The microgrid market is just beginning to enter into the early stages of formation. A number of companies have certain specialties and capabilities of what it takes for a full turnkey microgrid solution. However, given the complexity of microgrids — especially when all microgrids are different and there’s no “one-size-fits-all” microgrid — the development of full turnkey microgrid solutions will be accomplished by businesses working together, discovering how their unique specialties and capabilities align together and complement each other to provide a full microgrid solution.
Currently, finding funding and establishing economic feasibility for the development of a microgrid seems to be challenging. Despite declining costs in many technologies, including solar PV and battery storage, the totality of deploying a microgrid can be costly, even with economy-minded designs and grant money. The price tag to develop a microgrid will become more economically feasible as technologies continue to develop and decline in cost, and the proliferation of microgrids will increase as more companies, businesses, and utilities invest in microgrids for their reliability and resiliency.
Although these two topics are seen as important factors for microgrids, especially for most large power users, it can be difficult to quantify those factors from an economic standpoint. Consider the numerous natural disasters such as Hurricanes Harvey, Irma, and Maria, the California wildfires, and events such as the 11-hour power outage at Hartsfield-Jackson Airport that occurred in December 2017. What economic losses could have been prevented with a microgrid, due to things like customer satisfaction and revenue loss?
For a glimpse of what this can look like, Delta Airlines CEO is looking to the city of Atlanta for $50 million in losses due to the Hartsfield-Jackson Airport power outage. That’s one company’s financial losses in just 11 hours. That doesn’t include the future impact(s) this outage could cause, or the losses of other airlines and businesses that were affected. To prevent economic losses from natural disasters and other events, the need for solutions such as microgrid adoption is clear.
Despite these recent natural disasters and events, it will take time for utilities to view microgrids as a solution rather than a loss of revenue. There are utilities who have adapted to microgrids and are setting great examples of how utilities can incorporate microgrids into their power plans, such as California’s Hunters Point Community Microgrid Project and Florida’s Gainesville Regional Utilities and a local health provider’s partnership, but more education and examples are necessary to help the majority of utilities see how microgrids can benefit them and drive this trend. Prosumers will also have a large influence as they continue to push for better countermeasures regarding natural disasters and power outages such as the inclusion of microgrids in power plans.
One imperative factor for microgrid adoption in power plans is having a universally understood definition of a microgrid. To better understand a potential microgrid customer’s needs and fundamental knowledge, we ask several key questions: Do you need to be able to go into island-mode? For how long? What’s your critical vs. non-critical load? What’s your business objective? What are you trying to achieve?
Understanding the customer’s business objective is key to helping them find what they need. Some customers may think they need a microgrid, but after asking some questions, they may only require some Distributed Energy Resource (DER) assets to add reliability or become less grid-dependent. It’s important to know whether the customer’s next step is additional DER assets or developing a full turnkey microgrid solution to achieve grid modernization.
The best way for the energy industry to achieve grid modernization will require a combination. DERs will continue to be the big driver in grid modernization and will include appropriate, well-placed microgrids. The other major disruptor that will dramatically alter the energy business, related to microgrids, is EV charging. With EV charging, utilities can regain some of the lost revenue that microgrids and DERs take away while serving the public’s need to charge and electrify their electric vehicles. When paired with a microgrid, electric vehicles can become assets in a vehicle-to-building arrangement, and those batteries can be used as back-up to add resiliency in the event of an outage. Together, DERs, microgrids, and EV charging will enable the energy industry to evolve into the next stage of the modern grid.
About the Author:
Linda Stevens is Sr. Director of Business Development for USA Microgrids, Inc. (USA MG). She holds a Bachelor’s Degree in Organizational Management and Leadership from Concordia University, St. Paul, MN. Ms. Stevens has dedicated her career to the energy industry. She began in an Investor Owned Utility and learned firsthand about utility operations. This experience transitioned to an energy industry software and technology sales career path with Siemens, OATI and onto USA MG. Through a network of direct USA MG sales executives, key technology alliances, and an industry leading distribution channel, she drives the strategic sales initiatives for USA MG.