How Specialized Microgrids can Rapidly Enable a Low Carbon Electricity Network

The U.S. Department of Energy has declared that we are in the midst of a revolution toward a low carbon economy. The transition to renewable generation has begun in earnest, and it is now a matter of time before more energy is generated through clean sources than by burning fossil fuels. How quickly this transition happens depends upon our ability to enable commercial models that benefit all participants of the electricity ecosystem with currently available clean technology.

This paper presents how specialized microgrids enable a rapid transition utilizing technology available today.

The Challenge

The grid network is designed to be supplied by generation sources that are economical, stable, dispatchable, and have a high capacity factor (available day and night). Importantly, to be included in the energy generation mix to supply the grid network, the price point for a new source of generation should not exceed 4 or 5 ₵/kWh.

Wind and solar, the cleanest generation sources, have achieved the price point of 4 or 5 ₵/kWh.

However, unlike fossil fuel based generation, both wind and solar are intermittent, not dispatchable and importantly, have a low capacity factor (around 20% for solar and 40% for wind).

Intermittency and capacity firming can be achieved by adding limited amounts of storage, which does not increase its generation cost much beyond the 4 or 5 ₵/kWh.

However, to increase the capacity factor of solar and wind, large amounts of storage must be added, which raises their price point way beyond 4 or 5 ₵/kWh, making large-scale solar + large-scale storage uneconomical, and therefore, unviable as a generation source. The challenge, therefore, is to increase renewable generation beyond 20% – economically, technically viably and importantly, ensuring resilient, safe and reliable power that we are so accustomed to.