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Description

Microgrids are smaller-scale versions of a local centralised electricity system - a.k.a. a macrogrid - and are equipped with control capabilities that allow them to operate in tandem with the local macrogrid, or autonomously on a stand-alone basis. As such, microgrids have existed for decades powering industrial sites, military bases, campuses and critical facilities such as hospitals, primarily using fossil-fuel-fired Combined Heat and Power (CHP) and reciprocating engine generators. However, many cities are now interested in microgrid systems that can better integrate renewable generation resources and various energy loads, serve multiple users and/or meet environmental or emergency responses.

Microgrids can bring several benefits to the environment, utility operators and customers; benefits that are especially important for cities as they strive to create smart, safe, and liveable communities with thriving economies. Considering local priorities and challenges, municipalities have three good reasons to pursue microgrids:

  1. Microgrids contribute to reducing GHG emissions and help cities meet their climate goals by:
    • Fostering the integration and aggregation of renewable energy sources, thanks to their ability to balance energy production and usage within the microgrid through distributed, controllable generation and storage (e.g. CHP, thermal storage or fuel cells).
    • Harnessing energy that would otherwise be wasted (e.g. electricity transmission losses or waste heat from energy production), thanks to the proximity of where energy is generated and where it is needed.
  2. Microgrids can strengthen and increase resilience of the central grid by:
    • Increasing the system-wide reliability and efficiency, as they help reduce or manage energy demand whilst alleviating grid congestion, thanks to their ability to isolate and take over local energy demand autonomously.
    • Reducing grid vulnerability by coping with impending power outages and safeguarding against potential cyberattacks on energy infrastructure.
    • Sustaining energy service during emergencies or natural disasters, especially for critical public services, and helping the macrogrid recover from system outages.
  3. Microgrids can better serve the community and enhance local economy by:
    • Keeping electricity tariffs under control thanks to more efficient and cost-effective grid management, greater use of valuable wasted energy and/or reduced investments in additional energy capacity or transmission infrastructure.
    • Favouring the competitiveness of municipalities, as these can offer low energy costs and elevated levels of reliability that may attract new business and jobs, especially industries highly sensitive to power outages (e.g. data centres, research facilities, etc.).
    • Ensuring power reliability for isolated or hard-to-serve communities by providing clean, reliable, and resilient energy in a cost-effective way.
    • Constituting an ideal way to integrate renewable resources on the community level and allow for customer participation in the electricity enterprise.

Problems to be solved

Energy costsCarbon emissionsEnergy lossesUnreliable energy supplyIncreasing energy demandyAgeing, weak and absent infrastructure

Benefits

Main Benefits
  • Reducing operation costs

  • Reducing GHG emissions

  • Reducing use of fossils

  • Improving energy supply efficiency

  • Enhances grid stability

  • Shaving peak energy demand

  • Reducing energy bills

Potential Benefits
  • Reducing investment costs

  • Creating new jobs

  • Enabling new business opportunities

  • Reducing local air pollution

  • Reducing energy bills

  • Improving social integration

  • Improving life quality

  • Promoting sustainable behavior

  • Promoting sustainable use of land

  • Facilitating citizen engagement

  • Enhanced data collection

  • Enhanced data security

Functions

Functions help you to understand what the products can do for you and which ones will help you achieve your goals.
Each Solution has at least one mandatory function, which is needed to achieve the basic purpose of the Solution, and several additional functions, which are features that can be added to provide additional benefits.

