Distributed energy innovation
The energy industry continues to see increased penetration of distributed energy generation. Innovative solutions are being deployed across the energy supply chain with new technologies and funding models.
While innovation is happening across the world, research firm Navigant Research’s Principal Research Analyst Peter Asmus expects Asia Pacific, particularly Australia, China, India and Japan, to be at the centre of innovation. “Australia is where the most diverse opportunity exists in terms of DER [distributed energy resources] integration with microgrids and virtual power plants. Australia is also home to Power Ledger experiments with transactive energy,” according to Asmus.
World’s energy laboratory
Blackouts, high cost of energy from the grid and a large increase in distributed solar generation are some of the key factors driving growth in the distributed energy resources market in Australia, said Asmus.
There is currently no comprehensive data in the public domain on the global microgrid capacity, but Navigant Research’s Microgrid Deployment Tracker has identified more than 1800 microgrid projects worth over 20 GW of operating, under development and proposed microgrid capacity. Out of these, Australia has around 200 MW worth of projects.
With the world’s largest virtual power plant, the world’s first wave integrated renewable microgrid and the world’s first blockchain-enabled energy trading platform, Australia is at the global forefront of renewable energy.
The world’s largest virtual power plant worth $800m, 250 MW, being built by the South Australian Government and Tesla, will involve rollout of 50,000 home solar and battery systems across the state and is expected to meet around 20% of South Australia’s average daily energy requirements.
Asmus sees Australia as the “laboratory of the world” for DER. Businesses looking to implement really cutting-edge stuff might have a good chance of success in Australia, said Asmus.
Opportunities across industries
There are tremendous opportunities across the microgrid spectrum — islanded microgrids, grid connected systems as well as modular microgrid solutions, according to ABB Business Development and Technology Manager for Microgrids Juergen Zimmermann.
The Australian market isn’t mature and there isn’t enough understanding about the benefits that could be achieved with microgrids, he said. As a result, a number of businesses are looking at small 100–200 kW projects with a view to increasing capacity at a later stage, added Zimmermann.
Grid-connected microgrids are becoming increasingly popular because of their ability to isolate from the main grid when needed, for example, during peak demand times or a power outage.
ABB has so far completed around 50 microgrid projects globally and around 30 in Australia. The group is involved in projects across different industries including mining, oil and gas, food and beverages, defence and others. The group’s portfolio encompasses the full range of enabling technologies including conventional and renewable power generation, automation, grid stabilisation, grid connection, energy storage and intelligent control technology, as well as consulting and services to enable microgrids globally. ABB has developed a range of lifecycle management, consulting and integration services that enable its customers to achieve the maximum return on investment in their microgrids, from the initial design concept and on throughout long service life. The group offers end-to-end solutions, from consultancy through to operations and maintenance, in the microgrid market. This includes automation and control, energy storage and grid stabilisation and protection technologies.
ABB is installing a PowerStore battery storage system at oil and gas company Woodside’s Goodwyn A platform, located about 135 km northwest of Karratha, in Western Australia. The 55,000-tonne production facility is more than 290 metres tall and stands in a water depth of 131 metres. The group’s containerised, plug-and-play PowerStore battery storage system will support Goodwyn A’s existing gas turbine generators. The battery will replace one of the six existing gas turbine generators and will also reduce the need for using the emergency diesel generator. Short-term backup will be provided via an ABB Ability PowerStore battery energy storage system incorporated within the microgrid, to provide a ‘spinning reserve’. The ABB Ability Microgrid Plus control system will act as the brain of the solution and it will also be possible to remotely operate the microgrid if the need arises or the platform has to be de-manned for any reason. The system will help Woodside lower cost of operations and maintenance, and also contribute to the company’s 2020 goal of reducing carbon emissions.
The key drivers in the decision to deploy microgrids are different for different customers but they fall into three main categories — improving energy security or resilience, reducing cost and increasing renewables, said James Hunt, GM Energy, Schneider Electric. The company has worked on a number of remote microgrid projects but at this stage “most of the excitement” is in the grid-connected microgrid market, said Hunt. The shift in energy costs over the last few years has driven a lot of activity, he said.
Schneider Electric is working on several microgrid projects across different industries, including data centres, food and beverages.
The company is working with Planet Ark Power on a $13.9 million solar and battery pilot project at a major distribution centre in South Australia. The project will include a grid-connected microgrid with 2.9 MWh of smart battery storage, demand management, new network integration technology and up to 6 MW of rooftop solar power. It combines solar power and battery technology optimised by a Schneider Electric-led microgrid management system integrated with an Advanced Distribution Management System to deliver more secure and reliable energy back to the grid, according to the company.
Central to this project will be the integration of Schneider Electric’s EcoStruxure Platforms, including its Advanced Distribution Management System and Microgrid Advisor, which will optimise the site’s solar PV and battery storage. Embedding solar generation and storage with microgrid control will improve the grid’s resilience and the energy security of the site. The project has received a $1.95m grant from the South Australian Government.
Asmus expects the largest growth to be in the commercial and industrial segments. This will be driven by declining costs of microgrid-enabling components and technologies, such as solar and batteries. With technological advancements, particularly around batteries, business cases that didn’t make sense a year or two ago now seem viable, said Zimmermann.
The microgrid market is expanding at a rapid pace but challenges, from regulatory to technical, remain.
One of the biggest challenges is how do you combine the various value streams for the customer to establish a microgrid project, said Hunt. For example, identifying different ways customers can benefit through microgrids; establishing the business case, demand and energy management; maximising self-consumption etc.
The other challenge is that the penetration of co-generation is lower in Australia compared to the US and Europe, he said. This means, we don’t have microgrids with anchor assets. However, this is starting to change with increasing penetration of renewables and storage, he added. If customers have an anchor asset, they are automatically in a position where they are making decisions on generating themselves or buying from the grid. He further said that Australia has got a regulatory framework that doesn’t necessarily accommodate microgrids but that is gradually improving with changes such as demand management incentive scheme, demand response etc.
The global microgrid market continues to move forward despite the regulatory challenges, so if the regulations were improved there would be more growth, said Asmus. The challenges are often related to location, logistics and labour, said Asmus.
Our distributed future
The global cumulative spending on microgrid-enabling technologies is expected to reach nearly $112 billion by 2026, according to Navigant’s latest report.
The growth in a wide variety of distributed resources is driving microgrid deployments, according to Navigant. “As one of many options to aggregate and optimise these DER, the microgrid platform challenges the status quo by allowing for new levels of resilience and reliability in light of emerging threats to global power grids ranging from extreme weather events, earthquakes and wildfires to terrorist threats. At the same time, microgrids can help organise mixed asset fleets of DER at the distribution network level. With the right set of control technologies, this platform can not only offer value streams to site hosts, but also provide value upstream to the larger grid.”
“Biomass, combined heat and power (CHP), diesel, fuel cells, hydroelectric, solar PV and wind represent the lion’s share of potential revenue for microgrid implementation spending, and serve as the backbone of the microgrid value proposition: maximising the value of on-site power generation,” said Asmus.
Microgrids represent a key component of an emerging Energy Cloud focused on resilience and renewable energy integration, he said.
From a global perspective, CHP was the leading choice for microgrids in terms of capacity in 2017, with 655 MW deployed, followed by solar PV (392 MW), and then diesel (385 MW). By 2026, however, the MET landscape is expected to shift, with solar PV jumping to a commanding lead with 3786 MW annually, followed by energy storage with 3292 MW, according to the report.
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