Commercial and industrial customers in California are using microgrids to reach higher degrees of energy autonomy—increasingly with simpler, "prepackaged " microgrids—as developers tout the benefits of cleaner fuels and advanced technology that allows unprecedented levels of energy management.
California is now facing "significant power challenges with widespread and long-term power outages, along with the impact on business continuity and residential safety," Mark Feasel, president of smart-grid North America operations for Schneider Electric, told California Energy Markets. "Innovative technologies like microgrids can now deliver resilient, sustainable and affordable power to businesses and communities in the event of routine shut-offs or other outages that strain the grid. "
The next generation of microgrids will be less complex and will target a wider customer and user base, according to Feasel. Beginning in the recent past, microgrids have typically catered to large municipalities, large commercial buildings, campuses, and critical facilities such as hospitals and military bases. However, businesses of all sizes increasingly require the energy resilience and infrastructure modernization that a microgrid can provide. While technological advances and the maturation of innovative business models, such as "energy-as-a-service," have further enabled the expansion of microgrids to new customers, the primary customer for microgrids broadly remains large buildings.
Future microgrids must address both the cost and complexity concerns of many small-to-medium-sized buildings. Feasel sees a trend: Technology providers are turning their focus to developing simplified microgrid technology that can further drive down cost, risk and complexity. Additionally, Feasel says, "prepackaged microgrid solutions are quickly making their way into the market to further help simplify the deployment and management of microgrids."
As opposed to designing and building a system from the ground up at a site, corporations that design microgrids are now creating mass-produced solutions that can be quickly and easily deployed by other customers of similar size and with comparable needs. By allocating the complexity to the developer, customers can reduce both their risk and cost, while shortening the amount of time until deployment. As microgrids become less customer-specific and more tailored to common energy needs that multiple facilities face, the trend will be toward more modular systems that require less engineering so that a wider range of consumers can enjoy their benefits.
Feasel and his Schneider colleagues implemented a microgrid at the Marine Corps Air Station in Miramar, one of the few military bases located within a large city where more than 15,000 Marines, sailors and their families live. After feeling the brunt of the Southwest blackout in September 2011, the largest power outage in California's history, MCAS Miramar installation leaders recognized the fragility of their power supply. They immediately began exploring options for adding an on-site, large-scale renewable-energy system to the air station.
The microgrid has been operating since June 2020 and directly supports a U.S. Department of Defense initiative to deploy 3 GW of renewable energy throughout military installations by 2025. It makes MCAS Miramar one of the most sustainable and energy-secure facilities within the DOD and plays a key role in helping California reach its clean-energy goals, according to Feasel.
MCAS Miramar selected Schneider Electric and Black & Veatch to create an innovative microgrid that combines large amounts of methane from a local landfill and on-site solar with a central, conventional power plant to provide backup power to the installation. It leverages distributed energy resources including 1.3 MW of solar photovoltaic, 3.2 MW of converted landfill methane gas, and 6.5 MW of diesel and natural gas generation. The project is scalable to potentially power the entire installation of 100-plus mission-critical buildings. According to Feasel, the microgrid will manage electricity during peak usage and incorporate advanced smart-grid control systems and demand-response capabilities. It can power several facilities at the 12-kV level during a utility grid outage and utilize existing energy resources such as landfill gas and energy storage systems for standard operations. Schneider Electric and Black & Veatch also provided a fully permitted 7-MW diesel and natural gas power plant, updates to energy control systems, and integrated microgrid controls.
Additionally, the microgrid integrates with the utility control system at Naval Base San Diego, which when operational will have redundant controls for additional energy security. The project will help Miramar receive resilient electrical power; provide more than 75-percent renewable energy (counting methane); support services to the central grid; reduce utility demand charges; and provide significant cost savings for both the base and local utilities.
The military base already put the microgrid to the test during California's heat wave in summer 2020 and utilized its benefits. To support San Diego as it faced public-safety power shut-offs, the base eliminated 6 MW of demand from the region's grid that enabled them to share its electricity and power 2,000 community residents.
Another trend in California microgrid development is meeting environmental goals through cleaner backup fuels such as propane rather than diesel fuel. According to Michael Burr, executive director of the Microgrid Institute, "environmental sensitivity is the main driver for including propane." In addition to environmental performance, capital cost also is a key consideration when specifying generator types for microgrids. Liquefied-propane generators with capacities less than 150 kW are competitive against diesel generators on an upfront cost basis, Burr said.
Burr helped design and arrange funding for a new microgrid now under construction at the San Pasqual Band of Mission Indians Reservation, located an hour north of San Diego. He and MGI supported the competitive procurement process to select Industria Power as the design-build contractor and GridScape Solutions as the primary equipment vendor. The microgrid has containerized batteries, three carport solar arrays, and a 150-kW propane-fueled generator. Propane-powered microgrids provide a more resilient solution than some of the other options, especially diesel. Propane produces fewer particulates and less greenhouse gas per gallon than either gasoline or diesel and is deployable nearly anywhere, anytime, with limited concern for environmental impact.
