers Emerge at Key Industry Crossroads

— April 10, 2018

To many, the mystery behind the curtain of what is and what is not a good microgrid controller may feel a little like the Wizard of Oz. Often referred to as the “black box” or the “secret sauce” of what makes a microgrid work (or not), the number of companies with automation and control products keeps increasing (though casualties also litter the vendor landscape). But determining how these controllers compare, and what exact hardware and software components make them tick, remains opaque. Is it smart inverters, digital relays, or SCADA systems—or the even more nebulous world of software?

Navigant Research has just published its latest Leaderboard report on microgrid controllers. Among the vendors that ranked in the top five was Siemens, the German industrial giant. A Microgrid Knowledge survey has also shown that, among 21 candidates, Siemens was the most recognized company associated with microgrids.

A Confluence of Energy Storage

The company recently made two important moves designed to increase its microgrid market share. It has formed a new partnership with AES to offer energy storage solutions, creating a new global company called Fluence. Though this partnership is more focused on larger-scale energy storage projects, virtually every microgrid coming online today has some form of energy storage. In fact, Navigant Research expects that the revenue opportunity of energy storage in microgrids will feature a compound annual growth rate of 37.4% over the next decade, reaching an annual implementation spend of $4.5 billion by 2026. Fluence boasts some impressive credentials: 56 energy storage projects either operating or awarded in 15 countries with a total capacity of 485 MW. How this new strategic partnership will influence the microgrid market remains to be seen.

Better To Be Simple

Siemens has also released a new, lower cost microgrid controller product—SICAM Microgrid Controller—which is, in essence, a microgrid in a box for grid-tied applications. The company sees value in offering a simpler control offering for microgrids that are smaller in scale and less focused on sophisticated market exchanges, moving closer to a plug-and-play solution. I have long argued that the microgrid market may grow faster if there is a shift away from complex engineering projects in the 50 MW, 100 MW, or 200 MW range, focusing instead on 1 MW and below projects and allowing cloud-based software systems to aggregate these microgrids into a virtual power plant. Companies such as Spirae have articulated this approach, stripping out excessive engineering costs that can often kill a project’s viability.

The Bronzeville Project

In late March, Siemens announced a new project that shows that—despite its new plug-and-play, lower cost microgrid controller offering—the company also sees a market in its more sophisticated software solutions. After lengthy regulatory and legislative delays, the Bronzeville microgrid on the south side of Chicago is to be rate based by Commonwealth Edison. This project will rely on Siemens’ microgrid solution, its Microgrid Management System software, which will be used to optimize a cluster of two microgrids. The purpose of the project is to use advanced algorithms to implement controls for a microgrid serving over 1,000 customers, including critical facilities such as the Chicago Police Department headquarters, while interacting with the long-standing microgrid at the Illinois Institute of Technology.

A new energy storage powerhouse partnership, a new lower cost control option, and a project demonstrating the ability of its software to manage multiple microgrids show that Siemens is reinventing itself, as are its utility partners.

 

What Falls Under the Broad Microgrid Umbrella?

— January 9, 2018

There is arguably one question that needs to be answered by the customer thinking about microgrids: What do they really want in terms of a power supply solution? If the customer can quantify what they are seeking in terms of dollars saved, efficiency gains, or perhaps a reduction in downtime, then the solutions provider can design a system to meet those goals (whether that system meets the definition of a microgrid or not).

The question of whether you need a microgrid will be determined by different ownership models, geographies, and regulatory systems. Take the case of Duke Energy, a large vertically integrated utility serving customers in multiple US states. It views microgrids very differently than a third-party vendor focused on off-grid applications in the developing world.

Grid or No Grid?

Duke Energy jumped into the microgrid market seeking to build a system with off-the-shelf parts. It succeeded, but learned quite a bit about integration challenges, which led to its efforts promoting interoperability standards. It has since followed a dual path on microgrids, leveraging both its unregulated businesses in partnership with Schneider Electric for a community microgrid under a microgrids as a service business model, but also rate-basing a new microgrid at a National Guard facility in Indiana. For Duke Energy, microgrids are about enhancing traditional grid infrastructure. They can serve as a vehicle to integrate diverse distributed energy resources into its own power grid under a “do no harm” paradigm.

