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Distributed Microgrids Get Real-Time Touch

A number of technology companies and utilities have embarked on a testbed project to demonstrate a microgrid architecture for integrating solar, wind and storage that emphasizes distributed generation and control while maintaining overall grid reliability.

The project, under the supervision of the Industrial Internet Consortium (IIC), seeks to apply a networking scheme that is conceptually similar to the one used for smart buildings, Nest devices and consumer products - but on a larger scale and with more security.

Stan Schneider, CEO of Real-Time Innovations Inc. (RTI) and a member of the IIC steering committee, is leading the microgrid testbed effort. Schneider says the consumer Internet of Things garners the most attention but that the industrial Internet of Things is likely to have the most profound effect on society. “The industrial Internet of Things is infrastructure for how the world works,” he says.

Hospitals, transportation systems and power systems are among the industries the IIC consortium has identified for its first efforts. Founding members of the IIC - AT&T, Cisco Systems, General Electric, Intel and IBM - have customers for their products and services in nearly all major industrial sectors. Nevertheless, the Communications and Control Testbed for Microgrid Applications is the only such project the organization has made public.

The effort involves IIC members RTI, Cisco and National Instruments, along with utilities Southern California Edison and CSP Energy in Texas. The goal is to replace current grid management schemes, which typically operate in 15-minute output update cycles, with a real-time system capable of responding to grid requirements as they change moment to moment. One of the most promising ways to accomplish this is to deploy a series of microgrids that are individually more responsive to local conditions while remaining in contact to ensure overall grid stability.

The first phase of the testbed project is to design and deploy a smart grid network in each of the utilities’ research and development centers. The architecture behind the testbed project is based on Duke Energy’s Open Field Message Bus that will provide a common means for its currently disparate distribution systems to communicate across. Duke Energy is using RTI’s Connext data distribution service standard to develop the architecture.

The second phase of the project, scheduled for 2016, will demonstrate the scalability of the communication and control framework. The third phase of the testbed will deploy the architecture in an actual grid setting. The first two phases will take place at SoCal Edison’s Control Lab in Westminster, Calif., while the final phase will deploy at CPS Energy’s “grid of the future” test area in San Antonio.

According to Schneider, the power sector is a logical choice for the IIC’s first public testbed project. Not only are power generation, transmission and distribution founding parts of the world’s industrial infrastructure, but the challenge posed by integrating renewable energy onto the grid is also timely.

“Back in the dot-com era, Sun Microsystems famously said, ‘The network is the computer,’ and everybody laughed,” Schneider says, noting the prevailing wisdom at the time was that the computer and the network were separate and distinct. “Today, if you pull out your Google phone and talk into it, you tell me where that translator is running. The network really is the computer, and I’m now claiming that the network is the grid.” - Michael Puttré

 

Solar Seeks To Open Up Public Capital

From a developer’s point of view, each individual element of a distributed solar project portfolio is admirably flexible. However, the end result of all this flexibility is that the developer is going to have a lot of small projects. From a financing perspective, this introduces a level of complexity that is lacking in centrally located generating assets, which readily attract private capital.

“When you start looking at smaller projects, you immediately begin to think, ‘How do I finance this in the most efficient way possible?’” says Thomas Fink, senior vice president and managing director of Trepp Inc., a financial services and consulting firm based in New York City. “One way you do that is by tapping the public capital markets.”

Fink is also on the board of the Solar Energy Finance Association (SEFA), the organizer of the Sunshine Backed Bonds conference that took place in New York City at the end of April. The conference, now in its third year, focuses on issues related to how the solar sector can access public markets to finance projects.

“You can raise money in the private markets,” Fink says, noting that there are hedge funds, private-equity funds and institutional investors that will buy bonds and provide capital in the private markets. “But how do you get to the larger markets, which are the public capital markets?”

The first Sunshine Backed Bonds Conference took place right after the National Renewable Energy Laboratory received a U.S. Department of Energy grant to start the Solar Access to Public Capital (SAPC) initiative. One of the purposes of SAPC was to identify the obstacles that were keeping solar projects - particularly distributed solar - from gaining access to the public capital markets.

SEFA, which grew out of the SAPC initiative, is working to create an environment where public capital is readily available for solar projects, including distributed ones. The desirability of accessing public markets stems from its size - tens of trillions of dollars - and great diversity of capital “infrastructure.” These characteristics have the potential to make financing solar projects with appropriate public capital vehicles less expensive than financing the projects with private-equity sources.

In addition to the ongoing SAPC effort, there are a number of state initiatives, such as California’s property-assessed clean energy (PACE) finance programs, Connecticut’s commercial PACE and various “green bond” initiatives, that are trying to assist the solar sector in accessing the public capital markets.

