At the end of a heavily wooded, sparse industrial park here sits the North American headquarters and R&D center for Schneider Electric, which earlier this month unveiled its own campus power microgrid.
The microgrid for the global energy management conglomerate is expected to produce 520,000 kilowatt-hours (kWh) of electricity per year, or 10% of Schneider Electric’s power needs. It’s also expected to reduce its energy costs by 20%.
Perhaps more importantly, the microgrid incorporates a natural gas generator as an anchor resource, allowing solar panels to operate during grid outages to maintain critical operations. In the event of a power outage, a lithium-ion battery storage system would provide up to 100KW of power for an hour.
The battery storage system can also help shave the power Schneider Electric draws from the local utility during peak operating hours, enabling it to avoid costly fees for exceeding its pre-set demand limits.
While the microgrid does serve some of Schneider Electric’s own power needs, it’s also part of the company’s R&D efforts to create more sophisticated smart microgrid technology to sell as a service to customers who must rely on an aging, less-reliable national grid infrastructure and rising electricity costs.
A microgrid is a form of distributed energy generation that can function independently from the traditional, centralized regional power grid; it can enable towns, small cities or corporations to develop their own energy sources and power storage systems (via lithium-ion or flow batteries), distribute that energy and even sell excess power back to local utilities.
Microgrids also offer a quick response during high energy demand times or power outages.
Currently, Microgrids only supply about 1.6 gigawatts (GW) of U.S. electricity, or less than 0.2% of installed capacity. Over the next three years, however, that capacity is expected to more than double, according to the Center for Climate and Energy Solutions or CCES, a nonprofit, non-partisan organization.
An aging national grid infrastructure
Fueling interest in microgrids, CCES said, is their ability to improve resilience and reliability, increase efficiency, better manage electricity supply and demand, and reduce greenhouse gas emissions through the use of renewable energy.
“The U.S. has been the best market for microgrids because our [national] grid reliability is much lower than other parts of the industrialized world, such as Europe or Japan,” said Peter Asmus, associate director of Energy research at Navigant Research.
Between 2003 and 2012, weather-related outages and the aging infrastructure have cost the U.S. economy between $18 billion and $33 billion a year.
In 2015, Americans dealt with a reported 3,571 power outages lasting an average of 49 minutes, according to a report by the American Society of Civil Engineers (ASCE). The ASCE just gave the U.S. energy infrastructure a grade of D+.
Without greater attention to aging equipment, capacity bottlenecks and higher demand, as well as increasing storm and climate impacts, Americans will likely experience longer and more frequent power interruptions, The ACSE said.
“Local solutions, such as distributed generation and resilient microgrids, may offer lower-cost alternatives to major system investments particularly in areas at elevated risk from severe weather or other natural disasters,” the group said.
After superstorms Irene and Sandy in 2011 and 2012 left more than eight million homes or businesses without power, most states responded by introducing microgrid backups to their primary grid infrastructure.
“Basically, almost every state from Washington D.C. north on the Eastern Seaboard has some microgrid resiliency platform in place,” said Peter Asmus, associate director of energy research at Navigant Research.
While microgrids have been deployed for decades, mostly in remote regions where the conventional grid isn’t available or is less dependable, building one means a significant expense.
Government entities like military bases or schools or businesses such as hospitals where a reliable power source is critical would have to purchase a power source — solar panels, wind turbines or diesel/gas-fired generators — along with power converters, distribution lines and a battery storage system. On top of that, a sophisticated power management system is needed to control the ebb and flow of power between the microgrid and the regional, conventional grid.
For example, last month, Schneider Electric was awarded a subcontract from Constellation, a subsidiary of Exelon Corp., to support the development of smart controls as part of an energy savings performance contract at the U.S. Marine Corps Logistics Base (MCLB) in Albany, Ga.
And while some continue to purchase microgrids outright, businesses short on cash are turning to a new model called microgrid-as-a-service (MAAS).
Scheider Electric, with about 60 deployments, leads the North America microgrid industry, according to Asmus. And it’s taking the lead in that MAAS market.
The microgrid industry involves some 50 companies, large and small, from Lockheed Martin and Siemens to Princeton Power Systems and GE Digital Energy.
“The microgrid market is still wide open when it comes to market players and future opportunities for growth and maturation,” Navigant Research said in an industry report.
Schneider Electric has had a hand in building microgrids for 25 years, and for its own system partnered with utility-owner Duke Energy and its subsidiary REC Solar.
Schneider, which builds the energy management systems and software, will offer MAAS to customers through multi-year power purchase agreements (PPAs) or leases.