Modernizing power delivery – particularly in a time of rapidly expanding populations and rising costs of a reliable power supply – encompasses more than replacing old components with new. The investments will need to address integration of larger shares of renewable energy while delivering on higher levels of reliability and resilience that are demanded by energy consumers and businesses.
New tools, such as intelligent energy storage, smart grid, consumer demand response management (DRM), Internet of Things (IoT) technology and microgrids, are bringing about promising solutions.
The global microgrid market is estimated to top $35 billion by 2020. A new generation of low-carbon microgrids is emerging and shifting our conception of how energy and power is produced, distributed and consumed. The concept of locally generated and consumed energy is evolving how we plan for utility systems in densely populated cities, where resilience is increasingly valued in the face of violent storms that can bring down the power grid.
Microgrids Gaining Momentum
Many cities and municipalities are starting to make commitments to reduce greenhouse gas emissions, while providing reliable utilities and resilient essential services during emergencies or natural disasters. City residents and businesses stand to benefit by incorporating distributed low-carbon microgrid projects in smart city initiatives, and even more significantly, embedding them at the core of holistic strategic infrastructure and urban revitalization plans.
The idea of deploying local, renewable energy-driven microgrids across cities and metropolitan areas is gaining momentum across the U.S. A total of 124 microgrids with combined capacity of 1,169 MW were up and running across the nation as of July 2015, according to Pew Research. Microgrids capacity is projected to exceed 2,850 MW by 2020, an increase of almost 145 percent, with market revenue expected to soar as well, rising nearly 270 percent to total over $3.5 billion.
Risks inherent to large urban areas are tied to the recent surge. Extreme weather events have resulted in extended grid outages across the Northeast, catalyzing federal, state and local governments across the country to take action. Microgrids have emerged as a powerful tool in building a more resilient and sustainable power grid.
After Superstorm Sandy in 2012, New York was the first to launch a clean energy program aimed specifically at spurring distribution of low-carbon community microgrids state-wide. The $40 million NY Prize challenge is one of the latest in a series of green energy/climate change resilience initiatives launched by Gov. Andrew Cuomo. In the first of the three-stage program, the New York State Energy Research and Development Authority (NYSERDA) awarded $100,000 NY Prize grants to fund community microgrid feasibility studies in 83 cities and municipalities. More than 130 project proposals were submitted. Nine urban microgrid projects were awarded in New York City alone.
Developing Standards for Microgrids
At this early stage of evolution, the microgrid market is fragmented. As Navigant Research highlights in a recent report, projects and business models tend toward being “one-off” custom-designed installations. However, those one-off projects are already showcasing the technologies that we think will be the standard for the industry, and the New York Prize program also revealed the special challenges in designing microgrids for urban centers.
Resilient and low-carbon systems require multiple technologies to deliver on requirements. For example, a system based only on solar and wind generation would be low carbon, but would not deliver resilient or reliable service because these are both intermittent resources dependent upon the sun and wind. To be resilient, dispatchable resources like energy storage and fossil-fueled generation sources are required as part of the system. Seamless integration of multiple generation sources and loads is then at the heart of what makes a system a microgrid.
A platform for remotely operating and maintaining multiple distributed generation resources and microgrids is also critical because many of these resources are designed to be “operator-free.” Modern data analytics platforms can take holistic and granular views of energy flows, operating data in real-time through advanced predictive algorithms and equipment condition monitoring. These platforms can identify wasted energy, enhance efficiency, and enhance resiliency through coordination of generation and demand of smart devices deployed on the system —all while constantly monitoring and evaluating market costs and environmental performance.
Modern analytics and control allow microgrid owners to focus on achieving the benefits that are most important to them, be it cost, greenhouse gas reduction, resilience, or other attributes, without sacrificing on other important qualities.
Black & Veatch Builds Its Own Microgrid
In order to gain practical knowledge and greater understanding about the overall performance and potential value, Black & Veatch built a hybrid low-carbon microgrid that powers a significant section of its world headquarters in Overland Park, Kansas.
This system is composed of 50kW of solar photovoltaic generation, two 65kW natural gas-fired microturbines with the ability to capture and use waste heat (combined heat and power), a 100kW/100kWh lithium-ion battery energy storage system (BESS), EV charging stations and a geothermal well field that helps maintain comfortable temperatures year-round. The system is also integrated with the building management system to enable transitions from grid-connected to island operation by matching generation with building load.
The benefits accrue and extend beyond Black & Veatch to include our local utility and community, as well as the wide variety of organizations we work with. For instance, we worked closely with another local Kansas City company, Custom Controls, to design and engineer the microgrid's supervisory control system.
The International Energy Agency has estimated that $2.1 trillion in investments will be needed over the next 30 years in order to modernize the grid. Realizing this vision of efficiency and resilience can enable energy companies, city and municipal leaders to meet the pressing, interrelated challenges of modernizing our aging power grid infrastructure, as well as the pressures of ongoing urbanization and the escalating threats and costs of a rapidly warming climate. These are goals well worth the investment.