Adroit Market Research - Industry Insights

The development of microgrids is a growing global trend. Microgrids are increasingly viewed as a way to improve electric service resiliency, reduce costs, increase environmental stewardship, upgrade service reliability for critical uses and/or provide the owners with greater control over their energy supply. Microgrids can help communities of utility users to achieve key policy goals; as an example, microgrids enhance the use of renewable energy. However, decisions regarding whether microgrids are the right choice for a particular situation demand thorough analysis and innovative thinking.

The development of microgrids is a growing global trend. Microgrids are increasingly viewed as a way to improve electric service resiliency, reduce costs, increase environmental stewardship, upgrade service reliability for critical uses and/or provide the owners with greater control over their energy supply. Microgrids can help communities of utility users to achieve key policy goals; as an example, microgrids enhance the use of renewable energy. However, decisions regarding whether microgrids are the right choice for a particular situation demand thorough analysis and innovative thinking.

The objectives of the Energy Island Initiative include becoming the Green Port of the Future, showcasing renewable energy, and securing a resilient energy source capable of supporting critical Port assets in emergency situations. Development of a microgrid is consistent with these objectives, and may also support the Port’s needs for energy reliability, high power quality, and economic stability.

Microgrids are typically designed to operate in a two-way configuration; that is, they can deliver excess power into the incumbent utility grid as well as take power from the utility grid. When necessary, microgrids can operate completely separated (“islanded”) from the utility’s grid. A microgrid can be considered a small-scale version of the traditional utility grid that is better able to optimize energy services through its intelligent controls, designed to fit the specific needs of the energy users’ community being served. Unlike traditional utility services, the ability to coordinate unique community energy needs with generation resources can make a microgrid a superior choice. The diversity seen across a microgrid enables ‘intelligent sharing’ of energy loads and resources that improves overall performance and cost in a variety of ways.

Microgrids can be used within a single facility or interconnected at multiple facilities. In addition, microgrids can be aggregated and connected electrically through the local utility’s distribution network. An element of a microgrid is localized generation.

While a microgrid can rely strictly on power from the utility, full potential is achieved when also connected to an independent source of electrical power within its grid design. Then the microgrid delivers increased resiliency, improved efficiency, reduced emissions, and other benefits.

On a consumer level, microgrid customers can be aggregated to decrease the delivered cost of energy. Energy inputs of local generation can be highly efficient and require a lower capital-to-capacity ratio compared to utilities’ distributed generation. The realized attributes of localized generation would allow a capable operator to return savings to the consumer. Maximizing returns on investment can be included in the design criteria for a microgrid.

The Port’s assessment of microgrids will need to consider and prioritize specific options for microgrid projects and quantify the potential benefits and costs of implementation, as well as operational structures and regulatory requirements. A microgrid can operate connected or disconnected from the utility grid. Both microgrid modes of operation have unique characteristics and technical requirements which the Port needs to evaluate when reviewing its energy infrastructure options.

Grid-Connected Operation

In Grid-Connected Operation In the grid-connected mode of operation, a group of interconnected loads and distributed generation assets are joined to the utility at a point of common coupling. The amount of energy produced at any given time by local onsite generation or imported from the utility grid can vary. Microgrid controls can be configured using a variety of criteria including: minimized costs, maximized renewable penetration, and participation in utility programs such as demand response, etc.

Islanded Operation (Off-Grid Operation)

In the off-grid or islanded mode of operation, the microgrid is disconnected from the utility grid and no longer benefits from energy supply, i.e., the frequency and voltage stability provided by connection to the utility’s network. Advanced energy management software functionality is required from a microgrid control system to operate the islanded system in lieu of the local utility.

Microgrid Control Overview

The control functions within a microgrid are performed at different conceptual and physical layers. One way to define these control layers from bottom to top are: local control, secondary, and tertiary control. The complexity and scope of control increases from the local control upwards towards the tertiary control.

Local control, or primary control, is the lowest layer in this control hierarchy. The local control sits “locally” to the control system it is monitoring and controlling. For example, a member of the local control layer could be a generation controller or a protection relay. The function of the aforementioned control is to locally monitor and control the operation of the physical energy asset.

Secondary control is one layer above the local control, meaning it oversees multiple local controllers on multiple physical assets. The main function of the secondary control layer is to monitor and control multiple physical assets simultaneously in order to achieve a specific objective. In order to do this, there has to be a system to remotely monitor and control the local controllers. This process is known as SCADA. SCADA is required in the secondary control layer to execute specific objectives that are dependent on the ability to monitor and control multiple assets.

Tertiary control is the highest layer in the microgrid control hierarchy. The function of the tertiary control layer is to monitor all devices within the microgrid, use the data collected from those devices, and run different software applications to increase the efficiency, reliability, and the external availability of the microgrid. Examples of tertiary layer controls are the balancing between loads and the renewable generation forecast, system-level voltage and frequency control, generation economic optimization, external interface with energy markets, etc.

Generation & Energy Storage Technologies

Power supplies for a microgrid may be as simple as a battery energy storage system (BESS) that provides power to a microgrid for a limited period from a few minutes to a few hours. A power supply of this limited capability could support critical loads at a computer data center or communication hub during a power emergency. A short duration power output from a BESS could provide sufficient time to transfer data processing or communication switching to a backup facility. A BESS could also allow a controlled system shutdown to prevent data loss or equipment damage.

Initial Microgrid Cost

Microgrid costs are highly dependent on the design parameters of the microgrid. The higher the expected resiliency and independence from the utility grid, the higher the expected costs. There also exist some tradeoffs between paying a higher initial cost to obtain benefits in the operating costs or other benefits, such as environmental considerations.

Conclusion

Future steps in the Port’s assessment of microgrids will need to prioritize specific options for microgrid projects and quantify the potential benefits and costs of implementation, as well as operational structures, and regulatory requirements.