Microgrids Are Everywhere

Oct. 23, 2015
The key to the future of the grid is understanding microgrid technologies.

The more complicated the system, the easier it is to break. If that is not a correlation to Murphy’s Law, it should be, and the T&D industry could be the poster child for it. The electric grid has been supersized to the point it is groaning under its girth. Increased demand for more and better quality power has pushed the grid to its limits in both size and complexity.

What started out simply as regional islands of interconnected power networks has morphed over time into what the U.S. National Academy of Engineering described as the “most complex machine ever developed by humankind.” This mega grid is a marvel of interconnectivity that supplies a mind-boggling amount of electricity, but the magnificent machine is not what it used to be. With its architecture of large centralized generation plants and reliance on a spiderweb of T&D lines to supply consumers, the mega grid lends itself to outage difficulties.

According to the U.S. Department of Energy (DOE), a modernized master smart grid would go a long way to solving today’s mega-grid-related problems. However, the obstacles of implementing this master technology solution are plenty, ranging from regulatory approval to an enormous estimated price tag. It is doubtful a super smart grid will be deployed quickly. A more reasonable strategy has risen on the global radar in the last few years: microgrids.

A microgrid has a group of distributed generation with control devices, a method to disconnect from the utility grid and a localized load. Courtesy of Siemens.

What Is a Microgrid?

It should be an easy task to define a microgrid, but it is not. The definition has become a bit hazy in many people’s minds because some promoters of microgrids have been using applications to define the technology rather than the other way around. Fortunately, the International Council on Large Electric Systems (CIGRE) has developed a definition gaining traction within the industry.

According to CIGRE, “Microgrids are electricity distribution systems containing loads and distributed energy resources (such as distributed generators, storage devices or controllable loads) that can be operated in a controlled, coordinated way either while connected to the main power network or while islanded.”

Using the CIGRE definition, the Microgrid Institute suggests applications can be classified into one of four main categories:
• Off-grid — A microgrid that is not connected to a local utility network, such as an island.
• Campus — A microgrid that is fully interconnected with the local grid but can maintain some level of service in isolation from the grid, such as a university or corporate campus
• Community — A microgrid that is integrated into the utility network, serving multiple customers within the community. It is a cluster serving a group of customers.
• Nano grid — The smallest microgrid network with the capability of operating independently, such as a single building.

Combining the CIGRE definition with the Microgrid Institute’s categorization provides the order needed to keep everyone on the same page. These microgrid systems have capacities and capabilities defined by customer requirements. Looking under the technology’s hood, one can see a microgrid consists of components such as a controller (centralized or decentralized, depending on the design), some distributed generation sources, a fast separation device (breakers), a high-speed communications system and some local loads.

The controller performs dynamic control over the system. It is responsible for regulating power production and consumption within the microgrid’s boundaries (that is, the energy management system). It also performs actions such as grid synchronization, system protection, cybersecurity, load shedding and ancillary services to the grid. The controller closely monitors the interconnection with the central grid and, when called to, can seamlessly transition from parallel operation with the central grid to island mode.

The distributed generation portion of the microgrid system supplies electrical power to the protected loads. These sources can range from fossil-fuel-operated resources such as diesel and natural gas generators to renewable-driven microturbines, fuel cells, solar photovoltaics (PV) and wind turbines. With the appropriate systems in place, microgrids also are expected to participate in energy markets one day.

Annual microgrid revenues for world markets 2011-2017. Courtesy of Pike Research.

Why the Interest in Micogrids?

The size of the load varies depending on the microgrid customer, but numbers today are definitely pushing the market out of its pilot project demonstration phase. Frost & Sullivan released a report earlier in 2015 predicting the rapid growth in microgrids over the next five years will redefine this segment of the marketplace. It also noted the landscape will be very dynamic with utilities, municipal governments, public power, energy management companies, independent power producers, municipal utilities and independent transmission utilities being among the major players deploying microgrids.

Part of the driving force behind this interest is the negative impact of extended power outages on the economy. Other drivers include fuel-cost savings, carbon footprint reduction and fuel independence. In some countries, even social drivers are playing a role, such as increasing the rate of electrification by deploying microgrids in rural areas. However, power outages remain the chief motivating influence.

