Electrical Equipment Manufacturers See a Future in Microgrids

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A new report from the National Electrical Manufacturers Association details why there’s a future in microgrids for association members–and everyone else.

“Powering Microgrids for the 21st-Century Electrical System,” lays out the business case for microgrids, identifies the technological advances that will increase microgrid use, and provides a vision of microgrids as an essential part of the US grid.

“Given the many identifiable benefits of microgrids, the market opportunities have been steadily growing, particularly in the United States,” says the report’s executive summary.

Evolution of microgrids

Extrapolating out to 2030, NEMA describes a number of scenarios where microgrids become integral to the power delivery system with renewables integration, reductions in fossil fuel use, and regulatory changes.

After 2016, for example, grid-connected microgrids, utility-scale microgrids and community-scale microgrids will contribute to grid resilience and system efficiency, the report says.

Then after 2018, NEMA envisions microgrids—owned and operated via an increasing number of business models and ownership structures—are able to interact and integrate with the distribution management system.

And after 2020, the organization foresees many microgrids working together–and with the grid–based on their economics and ability to provide grid resilience.

The report explains how the grid works and shows how the grid has evolved from a passive grid to an active grid. “This change is the result of the deployment of distributed generation—in part based on renewable resources, including solar and wind power, and electrical storage devices, known as distributed energy resources (DER)—and the implementation of portions of the smart grid agenda.”

Technology of interest to electrical manufacturers is stressed in the report. For example, the report explains that intelligent equipment–including switches in the distribution grid and sensor and communication technologies across the distribution grid–make up needed equipment in the smart grid.

Microgrids go beyond averting power outages

No longer are microgrids viewed only as systems that are beneficial because they disconnect from the grid to serve individual facilities during power outages.

“Microgrids are now seen as part of distribution system operations, interacting with the distribution grid through advanced control and distribution management systems. Microgrids will play a major role in grid modernization in an evolving regulatory framework,” says the executive summary.

The concept of microgrids is changing; they are now seen as being able to participate in markets, integrate renewables, save money, and improve reliability. And they can have grid-like functions, the report says.

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NEMA also lays out the business case for microgrids, citing resilience, which is becoming more and more valuable as the US experiences more extreme storms; improved energy security; and continued service during power outages. In addition, the dropping cost of renewable energy is a “direct, quantifiable benefit realized by microgrids,” the report says.

The benefits of integrating CHP plants into microgrids is another positive, along with the microgrid’s ability to provide ancillary services to the main grid, the report says. And microgrid owners can use DERs to reduce energy imports during the main grid’s peak hours, reducing costs to consumers.

Cost components of microgrids are also provided in the report. For example, the report says that energy resources make up 30 to 45 percent of the costs, and switchgear protection and transformers make up about 20 percent of the costs.

Problems that arise when DER are integrated into distributed networks are noted by the report. Reverse power flows from customer load to grid are one problem. Microgrids can help solve these problems.

“The traditional system is designed for power flow from grid to customer, not the two-way flow of power. Since reverse power flow is not controlled by the distribution utility (let alone the transmission operator), major technical issues arise, such as voltage rise and protection system design, which are further compounded by the intermittency of renewable energy sources due to weather variability.”

Future in microgrids for many

The report also stresses the needs to accelerate standardization efforts in DERs and microgrids.

“The availability of standards will greatly simplify the implementation of microgrids and lead to reductions in the cost of equipment and controllers. In addition, the regulatory framework needs to evolve to allow microgrids to play a larger role in the distribution grid operation and contribute to the grid modernization efforts,” says the executive summary.

And finally, the report describes in much detail the many benefits of microgrids for a range of market players: the electrical equipment association members, utilities, the larger grid, consumers, industries and the environment.

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