Sean McEvoy, senior vice president of energy at Veritone, debunks three common microgrid myths around cost, value and predictability.
Microgrids deliver many benefits to utilities, independent power producers and power consumers. They can incorporate distributed renewable generation, distributed energy systems (DES), EVs and demand response. Microgrids can operate independent of the main grid (i.e., in islanding mode) during extreme events. They also decarbonize via their incorporation of clean energy.
Moreover, owners/operators of many of the over 2,000 microgrids in operation (primarily college campuses, industrial end users and military bases) realize cost benefits from their operation. Microgrids are a promising community-level solution, consolidating distributed, decarbonizing technologies into local grids. Community microgrids can extend resilience and decarbonization to the neighborhood level.
With so many benefits from microgrids, why are some still on the fence? Three major misconceptions about microgrids typically arise: high cost, limited use and unpredictability. In reality, microgrids reduce costs, have broad applicability and can be predictably controlled and managed.
Myth: Microgrids are too costly
The truth: The cost of renewables, especially solar and battery power, has plummeted to the point where microgrid projects are now feasible and make financial sense. Beyond the cost of the equipment itself though, consider the cost of doing nothing. Power outages and interruptions cost Americans at least $150 billion each year, and there was an average of five hours of power outage per US resident in 2019. An artificial intelligence (AI)-controlled microgrid can reduce the impact of these power outages, especially for critical loads where no power is not an option.
There are also other, more direct costs that microgrids can reduce, such as the amount of a utility’s required spinning reserves. Reserve margin per NERC was between 12% and 20% of energy production in 2019. Veritone estimates that its AI-controlled microgrids can reduce the need for spinning reserves by 25% or more. These millions of dollars of savings typically cover initial microgrid installation costs and any incremental operational costs.
Myth: Microgrids are only valuable in emergency situations
The truth: Microgrids are more than a power insurance policy. An AI-controlled microgrid providing two-way energy flow between it and the macrogrid can act as an extension to a utility’s power sources during normal operations, making the overall grid more efficient and cost effective. When stored energy from a microgrid is cheaper than macrogrid-provided energy (for example, during the afternoon hours on a hot day), that cheaper stored energy can be used instead, with predictive controllers directing energy traffic based on real-time supply, demand and environmental factors.
Myth: Renewable energy microgrids are too unpredictable
The truth: While renewable energy sources are inherently unpredictable, the microgrid orchestrating all of them doesn’t have to be. Day-ahead forecasting methods are used today to mitigate this risk but the wind and sunlight changes minutes at a time, making these methods less useful when these types of clean energy sources are in the mix. AI can now address this problem, working alongside advanced distribution management systems and other existing grid infrastructure. Real-time predictive models for power dispatch and storage are constantly updating for each device on the microgrid, sharing their model states with every other device, and sending control signals to each other to ensure all microgrid devices are meeting demand needs every second of every day. This AI-based modeling and control makes the unpredictable nature of microgrid energy sources more manageable and the overall microgrid more reliable.
Ultimately, microgrids are only as good as their energy management and control systems. To maximize the resilience, decarbonization and economic benefits of an autonomous grid system such as a microgrid, AI can provide active, real-time synchronization and control of microgrid resources, including PV, DES, EVs and other DER.
Microgrids also provide an opportunity for beneficial energy arbitrage, which can increase the affordability of microgrids, reduce net electricity costs and benefit both the microgrid and the main grid. AI systems can optimally model, control and dispatch individual devices and resources in ways that can optimize energy sharing and trading between individual connected microgrids, as well as between microgrids and the main grid. This can improve the stability, reliability, resilience, affordability and energy efficiency of the entire electric power system.
This article was written by Sean McEvoy, senior vice president of energy at Veritone.