Navigant Research Blog

Off-Grid Markets Foster New Microgrid Business Model Innovation

— April 29, 2016

Power Line Test EquipmentMicrogrids are being developed in mature industrial markets such as the United States to provide premium, high-quality clean power to a broad array of customer segments. Even more dramatic creativity is occurring on the business model front in developing world markets such as India, Africa, and Iraq. Here are three companies moving the needle in terms of technological advances fueling new creative ways to control, finance, and implement microgrids.

SimpliPhi

The first company is SimpliPhi Power, which got its start in 2002 developing off-grid portable power systems for Warner Brothers and Disney film shoots. The company’s portable power units, called LibertyPaks, were used in locations as diverse as the Amazon and New York City. The company then found a home for its technology with the Marine Corps in forward operating bases in Afghanistan and Iraq, relying upon lead-acid batteries and diesel generators optimized to reduce fuel consumption and save lives.

SimpliPhi has significantly upgraded its technology offering over time. The company now focuses on sophisticated power electronics embedded in its smart inverters to integrate distributed solar PV panels with non-toxic lithium ferrous phosphate batteries, which offer a thermal energy profile that does not require cooling and which reportedly outperformed Tesla’s Powerwall in a head-to-head competition. A school in Tanzania shows an example of the company’s typical installations in the developing world. Perhaps SimpliPhi’s most unique business model is its reliance upon an open source, plug-and-play, low-voltage 48-volt direct current (DC) power network, making its microgrids a nice fit with low-voltage grids throughout the developing world. Few other companies focus on such low-voltage microgrids.

SparkMeter

The second company I’d like to reference is SparkMeter, which has a smart meter offering that puts most advanced metering infrastructure (AMI) deployments by U.S. utilities to shame. Lower in cost than the majority of competing metering options and with robust functionality, the combination of hardware and cloud-based interface provides real-time monitoring and adjustments to voltage and frequency issues. SparkMeter offers a platform that that was designed for the off-grid environment, but which can also be deployed in centralized grids. A mobile money or cash-based prepayment system is also integrated into the microgrid platform, allowing vendors to insure cash flows vital to sustainable business ventures in key microgrid markets such as India. The company validates that smart metering is even more important in an off-grid operating environment than in developed economies. Why? In emerging economies, small amounts of electricity are consumed by large numbers of customers with little annual income. It is this kind of technology that is key to making any bottom of the pyramid (BOP) energy access strategy work.

Powerhive

Last, but certainly not least, is Powerhive. With recent investments by the likes of the investment arms of French oil giant Total Energy Ventures and diesel generator manufacturer Caterpillar Ventures, the company has announced plans to develop 100 microgrids serving 90,000 people without electricity. These systems will aggregate up to approximately 1 MW. With plans on the boards for microgrid portfolios that could top 500 MW over the long term, a key to the company’s success has been a pay-as-you-go business model that, like SparkMeter, depends upon mobile phone payment options. Powerhive’s Honeycomb remote monitoring system underpins the pay-as-you go strategy that it first deployed in 2011, which has now emerged as the primary business model for BOP deployments around the world.

All three of these companies highlight the innovation required to create viable sustainable energy projects. How can these lessons be applied to microgrid markets in the developed world?

 

Arctic Circle Is Hot Spot for Renewables Innovation

— March 2, 2016

GeneratorThe market opportunity for remote, off-grid power is immense, as verified in a report released late last year sizing this market (including projects that meet Navigant Research’s definitions of both nanogrids and microgrids). According to this analysis, the total value of the assets and services that could flow into this huge global market over the next 10 years could reach more than $200 billion.

As was reported in a previous blog, one could make the argument that Alaska, sitting within the Arctic Circle, is a global leader on remote microgrids, with almost 140 such systems representing over 900 MW of capacity identified in the most recent version of Navigant Research’s Microgrid Deployment Tracker. The vast majority of these remote microgrids incorporate some level of renewable energy. In fact, Kodiak Island reached nearly 100% renewable energy generation during 2014. Several local utilities have set goals ranging from 70%-80% renewable penetration within the next 5-7 years.

It turns out innovation on renewables and remote microgrids is not limited to Alaska. The Alaska Center for Energy and Power (ACEP) is co-leading a new program to be launched this summer for countries whose borders venture into the Arctic Circle. Dubbed the Arctic Remote Energy Network Academy (ARENA) program, this program is a formal project under the U.S. Chairmanship of the Arctic Council, with four of the eight council countries co-leading so far, including Canada, Finland, and Iceland, along with the United States (Alaska). This program is designed to bring together practitioners from throughout the Arctic to learn from one another with the goal of increasing the number of hybrid-renewable energy systems installed across the region. “ARENA is focused on the Arctic now, but we are hoping to expand it to other regions in the future, if we are able to find some partners,” said Gwen Holdmann, ACEP director.

Forefront of Climate Change

As a region, the eight countries representing the circumpolar Arctic are at the forefront of climate change, as measured and expected temperature increases are significantly higher than the national average. Impacts like diminishing sea ice and coastal erosion are becoming common challenges for these frigid and remote communities. However, the Arctic region is also leading the way when it comes to renewable energy development. ACEP estimates that 60% of grid-connected communities across the Arctic produce power from renewable resources (compared to a global average of 22%), including:

  • Finland (39%, biomass)
  • Sweden (48%, hydropower, biomass)
  • Norway (99%, hydropower)
  • Iceland (100%, geothermal, hydropower)

However, approximately half of the populations residing within the Arctic are not connected to a traditional power grid. Instead, they rely on remote microgrids to provide electric power services. This increases the complexity of integrating renewables, particularly at high penetration levels. These systems are among the most sophisticated engineering marvels in the world, providing energy services that are often a matter of life and death.

Countries throughout the Arctic are actively investing in renewable resource development. Perhaps the most fascinating data points come from Russia, a country not often linked with a focus on sustainability. The project pipeline in the country totals over 800 MW of remote microgrid capacity designed to displace pure diesel capacity with some renewables. Last year, a modest 15 MW of wind and solar capacity was brought online by RAO Energy Systems of the East, the state-owned utility that serves parts of Russia within the Arctic Circle. Those numbers are expected to scale up dramatically in the near future, with some 178 distinct projects in the works. At present, Russia also has the largest solar PV array located within the Arctic, a 1 MW system at Bagaday.

 

Blog Articles

Most Recent

By Date

Tags

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

By Author


{"userID":"","pageName":"Off-Grid Power","path":"\/tag\/off-grid-power","date":"12\/16\/2017"}