Power generation is not the primary business of most potential microgrid buyers. They’re generally not familiar with the technical details related to on-grid and off-grid energy, solar panels, controls, artificial intelligence and battery storage. That’s where a microgrid consultant may help, says Jon Erickson, senior project manager at POWER Engineers. Erickson was interviewed by Elisa Wood, editor-in-chief of Microgrid Knowledge, in preparation for Microgrid 2021: The World Awakens to Microgrids.
Consultants can help clients with all phases of a microgrid, beginning with the initial concept and focusing on tasks such as project implementation, contract design and financing.
Some prospective microgrid customers may have begun some of this work on their own. They can still contact a consultant partway through a project.
“A consultant understands the technologies, assessments, the financials of microgrid contracting, and is really a client advocate all the way through the process,” said Erickson.
To understand how consultants can help, it’s important to have a grasp on the four phases of microgrid development:
- High level assessment
- Feasibility study
- Investment grade audit
- Project execution
The high level assessment looks at whether the microgrid makes sense. The consultant will determine if the microgrid fits with the client’s resiliency, sustainability or cost cutting goals under a best case scenario. If a microgrid doesn’t meet best case scenario requirements, the consultant will help the client explore other solutions to meet its goals.
If a potential microgrid buyer is in the earlier stages of microgrid planning or wants help choosing a location, that’s also the high level assessment stage.
Analyze and audit
For the second stage, a feasibility study, a consultant will analyze economics and best use cases, both of which are designed to help get stakeholders on board with the project.
Next, an investment grade audit involves additional engineering and execution plans that identify how to build the microgrid. During this stage, the consultant will identify financing options and begin to get parties lined up for implementing the project.
The fourth stage helps microgrid buyers begin executing the project. During this stage, consultants help their clients decide whether an engineering consulting firm should design and engineer the microgrid, procure the equipment, and manage construction, start up, commission and testing.
“If you think you’re at stage four, and we look at it, you may actually need to go back to stage two. If you’re leaving some low-hanging fruit on the tree, so to speak, we’ll be able to look at that closely,” said Erickson.
Along the way, one of the issues that’s most perplexing to potential microgrid buyers is financing. A consultant understands market conditions, incentives, rates, project financing and deal making. Ideally, consultants should have good relationships with financial institutions and should have experience with power purchase agreements and energy as a service contracts.
Under power purchase agreements, a third party develops, owns, operates and maintains the equipment and the host customer purchases the system’s electric output for a given period of time. This allows the customer to avoid making upfront payments.
Energy as a service contracts also avoid placing the risk on the microgrid host. These contracts can be customized to the host’s needs, goals and existing energy resources.
How to choose a microgrid consultant
When searching for a consultant, potential microgrid buyers should look for consultants familiar with financing options. They should also search for consultants with a broad range of experience in power technologies and products, including renewable energy, storage, fossil fuel options and controls. Because microgrids are like minigrids and integrate many different technologies, this experience is critical.
What’s more, consultants should demonstrate experience contributing to the conversation about microgrids and related technologies. For example, they should be active in industry groups and technical committees.
Those who hire consultants for help with microgrids come from a number of different industries and have many different needs. They may be commercial, industrial or utility customers or government agencies. They won’t necessarily seek a consultant’s help at the beginning of a project. They might want assistance dealing with an energy as a service company. They might want a consultant’s help operating a facility, commissioning and testing the microgrid or advice on operation and maintenance issues.
Once microgrid buyers arrive at the fourth stage of the project — implementation — both consultants and their clients get to see their efforts materialize, said Erickson.
“The fourth stage is the fun stage,” he said.