Norm Campbell, federal team manager at Go Electric, discusses how modular microgrids and standardization can reduce the costs of microgrids.
As a manufacturer of battery enabled microgrid systems, we hear a consistent message from end customers that microgrid systems are too expensive to install and have too little payback. This would be systems that are behind the meter and not for utility-size renewable generation, storage and control. This issue has been at the forefront in the slow increase in adoption of microgrid systems. Solving this challenge will greatly enhance the opportunities to increase microgrid installations for end users to enhance their facility or campus resilience.
There are several ways to reduce costs in a microgrid and currently the majority of focus is in reducing battery costs. With a battery energy storage system (BESS) comprising more than 50% of a control system cost (generation excluded from this calculation), it makes sense to look at the large cost buckets. Battery prices are dropping based on changes in manufacturing and volume of purchases, but there is a bottom to this pricing under current chemistry and processes. When this will happen is a major conversation within the industry with numerous articles and studies publicly available.
However, there are hidden soft costs within microgrid systems that can be nearly eliminated. These soft costs focus on custom engineering and installation of systems. A great analogy can be seen in the nuclear energy generation space where Europe standardized on specific reactor specifications for design and implementation and the US allowed for many variations of design. The result was a stable cost of building nuclear power plants in the EU and a wide range of costs of building systems in the US. Currently, there is no standard design in the microgrid industry. Each project is considered a one-off or custom system. This approach drives costs and complexity in engineering and construction where it may not be needed.
So what is a solution? A modular and scalable battery enabled microgrid system that can act in a distributed manner appears to solve several of these issues. By standardizing and building on one unit, a microgrid can be constructed, tested and deployed with minimal special engineering and installation — a system such as depicted in Figure 1. In this instance, microgrid systems can be built to include microgrid controls, BESS and switchgear in a single ISO standard arrangement. These systems can be designed for base use cases and additives if and when the customer grows in need for added resilience. Engineering is handled at the manufacturing location and integration engineering is specific for the site and interconnection. Installation is reduced to pouring a concrete pad or pylons, leveling the system, connecting distributed energy resources, connection to load center and field commissioning the microgrid controls. When compared to traditional microgrid system installation, there is a direct reduction in both engineering and installation activity and resulting costs.
An additional benefit of such a design is it creates a potential distributed microgrid system that can be installed at times convenient to the customer with smaller capital expense focused on critical loads. As the facility or campus critical load needs change, other distributed microgrid packages can be installed and interconnected to act in unison for the customer needs. Much like Burger King once used the tag line, “Have it your way.” Just like for hamburgers, these modular systems do the same for microgrids at lower installed costs. Current experience and installations are showing a 20% reduction in soft cost installations and, as systems move to mass manufacture, it is anticipated these cost reductions will only increase.
In conclusion, it is time to move away from custom microgrid solutions for the 80% of applications that do not require custom engineering and deploy systems that are straightforward to install and operate. The platform battery enabled microgrid is an excellent way to help microgrids become more cost-effective and deployed, especially where needed the most.
Norm Campbell is federal team manager at Go Electric.