Microgrids and the Future of Energy

Electricity production has changed and evolved as societies’ needs shifted and new technologies became available. Around the beginning of 20th century, centralization of electricity production made sense as it improved power plant efficiency and significantly contributed to companies achieving economies of scale. Today the wheels have turned and decentralization has become the norm. Microgrids are helping to tackle the ever more complicated energy challenges of 21st century by creating more optimized ways for cities, businesses, and everyday people to access reliable, green energy.

Microgrids are a miniaturized version of the centralized electric grid of the past. They include loads, decentralized energy resources, battery storage, and control capabilities. Most of the microgrids constructed today have the ability to operate and switch between grid connected and grid islanded modes. In the case of grid islanded mode, the microgrid detaches itself from the centralized grid and powers the building’s load independently. This is very useful in locations that are often struck with natural disasters or for business in regions where grid outages are high in frequency. Renewable energy sources such as solar and wind are perfect candidates for microgrid solutions as they can allow excess energy produced to be stored on site for later use.

General layout of a microgrid system

Microgrids are gaining popularity with commercial building owners for a number of reasons. These include:

1. Energy Resilience

Microgrids have the ability to island themselves from the main grid and be self-sufficient. When there is a major issue in the grid, such as a power outage, the distributed resources can continue to power the connected facilities and it will not suffer from the productivity or product losses that usually come with a power outage. Microgrids are designed with advanced hardware, optimization algorithms, and advanced control strategies for better efficiency and higher reliability than traditionally energy systems.

2. Energy Cost Management

Microgrids can provide energy accessibility at all times and at reasonable costs. Microgrids are mostly developed by third parties who offer energy as a service at a fixed price for around 10 to 15 years. This means that energy is available at reasonable costs and the business is protected from fluctuating energy market rates.

3. Opening New Revenue Streams

Thanks to decreasing costs of renewable energy, microgrids have never made more financial sense. Not only will a microgrid solve your energy needs, but it will also open up new revenue streams through participation in demand response programs. In Massachusetts, programs like Clean Peak Certificates and Daily Dispatch allow you to discharge the energy from your battery back to the grid to help with high demands. For this, the utility company will compensate you handsomely, up to $250/kW throughout the year.

Here at NRGTree we are constantly working for a cleaner and more renewable future. Microgrids are the stepping stones to a decentralized energy transition, and offer the property owner numerous benefits. To learn more on how your business can benefit from a microgrid, visit us online or email TJCaveney@nrgtree.com

Author: Tibin Thomas- Tibin is a Solar Design Engineer at NRGTree

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