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Shift To Decentralized Power Presents Microgrid Opportunities
Shift To Decentralized Power Presents Microgrid Opportunities
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The tradi tional grid is based on centralized genera tion wi th genera ting
units from 10 MW to GW‐s cale capa ci ty i n one loca tion (or a few
loca tions ) and dis tribution through high‐vol tage (greater than 69 kV)
dis tribution s ys tems . By contrast, distri buted generati on consists of
smaller genera ting resources (less than 10 MW down to < 10 kW) using
medium‐vol tage (between 1K a nd 69K) and l ow vol ta ge (< 1K vol t)
dis tribution s ys tems .
Not all distributed genera ting resources a re mi crogri ds. Ma ny a re
genera tion resources onl y and never act as l oads on the grid. But all
mi crogrids are distri buted resources ; they a re a tta ched to the
medium/low vol tage dis tribution network and a ct both as genera ting
resources and loads .
Smart Grid Analysis | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-360-2967 | FAX: 804-270-7017
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• While the cos ts per kilowa tt‐hour for centralized genera tion is
increasing (because of feeds tock volatility a nd regulatory issues),
2 the cos t per kilowa tt‐hour of dis tributed generati on utilizing
mi crogrids has been falling (because of lower cos t wind and sola r,
lower cos t s tora ge, and low cos t sensor networks to enable
mi crogrids). This falling cos t has rea ched the point tha t i t is now
an a ttra cti ve option for many si tua tions , especiall y in applica tions
where genera tion source and load a re in close proxi mi ty and the
hea t from genera tion can also be used for s pace hea ting. In s uch
cases, overall feeds tock effi ciencies (hea t plus electri city) of
grea ter than 60 percent ha ve been realized i n tes t settings , whi ch
is far more effi cient than the a pproxima tel y 30 percent efficiency
of centralized genera tion wi th up to 10 percent loss of the
genera ted electri city i n the distribution network.
Smart Grid Analysis | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-360-2967 | FAX: 804-270-7017
www.smartgridanal ysis.com
is low or pri ces a re high, and to reengage when the “ma crogrid” pri ce is
low.
As a resul t of all this , NanoMa rkets/Sma rt Grid Analysis believes tha t
mi crogrids present major opportuni ties throughout the world, but these
opportuni ties also seem to va ry by geography.
3 Microgrids, Power Quality and Opportunities in the Developed
World
In the es tablished continental grids of North Ameri ca and Europe, the
cos ts of centralized genera tion a re increasing, mi crogri d cos ts a re
decreasing a nd the demand for power quality applica tions tha t a re better
served by mi crogrids is rising. The potential of mi crogri ds in these areas
is to i ncrease the use of distributed resources , whi ch will boost capa ci ty,
reliability, and securi ty, as well as incorpora te renewable resources such
as wind and sola r into the overall grid. This opportuni ty is al ready being
pursued in some countries such as Denma rk.
Microgrids improve power quality: The main nea r‐term dri ver for
mi crogrids in regions with esta blished grids is to signifi cantl y i mprove
power quality. The increased reliance on electri ci ty for key mission‐
cri ti cal appli ca tions is now a t a point where the power quality needs for
such a pplica tions exceed the a bility of centralized genera tion to deli ver
the requi red power quality. Power quality has been s ta tic for several
decades and is predi cted by some to even begin deteriora ting slightl y as
demand continues to increase, while suppl y and distribution remain
s tagnant.
The tradi tional centralized genera tion/dis tribution s tra tegy ma xes out in
reliability a t between 3‐ and 4‐nines reliability or s omewhere on a vera ge
of about 1–9 hrs of dis ruption per yea r. While this has been a cceptable
for most applica tions in the past, the increasing reliance on “alwa ys on”
mission‐cri ti cal electri cal gea r and the damage to gea r due to power
surges/spikes associated wi th outages make this level of reliability
unacceptable for many appli ca tions going into the future.
Smart Grid Analysis | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-360-2967 | FAX: 804-270-7017
www.smartgridanal ysis.com
By moving to a mi crogrid deployment s tra tegy wi th local genera ting and
dis tribution resources tha t can island themsel ves seamlessly from the
grea ter grid, the reliability can be increased from 3‐ to 4‐nines (1–9
hrs /outa ge per yea r) to 6‐ to 7‐nines (3 to 30 seconds/yea r). Wi th the
addi tion of electri cal s torage, which is an essential component of mos t
mi crogrids , the reliability for the mos t cri ti cal appli cations can be
increased further, to up to 9‐nines (30 ms/yea r).
4
Microgrid deployment in the U.S. and Europe: In the U.S., several large
pilot demons tra tion projects a re al ready underwa y. The following
projects all ha ve a cti ve mi crogrid demons tra tion progra ms in pla ce:
Chevron Energy, Consolidated Edison (New York), ATK Spa ce Sys tems ,
Illinois Ins ti tute of Technology, the Ci ty of Fort Collins, Col orado, San
Diego Gas and Power, and the Uni versi ty of Las Vegas‐Nevada . These
demons tra tion projects contain the elements of local genera tion,
intelligent self‐islanding, and local s tora ge and demand response
capabilities . Dependi ng on the exa ct goals, they also incorpora te hi gh
levels of wind and solar and/or combined hea t and power.
Europe is also a cti ve in mi crogrid development. Serious work on
mi crogrids in Europe s ta rted ea rlier than in the U.S. for two major
reasons :
Currentl y, eleven European countries a re opera ting mi crogri d projects .
But Denma rk is the leader in distri buted genera tion. The bes t known of
the true mi crogri d demons tra tions in Denma rk is the Bornholm Island
mi crogrid. It serves 28,000 cus tomers , provides over 55 MW of peak
Smart Grid Analysis | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-360-2967 | FAX: 804-270-7017
www.smartgridanal ysis.com
power, a nd incorpora tes 30 MW of wind power. The mi crogrid is
connected to a high power node in Sweden and is a ble to s uccessfull y
island off from the overall grid when power quality is low.
Island Microgrids
A smaller but high‐growth appli ca tion of microgrids is in true “island”
grids , whi ch either do not connect or a re designed for sus tained periods
5 of independent servi ce. Thus , the U.S. milita ry a nd ma ny remote
industrial and residential a reas a re rela ti vel y small ma rkets , but mi crogrid
growth in these a reas is projected to be brisk over the next ei ght yea rs .
The final a rea is in remote loca tions (indus trial, remote town, and
mili ta ry), where the falling cost of mi crogrids and storage ca paci ty, a nd
the emerging ability to sea mlessl y integra te wind and sola r into s uch
grids makes mi crogri ds viable in a wa y that was not possible even 10
yea rs ago.
Smart Grid Analysis | PO Box 3840 | Glen Allen, VA 23058 | TEL: 804-360-2967 | FAX: 804-270-7017