The concept of microgrids has gained traction worldwide as an innovative solution to enhance energy resilience and reliability. Amidst the growing concerns over climate change and the drive to promote renewable energy sources, microgrids play a pivotal role in building an efficient, sustainable, and resilient power grid system. This growing market trend in microgrid technology is a testament to the increasing recognition of the role of microgrids in energy resilience.
A microgrid is a localized group of electricity sources and loads that normally operates connected to and synchronous with the traditional centralized grid (macrogrid), but can also disconnect and function autonomously as physical and/or economic conditions dictate.
Microgrids and Energy Resilience
One of the most compelling aspects of microgrids is their potential to enhance energy resilience. Energy resilience is the ability of an energy system to recover quickly from disruption and ensure a continuous supply of energy.
Microgrids, by their nature, are physically closer to end-users, which reduces energy transmission loss. Moreover, they can operate independently from the main grid, providing backup power and maintaining vital services during major outages caused by severe weather or other disturbances.
Microgrids and Energy Reliability
Energy reliability refers to the consistent availability of energy. In the context of electricity, reliability could mean the avoidance of blackouts or brownouts. Microgrids contribute to the reliability of power supply in several ways.
Microgrids are often composed of diverse energy sources, including renewable energy and conventional generators, enhancing the reliability through diversification. Advanced energy management systems within microgrids can optimize the use of different energy sources, further enhancing reliability.
Types of Microgrids
Microgrids can be categorized into several types based on a variety of factors including ownership, source of power, and operational mode. Here are the main types of microgrids:
- Community Microgrids: These are typically owned and operated by the community members themselves, serving multiple buildings within a localized area. Community microgrids are designed to balance local energy demand and supply, and often include a mix of distributed energy resources.
- Institutional or Campus Microgrids: Institutional or campus microgrids are often found in universities, colleges, or hospitals. They are designed to provide power to the buildings within these institutions. They are generally owned by the institution itself and can help ensure a reliable energy supply to critical infrastructure.
- Commercial or Industrial Microgrids: These microgrids are typically owned by a private entity and used to ensure reliable and cost-effective energy for industrial processes or commercial facilities. They can operate independently from the grid, providing business continuity during power outages.
- Military Microgrids: Military microgrids serve military bases to provide reliable and secure energy, crucial for maintaining operations even during grid failures or cyber-attacks. They often utilize a mix of energy sources, including renewables, to enhance energy security.
- Remote or Island Microgrids: Remote or island microgrids serve isolated communities that are not connected to the main grid, often in remote geographical locations. These microgrids rely heavily on local energy sources, often renewable, such as solar or wind.
- Utility or Public Microgrids: These microgrids are owned and operated by utilities. They are often used to enhance grid reliability and resilience, provide power during outages, and integrate renewable energy sources into the grid.
- Hybrid Microgrids: Hybrid microgrids incorporate a combination of different power sources, including renewables, diesel generators, and battery storage. They provide a flexible and efficient energy solution, especially useful in areas with intermittent renewable energy supply.
Each of these types of microgrids is designed to meet specific energy needs and conditions. The choice of microgrid type depends on factors such as the availability of resources, the specific energy requirements, the level of desired autonomy, and the budget.
The Economics of Microgrids
In recent years, the economics of microgrids have become increasingly attractive. This is in part due to the falling costs of renewable energy sources such as solar PV and wind, and the advancements in energy storage technologies, particularly lithium-ion batteries.
These trends, combined with the desire for energy resilience and reliability, have been major driving forces behind the growing market of microgrids. Microgrids can help mitigate the financial impacts of energy disruptions, as they provide a steady and reliable power supply. Moreover, they also allow communities and businesses to save on their energy costs by reducing demand during peak price periods.
A case in point is the Brooklyn Microgrid project in New York, which, besides providing resilient power, has also created a local marketplace for renewable energy transactions.
Microgrids and Sustainability
The role of microgrids extends beyond just energy resilience and reliability. They are also critical components of the global effort to reduce greenhouse gas emissions and transition to a sustainable energy future.
Microgrids often integrate multiple types of distributed energy resources (DERs), such as solar PV, wind energy, and energy storage systems, which not only provide local and reliable power but also help in reducing carbon emissions.
As the technology and regulations evolve, microgrids are becoming a viable solution for a range of applications – from powering remote communities and critical facilities like hospitals and military bases to supporting the electric vehicle charging infrastructure.
Microgrids: Bolstering Stability Amid Disasters
In the wake of recent natural disasters, such as hurricanes and wildfires, microgrids have emerged as a key solution for maintaining electricity supply when the traditional grid is compromised. Their ability to isolate from the main grid during a grid outage and continue to supply power to critical services makes them an essential component of disaster preparedness.
For instance, during Hurricane Sandy in 2012, the microgrid at the New York University campus was able to keep its lights on while most of the surrounding area was in the dark. This demonstrated the effectiveness of microgrids in ensuring energy reliability during extreme weather events and underscored the importance of investing in such technologies for resilience.
Regulatory Landscape and Future of Microgrids
The growth of the microgrids market is also influenced by the regulatory landscape. Policymakers are beginning to recognize the value of microgrids and are enacting policies to facilitate their development.
For instance, in California, the passing of SB 1339 mandated the state’s utilities to develop standardized processes for the interconnection of microgrids. This regulatory support is crucial in propelling the adoption of microgrids and contributing to a more resilient and reliable energy infrastructure.
