Recent weather events such as the increasing number and intensity of storms, and the extreme winds and fires in Northern California – leading to the pre-emptive shutdown of electricity service to millions ‚Äď have greatly increased the interest in microgrids (smaller localized grids serving designated end users that can ‚Äėisland‚Äô off from the main grid in the event of outages).¬†¬†
A recent story in Microgrid Knowledge (yes, there is such an online publication and it‚Äôs one of the best places to go for information on the topic)¬†highlighted the experience of three fire stations in Fremont California¬†(35 miles SE of San Francisco) that installed and deployed microgrids in December 2017.¬†¬†They all fared well during the scheduled power outages.¬†¬†One interesting element of that story was that all three of these microgrids were the same.¬†¬†Each had 40 kilowatt (kW) solar arrays combined with 110 kilowatthour (kWh) battery storage systems.¬†¬†
If you‚Äôve seen one microgrid‚Ä¶
For years during the microgrid industry‚Äôs infancy, the criticism has been that yes, microgrids provide valuable services, but they are too expensive. That has largely been because each one typically involves its own unique and bespoke ‚Äėscience project‚Äô approach, combining end uses with (often multiple) generation technologies, and a controller that essentially serves as the brains of this miniature grid.¬†¬†In fact, a well-known and oft-repeated saying in the industry has been, ‚Äúif you‚Äôve seen one microgrid, you‚Äôve seen one microgrid,‚ÄĚ implying that they defied the efficiencies that could come with modularization, repetition, and economies of scale.
More fires, more outages, more microgrids
The industry is now starting to evolve beyond that, with a number of companies offering more of a modular approach to the design and build.¬†¬†A local outfit –¬†¬†Gridscape (also with offices in India and the UK) – owns and operates Fremont‚Äôs microgrids.¬†¬†However, it was¬†Delta Electronics¬†‚Äď an international corporation offering power and thermal management solutions, with $9 bn in annual sales ‚Äď that contributed the PV inverters and energy storage systems as part of the overall solution.
In order to find out more about the potential for a more modular approach to future microgrids, I lined up a conversation with Brian Van Heel, Director of PV Inverters and Energy Storage at Delta Electronics (Americas).¬†¬†Van Heel has been on the cutting edge of evolving energy technology since the mid 2000‚Äôs when he was in multiple verticals in the solar industry.¬†¬†He subsequently migrated into the inverter industry, so he‚Äôs seen a lot of changes and gained a thorough understanding of the constituent elements of microgrids before he came over to Delta this past July.
Scalability and modularity will help drive costs down
Delta prides itself on manufacturing many of the critical elements, including the power conditioning systems, bi-directional inverters, the battery and energy management systems, and the battery cabinets (the company also does a lot of work in EV chargers as well).¬†¬†The company therefore possesses many of the critical pieces that facilitate development of a modular approach to microgrids, somewhat akin to the construction of modular homes ‚Äď where the ability to efficiently assemble the various elements in a controlled environment lowers costs and reduces the time and effort involved during on-site installation.¬†
Even outside of the northern California with its frequent and recent outages, he notes, the interest in microgrids is growing rapidly, and he‚Äôs bidding numerous projects across the United States, with a issuers of large number of RFPs trying to accelerate their projects.
Van Heel‚Äôs group at Delta assembles scalable kits that can be installed in similar types of buildings.¬†¬†For example, small convenience stores or chain drug stores have comparable footprints and similar electricity consumption profiles.¬†¬†They might be good candidates for Delta‚Äôs 125 kW power conditioning system (PCS), typically combined with 40 kW of solar and a 110 kW battery rack with a full cabinet of batteries (the same configuration used in Fremont‚Äôs fire stations).¬†¬†
That basic configuration can be adapted or multiplied depending on the size of the customer, he says.¬†¬†‚ÄúWe can basically skid it, and do your facility, where we can land up to 4 of these PCS units on one skid.¬†¬†You can go from 125 to 250 to 375 to 500 kW‚Ä¶ we can skid battery cabinets as well ‚Äď each at 110KWh with up to 5 per battery skid.‚ÄĚ
For facilities with an even larger power draw, Delta can assemble bigger combinations.¬†¬†For example, the PCS 2000 is a 2.5 megawatt (MW) unit, while the PCS 3000 can support up to 4.4 MWs.¬†¬†
As much work as possible is performed ahead of time, in the factory¬†
All of the necessary wiring is preconfigured so the onsite work is often relatively simple (though there are frequently those unavoidable and vexing issues such as trenching and/or cutting through concrete).¬†¬†But for the most part, it‚Äôs a fairly straightforward matter of bringing in the AC and DC power to the units and connecting up the system, involving no more than a couple days.¬†¬†‚ÄúYou run all wiring and it‚Äôs all done,‚ÄĚ Van Heel comments, saving both time and money since on-site work is generally more costly.¬†¬†Many issues can be avoided through testing and plugging into power in the controlled factory environment.¬†¬†In the Fremont installations, for example, the installation process did not disrupt the activity of the fire stations.
So, as the emerging microgrid industry evolves, how will the responsibilities be apportioned?¬†¬†Who does what?¬†¬†Van Heel comments that since the microgrid business ecosystem continues to evolve, ‚ÄúEveryone is still trying to figure out where everyone fits in.‚ÄĚ¬†¬†For example, ha asks, ‚ÄúDo they want Delta to provide the batteries, or do they want to buy direct?‚ÄĚ¬†¬†
Delta often plays the role of the developer and the EPC (engineering, procurement, and construction contractor).¬†¬†However, it typically sells the equipment to an integrator (a company such as Gridscape, Powin or NEC) who ‚Äėwraps‚Äô the entire solution with warrantees and communications capabilities.¬†¬†These outfits typically assume responsibility for ongoing operations and economic optimization (for example, managing the equipment to minimize monthly utility demand charges, or interacting with wholesale markets).¬†¬†
Van Heel indicates that the process from start to finish can be relatively quickly, since all the equipment sits in the warehouse.¬†¬†‚ÄúWe could do it one in a month if the permitting is done,‚ÄĚ he asserts,¬†and it can be even quicker for residential applications.¬†¬†
Van Heel is bullish on the entire industry, but cautions that the cost of the batteries is still holding back the industry from massive deployments.¬†¬†‚ÄúWe need a 70% decrease to where it can be delivered cost effectively at large scale.‚ÄĚ¬†¬†Given the pace of change in the global battery industry, in both cost-cutting and technology development (for example,¬†Bloomberg New Energy Finance cited a 35% decline¬†in the costs of lithium ion batteries over the nine-month period from mid-2018 to first quarter of 2019), the necessary tailwinds for that rosy future appear to exist.¬†¬†Very shortly, we may see microgrids rapidly take root across America‚Äôs energy landscape.¬†¬†In places like Northern California, that future cannot come fast enough.