Page 28 - Vol 32 Issue 33 2121

energy microgrids

How a perfect storm is driving

microgrids into the mainstream

By Will Agate

Given the diverse benefits that microgrids provide – reductions in energy costs, business risk,
and carbon emissions, and increases in resiliency and power reliability – one wonders why
discussion of microgrids has only started to take off recently.

generators in the case of an outage, which
Urban solar farm helps maintain smooth operations to avoid
damage to equipment and infrastructure
caused by outages. Microgrid controllers,
which allow microgrids to island from
the grid during a major event, also
enable a level of control over power that
far exceeds traditional backup power
systems. These technologies, coupled with
other types of distributed generation, are
enabling microgrids with a broader set of
capabilities than at any point in the past.
Third, perhaps unsurprisingly, is the
fact that the costs of distributed energy
resources are dropping rapidly, allowing
them to achieve price parity with other
traditional energy sources. Solar PV will
likely continue to experience steady cost
declines as the market continues to grow.
The same is just starting to impact storage
ost of this can be explained and One of the key drivers of interest in strategies; as the financial advisory and
understood in that it comes microgrids today is the increased asset management firm Lazard wrote in
Mdown to the fact that microgrids need for businesses and communities its most recent levelized cost of storage
are now experiencing “the perfect to plan for their own resiliency. The analysis, “sustained cost declines have
storm” of factors relating to why they traditional electricity grid was not built exceeded expectations for lithium-ion
are beginning to make so much sense. to withstand the increasingly intense technologies.” Accordingly, the market
These factors include pivotal advances weather conditions, such as hurricanes, is reaching an inflection point at which
in technology, reduction of costs, and that have become stronger and more the cost of solar-plus-storage places it
significant changes in the environment frequent; companies and government within the investment criteria of many
and traditional electric grids all around agencies are looking to microgrids as a organizations to serve at least a portion of
us. Today, these factors and other related means of hardening their infrastructure their on-site energy needs.
energy innovations are leading many on a localized basis as protection against Of course, none of these innovations
large energy users to contemplate how the types of major outages unleashed by would have been possible without major
they might be able to leverage a microgrid Hurricanes Maria, Sandy, Florence, and changes in how the energy sector is
to help them address their own energy others in recent years. regulated. A few decades ago, customers
and infrastructure needs. In this article, The increasing availability of new had few choices for energy supply beyond
we will present key reasons for why now distributed energy resource technologies relying on monopoly energy and gas
is the right time to start thinking about is the second major driver of interest in utilities. Following years of deregulation
microgrids more seriously as well as some microgrids, particularly energy storage, and the creation of new market rules
perspectives on how to make the leap to which is arguably where solar was 10- (such as those enabling customer and
your first microgrid. 20 years ago and is about to undergo third-party ownership, innovative tariff
Five Key Factors Driving Interest in a major period of deployment. Energy schemes, demand response programs,
Microgrids Today storage technologies can now provide and others), customers these days tend
faster and more flexible power than diesel to have a diversity of options for how to

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