Microgrids are gaining a lot of attention from within and outside of the utility industry as they migrate from concept development and demonstration to deployment and implementation. The concept of decentralizing the grid, by using distributed microgrids integrated with renewables and energy storage, is becoming more viable as costs continue to decrease and integration issues are addressed. In addition, ongoing grid operational issues have resulted in a chorus of voices pushing for increased microgrid and distributed generation deployment. Simultaneously, there is ever increasing attention paid to energy security in the face of natural disasters, particularly for critical assets such as data centers and defense installations.
Meanwhile, the drive toward carbon neutrality has pushed corporations, municipalities, institutions, and governments to commit to carbon reductions and carbon neutrality. At the 2019 UN Climate Action Summit, 65 countries or states committed to net-zero carbon emissions by 2050, and more than 100 new companies committed to carbon reductions in alignment with the Paris Agreements.
The emergence of microgrids that utilize renewables, energy storage, optimized designs, and innovative controls are perfectly timed with the growing commitments to energy security and carbon emissions reduction. However, deployment of microgrids must be done correctly. In addition to energy and economic performance measures, the carbon impacts of new microgrids should be monitored and verified to ensure real reductions are realized.
Carbon Emission Reductions from Microgrids
Several recent studies have provided a strong case that microgrids with all renewable generation sources are viable and in certain cases, can eliminate carbon emissions. Microgrids with blended assets, including renewables, can also have significant impacts. A study focused on implementation of an industrial facility microgrid in China with maximized renewable capacity suggests a 63% greenhouse gas emission reduction is possible. Other studies indicate implementation of fuel cell or microturbine based combined heat and power microgrids could reduce CO2 emissions by 25-50%.
For an example of this in practice we can reference Navigant Research’s Microgrid Tracker 2Q19 which indicates there are currently 4,475 microgrid projects installed or planned with approximate total capacity of 27 GW. The Energy Information Administration (EIA) indicates the recent global average carbon intensity factor for electricity generation is 475 gCO2/kWh. 27 GW of traditional grid generation operating at 50% capacity (a happy medium between a 25% solar capacity and 75% natural gas capacity estimate), emits an estimated 56 million metric tons of CO2 emissions per year. Assuming this is eventually replaced with renewables-containing microgrids with a conservative 30% reduction in CO2 emissions over the baseline grid- provides a 16.8 million metric ton CO2 emissions reduction estimate from all of the installed or planned microgrids. For a small relative deployment, the potential is promising, and improves if these microgrids utilize primarily renewable energy generation and battery storage.
However, emission reduction potential greatly depends on microgrid design, its generation assets, storage, and controls as well as the electricity or thermal energy sources it is replacing and their CO2 intensity. In fact, other reports have indicated that the implementation of microgrids simply based on localizing energy generation – electricity and thermal – and optimizing economics could lead to a significant increase in CO2 emissions. Why? Because natural gas fired combined heat and power (CHP) can become the most economically viable option in a distributed microgrid. One recent study indicated a potential 61-92% increase in CO2 emissions compared to the current baseline grid if natural gas CHP dominate.
Designing Optimal Microgrids
There is extraordinary potential for microgrid deployment to significantly impact carbon emissions. However, deployment needs to be done to optimize microgrid design and ensure that system economics are positive, critical load coverage requirements are met, and carbon emissions are included in design optimization.
We recently completed a project with Arizona State University and XENDEE focused on modeling and design of energy storage enabled microgrids for defense installations under the DoD Environmental Security Technology Certification Program (ESTCP). Our findings demonstrate the potential that optimal design of a microgrid can have and how it can impact carbon emissions. Where possible, design optimization should include configuration of all assets in the planned microgrid – as opposed to utilizing existing assets and simply adding energy storage. The latter is opted for in many cases, but can be a significant detriment to the final design and the carbon emissions impact.
We observed that an optimal microgrid design for a representative facility would result in a fourfold increase in planned solar PV capacity over the existing assets and a similar or larger increase in design energy storage capacity (4x-7x, depending on the specific storage technology). The optimized design also maintains critical load coverage and provided competitive system economics, with either no change, or a slight reduction in projected levelized cost of electricity (LCOE) at the site. In terms of potential carbon impacts from the optimized design, diesel genset capacity requirements were reduced by 20%, and dependence on grid electricity was significantly reduced and replaced by on-site renewables generation. This resulted in major carbon emission reductions for the site. However, this design did not incorporate carbon intensity as a requirement nor did it consider addition of natural gas assets – so it could have increased potential carbon impacts.
Design to Optimize
With the wide range priorities and options under consideration in the optimal design of a microgrid, it isn’t easy to please everyone. Conflicting priorities can lead to microgrid designs that may not have significant impacts in carbon reduction. Economics may take a hit if carbon intensity is considered, or vice versa. However, we should still consider these priorities in designing and optimizing microgrids for impact.
Consider that our grid’s carbon intensity is constantly changing. As is power usage at a site, critical load requirements, and – full circle – our commitments to achieve environmental targets such as the net zero carbon goals mentioned before. Even with a design optimized for current criteria, the relative impacts of the system can change – even daily. If microgrids, and new technologies to enable their optimization – new energy storage tech, optimized market participating controllers, cloud based predictive forecasting, etc. – are going to be used to claim carbon credits or progress toward CO2 emissions reduction, we need to know what they are truly accomplishing and regularly validate their impacts.
Verify the Impact
There are a number of options available to verify the impact of emerging microgrid designs. For new innovative technologies that have a potential impact on carbon reductions – Environmental Technology Verification (ETV) using the ISO 14034 standard can be used to verify the technology performance and potential impacts before it is deployed. An ETV gives users independently validated high quality data to make decisions about such technology implementation and its impact, including the potential to support carbon reduction goals.
For microgrids being deployed under third party ownership or ‘energy as a service’ programs – 46% of new microgrids in 2017 – measurement and verification could be included in contract requirements such as energy savings performance contracts. The International Performance Measurement and Verification Protocol (IPMVP) is often applied to verify energy conservation and efficiency savings and could be applied to microgrid related savings and include associated carbon emission reductions verification.
Whatever the approach, as microgrid implementation rapidly increases and intersects with carbon emission reduction targets, we need to pay close attention to optimal design considerations and impact verification to ensure we all get exactly what we are looking to accomplish.