Page 39 - Energize May 2021

TECHNICAL

When consumers are allowed to
Investment
participate, it opens up a new revenue
stream for consumers who can sell
1
Investment via energy savings $110-million (incl. ~$30-million of renewables)
electricity back to the main grid. Investment via capital outlay $40-million (incl. ~$30-million of renewables)
• Federal: Compliance with current and Total investment required $150-million
2
future EPA regulations is a significant
opportunity for cost avoidance. Diesel Results 3
generators must be permitted and
are limited in their run time due to Energy savings achieved 15% (~6 MW of permanent load reduction)
Renewable generation deployed 14 MW (cost ~$60-million, see above)
pollution concerns – a point in favour
Financing term of energy savings 24 years (assuming a 6% interest rate)
of integrating a higher portion of
renewables and/or natural gas turbines.
Note: Investment includes advanced controls, cyber security and grid independence
The New Markets Tax Credit, which is
capability
relevant when an efficient generation
source is installed in a low income or Notes
disadvantaged location, can reduce the 1 This investment will be paid back via energy savings
out-of-pocket costs for the project. In the 2 Does not include revenue potential from demand response programmes
future, depending on the political climate, 3 Expected water savings are not detailed here, but water conservation measures are
a national carbon market is possible, included in the total investment required
which will be a revenue opportunity for
Table 1: Estimated investment and potential results for a 40 MW microgrid.
those organisations that can verify their
carbon reduction.
The estimate in Table 1 includes the measurement, verification, operations and
Altruism maintenance required to ensure the demand reduction measures (electricity and water)
Organisations with a strong commitment to are implemented. The estimate does not include the potential revenue benefits of selling
green energy and a vision of a sustainable electricity back to the utility through demand response programmes, state level incentives or
future are likely to invest in renewable power carbon trading (if applicable). This revenue potential will vary greatly depending upon the state
generation and microgrid solutions. These and region.
groups may harbour concerns that the main Advanced controls, automatic grid connect/disconnect and storage technologies are
grid faces reliability risks or are concerned expected to decline in cost as they are more widely adopted, which will lower the investment
about the environmental impact of fossil fuel numbers shown above.
generation. They will choose to reduce their
own consumption and dependence on the Partner approach to implementation and management
main grid at almost any cost. Microgrids are not a do-it-yourself project, even for organisations with deep electrical and
mechanical engineering expertise. Microgrids have multiple power, operations management
Microgrid candidates and control system components from diverse vendors that must be integrated and optimised
• Continuous power requirement for interoperability and security. The right team of software, hardware, systems integration and
• Security requirements consulting partners will ease the design and implementation process.
• Planned transformation
• Regional drivers Key areas for partnering
• Altruistic consumers • Microgrid management software
• Hardware for connecting to the main grid
Microgrid investment vs. payback • Power system design and modelling
One of the biggest hurdles to the adoption • Renewable energy project development and financing
of microgrid solutions, the end-user’s return • End-user change management programmes
on investment (ROI), can be managed by
tailoring the solution architecture and project Conclusion
implementation schedule to the end user’s A microgrid is the end state of an energy modernisation effort that will take two to five
requirements. Energy and water conservation years to implement at an installation (corporate park, military base, university campus,
measures are the quickest way to realise etc.). The benefits will accrue to the end user, utility and the public overall. External
project payback, and they can be combined research points to strong growth opportunities and the need for this technology; however,
with simple demand response programmes the challenge is execution.
(outsourced to an aggregator or managed Like other Smart Grid solutions, microgrids will continue to improve as new technologies are
internally) to improve ROI. A fully developed commercialised. Advancements to the hardware that enables automatic grid independence and
microgrid with demand reduction, on-site the systems integration that enables automatic control of the entire power system are some of the
generation and storage, advanced controls innovations currently underway. End users who place a high value on continuous access to reliable,
and grid independence capabilities will likely secure power and want a high level of control over their energy supply and demand should look
be reserved for large energy consumers with closely at a microgrid solution and its potential to secure energy independence. n
a critical need for reliability and the patience
for a longer payback. Send your comments to rogerl@nowmedia.co.za

energize | May 2021 | 37