Utilities Should Overcome Their Fear of Microgrids

Siemens is aiming to show utilities that microgrids can provide Europe’s grids with greater flexibility.
Published: Wed 29 Oct 2014

The move to microgrids is viewed by Siemens as an evolution, says Bernd K. Koch, Director, Siemens Microgrid, Energy Automation, who will be part of a roundtable discussion on resiliencies and microgrids at the upcoming European Utility Week.

Developing “green microgrids”

“We are addressing two main issues: renewable integration and the microgrid. This is twofold since renewable integration typically involves issues surrounding the distribution grid which receives its power from various sources such as rooftop PV, small to medium size PV farms, onshore wind power, biogas generation, as well as various storage solutions. The grid faces various challenges involving transformers and thermal issues for instance and we try to resolve this in a modern way so that the grid can adapt to the changes. As a consequence you are able to run a portion of the grid independently from the main grid. This development will increase with LMV(low/medium voltage markets) which is evident in the US.”

While many utilities understand the value of renewables development, the challenge is to take this to the next step: developing the micogrid. By developing these renewable sources to become independent of the grid, utilities can help keep the lights on during emergencies and outages until the main grid has been restored, explains Koch.

Siemens’ focus is on “green microgrids” - that is, powering the microgrid with renewable sources such as solar, wind and biogas. A good example of a recent project is IREN2 (Future Viable Networks for Integration of Renewable Energy Systems) has been started in Wildpoldsried in the Allgäu region in southern Germany. [Engerati - Microgrids To Test Renewable Energy Integration in Germany.]

“We want this kind of variety in generation since fossil fuels are proving to be more expensive due to transport costs, especially in remote locations. Solar and wind have low operational costs since they generally do not have to be transported to the area of consumption. Power is generated onsite and generally consumed nearby.

In addition to this, microgrids offer the grid resiliency when it comes to outages. “It is a bit like insurance,” explains Koch, “Utilities can lose a great deal of money if they can’t get power to their customers via the central grid. The microgrid gives utilities the ability to provide power during down times.”

Subsidies and tax breaks for microgrid development also strengthen its case. Subsidies in Europe are generally focused on renewables development, not microgrid development but most European countries are adopting the microgrid as they are business-case driven, explains Koch. Places like islands (e.g. Portuguese, Italian, Greek islands) and industrial sites are interested from a commercial point of view so subsidies are not necessary.

What stands in the way of microgrid development?

A lack of understanding amongst utilities about the future role of the microgrid is a great challenge, says Koch, since some still view the microgrid as a threat to their earnings.

However, there are some proactive utilities who see that microgrids can save them from building unnecessary infrastructure, he explains.

“This is where Siemens is trying to help utilities think more proactively. We want to show them how microgrids can help them operate more effectively in the future. However, it is difficult to change the mindset in some European countries as some view the microgrid as being useful only for larger countries like the US where there are a lot of isolated areas requiring access to power. But still, microgrids carry out a supportive role for Europe’s grids. They can run them as load stations, or as generators. They will give Europe’s grids greater flexibility.”

“I want to see more support from the utility side for the microgrid- they need to set part of their grids aside for islanding. The process is technologically feasible even though many don’t believe that it can be done. From an economical optimisation point of view, microgrids are the answer for many utilities trying to define their way into the future.”