Mandatory Functions
    Meeting end-user energy demand

    Micro grids enable to meet the end-user energy demand

    Balancing power and load

    Micro grids enable to balance power and load

    Maintaining stability of the system

    Planning to maintain the tsability of the system

    Managing grid congestion

    Planning to manage grid congestion

    Enabling fault management, fault location, isolation, and supply restoration (FLISR)

    Products that enable FLISR

    Enabling off-grid / grid-connected transition

    Planning to enable off-grid / grid-connected transition

    Providing access to data and data management

    Services that enable to access data and data management

Potential Functions
    Exchanging power with the main grid

    Products and services that enable an power exchange with the main grid

    Providing ancillary services to main grid (frequency control support, voltage control support, congestion management, load shedding)

    Services that provide ancillary services to main grid

    Enabling end-user interface and data management

    Services and products tgat enable an end-user interface and data management

Variants

From the technical point of view, a microgrid is a localised group of interconnected loads and distributed energy resources (DERs) with clearly defined electrical boundaries that may operate at grid connected or islanded modes, acting as a single controllable entity with respect to the grid. Several variations (and combinations) of microgrids are possible, based on their connection mode to the central grid (off-grid or plugged-in), and by their size, type of load and functions (e.g., residential, commercial, community, etc. – from 100 kW to multiple MW).

Not only are microgrids electricity grids but they can also often constitute thermal grids as well, providing both types of energy to different users by exploiting different primary sources (renewables and/or fossil fuels). Furthermore, the more complex a microgrid is, in terms of interconnected loads and energy sources, the ‘smarter’ it needs to be. The microgrid’s energy management system achieves this through advanced ICT-enabled capabilities, acting as the microgrid’s ‘brain’ to manage energy production and loads to the operation.

From the user’s point of view, a microgrid can be constructed based on a variety of benefit expectations, which might be the improved reliability, economy or preparedness for disasters. Additionally, the geographical locations set conditions for the microgrid feasibility.

Description

Microgrids serve in different applications such as commercial buildings, industrial sites and campuses and institutions. While being connected to the main grid, these microgrids are created for improved reliability (in places where the main grid reliability is inadequate), shaving peak demand, reducing operation costs and preventing faults. Depending on the local market conditions, facility microgrids can help increase resilience and provide ancillary services to the utility in the form of a virtual power plant (VPP) - whether acting as a demand response resource or providing other grid services.

Use Cases

Photovoltaic installation on post 2000 building

The system is an integral part of the ambition to become grid independent on a campus housing 1 large academic building, an energy centre, a multi-storey car park and accommodation for 900 university students.

Micro-grid management system

Microgrid management controller, designed to integrate disparate energy assets throughout single stakeholders to deliver improved energy performance within the areas of cost, CO2, flatten peak and effective use of low carbon generation.

Description

A common type of microgrid typically found where the main grid is out of reach, such as islands or remote rural areas. They range from remote facilities such as military bases, remote mines or industrial sites, to remote villages and communities, serving multiple consumers and producers.

Supporting City Context

Supporting City Context: It is critical to ensure high energy reliability and minimise production losses. This is achieved through the integration of low carbon renewable energy (e.g, biomass, solar photovoltaics (PV) and wind power) to minimise fuel dependency while reducing pollution and energy costs.

Use Cases

Off-grid charging station for a sustainable micro-mobility

An off-grid charging station was installed in the Hochschule Bochum as a pilot project to harness solar power into a flexible and modular light EV docking station.

Description

These microgrids serve multiple consumers and producers and are connected to the main grid or managed as a dispatchable unit with optimised power exchanges with the central grid. Their size ranges from districts-enabling applications, such as smart districts or positive energy districts, to villages, towns and small municipalities.

Supporting City Context

Smart communities and distribution networks will need to rely upon digital platforms to maximise the use of prosumer assets (solar PV or electric vehicle (EV) charging infrastructure), which can be aggregated into Distributed Energy Resources (DER) portfolios that trade energy services via VPPs. Established market structures and regulations are critical to enable this type of business model.

Use Cases

Micro-grid management system

Microgrid management controller, designed to integrate disparate energy assets throughout single stakeholders to deliver improved energy performance within the areas of cost, CO2, flatten peak and effective use of low carbon generation.

Smart energy and self-sufficient block

The smart energy and self-sufficient block aims to reduce electric consumption in tertiary buildings through renewable energy, especially photovoltaic. 

Description

Cogeneration (combined heat and power) and trigeneration (combined, cooling, heat and power) plants are characterised by the simultaneous production of electrical and thermal energy and are paving the way for the integration between smart power grids and district heating and cooling networks.