The World Bank confirmed this when it published a survey on the global influences electricity outages are having on the world economy. In the category of all countries, it reported the number of electrical outages in a typical month is 6.4 with a duration of typically 2.7 hours. It estimates the average monetary loss as a result of these outages is approximately 4.7% of a country’s annual sales.

To put those figures in perspective, a recent GE report estimates power interruptions cost businesses in the European Union about 150 billion euros annually. The DOE estimates the cost of power-related outages to the U.S. economy is approximately $150 billion in damages annually.

Eaton publishes a Blackout Tracker Report each year. In a recent report on 2014 activities, Eaton noted the U.S. experienced 3,634 outages affecting 14.2 million people, an increase of 12% over 2013.

Amazingly, the DOE reported 90% of all electrical outages take place on the distribution system in the U.S. This means of the 3,634 outages in 2014, about 3,270 of them were experienced on the distribution system. With these numbers, it becomes clearer why microgrids are attracting so much attention in North America and elsewhere.

Several years ago, the Electric Power Research Institute (EPRI) identified the sectors particularly sensitive to power outages. EPRI found the digital economy, continuous process manufacturing sector and essential services were vulnerable to power-supply interruptions. These are segments where microgrids can provide relief by eliminating outages and their economic impact completely.

Worldwide, the market for microgrids is growing substantially. Courtesy of Navigant.

Extreme Weather Brings It Into Focus

Although there are many causes for power-supply interruptions, the DOE estimates severe weather is the single leading cause of power outages in the U.S. The agency says severe weather and, correspondingly, power outages are increasing.

Superstorm Sandy focused everyone’s attention on microgrids when it turned out the lights on approximately 8.5 million people in the northeastern U.S. Microgrids provided isolated islands of electricity and heat when the utility grid was devastated, which did not go unnoticed. Stories about hardships the population endured were punctuated by reports of plentiful power where microgrids existed.

In the months following Superstorm Sandy, a joint report was published by the DOE, the Department of Housing and Urban Development, and the Environmental Protection Agency. The report provided examples of how microgrid technology enabled some critical infrastructure to continue operation when the electric grid went down.

The report described a large housing complex in the Baychester section of the Bronx, New York, that had power and heat from a 40-MW system until the grid was restored. Similarly, Princeton’s 11-MW microgrid provided power to portions of its campus in Princeton, New Jersey, during the crisis. The U.S. Food and Drug Administration’s White Oak research facility had power from its on-site generation for two and a half days, and other microgrids flourished, as well.

Many of these microgrid systems were powered by a distributed generation technology referred to as combined heat and power (CHP), also known as cogeneration. The joint report pointed out that CHP allows these segments to function with greater resiliency during and after a storm. The agencies said CHP has proved its value as an alternative power source repeatedly for many years.

Frost & Sullivan reported the CHP marketplace for 2012 was evenly distributed among North America, Europe and Asia-Pacific sectors, but marketing research shows North America is the current leader for overall microgrid installations.

A Navigant Research report stated worldwide microgrid capacity had increased to more than 12,030 MW by the end of second quarter 2015. The report said roughly 66% of this capacity is installed in North America alone. Future predictions by GTM Research projected an increase of about 1,843 MW of microgrid capacity in North America by 2017.

Another Navigant report focused on the sales of microgrid systems worldwide. The Navigant report predicted sales of microgrid technology will grow globally from the $4.3 billion spent in 2013 to nearly $20 billion by 2020. The report also stated, “Under a more aggressive scenario, revenue could reach $36.2 billion annually.”

In a press release from Navigant, Peter Asmus, a principal research analyst, said, “Microgrids are inching their way into the mainstream ... The number of companies active in the space, and the range of applications of microgrids, are growing

Remote islands like the island of Faial in the Atlantic Ocean are microgrids in themselves. They are adding more wind generation to their power mix, and that is causing problems with the power supply. Courtesy of ABB.

Helping the Environment

Not only do microgrids provide security, resiliency and reliability by adding a renewable energy component, they do so in an environmentally friendly manner. Thanks to the dropping prices of PV, panels and inverters have made rooftop solar installations grow exponentially in solar-rich environments. Aggregating these small local PV resources enables microgrid-controlled large blocks of renewable generation to be connected to the central grid, thus becoming a demand-response resource.