For Optimal Power Solutions, an Australian-based firm active in overseas developing economy markets such as India, Indonesia, and Malaysia, the perspective on microgrids is vastly different. “The term microgrid may be the broadest church of all,” commented Stephen J. Phillips, company founder and a 20-year veteran of deploying off-grid solutions for village and remote commercial customers. He observed that the majority of the 1,800 systems Optimal Power Solutions has deployed were designed to displace diesel burning in remote parts of the world. Today, however, much of its work revolves around “essentially installing an off-grid system that is connected to a standard utility grid.” Case in point are several grid-connected solar PV plus energy storage projects in Japan, including the Nagoya landfill project, designed to make such hybrid systems dispatchable and time-shift stored solar energy after the sun sets.

Latest Regional Trends

The US is the top country in the world in terms of total identified capacity according to Navigant Research’s newly published 13th edition of the Microgrid Deployment Tracker. The US has 6,213.1 MW of capacity across 853 projects. China comes in second place, a country where verifying project data is the most difficult of all countries. Perhaps the biggest surprise, however, is that Saudi Arabia jumps in at 3rd place with the addition of the Saudi Aramco microgrid cluster, a 2.2 GW project at the Saudi Aramco gas-oil separation plant in Shaybah, Saudi Arabia from Schweitzer Engineering Laboratories. This microgrid (technically eight interconnected microgrids operated by a single controller) is likely the largest group of nested microgrids in the world and the largest single entry in the Tracker.

India and Australia round out the top five countries in terms of capacity (see Top 10 figure). Is the Saudi Aramco project really a microgrid? From a controls perspective, the answer is yes. I’ll leave it to others to debate whether there should be a size limit on microgrids.

Top 10 Countries by Total Microgrid Power Capacity, World Markets: 4Q 2017

(Source: Navigant Research)

 

The Growing Role of Energy Storage in Microgrids

— May 23, 2016

GeneratorEnergy storage systems (ESSs) have an important and diverse role in microgrids. Solar PV and other renewable distributed generation (DG) technologies require a voltage source in order to synchronize. This has typically been done with a backup generator; an ESS provides a similar voltage source but without the emissions of a diesel generator. Recent advances in microgrid automation systems, however, have made ESSs less of a necessity in partially renewable-based microgrids. According to industry leader ABB, microgrids with as much as 50% of load coming from renewable sources do not need an ESS. This is 10% higher than previously believed. Despite this, microgrids without some form of storage are not likely to become the norm, as ESSs provide a number of other advantages aside from being a voltage source. Peak shaving, smoothing power flow, and volt ampere reactive (VAR) support are just a few of the supplemental functions an ESS frequently serves. Islanding and black-start assistance further support the case for storage use in renewable DG microgrid systems.

The most recent update of Navigant Research’s Microgrid Deployment Tracker investigated the use of ESSs in microgrids across the globe. According to the report, of the greater than 15 GW of microgrid capacity accounted for in the Tracker worldwide, almost 25% utilized ESS in some form, up from a reported 17.5% of projects in the previous Tracker update in 4Q 2015. This is a result of ESSs being present in over 40% of new project capacity from the most recent update.

The chart below shows the percentage of ESS utilization by microgrid segment for both the 4Q 2015 and the 2Q 2016 Tracker. While ESS utilization grew across all categories, the commercial and industrial (C&I) and utility distribution segments saw the most significant increase, growing 40% and 23%, respectively. C&I microgrids have traditionally been led by diesel combined heat and power (CHP) systems in the past. The jump in energy storage use among microgrids in this segment likely signals a shift to solar PV and other renewable energy use that has a higher need for ESSs.

ESS Utilization by Microgrid Segment, World Markets: 4Q 2015 and 2Q 2016

Adam Wilson Blog

 (Source: Navigant Research)

This is further supported by the fact that solar PV capacity in microgrids grew by almost 840 MW since the last update of the Tracker, an increase more than 5 times greater than CHP capacity growth. The combination of solar PV and ESS is expected to grow in popularity across most segments and regions of the microgrid market. The declining price points of energy storage and solar PV technologies and an increasing focus on renewable sources are largely responsible for this shift. It has also been suggested that the combination of CHP, solar PV, and lithium ion energy storage represents the ideal mix of technologies for microgrids, particularly in the United States.

The high functionality of storage systems along with the growing presence of renewable generation in the microgrid market bode well for the future of ESS. These systems are expected to remain a core technology in the microgrid industry for the foreseeable future.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Finance & Investing, Policy & Regulation, Renewable Energy, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"Energy Storage Microgrids","path":"\/tag\/energy-storage-microgrids","date":"5\/26\/2018"}