Navigant Research Blog

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.

 

Tesla Announcement Highlights Importance of Energy Storage Partnerships

— June 9, 2015

Boatbuilder_webTesla Motor’s April announcement of stationary energy storage solutions brought an unprecedented level of attention to the burgeoning energy storage industry, benefiting all stakeholders.  Competing products providing storage for residential, commercial, and industrial customers are already on the market, however.

These systems are designed for a variety of distributed energy storage applications—currently some of the fastest growing areas of the global storage market.  Navigant Research estimates that the global installed capacity of residential and commercial energy storage systems will grow from around 246 MW in 2015 to over 10,484 MW by 2024, with lithium ion (Li-ion) expected to account for 58% of total capacity.

The new product launches from Tesla highlight the growing importance of partnerships within the industry.  While Tesla provides a sleek battery module, the company does not offer bidirectional inverters or installation services.  The energy storage ecosystem is comprised primarily of companies like Tesla, with specialized offerings that must seek out partners to offer the complete solutions that customers demand.  (Navigant Research’s recent report Energy Storage Enabling Technologies analyzes the value chain within this industry.)

Tesla has established partnerships to complete their offering and provide storage systems for a range of end-users through channel partners.  The systems will be available through solar PV provider SolarCity, demand response aggregator EnerNOC, and engineering/construction specialist Black & Veatch, among others.  These partnerships each target different market segments, each requiring varying business models and product specifications.  With Tesla’s plans, competition has intensified in the distributed storage market, as several leading companies have recently announced new partnerships to offer similar integrated solutions.

Competition Heating Up

Partnerships are essential for most storage market players: battery manufacturers need supply agreements for their products and system integrators need component suppliers, while software and power electronics providers look for integrators and developers to get their products into complete solutions.

Electrical solutions provider Gexpro recently announced an agreement with battery manufacturer LG Chem, the power conversion provider for Ideal Power, and energy management software vendor Geli to offer a fully integrated battery energy storage systems (BESS) for commercial and industrial (C&I) customers.  This follows similar announcements from LG Chem to provide Li-ion batteries in the Northeast United States through an agreement with energy services company OneEnergy for C&I customers and Eguana for residential customers.

Other notable relationships recently announced include solar PV provider SunPower partnering with storage system vendors Stem and Sunverge to offer BESSs for their C&I solar customers.  Additionally leading Li-ion battery vendor Samsung SDI recently announced supply agreements with GreenCharge Networks, as well as with microgrid developer ABB.

Aside from battery vendors, other companies in the market are establishing similar relationships to solidify their offerings.  Notably, microinverter manufacturer Enphase, which is developing energy storage solutions utilizing their products, recent announced an agreement with battery vendor ELIIY.

Coming into Focus

While supply agreements and distribution partnerships have been developing in the stationary storage market for some time, more recent announcements targeting C&I customers are increasingly important.  In this segment it is crucial for companies to offer integrated solutions that are easy to operate and quick to install.  As a result, leading companies are joining forces to combine their specialties into the most effective offering.  We explore these relationships within the energy storage ecosystem through various reports including the recently published Navigant Research Leaderboard Report: Energy Storage System Integrators and an upcoming Leaderboard Report on lithium ion grid storage.

 

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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