The rise of the microgrid

Microgrids are delivering major benefits to utilities and companies across a wide range of applications all over the world.

Microgrids are small, self-sufficient power grids that serve a self-contained, often isolated entity such as an island, a remote rural community, a university campus, military base, industrial site, mine or municipality. The microgrid can draw power from or supply power to the main grid or it can operate in ‘island-mode.

Remote communities and industrial complexes traditionally rely on dieselbased generation. The emergence of renewables like wind and solar power has brought opportunities for these users to significantly reduce fuel consumption and CO2 emissions.

Additionally, microgrids can protect consumers from the outages caused by natural disasters like hurricanes and superstorms; they are ideal for rural electrification and access to electricity programs in developing countries; and, the technology needed to make microgrids feasible for everyday use, such as power storage and stabilization, is now available and commercially viable.

The benefits of the microgrid

Microgrids have the potential to deliver numerous benefits:

  • Providing power to remote areas: there are many parts of the world that cannot be reliably supplied by the existing grid infrastructure. For example, a remote mining operation or an island separated from the mainland may not be able to access the main grid at all.
  • Hedging against rising fuel costs: remote areas are often characterized by high fuel costs driven by transportation costs. Introducing renewable energy with zero fuel cost can reduce power generation operating costs significantly. This applies to all industries and communities located in remote areas.
  • Reliability: when the main grid loses power, the microgrid can switch to island mode. As long as there is an adequate source of power at the local level (diesel generator, wind turbine, fuel cell, photovoltaic solar power, etc), the electricity continues to flow in the microgrid while the rest of the community is enveloped in darkness.
  • Meeting renewable targets: many countries have ambitious renewable energy targets. Microgrids allow utilities and companies to make pragmatic investments in renewable energy. Microgrids are particularly suited for multistage development projects, permitting the easy addition of renewable power generation units as and when they are needed.
  • Improving security: utilities and governments need to find ways to protect the grid from natural disasters as well as physical sabotage.Any prolonged disruption of power, regardless of the cause, represents a threat to security and economic stability.
  • Grid stability: technology advancements in grid stabilization and energy storage have addressed the risk to grid stability from high penetration of intermittent renewable energy. By rapidly absorbing power surges from the renewable
    energy source, or by injecting power to make up for short-term lulls, a stable voltage and frequency can be maintained in both the microgrid and the main grid.

Offsetting costs

Like any capital project, implementing a microgrid involves an investment in infrastructure, including the power sources and the technologies needed to manage and connect the microgrid to the main grid.

The capital outlay required for a microgrid, however, is often much less and payback is significantly faster than other initiatives to improve the availability and reliability of electricity. A number of other factors help offset the cost of a microgrid:

  • Greater fuel choice: solar and wind power are ‘free of charge’ fuels and can significantly reduce operational expenses. While wind turbines and diesel generators are probably the two most common sources of power for established microgrids, natural gas, solar, fuel cells and biomass are all becoming increasingly feasible.
  • Lower cost of power losses: as much as 6-10 percent of energy is lost in transmission and distribution. Microgrids are local and the power consumed has less distance to travel to the consumer.
  • Additional revenue streams: in some regions, energy markets allow microgrid operators to sell the excess power generated. In addition, the heat generated from the source powering the microgrid can be used to create an additional revenue stream. For example, steam might be used to power up additional generators, or hot water could be used for absorption
  • Flexibility and scalability: finally, the capital expenditure can be spread over several years: the technology allows for the microgrid to develop in stages, adding more generation as needed over time.

Implementing a microgrid

Setting up a microgrid is much simpler than building a new coal-fired power plant or nuclear power station. Even so, several steps need to be followed during planning and implementation to ensure maximum efficiency and reliability. 

  1. Conceptualizing: this is perhaps the most important step for any microgrid project. Project leaders need to define and prioritize objectives. They need to ask questions such as:
    – What is our main objective and what are our secondary objectives: Increasing renewables? Self-sufficiency during times of power disruption? Decreasing the cost of energy?
    – What are our targets? For example, if the main goal is to increase the amount of energy supplied by renewable sources, which sources? By when? By how much?
    – What are our budget constraints?

  2. Modeling: the goals set in step one will determine what the microgrid needs to succeed. For example, if the primary goal is to decrease reliance on the central grid by adding a solar array or wind turbines, the microgrid will need to address stabilization and possibly storage as well.

    At this stage, it is important to involve experts like ABB who have experience in helping organizations meet their goals with microgrid technologies. These experts can help design the microgrid and use sophisticated forecasting tools to determine whether the microgrid, as designed, is likely to hit targets.

    Financial modeling is another important part of this step. ABB experts help customers work out the many 'what if' scenarios involved, determining the best mix of energy sources and balancing goals against budget and timelines.

  3. Deployment: at this stage, all the pieces of the microgrid solution start to come together. However, most microgrid projects are multi-year initiatives and involve the building of some basic infrastructure, such as additional power sources.

    Working with a company like ABB that provides these solutions and can act as a single point of contact throughout the life cycle of the project can help ensure success.

  4. Stabilization: During the final phase, solutions guaranteeing the highest degree of grid reliability are deployed to integrate renewable energy sources and meet load demands and energy requirements.


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