RnR Market Research released “The Global Microgrid Market for 2015-2020” report with forecasts of the microgrid marketplace. The report estimates the microgrid industry will grow at 18.72% compound annual growth rate (CAGR) in terms of revenue and 17.29% CAGR in terms of microgrid installed capacity over the period of 2014-2019.

The report also identified the major manufacturers operating in the microgrid enabling technology marketplace: ABB, GE Digital Energy, Siemens, S&C Electric, Lockheed Martin, Bosch, Schneider Electric, Chevron Energy, Echelon, General Microgrids, Microgrid Solar, Pareto Energy, Power Analytics, Spirae and Viridity Energy. With players such as these manufacturers, it really shows how the technology is no longer a niche area for shade-tree enterprises of yore.

The Role of Energy Storage

By adding energy storage to the mix, microgrids are improved further. Storage stabilizes the microgrid by providing a very fast response to power-delivery needs. It also enables the microgrid’s energy management system to drive optimization by allowing load management assets to vary based on factors such as demand and cost.

A storage component also firms the power output, making it dispatchable. Time shifting the load profiles is possible, too, which aids in demand management when a microgrid has an energy storage component.

RnR Market Research also recognized microgrids with storage capability as a potentially important player in this marketplace. Its companion report on “The Global Energy Storage for Microgrids Market 2014-2018” forecasts the microgrid storage market will grow at a CAGR of 19% from 2013 through 2018. The report identifies the storage technologies as advanced lead-acid batteries, advanced Lithium-ion batteries, flow batteries, sodium-metal-halide batteries and flywheels.

As in the first RnR Market Research microgrid report mentioned, the research firm identified the following companies as important manufacturers in this technology in its companion report, as well: ABB, EnStorage, NEC, S&C Electric, GE Digital Energy, Toshiba, Ampard, Greensmith Energy, Aquion Energy, Green Energy Corp., Raytheon Co. and Sunverge Energy.

Microgrid technology can be used for energy management when connected to the utility grid and provide power when islanded. Courtesy of Siemens.

Turning the Corner

The future grid is going to include microgrids installed on the utility’s grid, supporting industrial loads and providing power to residential customers. Microgrids and their component costs are dropping. Efforts are being made to standardize microgrids, thereby easing their integration into the power-delivery system. Regulatory groups, utilities and the public have seen the benefits of a strong resilient grid reinforced by microgrid technology. As a result, the industry’s emphasis on microgrids is shifting from demonstration projects to deployment.

Microgrids also are being seen as environmentally friendly, as renewable resources such as PV and wind are added to their generation capabilities. By adding a CHP component, the efficiency of a microgrid increases to roughly 80%.

Energy storage is improving the demand-response capabilities of a microgrid, thereby helping to reduce system loads during critical peak conditions. It also improves renewable dispatchability. With all these benefits, it is easy to see why the worldwide microgrid market is developing so rapidly. Superstorm Sandy and other extreme weather events have been hard to endure, but they had a silver lining by putting pressure on the industry to accelerate the use of technologies like microgrids and all their components.

About the Author

Gene Wolf

Gene Wolf has been designing and building substations and other high technology facilities for over 32 years. He received his BSEE from Wichita State University. He received his MSEE from New Mexico State University. He is a registered professional engineer in the states of California and New Mexico. He started his career as a substation engineer for Kansas Gas and Electric, retired as the Principal Engineer of Stations for Public Service Company of New Mexico recently, and founded Lone Wolf Engineering, LLC an engineering consulting company.  

Gene is widely recognized as a technical leader in the electric power industry. Gene is a fellow of the IEEE. He is the former Chairman of the IEEE PES T&D Committee. He has held the position of the Chairman of the HVDC & FACTS Subcommittee and membership in many T&D working groups. Gene is also active in renewable energy. He sponsored the formation of the “Integration of Renewable Energy into the Transmission & Distribution Grids” subcommittee and the “Intelligent Grid Transmission and Distribution” subcommittee within the Transmission and Distribution committee.

Voice your opinion!

To join the conversation, and become an exclusive member of T&D World, create an account today!