Microgrids are poised to make a significant impact on the power grid, but challenges remain.
Next to distributed energy resources (and also because of them), microgrids have to be one of the hottest topics in the power industry at the moment. Their potential to increase reliability and facilitate the integration of more renewables, not to mention provide a new line of business for utilities, is tremendous.
At the Grid Edge World Forum, held last month in San Jose, microgrids came up a lot despite only having one session ostensibly devoted to the topic on the agenda. I took this as a sign.
No one is really sure what shape the utility industry will eventually take, but everyone seems to agree that the trend is toward decentralization. The most radical vision for change at the conference came from Jeroen Scheer, Chief Technology Officer at Alliander, the largest Dutch distribution company with 6 million customers.
He painted a picture of “radical decentralization” with regard to both grid equipment and the supporting IT so that a mere ten years from now there will be “no control room.” Energy will be bought and sold on an “energy economy sharing platform.” Sounds great, right?
Alliander is putting its money where its mouth is. The company’s investments are being focused on building networks, not so much generation capacity, and on grid management systems. The goal, Scheer explained, is to “digitize the company,” and while he didn’t talk specifically about microgrids, the future he envisions would certainly be amenable to them.
To be fair, I think Mr. Scheer was aware of how provocative his remarks sounded to the audience, and that was probably by design. It’s a compelling vision, but as even he admitted, we’re not quite there yet.
Putting aside market rules and regulatory issues for the moment, one thing I keep hearing a lot is the need for better microgrid controls. So far, control system vendors have come at this problem by either building a microgrid-specific system from scratch or carving down an existing product originally designed for other generation technologies. In either case there is room for improvement, for example with regard to optimizing DERs or demand response (or a combination of both).
Then there is the challenge of making microgrids responsive to conditions taking place at the transmission level, which implies some degree of coordination with a balancing authority like an ISO or RTO. This, of course, is inextricably linked with the market/regulatory structure (i.e., so the microgrid owner can monetize its capabilities), and it’s probably best to approach the challenge from a more holistic viewpoint. Given where things stand today and the fact that this is largely regulated at the state level, defining what that connection looks like is an especially tough nut to crack.
Unfortunately, despite the topic coming up frequently at the Forum, there wasn’t much on offer in terms of a path forward. My guess, then, is that we’ll probably see a few more years of industry rumination on this (e.g., regulatory experiments a la New York and California, pilot projects to test new technologies, etc.)
Presently, even with a modular easy-to-install microgrid solution, there is always some amount of tweaking to do, always some unique characteristics of the local grid that must be accounted for in addition to the particular needs and design imperatives of the microgrid itself. That means there needs to be substantial collaboration between EPCs, technology providers, system integrators—everyone involved in the project, basically—and that is unlikely to change anytime soon.
Meanwhile, the improvement of software applications continues with increasing levels of automation and the ability to interact with more complex networks, for example. The speed with which we can realize the distributed energy future that so much of the industry has in mind will depend in large part, then, on the coordinated development of market and regulatory structures with the technical systems that must operate within them. It will be interesting to revisit the microgrid landscape in a year’s time to see how much closer we really are.