Are microgrids the future for utilities?

There’s currently a lot of talk about how we support environmental legislation while balancing a grid under pressure, not to mention how to meet future energy demands. In answering those questions, there are many different solutions being discussed and explored.

In areas such as North and South America specifically, frequent severe weather incidents that bring down grid power for weeks and months, such as last year’s Hurricane Irma, require much more direct and immediate solutions.

And this is where the use of a decentralized grid or microgrids are now not only being trialled for critical backup power, but for some more remote communities, used as mainstream primary power too. For the modern utility business, these solutions are very different, but increasingly viewed as very compelling business models ” and for me, they’re really exciting too.

The compromise for many though has been the continued reliance on polluting and un-environmental diesel generator technology to support these projects. However, there’s now a 100 per cent clean, weather independent solution that’s not only ready to replace diesel generators, but also provide a host of other benefits too ” the modern fuel cell.

What is a microgrid?

If you’re unfamiliar with the microgrid concept, according to the US Department of Energy: “A microgrid is a local energy grid with control capability, which means it can disconnect from the traditional grid and operate autonomously. A microgrid can be powered by distributed generators, batteries, and/or renewable resources like solar panels. Depending on how it’s fuelled and how its requirements are managed, a microgrid might run indefinitely.”

Essentially, a microgrid can backup the grid, or crucially, operate independently. This makes them hugely attractive to local communities wishing to take control of their power generation, as well as rural communities looking for robust and independent electricity supply.

In the continued global shift to renewable energy generation to counter climate change, microgrids enable communities large and small to improve local energy delivery by leveraging the best of green technologies.

Very often, various renewable technologies such as wind turbines and solar panels can be placed within residential buildings, alongside a battery to provide an alternative power source to the grid ” not only providing environmental benefits, but also increasing energy efficiency and cost-savings. However, the performance of renewables is subject to variable weather conditions, which frustrates their ability to provide 100 per cent reliability. à‚ 

And with the ever-increasing consumer demand for power, renewable reliability is possibly one of the biggest challenges that the microgrid market faces today. Added to which, the use of diesel generators to support them is also considered a big barrier.

So, who owns these microgrids? Well, some are independently owned by local communities, some are funded by venture capitalists/investors, and some are embedded and owned by our existing utility providers and islanded off when critical backup is needed.

But crucially, all the evidence suggests that their business models stack-up. Both for local communities looking to reduce energy costs and retain control, but also for utilities looking to diversify, increase energy resilience, add customer value and new revenue streams.

How big is the power problem?

The energy backup issue is significant. According to the US Department of Energy (DOE), the US suffers more blackouts than any other country in the developed world. The DOE also reports that power outages lasting more than an hour are increasing and cost American businesses around $150 billion a year. No small sum ” and, I suspect that the implications of these blackouts are more far reaching than just financial losses.

To help tackle this, microgrids are on the increase and they’re already helping to prepare communities by providing the critical backup power to replace the grid should it go down. And importantly for many, they’re also providing important savings too.

To ensure that microgrids are sustainable and non-polluting, attention has now turned to the use of diesel generators and how to reduce their use or bring about their replacement within these environments ” a previous redline for many.

The answer? The modern fuel cell. In 1969, NASA began using fuel cells in its Apollo program to provide extreme power reliability to sustain life on board its spacecrafts. As you’d expect, the cost of such a technology would prove a significant barrier to widespread use on earth. But in recent years, technology breakthroughs via companies like our own, GenCell, have enabled the cost of fuel cells to reduce and to now compete with traditional power sources ” offering the first viable green alternative to batteries and diesel generators for ultra-reliable, long-duration backup power.

We’re already seeing strong demand from utilities, including long-duration backup solutions for substations. But there are also projects exploring the wider potential of fuel cells for everyday applications in our towns and cities. We’re seeing some pilot projects placing fuel cells in hospitals in North America and Europe to provide backup power for hospital theatres and other critical services. Others are also using fuel cells in high-rise buildings as backup power for elevator systems. Essentially, where power is critical to business or life, there’s now a business case for the modern fuel cell that can offer unparalleled power reliability at an affordable price.

In fact, a compelling incentive comes from the reintroduction of a 30 per cent tax credit for companies investing in renewable energy technologies, which means that the most advanced fuel cells are now more affordable than ever. The Trump administration has been driving this initiative and it will remain for the next three years, significantly reducing the capital expenditure (CAPEX) for utilities looking to introduce the technology within their operations.

Regulating renewables

However, one of the inherent benefits of a fuel cell is its ability to go beyond just power generation, by offering businesses and utilities the capability to also store energy and regulate power flow via an ‘energy bridge’. And for me, it’s this energy storage facility that will further support effective microgrids of the future. Typically, larger microgrids have several sources of power generation, normally including renewable solutions in their mix. But due to varying weather conditions, wind and solar can provide intermittent power ” in steadying this power supply, fuel cells are ideal.

For shorter duration backup, fuel cells are already in use extending the operation duration of existing batteries, recharging them during an outage. But if there’s a more sustained outage, assuming a steady supply of hydrogen, fuel cells can run 24/7 providing uninterrupted power for the SCADA and the breaker operation at the substation. For many substation managers around the world, this capability is very attractive in reducing operational stress, and for many utility bosses, it’s becoming a must have in the fight to reduce costs and increase resilience.

As a modular and scalable technology, additional fuel cells can be added to a microgrid as our energy demands grow. Unlike solar and wind farms that require large spaces of land, fuel cells are also significantly easier to install in urban environments. Producing zero emissions, near silent and with no vibrations, fuel cells can sit outside or inside a building ” so, in the case of hurricanes or severe weather, they can be placed within protected environments and be operational throughout and directly after the incident with no disruption to life-saving power.

In supporting microgrids, fuel cells installed in our towns and cities could essentially become energy timers or boosters. In the future, we expect to see them located at many other public buildings providing critical backup for those locations ” office blocks, data centres, residential high-rises etc. ” but operating in a microgrid environment, those units would be turned on to send emergency energy back to the grid as required.

Barriers to microgrid adoption

So, the case for microgrids is strong and the plans for their adoption is broad. But the reality is, that the speed to which microgrids can be created is often down to how quickly the accompanying infrastructure processes can be improved. So, any progress that can be made to expedite this would make a considerable difference to microgrid deployment.

For those seeking highly reliable power, Microgrids in a smart grid environment have the potential to transform power in areas where grid instability is common. In bringing this about, we anticipate that the modern fuel cell will be the lynchpin in closing the loop on microgrid reliability and its sustainability credentials. What’s more, it seems inevitable that the modern utility will take a leading role in bring this about.

Gil Shavit is President of GenCell. He is a renewable energy expert who works very closely with utility companies and collaborates with the US government’s Renewable Energy Department.

Microgrids will be discussed in detail at POWER-GEN Asia in Jakarta next week. Click here for details and to register to attend.

Combining thermal and electrical microgrids is examined at European Utility Week in Vienna in November. Click here for details.

And microgrids are also explored in detail at POWER-GEN International in Orlando in December. Click here for details and to register to attend.


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