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Residential and small commercial microgrids can help both utilities and system owners with grid issues and renewable energy integration. The deployment of microgrids is rising, and they could very well reshape the power sector as it is today.

In the late 1800s, the U.S. electric grid was in its infancy. Small generating stations were coming online and could power just a few city blocks at a time. In the following decades, the practice of transmitting electricity long distances at a high efficiency was mastered. Larger and larger power plants were built, and the modern centralized electric grid was born. By 1930, the majority of people in the U.S. had access to electricity. A “centralized utility grid” typically relies on large-scale power plants to produce electricity that may have to be transmitted hundreds of miles before it reaches its final destination. Centralized utility grid infrastructure makes up roughly 50% of utility costs to ratepayers. The other half of energy costs are for the supply of electricity, which consists of the price of building and maintaining power plants and supplying the fuel they burn. Deployment of microgrids with solar energy will reduce infrastructure and energy supply needs from the centralized utility grid.

 

Microgrids 101

A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries and acts as a single controllable entity with respect to the utility grid. A microgrid can connect and disconnect from the utility grid to enable it to operate in both grid-connected or island mode. Modern stand-alone inverters and microgrid systems are capable of connecting to both single- and three-phase electrical services. Any building with a standby generator is capable of operating as a stand-alone microgrid, albeit a crude one that typically cannot connect in parallel with the utility grid. Introducing a battery bank of some type and a sophisticated inverter system allows several microgrid technologies to operate in tandem with a live utility grid connection and facilitates the flow of energy into and out of the building. These technologies include photovoltaics, wind turbines, hydro, generators, combined heat and power (CHP) units, and fuel cells. Key to the whole process is an integrated smart energy monitoring and control system. Microgrid systems can be programed to be optimized in many different ways, including emergency backup power, demand charge reduction and self-consumption, as well as act as a service to the utility.

Solar electricity is the primary renewable energy technology that can produce clean, reliable energy for microgrids. A drawback of solar without a microgrid is that energy is produced in conjunction with the resource at any given time and is essentially uncontrolled. In most U.S. markets, the utility grid has a significant baseload of electricity demand and can handle significant future development of traditional grid-tied solar energy. In markets saturated with solar and/or wind development, such as Hawaii and Germany, the grid has reached a point in which backfeeding all of that renewable power is not desirable, and it is more beneficial to store the energy on-site for later consumption. If net metering is not allowed, modern inverters have the ability to curtail energy production based on the instantaneous building electricity usage to avoid backfeeding electricity to the utility grid. However, the best solution is to utilize a microgrid with on-site energy storage. Solar is a perfect energy source in a microgrid because it is clean, silent, reliable and virtually maintenance free.

 

Generators, CHP and fuel cells all fall into a similar category in that they are controllable electricity production resources that store potential energy in the form of fuel. CHP units are essentially generators that have a hydronic system to harness the heat of combustion to use for domestic water heating, space heating, and process heating and cooling (via absorption refrigeration) for commercial applications. The benefit of the three aforementioned electricity production technologies is that they can be turned on and off by the microgrid management system. The main drawback is that they consume fuel to run. Having one of these generation sources integrated in off-grid and emergency backup microgrids is essential to ensure 100% reliability. The accompanying solar array and battery bank should be sized appropriately to minimize the need for fuel-derived backup power.

Batteries are the primary form of energy storage for small-scale applications. Historically, flooded and sealed lead-acid batteries have been the most common for backup applications. Today, they still represent one of the least expensive upfront cost forms of electricity storage, though the cost gap has narrowed or may have even disappeared with new battery technologies that offer lower maintenance costs and greater lifetime cycles. Today’s suite of modern batteries includes the various lithium-ion technologies, saltwater-based batteries, flow batteries - the list goes on. Exciting developments will continue to happen in labs in terms of battery efficiency and capacity. As of now, the best way to reduce battery costs is through increased manufacturing volume and system deployment.

 

Smart tech

The key to operating an efficient microgrid is to make it a smart one. Fortunately, we live in the age of a nearly unlimited ability to access information, optimize software, and control mechanical and electrical systems. Microgrids can be programed and optimized to achieve a number of goals and can quickly switch from one mode to another. The most simple configuration is where net metering with a utility is compensated at full retail electricity and a battery bank would be reserved only for blackout events; otherwise, all available energy is fed into the grid. This configuration allows the designer to reduce the battery bank size to a minimum, assuming that an integrated generator or CHP plant will be available to recharge a depleted battery bank during a blackout event. Where net metering is discounted or not allowed, the sizing of the battery bank and the ability to control loads become much more important. There is a round-trip efficiency loss when storing energy into and taking it out of a battery bank (roughly 10% to 15%), so it can make sense to prioritize controlling loads to consume excess energy when available as compared with charging the battery bank as the first priority.

