A decision by companies to merge often reveals something about the larger market in which they play.
S&C purchased IPERC (short for Intelligent Power & Energy Research Corporation) in part because it sees growth ahead in what it describes as the ‘unintentional microgrid’.
Most microgrids today are planned. Utilities, institutions, businesses and communities install microgrids intentionally, maybe to improve electric reliability, integrate renewables, or use resources more efficiently.
But unintentional microgrids are different. They are not planned, but reveal themselves as the obvious culmination of other upgrades made to the grid.
For example, a utility may not have been thinking microgrid when it added energy storage, solar and distribution automation to a section on its system. But once it steps back and looks at this puzzle of resources, it sees that inserting one more key piece – a microgrid controller — gives the system greater abilities. It becomes a microgrid.
“We do a lot of distribution automation. Distribution automation automatically disconnects, reconnects, isolates, islands and reconfigures the network,” said David Chiesa, S&C Electric’s senior director of global business development. “One of the things that is a natural outcropping of that is the ability to form microgrids. So as distribution automation continues to proliferate on the network, coupled with distributed generation, you end up with what we call unintentional microgrids or microgrids of opportunity.”
Adding the microgrid controller – often described as the brain of the system – brings a new intelligence to the configuration. The controller senses when a problem is occurring on the grid and islands away from the problem. Its generators then feed power to customers within the footprint so that they do not experience the grid’s outage.
Unintentional microgrids and utilities
Failing to spot unintentional microgrids could get utilities into trouble – especially as customers become more savvy about distributed generation in the future.
“Customers are going to say, I’m out of power, but I can see my community solar field. It’s just right over there. How am I in a blackout? I can see the generation source, and the sun is shining,” Chiesa said. “They are going to get angry and upset and rightly so.”
Seeing opportunity ahead in ‘unintentional microgrids’ — and banking on planned microgrids as well — S&C began looking for a microgrid controller to add to its product line. (S&C already offers many of the other pieces for a microgrid, such as automation, energy storage, and technology to integrate renewables.)
S&C chose IPERC’s controller because of its ability to provide distributed intelligence, Chiesa said.
A brain in the feet and hands
IPERC’s controller is unique in that it offers distributed intelligence, according to John Carroll, IPERC’s vice president of business development. This means rather than centralizing its capability in one master microgrid controller, it spreads decision-making throughout the components of the microgrid.
Think of having a brain not just in your head but in your feet and hands too.
“We have one head. You lose that head and the body collapses. It’s a single point of failure. But what if your hands and feet were capable of acting as a brain? You’d have multiple levels of redundancy and resiliency,” he said.
Each controller can act alone or act collectively with the others as a community. One controller acts as the supervisor. If the supervisor fails – say its accompanying generator goes off line — the remaining controllers recognize the loss, reconfigure and continue making decisions, Carroll said.
The merger is in keeping with an increasing focus on controllers in the microgrid industry, according to Omar Saadeh, an analyst who has written several reports on the microgrid industry.
“S&C’s recent acquisition of IPERC reinforces our strong belief that generator and storage manufacturers and providers are aggressively looking to add increasingly holistic control and energy management functionality to their offerings,” Saadeh said.
He added that S&C’s acquisition of IPERC “could ultimately allow S&C to provide a wider portfolio of technology solutions to national developers and EPCs focused on microgrids.”
For S&C new inroads into military microgrids
The merger also speaks to other industry trends. For one, the military continues to be a primary market for microgrids. The IPERC acquisition gives S&C new inroads into that market.
IPERC has some unique credentials when it comes to military microgrids. Its controller, GridMaster, is the only microgrid controller that has obtained an “Authority-to-Operate” from the U.S. Department of Defense. The DOD issues the designation for secure control architecture after extensive testing.
IPERC’s microgrid team also recently received recognition as part of the military Smart Power Infrastructure Demonstration for Energy Reliability and Security (SPIDERS), a project demonstrating cyber-secure microgrids. The U.S. Department of Energy presented the project with an energy and water management award. In addition, the DOD named the entire SPIDERS team as the Joint Capabilities Technology Demonstration Team of the Year.
The two companies had already partnered on various microgrid projects before merging. Carroll said it became increasingly clear that together they could “provide overwhelming capability to the customer.” So rather than “divide and conquer the industry we decided to unify.”
Although they’ve merged, S&C and IPERC will both remain open to outside microgrid partnerships. IPERC is now a wholly owned subsidiary of S&C that is operating in a quasi-independent fashion.
“That will allow them to provide their solution to any number of players across the marketplace. We didn’t want to limit their market penetration and name recognition,” Chiesa said.How Unintentional Microgrids Will Create New OpportunityClick To Tweet
S&C and IPERC cited many market reasons for the merger. But simple congeniality also played a role in the decision. Both were employee-owned companies before the merger, which made for compatible corporate cultures.
“Collaboration is hard, but collaboration with IPERC right from the beginning was easy, comfortable, familiar. We felt it all the way from the engineers to the CEO level. That is so rare,” Chiesa said.
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