In this edition of Industry Perspectives, Brian Baumann, business development manager for microgrids at Siemens Digital Grid, explores the vital elements integral to successful microgrid deployments.
The microgrid market continues to evolve as new systems are developed and new challenges are addressed by distributed generation and advanced controls. Though similarities exist, each has unique aspects with respect to industry, distributed generation asset mix, financing structures, and ultimate goals set by the end-use client.
Taking a step back and thoughtfully addressing the stakeholders’ goals will enable the team to move forward to receive maximum value in the most efficient manner.
New terms are being defined as quickly as new applications are being implemented. “Microgrid-as-a-Service” and “Transactional Energy” are two such terms that are becoming part of our daily conversations.
Regardless of the owner, developer, or financier of the microgrid deployments, all stakeholders want systems that perform from the first day to their satisfaction. To ensure promising first day results, there are six essential elements that every project needs to address as well as an order in which they should be followed.
- Consulting & planning
- Equipment – Generation assets, electrical equipment, protection, relays, etc.
- Automation & controls software
- Service & maintenance
Who covers each element is up to you and your team. Sometimes it could be one entity that takes care of all these elements or contracts with multiple partners each responsible for their individual area(s) of expertise.
Regardless of the party responsible for each step, it is essential to start with consulting and planning. All too often projects start by creating a list of distributed generation assets. We have attended many kickoff project meetings where the end-use client states they want X-kW of one thing and Y-MW of another, without stopping to clearly define the endgame of implementing a microgrid, such as reliability or cost savings. Taking a step back and thoughtfully addressing the stakeholders’ goals will enable the team to move forward to receive maximum value in the most efficient manner. From there, the team can assess the best product mix of existing and/or new equipment, specify the level of advanced control needed, and optimize the control scheme through analytics.
With those variables defined, a roadmap to success now exists and you can consider who will service and maintain the system and what the total cost of ownership will be over the life of the system. There are a multitude of financing options – ranging from a cash sale capital project where the end-use client owns, operates, and maintains the system to, as previously mentioned, Microgrid-as-a-service, where a third-party has ownership and provides the system at a monthly cost to the client.
In addition, depending on location, there are grants and rebate programs available for microgrid projects. Just as it is crucial to properly define the mechanics of a project, determining the best financing vehicle for your unique situation is equally important.
In the end, choosing a partner with expertise across all six elements or a team of partners with expertise in individual elements will make for a successful project delivering promising first day results to the system stakeholders.
Brian Baumann is business development manager for microgrids at Siemens Digital Grid.