Microgrids are becoming increasingly prevalent and utilities are generally not on the cutting edge of this innovation. The reason for this is probably because utilities view the distribution microgrid as an existential threat to their traditional business models, according to Navigant Research in its report, Utility Distribution Microgrids.
Utilities embrace microgrid business
However, there are a few utility innovators that are taking on microgrid projects despite significant institutional bias and regulatory obstacles, leveraging a wide range of smart grid technologies and utilizing new architectures to pursue creative solutions for the integration of renewable energy, the improvement of grid reliability, and the reduction of peak load. [Engerati-Are Microgrids The Route To The Utility Of The Future?].
Utilities such as Korea Electric Power Corporation (KEPCO) and Powerstream are seeing the potential in the microgrid global market business. They have just signed a Memorandum of Understanding (MOU) to collaboratively advance into the global microgrid market. The MOU has set the framework for the two utilities to work together on a project which will be of mutual benefit.
Large-scale application of microgrid technology
The MOU makes specific reference to the use of microgrid and Smart Grid technologies with an objective of developing a large-scale application that would serve as a model for further advancement of these technologies in worldwide electricity distribution systems.
Both PowerStream and KEPCO are proven leaders in the implementation and use of Smart Grid and microgrid technologies within their respective jurisdictions. In 2013, PowerStream, serving northern Toronto and Central Ohio, started building a microgrid demonstration project at its head office while KEPCO has committed to invest over US$7 billion in its smart grid business by 2030 to make electricity distribution more efficient and decrease Korea’s greenhouse gas emissions. KEPCO intends to help about 120 islands in South Korea to become eco-friendly and energy independent through the adoption of microgrid technology. Independent microgrid businesses replace diesel power generators in island areas which have a high cost of power generation with “new and renewable and energy storage systems (ESS)” converged microgrids. The costs of running diesel power generators in the long term will be invested in new and renewable energy and ESS preemptively, and economic feasibility which enables private companies to participate will be guaranteed.
Under the two year agreement, valued at 5 million won (CAD5.33 million/US$4.8 million), the two utilities will cooperate to develop a large-scale application of microgrid technology which aims at boosting efficiency in electricity distribution.
“The agreement of this MOU is like establishing a bridgehead to step into the overseas market of KEPCO and its collaborating companies. It will accelerate our advancement into the North American market and thus the export of our related technologies overseas,” says President and CEO Cho Hwan-ik, KEPCO. “We reached out to PowerStream at an industry conference held earlier this year and we were intrigued by their microgrid demonstration project and believed that we could further our own efforts in this area by working with what we see as being a forward-thinking company.”
PowerStream’s microgrid demonstration project marks the next phase in the company’s aim of supporting Smart Grid development at the provincial level and raising awareness for the need to leverage innovative ‘smart’ technologies in Ontario’s electricity sector. PowerStream will be implementing its new microgrid in two phases, over a two-year period. In phase one, the company will draw electricity from existing assets – a solar array, a wind turbine, a soon-to-be installed natural-gas generator, a lead acid battery and a lithium battery – in order to provide electricity from loads such as lighting, air conditioning and refrigeration at its head office location. Electricity generated from this combination of clean and renewable sources will also be used to power the company’s electric vehicle charging stations (which energize the company’s fleet of electric vehicles) and to maintain a steady charge in the Micro Grid’s storage batteries.
Maurizio Bevilacqua, PowerStream Board Chair and Mayor of the City of Vaughan says: “We are thrilled and honoured to be working with KEPCO a recognized global leader in the electricity industry. There are tremendous synergies we are able to achieve by working with partners who have the same vision and commitment that we do in furthering the use of innovative technologies to provide additional benefits to customers.”