Propane is also considered to be a better option for the long-term cost of ownership, according to Tucker Perkins, president and CEO of the Propane Education and Research Council. With lower maintenance, less fuel-price volatility, greater molecular integrity, longer shelf life and the low cost of propane engine maintenance, propane outperforms diesel-fueled power generation, Perkins said, adding that emissions from propane have 72 percent less sulfur dioxide than grid electricity, 31 percent less nitrogen oxides than natural gas, and 17 percent less GHG emissions than natural gas. In additional to lower cost of ownership, upfront infrastructure costs for independent propane systems is a fraction of those of a comparable liquefied natural gas system, Perkins said.
Looking ahead to potential changes under the incoming Joseph Biden administration, Burr thinks that "the demand for microgrids would likely grow faster in an administration that is more interested in sustainability and reducing the carbon footprint." He said that "with a more consistent federal climate strategy, utilities might be able to take a more orderly and thoughtful approach to increasing the resiliency of their systems. These factors point to a strong outlook for microgrids, and anywhere natural gas is not available, propane is certainly a winner." Burr concluded that "propane's prospects for power generation in remote applications remain high—even though propane use in the residential appliance market is down due to electrification."
Burr's assessment is that microgrid designers are always trying to balance various resources to provide a secure power supply in case the grid goes down. "In my experience, the most cost-effective approaches today keep the battery size small, specifying battery storage for short-duration purposes, and rely on a fueled generator for longer-duration outages," he said. "Where natural gas supply isn't available, a propane tank is a more cost-effective form of stored energy than a larger battery."
Advanced microgrids are also increasingly being deployed, the result of a technological evolution that started decades ago. While the resilience function in microgrids and its relation to power system controls has been well understood for some time, today's microgrids add energy management systems. These systems introduce unique algorithms based on artificial intelligence and machine learning engines that can increase the functionality of distributed energy resources. According to Feasel, "they can also optimize their energy contribution. This expanded element of energy optimization and dynamic energy management, which is intended to increase the value of DERs in a microgrid, helps us characterize what we call advanced microgrids."
For example, today's microgrids typically entail controllers that serve as the brains of the system and dictate how a microgrid is intended to do its job. Microgrid controls are flexible, configurable and cost-effective for all types of customers to deploy. Many microgrid controls have also abstracted their complexity to the cloud. Feasel explained that "by managing data in the cloud, the integration of DERs is simplified and microgrid operators can monitor, forecast and automatically optimize the operation of on-site resources using real-time data and predictive [machine learning] algorithms."
Advanced microgrid controls transform facilities into a connected system that is dynamic, fast and smart to achieve savings, sustainability and resiliency goals through energy management and optimization. By tracking, forecasting and visualizing energy data, operators get a comprehensive view of variable energy production, consumption and storage; consumption shifts based on day-ahead and variable utility energy price; weather forecasts to predict and manage storm-hardening measures; demand-response requests; and site-specific operating requests to enhance the facility's sustainability.
The current situation is opportune for microgrids, according to John Glassmire, senior technical advisor on grid-edge solutions at Hitachi ABB Power Grids. Climate change is speeding deployment of renewable energy as communities and corporations adopt new goals for reducing emissions, while combating wildfires and weather events.
Renewables continue to decline in price. Solar costs have dropped 90 percent in the past 11 years, and they continue to fall. With cost reductions in generation, Glassmire expects "the generation mix to change globally; the electricity backbone must evolve to enable it. The good news is that we can learn from what already works. In fact, we've been proving these concepts with grid-edge solutions for more than 30 years."
As the move to "electrify everything" picks up momentum, from transportation to household appliances to construction equipment, there is also a strong push across the energy network to become more energy-independent, moving beyond a centralized grid to a more distributed one. Experience, especially in microgrids, shapes Glassmire's and ABB's vision of the future grid "toward one that is modular and decentralized. This is now evident where global macrotrends (like COVID and climate change) are shifting, in real time, how businesses and homes use energy."
The International Energy Agency's World Energy Outlook for 2020 underscores the value of this approach, stating that "the pace of change in the electricity sector puts an additional premium on robust grids and other sources of flexibility . . . storage plays an increasingly vital role in ensuring the flexible operation of power systems."
The year 2021 could become a banner year for microgrids in California. In December of last year, the California Public Utilities Commission published a draft decision that aims to speed up statewide microgrid development. It earmarked up to $350 million for utility "clean substation microgrid" proposals in 2021-2022. The CPUC is expected to vote this month on the draft decision. Included are some new initiatives designed to strengthen the success of two types of microgrids: those which are community-operated, and those which are third-party-operated. Both are mandated under SB 1339, a microgrids-focused bill passed by the Legislature and signed into law by then-Gov. Jerry Brown in 2018.
The CPUC is currently working on Track 2 in its microgrid proceeding, which is aimed at reducing barriers for microgrid deployment without shifting costs between ratepayers, and developing separate rates and tariffs that will support microgrid installations, among other goals (see CEM No. 1605).