Does Microgrid Software-as-a-Service Hint of a New Utility Business Model?

With today’s release of its new microgrid software-as-service product (MSaaS), Siemens opens the door for a new and intriguing business model – especially for utilities.

The product is meant to take the hassle out of software management for colleges, businesses, manufacturers, communities, utilities and others with microgrids. It does so by placing microgrid software and related hardware at an off-site Siemens data center.

A team at the data center handles all software management — upgrades, defect fixes, patches and the like. Spared these frustrations, the microgrid operator simply logs into the software to manage the site.

“It is making it easier for microgrid customers that don’t have a knowledge of energy management systems or SCADA (supervisory control and data acquisition),” said Sally Jacquemin, Siemens microgrid business manager.  “This is a great, carefree, maintenance-free way for them to deploy a microgrid.”

MSaaS starts to make good on predictions that operating a microgrid will become easier as the industry matures and gains efficiencies.

But Jacquemin points out that the service does something else as well —  it paves the way for a new business aggregation model.

“In the long term, it opens up a business model for aggregate operators, if you will. A company that may want to operate more than one microgrid for multiple customers can do that — and create a new business out of this,” she said.

Utilities, for example, are in a good position to take on this kind of role.

“Let’s say a utility wants to operate 10 microgrids in their territory, this would be a great way for them do to this. And it reduces the hardware and software they have to maintain,” she said.

The idea echoes some of the discussion in New York’s Reforming the Energy Vision, where the new utility performs as a kind of distributed grid operator.

“Utilities are trying to to figure out, ‘What role do I play in the microgrid space going forward?’” she said. “Maybe they don’t own or supply the actual energy generation. But they could do the management because a utility’s core competency is the overall energy management and distribution.”

Jacquemin added: “This is right up their ally – to be able to provide a premium service to operate whatever decentralized grid assets or loads may be in a microgrid. They could scale this up, microgrid-by-microgrid, fairly easily.”

Driving down microgrid costs

Microgrid software-as-a-service also helps drive down costs, Jacquemin said. Microgrid owners are spared the cost of custom software and hardware. Instead they can leverage equipment in the Siemens data center for an approximate 25 percent savings in upfront installation costs, she said.

The SaaS is part of Siemens’ Spectrum Power Microgrid Management System (MGMS). Other details offered by Siemens are:

• Siemens will host the microgrid software at a secure data center facility and its personnel will monitor and maintain the system 24/7, though overall operation of the microgrid system is still executed by the microgrid owner or operator through a web-based user interface. The software is built to easily integrate into existing on-site software including building automation systems and renewable generation sources. It includes advanced physical and cyber security measures.

• Operators can plan power generation based on energy market price forecasts from 15 minute to hourly increments and up to day-ahead horizons. This allows microgrid operators to achieve full economic value from the microgrid while maintaining their traditional base load needs and minimizing carbon footprint.

• The control software is responsible for microgrid operation while connected or disconnected from the utility grid and can interface with local utility systems to ensure the utility control systems (EMS/DMS) and the microgrid control systems work together efficiently and reliably.

“As the energy landscape continues to change, we understand that technology must evolve with the shifting needs of power operators and producers both large and small,” said Mike Carlson, president of Siemens Digital Grid. “By hosting our advanced microgrid control software in a secure data center, we can lessen the financial and physical burden of building a microgrid and, in turn, make the idea of stable power from distributed generation a reality for power operators of any size.”

More details are available at http://usa.siemens.com/smartgrid.

Learn more about emerging microgrid business models at the May 19 Microgrid Knowledge conference in Manhattan: New York and Beyond Advancing Microgrids Nationally with Lessons Learned in New York.