Description

The massive diffusion of renewable energy source power plants within smart microgrids is usually coupled with the installation of electrical storage technologies that are acquiring more importance to compensate the fluctuation of the renewable energy source productions and to provide ancillary services to the grid. Small-distributed energy storage devices can be used to increase self-consumption of generated energy inside microgrids, helping also to flatten the daily load curve of the electrical power system.

Electrical storage systems can be used to smooth the load peaks on the grid, participate in reactive power and voltage regulation and active power and frequency regulation, provide spinning reserve to the electricity market, contribute to solve grid congestions and defer investments on the grid consequent to the increase in loads.

Use Cases

Energy storage assets

Energy storage system with Li-Ion batteries which provides bi-directional flexibility. It is aimed for dynamic cycling.

Description

MEMS aim to provide controlled and optimised operation of a microgrid to meet its functional requirements and the benefits expectations set for the microgrid. They include real-time control functions that allow the system to manage itself, operate autonomously and connect to and disconnect from the main grid for the exchange of power and supply of ancillary services. These functions run based on data monitoring, data analytics and forecasting (generation, storage, meteorological data and market prices)

Use Cases

Micro-grid management system

Microgrid management controller, designed to integrate disparate energy assets throughout single stakeholders to deliver improved energy performance within the areas of cost, CO2, flatten peak and effective use of low carbon generation.

Description

With the integration of more intermittent Distributed Energy Resources (DER) from renewables, many stability and reliability issues are raised during microgrid operation. Transforming (or ‘upgrading’) microgrids into VPPs is a way to eliminate DERs negative impacts, since VPPs can coordinate all DERs as a single agent to integrate them into the grid without compromising stability and reliability, adding many other additional benefits and opportunities for customers, prosumers and grid operators.

There is a great overlap between microgrids and VPPs, as they both have in common the aggregation and optimisation of an equally diverse DER portfolio. The difference is that a microgrid is a confined network boundary and can disconnect from the larger grid to create a power island, while VPPS can stretch over a much wider geography and can grow or shrink depending upon real-time market conditions.

The primary value proposition for a VPP is that the services from these DER assets flow upstream to the macrogrid operator; services are not sealed off into an island from the larger grid.

Once a microgrid sells a service to a load aggregator or utility, it becomes “VPP-ready”, and then can be used as a Distributed Energy Resource Management Systems (DERMS), for instance, to help mitigate voltage hotspots on a feeder, providing bidirectional value to the larger grid.

Use Cases

Micro-grid management system

Microgrid management controller, designed to integrate disparate energy assets throughout single stakeholders to deliver improved energy performance within the areas of cost, CO2, flatten peak and effective use of low carbon generation.

Smart City Central Energy Controller

A Virtual Power Plant energy management platform, providing the capability to city stakeholders to actively manage Distributed Energy Resource (generation, storage and load) from a single platform.

Value Model

Value Model for a Smart Grid System (BABLE, 2021)

City Context

Local governments can play a key role in supporting the implementation of community microgrids in existing electricity grids to meet city specific objectives. This is a complex task that requires institutional changes and regulatory updates. Nevertheless, microgrid providers and developers respond to market signals, and local policy can create clarity, communicate priority level and lower entry barriers. In addition, local governments can engage stakeholders and citizens around needs and opportunities and even become a microgrid customer in specific municipality-led initiatives, e.g. the German village Feldheim which claims to be the only grid-independent village in the developed world with 100% renewable resources. Some key factors to ensure the deployment of community microgrids are the following:

  • Setting the policy environment by creating the right mix of policy instruments and incentives to remove all regulatory and administrative barriers. Besides traditional DER incentives such as feed-in-tariffs or net metering schemes, other effective alternatives include waiving permitting fees to expedite processes or granting zoning incentives to projects that include microgrid features, such as energy storage, renewable energy generation or intelligent management. Similarly, regulations that prevent on-site energy storage or preclude utility ownership of storage facilities need to be updated.
  • Technology infrastructure enabling future microgrid development such as smart meter deployments or connectivity infrastructure coverage.
  • Community involvement and motivation to increase the social value of implementing and operating the microgrid within the community, and in turn increase social acceptance.
  • Local utilities attitudes and level or activity greatly influences community microgrid developments. Historically, resistance from utilities has hindered community microgrid deployments, but recently there have been some utilities proactively pursuing these projects. There is a push from the EC on utilities to increase the level of activities with non-traditional electricity infrastructure development, which could improve the conditions for community microgrid development.
  • Environmental constraints such as area of influence, space availability, renewable energy sources and other local resources, as well as energy density of the area.

Supporting Factors

  1. Setting a supporting policy environment
  2. Enabling local energy trading between distributed generation and bidirectional power flow
  3. Clear and transparent interconnection rules with the main grid
  4. Availability of local energy markets
  5. Ensuring economic efficiency and profitability when security of power supply is not an issue
  6. Supporting viable business models and benefit sharing to cope with high capital costs
  7. Creating appropriate governance models for community-led initiatives
  8. Ensuring stakeholder involvement to maximise social value
  9. Pursuing protection of data and communication
  10. Deploying appropriate storage technology and size
  11. Better integrating Energy Management Systems and Business Management Systems
  12. Increasing usability in interfaces with community residents to ensure transparency and foster energy-efficient behaviour

Government Initiatives

In European countries, the implementation of local energy systems is supported by many initiatives and policies at the European- or national-level, where many research and development projects, benefitting from national or European funding, are focused on smart grids, energy efficiency, integration of distributed renewable resources, smart network management and much more.

In the context of EU policies, the policy drivers for such projects include increasing grid congestion and energy demand, climate change, depletion of fossil fuels, aging infrastructure of electricity network and internal European energy market; all of these factors pushing for the implementation of local energy systems has been inspired by the latest EU’s climate and energy package ‘Clean energy for all Europeans’, and now the new European Green Deal.

A noteworthy initiative is the establishment of the Smart Grid Task Force (SGTF) as part of the EU third energy package in 2009 to advise on policies and regulations concerning smart grid deployment. For instance, under the development of a common standard for European Smart Grids, several mandates have been issued by the EC to the European Standards Organisations (ESO) seeking to establish standards for the interoperability of smart utility meters, EV charging standards and high levels of smart grid services and operations.

The EU is currently directing member countries to update their electricity market and renewable energy regulations to allow communities to act as aggregators of renewable generation, flexible loads and storage services to the overall grid, paving the way towards community microgrids.

Stakeholder Mapping

Stakeholder Map for a Smart Grid System (BABLE, 2021)

Market Potential

The advancement of microgrids is part of a broader trend towards digitalisation, decentralisation, and decarbonisation of the energy sector. Globally, the growing market of local energy systems is a response to environmental concerns, lack of robust grid infrastructure and power reliability, rising energy prices and a combination of regulatory pressures and incentives. As a result, the microgrid market is expected to quickly grow over the next 10 years.

Annual Total Microgrid Power Capacity and Implementation Spending by Region, World Markets: 2020-2029 (Guidehouse Insights)

Despite being considered a global leader in moving towards a low carbon energy future, Europe represents only 9% of the global microgrid market. The most direct explanation is that the vast majority of installed microgrid capacity in Europe is located on remote islands that are not connected to the mainland grid. However, a closer look at the way in which EU markets are tightly intertwined and regulated shows a distinct pattern that places severe constraints on the development of microgrids (according to Navigant Research): (1) Europe has been focusing on large-scale renewable energy deployment, such as offshore, which requires massive investment in transmission infrastructure; (2) Deployment of distributed energy resources (DER) has primarily been based on feed-in-tariffs, a business model precluding the key defining feature of a microgrid, i.e. islanding; (3) The preferred methods to address the variability of renewables and increase power reliability lean towards cross-border trading and not towards localised microgrid

Ultimately, the advanced integration of the European market is shifting the focus from microgrids to VPPs. In fact, Europe is at the forefront of the adoption of VPP platforms with sophisticated capabilities that enable the integration of renewables and real-time energy trading to maximise the value of flexibility resources, while opening the door to new value streams to create markets for ancillary services.