Looking towards the future, advancements in technologies like artificial intelligence, machine learning, and the Internet of Things (IoT) are expected to drive the next wave of microgrid development. These technologies can enable more sophisticated control and optimization of microgrid operations, further enhancing their resilience and reliability.
Microgrids Around the Globe: A Glimpse
Around the world, numerous countries and regions have recognized the potential of microgrids and have taken steps to foster their development. For instance, in the United States, the Department of Energy’s Microgrid Research and Development program is pioneering advancements in microgrids technology.
In Asia, Japan leads the way with several microgrid projects in operation, especially after the Fukushima disaster emphasized the importance of energy resilience. Meanwhile, in Europe, the EU’s Smart Grid Task Force is actively promoting the integration of microgrids into the continental power system.
The expanding interest in microgrids worldwide is a testament to their promise in enhancing energy resilience and reliability in an increasingly complex and demanding energy landscape.
Benefits of Microgrids Technology
The benefits of microgrids are numerous, ranging from greater energy independence, increased energy efficiency, and potential for local economic development.
- Enhanced Power Reliability: Microgrids can operate independently of the main grid, ensuring a consistent supply of electricity even during grid outages. They are designed to seamlessly switch from grid-connected mode to ‘island mode’, providing a continuous power supply and enhancing reliability.
- Improved Energy Resilience: Given their capacity to function independently, microgrids can significantly improve energy resilience, especially in times of natural disasters or grid instability. They can serve as reliable energy sources during power outages and help minimize the impact of outages on critical facilities like hospitals or data centers.
- Greater Energy Efficiency: Microgrids often involve localized generation and consumption of power, reducing transmission losses that occur when electricity is transported over long distances. By integrating renewable energy sources and utilizing advanced control technologies, they can optimize energy usage and improve overall efficiency.
- Lower Carbon Emissions: Microgrids can incorporate renewable energy sources such as wind, solar, or hydro power. This local generation of renewable power helps in reducing carbon emissions and promoting sustainable energy practices.
- Cost Savings: By allowing consumers to generate their own power and sell excess energy back to the grid, microgrids can lead to significant cost savings. Also, during periods of high electricity prices, microgrids can switch to island mode and rely on stored power or local generation to avoid or reduce high energy costs.
- Grid Support: Microgrids can contribute to grid stability by supplying excess power back to the main grid. During peak demand times, this can help reduce stress on the grid and prevent blackouts.
- Energy Security: For military bases or remote communities, microgrids offer the ability to maintain a secure and self-sufficient energy supply, free from disruptions that could affect the broader grid.
- Local Economic Development: Microgrids can stimulate local economies by creating jobs related to the installation, maintenance, and operation of the microgrid system. They can also make local businesses more competitive by reducing energy costs and improving power reliability.
- Grid Modernization and Innovation: Microgrids serve as testbeds for innovative technologies like advanced controls, energy storage, and demand response, which can help modernize and improve the overall electricity grid. They can pave the way for a more decentralized and digitized power system.
Leading Companies in the Microgrid Business
Several innovative companies have established themselves as leaders in the growing microgrid market. Here’s a look at a few of them.
Schneider Electric
Schneider Electric, a France-based global specialist in energy management and automation, has made significant strides in the microgrid market. The company offers advanced microgrid solutions, enabling the integration of renewable resources and improving grid resilience.
Recently, Schneider Electric announced a partnership with Huck Capital to develop and operate solar power microgrids for commercial and industrial buildings across the U.S. This initiative is expected to catalyze the decarbonization of the building sector, contributing to the fight against climate change.
According to their 2022 Annual Financial Report, Schneider Electric posted revenues of €34 billion, up by 18.2%.
ABB
ABB, a Swiss-Swedish multinational company operating mainly in robotics, power, heavy electrical equipment, and automation technology areas, is another key player in the microgrid sector.
In recent news, ABB has collaborated with SUSI Partners, a Swiss investment advisor, to implement a microgrid and storage solution project in Maricunga, Chile, to support renewable energy development in the region. This will significantly contribute to the region’s power resilience.
ABB’s latest financial data show a revenue of $29.4 billion and changed by 12% for the fiscal year 2022.
Siemens
German engineering conglomerate Siemens has been an active participant in the microgrid market, offering solutions through its Digital Grid and Smart Infrastructure business units7.
Siemens recently announced its involvement in the development of a microgrid at London’s Moorfields Eye Hospital, designed to ensure reliable power and reduce the hospital’s carbon footprint8.
Siemens’ Annual Report 2022 shows revenues of €72.0 billion, increased by 8.2% and a net income of €4.4 billion.
Hitachi
Japan’s Hitachi provides comprehensive solutions for microgrids, integrating renewable energy, storage devices, and power controls. Recently, Hitachi ABB Power Grids has been selected to deploy its innovative energy storage solution to support the development of Singapore’s first Virtual Power Plant.
In the fiscal year 2022, Hitachi reported revenues of ¥10.8 trillion, with a net income of ¥703 billion (approximately $4.6 billion)12.
The Future of Energy Resilience and Reliability: The Role of Microgrids
The role of microgrids in promoting energy resilience and reliability is increasingly gaining attention. Microgrids technology advancements, driven by the push for low carbon footprints and sustainable energy solutions, are playing an essential role in shaping the future of energy resilience and reliability.
The growing market of microgrids underscores the vital role this technology plays in enhancing energy resilience and reliability. As microgrids technology continues to evolve, it is anticipated to be a game-changer in the energy sector, contributing significantly to creating sustainable and reliable energy systems for the future.