According to Fink, the prospects for opening pubic capital markets to solar are good because solar assets share many of the characteristics of real estate assets, which are routinely financed by public vehicles. Ideally, the solar sector should be able to follow the route of the real estate market, which has real estate investment trusts, commercial mortgage-backed securities, bank lending, insurance company lending and all sorts of other options.

Educating sources of public capital about the opportunities and risks of solar development is one way forward. Another is for solar developers to learn the ways of public capital providers and to find ways of appealing to those sources that best fit their business models.

“What I think is fascinating to watch is how fast the solar sector evolves in terms of its financing vehicles and its techniques,” Fink says. “People are experimenting and working with different structures - finding those structures that make sense for the business strategy they are following. All of this is focused on getting the long-term cost of capital down by putting the right risk with the right capital market player at the right price.”

- Michael Puttré

 

Group Buying Brings Down Solar Costs

One challenging aspect of the residential solar business is putting motivated buyers together with effective installers. The Community Power Network (CPN) is a nonprofit organization that functions as a “referee” for homeowners interested in group buying - rather like a state-sponsored Solarize program. The main difference is the nature of the group that drives the bulk-purchasing dynamic.

The groups typically form around a kernel of “solar champions” that may be neighborhood solar activists or some other organization with motivations for going solar. For example, the CPN formed a group composed of World Wildlife Fund members.

The core members of each group generally do the heavy lifting of recruiting friends and neighbors to join. Group members sign a memorandum of understanding that is not a contractual obligation to purchase a solar power system but simply serves as a formal declaration of interest. In addition, CPN personnel inspect the property of each group member to make sure each could usefully support a rooftop or pole-mounted array.

When a group reaches a critical mass of members - 20 to 30 families - it issues a request for proposals (RFP) for solar contractors able to handle the work. A selection committee in each group evaluates the bids according to a point system that CPN has created and picks a winner.

The CPN, which currently operates in Maryland; Washington, D.C.; Virginia; and West Virginia, receives a referral fee from the installers that participate in the program.

Anthony Colella, solar project manager and co-owner of Beltsville, Md.-based Edge Energy, says the CPN programs for group buying have had a tremendous impact on his business. The company started out performing energy audits and expanded to include energy-efficiency, insulation and roofing services. Installation of photovoltaic power systems grew gradually from this process.

“When we started installing solar in 2009, we were at a pace of doing one or two systems a month,” Colella says. “It was, by no means, a huge part of our business. But we very much saw solar as the future. We saw this thing coming, and I really wanted to be a part of it.”

Edge Energy’s association with the CPN began, in part, through the recommendations of colleagues and even home energy audit customers who had heard about it. Colella says the Maryland-Washington, D.C.-Virginia region is relatively new to solar, and the education and motivation aspects of the groups formed under the CPN’s aegis or in partnership with it make a big difference.

“The quality of leads that come from typical advertising sources is all over the board,” Colella says. “And this is also true of state Solarize programs. We get what I call ‘tire-kickers.’ The customer-acquisition costs with a neighborhood bulk-purchasing program are much, much lower. Basically, it’s a huge group of homeowners who are already well aware of what solar is all about. They are motivated. They are excited.”

The benefit to homeowners in the group and installers alike arises from the group. The contractor selected through the group’s RFP process now has a pool of centrally located customers who have a very high likelihood of following through with a contracted solar sale. The contractor is then able to buy materials and schedule labor with a number of projects on the plate.

“Right off the bat, one of the biggest advantages for the installer is volume of work,” Colella says. “We’re ordering in bulk, so instead of buying a small system, one-by-one, we’re ordering systems by the truckload. We’re bringing in hundreds of panels and dozens of inverters all at once, which results in huge real-money savings that we are confident about. So, we can then offer savings to the customer in our bids.”

At the same time, having a group of projects also helps reduce soft costs. Colella says he can go to the permitting office and come back with five permits in the time it used to take to get one. Similar efficiencies can be found in the scheduling of inspections and even in deliveries of materials and the allocation of labor.

“We had some key solar staff, and we were not selling all of their time with solar,” Colella says, describing the early days of the solar business. “We got started in our first group with the CPN about a year and a half ago. We’re now completing our fourth group. We thought this could be just the thing to take our solar business to the next level.”

- Michael Puttré

 

Wind, Solar, Gas Lead New U.S. Capacity

Wind, solar, geothermal and hydropower combined provided more than 75% of the 1.2 GW of new U.S. electrical generating capacity placed into service during the first quarter, according to the latest Energy Infrastructure Update report from the Federal Energy Regulatory Commission’s office of energy projects.

Specifically, during the quarter, eight new units of wind came online with a combined capacity of 647 MW - accounting for 52.64% of all new generating capacity for the quarter. This was followed by 30 units of solar, representing 214 MW. In addition, one 45 MW geothermal steam unit and one 21 MW hydropower unit came online.

