Why Aren’t There More Microgrids?

May 14, 2021
Microgrids can improve energy reliability, help facilities achieve sustainability goals, and lower their electricity costs. So why aren’t there more microgrids? See what Microgrid 2021 panelists had to say.

Microgrids can improve energy reliability, help facilities achieve sustainability goals and lower their electricity costs. So why aren’t there more microgrids? A panel of energy experts took on this question May 13 during the second day of Microgrid 2021.

The panelists, from companies and organizations that develop, engineer and advocate for microgrids, delved into customer thinking about microgrid projects, how to cut costs, technical challenges and the way forward in a session titled, “How to Get More out of Microgrids: Overcoming the Challenges.”

Why do you want a microgrid?

One challenge is simply ensuring that customers get off to the right start.

Too often customers begin without first thinking through exactly what they want the microgrid to do. Knowing what they want will help determine the type of technologies used in the microgrid, according to Scott Kessler, Siemens’ head of microgrid strategy and sales.

The main goal, for example, might be to provide energy resiliency, Kessler said. Or it could be to save money by peak shaving and load shifting, or it could be to meet company sustainability goals, he added.

“The one thing that I always sort of lead with is, why are we doing the project, and why do you want it to do this thing that you think you need to do?” Kessler said.

Once the customer is clear about goals, the details of the microgrid can take shape, such as how big it should be and how sophisticated the controls should be, which could affect how much energy storage is required, according to Kessler.

Some customers think of a microgrid as a group of disparate energy resources under one roof, when, in fact, it is more than that, given the intelligence applied to the system by the microgrid controller. “A microgrid is a collection of assets, and they’re all going to work together,” Kessler said. “I think, too often, it’s like I buy the solar, I buy the storage, I buy the controls, and I’m done. And unfortunately it’s not quite that easy.”

Do you want resilience, reliability or both?

Energy resilience and reliability are two benefits often sought. Many people are unaware that there is a distinction between the two, noted Samantha Reifer, director of special projects at Scale Microgrid Solutions and moderator of the panel. The distinction is important, she said.

She described energy resiliency as “getting up after you’ve been punched” and reliability as “just being able to stand up without any punch at all.”

Watch this panel discussion free of charge on demand through June 3 by registering at Microgrid 2021.

The terms come into play as customers and regulators try to determine the monetary value achieved when a microgrid prevents a power outage or helps a customer quickly recover from one.

Kessler noted that it’s not always easy to quantify this value, but “greenshoots” are appearing in the quest. For example, the Clean Coalition has created a methodology known as VOR123 that calculates a monetary value on resilience. It was used for the Santa Barbara school microgrid project.

Modular approaches cut costs

Another key challenge — reducing microgrid costs — is being addressed by making microgrids more modular and standardized, according to the panelists.

For some projects, a replicable, modular approach might provide 95% of the benefits of a customized approach but at 60% of the costs, Kessler noted.

However, microgrids built for infrastructure, healthcare facilities and the military still need to be customized, he said.

“They tend to be a little bit more engineering heavy than if you’re looking at something like a big box store or a warehouse,” Kessler said. He added that as microgrid costs continue to decline and the technology attracts smaller customers, replicable solutions will be key.

Karim El Alami, managing director of Elum Energy, noted that his company has developed several modular microgrid projects in Puerto Rico, where solar-plus-storage is less expensive than the utility grid and generation sets.

Schweitzer Engineering Laboratories (SEL) has developed two lines of microgrid controls and protection solutions, according to Scott Manson, technology director at SEL. One is for projects above 10 MW, and the other is for smaller projects.

The larger projects are always unique, according to Manson. “Nothing about them is ever the same.”

Inverters pose technical challenges

There are also technological barriers to the widespread adoption of microgrids. One of the main challenges for microgrids is direct current to alternating current inverters, Manson said. The inverters are inconsistent, creating reliability issues for the grid, he said.

“This stands as a large impediment, I believe, to the renewable energies market,” Manson said. “If we don’t solve this, we are going to make our grids very fragile.”

Five year plan?

Speaking at Microgrid 2021: Scott Manson, SEL; Samantha Reifer, Scale Microgrid Solutions; Scott Kessler, Siemens; Keith Thomson, AVL Critical Services Microgrid Group; Karim El Alami, Elum Energy

To wrap up the panel, Reifer asked the speakers what they want to accomplish in the next five years in order to help push forward the microgrid industry.

Kessler said he’d like to see greater customer understanding of the value of reslience. “If you are able to unlock that, it will make everything easier,” he said. He described a situation where a customer was losing up to $10 million from power outages, but had not considered a microgrid. “Conversations like that blow our minds. If we can come up with a way [of valuing resilience] that is standardized, and the customers don’t have to look at that as some sort of accounting voodoo — but here is the actual value to your business in plain dollars — I think that will drive the industry forward much more than anything else.”

He added that the microgrid industry is growing by “leaps and bounds,” but the growth tends to be centered around government incentives, so the market is not yet on “cruise control.”

Keith Thomson, co-founder and facilitator, AVL Critical Services Microgrid Group, which is part of a group advocating for a community microgrid in Asheville, North Carolina, said he hopes to bring “people to the awareness and the acknowledgement of opportunity.”

“Too many people are thinking of opportunities that existed five, 10, 20, 30 years ago. The world has changed, and the opportunities have changed,” Thomson said.

He described microgrids as part of a 70-year progression toward miniaturization of products. “Silicon and lithium revolutions have been changing everything we do.” Utilities and older energy companies need to adapt “to uptake the possibilities of the revolution,” he said.

Solar is yesterday

El Alami said he foresees microgrids following the path of solar. Ten years ago, solar was new and not understood — the position microgrids are in now. He described microgrids as a natural progression of distributed energy. “Microgrids are the second generation of solar and decentralized generation,” he said. “Let’s not just think about solar. Solar is great. But now microgrids are greater.”

SEL’s Manson said he’d like to help bring the same simplicity to microgrids that now characterizes cell phone use.

He also sees a need for those who understand the technology to pass along their knowledge.

“We should all be teaching,” Manson said. “If you’re not, get to it.”

“That’s a great point,” said Reifer. “There is so much knowledge in this space that needs to be shared, not just among customers, but each other. That’s what panels like this are for.”

Second week of Microgrid 2021 coming up!

Join us for the second week of Microgrid 2021, beginning May 18, when the topic will be microgrid costs and savings. Registration is free but must be done before the day the session runs.

Elisa Wood contributed to this article.

About the Author

Ethan Howland

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