Microgrid Controllers: What…or Who…is Behind the Curtain?

April 26, 2018
Peter Asmus, of Navigant Research, explores how microgrid controllers are at the forefront of microgrid industry evolution.

In this edition of Industry Perspectives, Peter Asmus, research director at Navigant Research, explores how microgrid controllers are at the forefront of microgrid industry evolution. 

Peter Asmus, Navigant Research

To many, the mystery behind the curtain of what is and what is not a good microgrid controller may feel a little like the Wizard of Oz. Often referred to as the “black box” or the “secret sauce” of what makes a microgrid work (or not), the number of companies with automation and control products keeps increasing (though casualties also litter the vendor landscape). But determining how these controllers compare, and what exact hardware and software components make them tick, remains opaque. Is it smart inverters, digital relays, or SCADA systems — or the even more nebulous world of software?

Navigant Research has just published its latest Leaderboard report on microgrid controllers. Among the vendors that ranked in the top five was Siemens, the German industrial giant. A Microgrid Knowledge survey has also shown that, among 21 candidates, Siemens was the most recognized company associated with microgrids.

A confluence of energy storage

The company recently made two important moves designed to increase its microgrid market share. It has formed a new partnership with AES to offer energy storage solutions, creating a new global company called Fluence. Though this partnership is more focused on larger-scale energy storage projects, virtually every microgrid coming online today has some form of energy storage. In fact, Navigant Research expects that the revenue opportunity of energy storage in microgrids will feature a compound annual growth rate of 37.4 percent over the next decade, reaching an annual implementation spend of $4.5 billion by 2026. Fluence boasts some impressive credentials: 56 energy storage projects either operating or awarded in 15 countries with a total capacity of 485 MW. How this new strategic partnership will influence the microgrid market remains to be seen.

Better to be simple

Siemens has also released a new, lower cost microgrid controller product—SICAM Microgrid Controller—which is, in essence, a microgrid in a box for grid-tied applications. The company sees value in offering a simpler control offering for microgrids that are smaller in scale and less focused on sophisticated market exchanges, moving closer to a plug-and-play solution. I have long argued that the microgrid market may grow faster if there is a shift away from complex engineering projects in the 50 MW, 100 MW, or 200 MW range, focusing instead on 1 MW and below projects and allowing cloud-based software systems to aggregate these microgrids into a virtual power plant. Companies such as Spirae have articulated this approach, stripping out excessive engineering costs that can often kill a project’s viability.

The Bronzeville project

In late March, Siemens announced a new project that shows that—despite its new plug-and-play, lower cost microgrid controller offering—the company also sees a market in its more sophisticated software solutions. After lengthy regulatory and legislative delays, the Bronzeville microgrid on the south side of Chicago is to be rate based by Commonwealth Edison. This project will rely on Siemens’ microgrid solution, its Microgrid Management System software, which will be used to optimize a cluster of two microgrids. The purpose of the project is to use advanced algorithms to implement controls for a microgrid serving over 1,000 customers, including critical facilities such as the Chicago Police Department headquarters, while interacting with the long-standing microgrid at the Illinois Institute of Technology.

A new energy storage powerhouse partnership, a new lower cost control option, and a project demonstrating the ability of its software to manage multiple microgrids show that Siemens is reinventing itself, as are its utility partners.

Peter Asmus is a research director at Navigant Research. This post originally ran on the Navigant Research blog.

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