Microgrids Are Changing The Energy Landscape

Utilities should recognise that there are many opportunities to be had from distributed energy resources through microgrids.
Published: Fri 02 Oct 2015

The global energy landscape continues to evolve and proactive energy consumers or ‘prosumers’ are growing in their numbers.

Campuses, institutions, businesses, and homeowners are taking control of their energy consumption and production by using new technologies which enable them to take direct control of energy sustainability, reliability, and cost.

To take advantage of the smart grid and onsite clean energy production, local microgrids are being developed by dynamically managing a variety of distributed energy resources, including loads, onsite renewable energy production, and energy storage. By connecting prosumer sites to the smart grid, new information and control platforms are enabling participation in programmes that fully monetize the flexibility of these assets.

Engerati spoke to Mr François Borghèse, Prosumer Marketing Director, Schneider Electric, who will be presenting the upcoming webinar, “How to reap utility benefits of distributed energy through microgrids and beyond ....” about the benefits and opportunities associated with microgrids.

Microgrid-opportunities for the customer and utility

Microgrids are now recognised as a clear opportunity for more flexibility, more renewable integration, higher reliability of the site energy usage and a means to reinforce grid reliability, explains Mr Borghèse.

Microgrids originated in the US in response to blackouts caused by grid weakness, due to different reasons, including severe weather events but today, the microgrid offers so much more.

As the microgrid is grid-connected most of the time, its value to network operators, through Time-Of-Use rates, Demand Response and Frequency Regulation is considerable.

There are also many benefits for end users. Other than proactively producing and consuming onsite energy resources, the value of their Distributed Energy Resources can be fully monetized as power loads and generation can be managed in response to smart grid opportunities. It also enables customers to optimize their energy bills, stabilise energy costs, and avoid the frustration of blackouts.

Thanks to a new cloud based platform, the microgrid can exchange information with supply side actors (Utilities, commercial aggregator). This creates the opportunity to balance the grid through the management of local production and consumption.   

Through smart solutions like Schneider Electric’s Prosumer Microgrid Solution, prosumers can take advantange of their energy flexibility to maximise return from smart grid opportunities including demand management and demand-response programmes as well as variable tariffs.

During the aforementioned webinar, a case study will highlight the benefits and opportunities of an islanding-enabled microgrid solution which was recently deployed in Texas, US where Schneider Electric’s demand-side expertise is coupled with distributed generation flexibility and control for greener, cheaper and more reliable energy.

Market potential for microgrids

Today, the biggest potential for the microgrid is in the US, especially campuses for grid tied microgrids, says Mr Borghèse.

“Universities and colleges are developing microgrids  in order to optimise local production and consumption and avoid blackouts.”

With the Prosumer Microgrid Solution, campuses can store excess energy using a centralized or distributed electrical energy storage system. This will ensure available backup power in case of a blackout, automatically keeping critical buildings, equipment, and processes running.

Other large sites on the market include commercial and industrial buildings.

“For different reasons, Europe and South East Asia are where the future of microgrid markets will be,”  says Mr Borghèse. The main drivers will be grid reliability (mainly for SE Asia) and multiple tariffs which enable the optimization of energy usage.

Many countries in the region do not have a reliable source of power. Through microgrids, the region can prepare for the intermittent nature of renewables and blackouts. “There are frequent blackouts in this region so major actors will have to organise themselves in microgrid mode to be independent from the central grid when necessary. The turn towards microgrids are generally for economic reasons.”

When it comes to challenges surrounding microgrid development, Mr Borghèse says that easy to use microgrid solutions must be implemented. “People are not always energy experts so we need to provide easy to use solutions where the site manager won’t be disturbed frequently due to a new approach. This is our vision and a key element of what we aim to achieve.”

No hiding from the microgrid

Utilities have identified that the microgrid market is definitely growing, says Mr Borghèse. He adds that utilities should not hide from it or see it as a threat but instead grab the opportunities that microgrids have to offer.

“This is certainly the case with European utilities such as RWE and E.ON,” he explains, “They are reorganizing themselves in order to embrace the opportunities that microgrids offer.”

“Utilities have to reinvent themselves by expanding their service offers beyond just energy supplying. We have to help end users to manage their local energy access and access reliable energy via the efficient management of local energy resources.”

Further reading

How Prosumers Leverage 4 Technologies for Greener, Reliable, Economical Energy [pdf]