Operating Models

Until recently, the business model for microgrids was an obstacle for many organisations, given the required costly capital expenditure and high financial risks associated with their construction and deployment. Now, new financing and operating mechanisms are reducing the barriers to organisations and communities, enabling more microgrids - and hence the sustainable energy transition - to become a reality.

Operating Model for a Smart Microgrid System (BABLE, 2021)

Regulations

Since there are no specific regulations for microgrids in the European Union, it is necessary to first define key regulatory field of microgrids and link the existing European directives to these fields. The regulatory fields relevant to microgrids and the related directives are:

Renewable energies: considering renewable generation units within the microgrid, incl. measures fostering the integration of renewables, energy efficiency, and decarbonisation.

Regulations Renewable Energies (BABLE, 2021)

Grid connection: concerning distribution grid connection requirements for loads, generation units and energy storage devices.

Regulations Grid Connection (BABLE, 2021)

Self-consumption and energy storage: Conditions for delivering excess of production, possibility of use of storage systems, etc.

Regulations Self-Consumption and Energy Storage (BABLE, 2021)

All in all, the amount of regulation directly applying to microgrids for the EU is low, which also increases differences between regulations for microgrids in each member state. Nevertheless, the impact of some regulations as 2009/28/EC promoting renewable energies is considerable.  To comply with the goals of European directives in line with microgrids, member states have implemented strategies based on economic incentives. The most common support scheme in the EU is based on Feed-in-Tariffs (FITs); however, there are other relevant incentives such as market premiums, green certificates and traditional tenders.

Data and Standards

Data and Standards for a Smart Micogrid System (BABLE, 2021)

The creation of this Solution has been supported by EU funding

Use Cases

Micro-grid management system

Microgrid management controller, designed to integrate disparate energy assets throughout single stakeholders to deliver improved energy performance within the areas of cost, CO2, flatten peak and effective use of low carbon generation.

Off-grid charging station for a sustainable micro-mobility

An off-grid charging station was installed in the Hochschule Bochum as a pilot project to harness solar power into a flexible and modular light EV docking station.

Smart energy and self-sufficient block

The smart energy and self-sufficient block aims to reduce electric consumption in tertiary buildings through renewable energy, especially photovoltaic. 

Smart City Central Energy Controller

A Virtual Power Plant energy management platform, providing the capability to city stakeholders to actively manage Distributed Energy Resource (generation, storage and load) from a single platform.

Energy storage assets

Energy storage system with Li-Ion batteries which provides bi-directional flexibility. It is aimed for dynamic cycling.

Related Solutions

Local Energy System

Approximately one-quarter of the energy price is owed by the transportation of the energy. The implementation of a local energy system can shift the energy production from a centralised system to a decentralised system.

Electric Bus System

The Electric Bus System is a public transportation system that is operated by electric buses only. Electric buses are not only environmentally beneficial, as they do not have any local emission, but due to their longer lifespan and lower operational costs, they can also be financially beneficial.

Public Charging System for Electric Vehicles

The current EU regulation on emissions for cars is the strictest worldwide. Along with further restrictions the thresholds cannot be meet with conventional cars only anymore. One alternative technology, reducing the local emissions, are electric vehicles.

Building Energy Management System

According to the Energy Performance of Buildings Directive (EPBD), buildings are responsible for approximately 40% of energy consumption and 36% of CO2 emissions in the EU.

Smart Lighting

Smart streetlights enable the reduction of running expenses associated with public lighting by delivering several value-added services to cities and citizens.

Virtual Power Plant

VPPs are a response to the growing number of distributed energy resources (DER) making their way onto the grid, as VPPs allow their production to be pooled to achieve the flexibility and scale needed to trade in the electricity market; unleashing gains for prosumers, aggregators, and grid operators.