Microgrid systems are a frequent topic of conversation in the energy storage community.
This blog has discussed what exactly microgrids are, and more specifically about remote telecom microgrids going green and ditching diesel. Of course, we also like to talk about our favorite microgrid projects, like an organic winery in California, an ecotourism lodge in Kenya, and an installation at the Illinois Institute of Technology.
If you’re not in the solar or energy storage industry, this may sound a bit like shop talk. But with microgrid investments increasing faster than ever and stories like Tesla’s 100% solar island microgrid in American Samoa making international headlines, it’s clear that the microgrid conversation is bigger than us. Microgrids are becoming a widely used solution around the world, providing reliable electricity to remote and developing areas, and helping to combat climate change.
Current Trends: Increasing Bankability and Market for Microgrids
Microgrid Knowledge conducted a survey of their readers over the past year and found that the greatest hindrance to installing microgrids was “Cost/Capital/Financing.” Overall, renewable energy costs are decreasing, especially in comparison to fossil fuels. This coupled with smarter microgrid technology, including reliable energy storage, is making microgrids a more financially viable option.
A recent article from Greentech Media argues why microgrids make sense financially, not just for resiliency. According to GTM, microgrids are mutually beneficial with cost-savings for utilities and end-customers, and incorporating renewables (like solar + storage) is a cost-effective and reliable way to meet carbon-reduction targets. Additionally, the microgrid market is proving to be a diverse staging area for many different investment opportunities and business cases, providing customized value propositions.
Credit: Greentech Media
It gets better: while the costs are shrinking, the market is rapidly expanding. The global microgrid market is expected to grow at a 13.67% CAGR over the next few years, reaching an estimated $34.5 billion by 2022. Despite recent political changes in the United States and worries over the future of renewable energy, the microgrid market has enough traction to avoid any major impacts. There is enough need for cost-savings, resiliency, and self-reliance that the market will not be seriously affected.
Current & Future Trend: Microgrids Electrifying Rural Areas and the Developing World
In remote areas of the world where the grid does not reach, and in developing, poor, or rural regions where the grid is unreliable, microgrids are making electricity more attainable than ever before. Many people in these areas rely on diesel generators or toxic lead acid batteries, whose disposal and recycling leads to hazardous pollution and health risks.
Many are taking the first steps to reliable renewable energy: millions of homes in rural communities are now equipped with solar home systems. However, faulty grids are leaving many people out of the electrification journey. Grid systems in these areas need to transition from being “centralized, dumb, and dirty to becoming distributed, smart, and clean.” according to the Huffington Post. The answer? Microgrids.
In remote locations where microgrids are already installed, drastic improvements in energy supply and standard of living are apparent. For example, people living with microgrid power in the undeveloped tropical forests of Colombia no longer have to plan their days according to when they may or may not have electricity. Children can study at night, and cooking dinner doesn’t have to be done by candlelight.
Many communities and organizations have already begun scaling efforts in Africa, Asia, and South America, but there are still plenty of lessons to learn and work to be done. Luckily, with market growth and smarter technology, microgrid systems are poised to bring light to these hard-to-reach places faster and better than any other form of energy.
Future Trends: Sustainability & Climate Change
Obviously, the most important future trend for microgrids is to provide a much more sustainable and environmentally friendly alternative to traditional grid systems and off-grid systems using diesel generators. This is a game-changer for off-grid islands. Tesla’s solar power system in American Samoa is replacing the use of 110,000 gallons of diesel per year. Eliminating the emissions from so much diesel, as well as the cost of transporting fuel to islands like these, is a key advantage for solar microgrids.
This also relates back to rural electrification with renewables. Imagine if the hundreds of millions of people who need power were supplied with 100% renewable energy. Not only would it improve their lives, but it would also relieve the atmosphere from over 240 million tons of carbon dioxide emissions that fuel-based lighting causes every year. Skipping traditional grid energy and installing solar microgrids in these regions could make a world of difference for the environment.
However, microgrids aren’t a sustainable solution just for developing or rural areas—they matter for industrial, commercial, and urban locations, too. Many businesses also rely on generators during power outages. With solar and energy storage, microgrids can provide that reliable backup power instead. For instance, ABB’s campus in Johannesburg, South Africa is a microgrid with the capability to connect and disconnect from the grid as needed, and run entirely on solar on sunny days. This equals a 1,000 ton CO2 reduction each year.
As climate change effects loom around the globe, these kinds of capabilities are becoming necessary. More natural disasters and changing weather patterns will affect the power grid more dramatically, potentially causing more blackouts and failures. Using fossil fuels as backup will only worsen the situation. Events like Hurricane Sandy in 2012 exposed how vulnerable coastal regions can be to climate change effects. The New Jersey city of Hoboken was left flooded and in darkness: the grid couldn’t withstand this kind of emergency. So, the city has turned to microgrids. Microgrid systems will be able to keep the lights on during emergencies in hospitals, grocery stores, and senior homes, as shown in the graphic on the left (credit:citylab.com). Hoboken also plans to keep the system design as green as possible, making it a valuable asset beyond providing backup power. Plus, using microgrids to combat storms and heat-waves may end up being cheaper than expanding grid capacity for the region. Advantages on all fronts.
These trends all point to a microgrid revolution: bringing electricity to those who’ve never had it, and changing the way we power our homes and businesses to better protect our communities and our environment. The future for microgrids is anything but micro.