The balance of new generating capacity for the quarter came from five natural gas units with a combined capacity of 302 MW.

According to the nonprofit SUN DAY Campaign, the numbers for this year are similar to the numbers for the same period in 2014, when renewables provided more than 1.4 GW of new capacity and natural gas provided 159 MW while coal and nuclear provided none and oil just reached 1 MW. Renewable energy sources accounted for half of all new generating capacity last year.

“The trend lines for the past several years have been consistent and unmistakable,” notes Ken Bossong, executive director of the SUN DAY Campaign. “Each month, renewable energy sources - particularly wind and solar - increase their share of the nation’s generating capacity while those of coal, oil and nuclear decline.”

Renewable energy sources now account for 16.92% of total installed operating generating capacity in the U.S.: water (8.53%), wind (5.65%), biomass (1.38%), solar (1.03%) and geothermal steam (0.33%).

 

U.K. Solar Boom ‘Unprecedented’

According to a new report from IHS Inc., at least 110 photovoltaic projects with a combined capacity of 1.6 GW were completed in the U.K. in the first quarter.

This latest push brings the total number of large solar farms to 311, with a combined capacity of 3.8 GW, IHS says. This represents 51% of the U.K.’s total installed PV capacity of 7.5 GW.

According to the report, one-third of the total capacity is controlled by the three largest PV investors in the U.K.: Lightsource, TerraForm Power and Bluefield LLP. Half of the total capacity is owned by the 10 largest developers.

The heightened activity was spurred by the end of the Renewable Obligations scheme for projects larger than 5 MW - which expired at the end of March. IHS says there are 500 projects in the U.K. pipeline larger than 5 MW that will now either have to be reduced below that threshold, submitted under less advantageous tenders or completely scrapped.

“After this rush in the U.K., less capacity will be installed per quarter, but the market has not cooled off,” says Josefin Berg, senior analyst for solar power at IHS. “How policymakers will react to this market pace remains to be seen - we will not know much before the coming elections.”

 

Intersolar NA Staging Energy Storage Event

For the past two years, Intersolar North America has spotlighted the growing energy storage market that showcases PV energy storage systems at the annual exhibition and conference. This year, Intersolar North America (San Francisco, July 14-16) will host a new special exhibition - ees (electrical energy storage) - to extend the event’s focus on the latest technologies and policies in the energy storage value chain. More than 50 of the 500 exhibitors at Intersolar North America will showcase their storage solutions in this special exhibition.

The conference will also host a number of panels focused on storage technology and policy incentives driving the market forward.

Today, all eyes are on the potential for solar paired with storage. The combination is seen as the golden ticket to mass-market adoption - enabling customers to use electricity generated by renewables even when the sun isn’t shining.

Lithium-ion (Li-ion) batteries are well suited for distributed solar due to their compact size. Further, the cost barrier with this technology has fallen with the growth of the battery-dependent electric vehicle market. The rapid drop in battery costs over recent years is not unlike the fall in solar panel prices a decade ago.

Players such as Tesla, Sungevity and Sonnenbatterie are entering the solar storage market to establish early dominance.

California is home to one of the largest and most dynamic energy storage markets in the U.S. This is primarily due to California’s aggressive storage incentive plan in A.B.2514, which requires state utilities to procure 1.3 GW of storage by 2020.

Spurred by this, California’s three largest investor-owned utilities - Southern California Edison (SCE), Pacific Gas and Electric (PG&E) and San Diego Gas & Electric - are now installing cost-effective storage solutions. For example, SCE invested in a wind farm in the Mojave Desert that stores wind power in giant Li-ion batteries. PG&E plans to integrate 74 MW of energy storage through a series of tenders.

States on the East Coast are also coming out with storage incentives to support the adoption of renewables. New York has budgeted $25 million to promote storage development. Moreover, PJM, a utility that serves Michigan, Maryland, New Jersey and Pennsylvania, has adopted the Federal Energy Regulatory Commission’s new rules governing storage solutions.

The Alcatraz Island microgrid project, developed by Princeton Power Systems, is an example of a system that successfully unites solar and battery storage. Because the solar PV system was installed on an island, it needed to function off-grid and storage was absolutely essential.

Previously, the historic prison used diesel generators to power operations. Princeton Power Systems installed a large Li-ion battery to provide 24-hour power to the landmark facility. For its forward-thinking approach to renewables, Princeton Power Systems was awarded The North American Project of the Year at Intersolar North America 2014.

The energy storage market is dynamic. To stay up to date with market progress, professionals need to seek out like-minded experts for insights and business partnerships. Events such as Intersolar North America’s ees exhibition serve as a connection point for professionals to hear about innovation. - Markus Elsasser

Markus Elsasser is the founder and CEO of Solar Promotion International GmbH, the organizer of Intersolar exhibitions and conferences. S