There are many loads in our homes and businesses that run on relatively primitive logic. For example, an electric water heater will cycle on and off continuously to make up for standby heat losses and maintain a fixed temperature setpoint 24/7. By using smart controls on an electric or heat pump water heater, the setpoint of the tank can be raised by 20° to 60° when there is excess solar generation available. This effectively stores solar energy in the form of hot water that would have been produced at a later time anyway. Now this same water heater will be less likely to run through the night when only battery or utility grid power is available. This is very cheap storage, as the water heater may already exist and only requires a control signal from the microgrid management system. This same logic can be applied to an electric water heater that may be installed as a “preheat” to an existing water heater for an even larger storage capacity. The key to this strategy is that there is sufficient hot water demand available. Other controllable loads include adjusting heating and cooling setpoints, refrigeration setpoints, and electric thermal storage for space heating. Appliances such as dishwashers and clothes dryers can be set to run on a time delay or a control signal so that they do not turn on until appropriate.

 

AC coupled vs. DC bus

Microgrids are available in two different configurations: AC coupled and DC bus architectures. Today, AC coupled systems are the most common and, in many cases, are most easily adapted to existing infrastructure, including existing PV systems with grid-tied inverters. In an AC coupled system, all electricity into and out of a battery bank is sent through an inverter that is dedicated to providing a clean AC signal that can function with or without the power grid. The electricity from these inverters is so clean that they “trick” the PV inverters into staying online and producing power. In off-grid mode, the inverters can easily manage the ebb and flow of electricity to and from the batteries to maintain a stable microgrid. This is also called “islanding.”

DC bus system architectures are in their early stages of development, but they promise higher efficiencies and fewer components/inverters when it comes to using, storing and backfeeding electricity to the grid. It comes down to the fact that much of the loads that we run with AC electricity today actually convert the electricity from AC to DC to run the appliance. Some examples of this are PV, batteries, high-efficiency heat pumps, fluorescent and LED lighting, and electric vehicle charging. Every time electricity is converted from AC to DC, there is an efficiency penalty. In a DC bus system, there is a portion of the microgrid that runs off DC electricity (typically at 380 V) that allows available DC loads to be fed directly from the battery storage and/or solar array to minimize the amount of energy that runs through an AC/DC conversion. In almost all cases, DC bus microgrids will contain a single DC/AC inverter responsible for managing power to and from the grid and other AC loads.

 

Potential benefits for all

Many utilities consider microgrids a threat to their business. When utilities build out infrastructure, they are guaranteed a fixed financial return on any money they invest in the upgrades. Development of microgrids will reduce the overall peak load on the grid and, as a result, will reduce the need to build out new infrastructure and will hurt a utility’s bottom line. Potential customers will have the ability to avoid connection to the grid altogether if they choose.

Believe it or not, though, microgrids can actually be beneficial to utilities. Distributed renewable energy and electricity storage in microgrids can substantially reduce the costs associated with building out and maintaining the current electric grid, as well as eliminate the need to build new centralized power plants. Microgrids can also act as a service to utilities by backfeeding energy onto the grid based on utility needs at any given time. This further reduces infrastructure requirements and the need for “spinning reserves” at large power plants. Utilities should be promoting the development of grid-­connected microgrids, as the practice can benefit them and their customers.

Utility customers, meanwhile, can benefit from a microgrid in several ways. They can receive payments from a utility by having stored energy available to the power company for when it needs it most. If net metering with a utility is not fully compensated, the customer can simply rely on a microgrid to store the solar energy on-site rather than sending it back to the grid. Microgrid owners also will have power available at their homes or businesses when the utility grid goes offline.

Key to the increased deployment of microgrids is strong policy support from utilities and state and federal agencies. Attractive incentives will be required to drive rapid development. The savings and benefits of reducing grid infrastructure needs and increasing grid efficiency can be used to fund these incentives.

Some states and utilities are already working to embrace microgrids. For example, the New York State Energy Research and Development Authority is currently deploying a $40 million competition to help communities create microgrids. And in Vermont, utility Green Mountain Power is running a program under which a customer installs on-site battery storage and the utility has rights to use roughly 50% of the storage capacity for grid management, with the remaining 50% reserved for the residence for emergency backup power.

Transitioning from fossil fuels to renewable energy is paramount to the well being of our economy, our health and our national security. Thomas Edison reportedly said it best back in 1931: “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

Residential and small commercial microgrids will play a large role in sustainable deployment of renewables in the very near future. Home and business owners will have more visibility into how they use energy and will be able to actively manage it. System owners, utilities and all ratepayers will reap the benefits.

 

Geoff Sparrow, P.E., is director of engineering at New England solar installer ReVision Energy.