What exactly are nanogrids? Think of a microgrid, but:

• Smaller, which means quicker and easier to deploy and more affordable
• Localized, so customer centric and able to be tied to other nanogrids, microgrids and the utility macrogrid
• Able to be aggregated, which can create a coordinated response to support other grids in times of emergencies

Both nanogrids and microgrids are forms of local energy—self-sufficient systems with power generation, controls and often energy storage—that serve customers within a discrete footprint. Although they can operate on their own, most North American microgrids and nanogrids are also connected to the central grid. They are able to island from the larger grid and operate independently during power outages. Electricity continues to flow to homes and buildings served by microgrids and nanogrids even as others around them are in the dark. This is a prime reason for their installation, one that is especially important given that the U.S. is experiencing more outages caused by storms, wildfires and other dangerous conditions that affect the safety of communities. Meanwhile, power outages to homes, a prime market for nanogrids, are no longer a mere inconvenience; they can carry significant costs now that more people are working from home. Indeed, COVID-19 created situations where high ranking corporate officials were operating from their houses, shifting the corporations’ de facto headquarters to residences that lack the kind of backup energy systems more likely to be found at their office complexes.

But it’s not only electric reliability that makes these systems attractive. Because they are tied to the electric grid, they may supply services to it and be paid for doing so. For example, a utility might pay to tap into a nanogrid’s battery at a time when demand is high on the electric grid and it needs more energy, such as a hot day when air conditioning use is high.

Nanogrid and microgrid owners also can save money if they use energy from their systems, instead of the grid, during times when grid power is expensive.

Another important benefit of nanogrids is their interconnectivity to a larger scale smart grid. An aggregated network of nanogrids can be very valuable to the grid. Currently, solar is generating power at times of the day when energy is at lowest demand. Besides simply turning off the solar panel production, through a practice called curtailment, the utilities do not have an effective way of managing all the separate points of intermittent connection. They don’t have a way to store the solar power effectively. In addition, at times when the utilities need the power most, current independent solar systems cannot necessarily supply it because they lack the intelligent technology to do so. This is partially due to the fact that the solar energy is not being produced at those critical times of the day. Nanogrids can help solve this problem.

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In a new report by Deloitte, 44% of businesses who responded to a national survey said they are considering microgrids, an increase of nine percentage points over last year’s survey.

In “Deloitte Resources 2020 Study,” 54% of those considering microgrids said they have critical operations that require uninterrupted power supply, said Marlene Motyka, principal, Deloitte Transactions and Business Analytics. Fifty-one percent said they have experienced increases in the number of outages.

The study did not pin down where the survey participants were experiencing outages. Major storms, fires and Public Safety Power Shutoffs in California are among the possible reasons, she said.

“They know they have to be resilient and more self sufficient,” she said.

Concern about resilience driving microgrids
Resilience was on the top of both residential and business customers’ interest list.

Fifty-two percent of business respondents said they’re concerned about an interruption to their electricity supply due to a cybersecurity event on the electric grid. And 37% of residential consumer respondents echoed this concern.

Residential customers showed that they know where to find resilience. More than half of these customers said they were interested in solar if combined with batteries.

“They see that if they have solar plus a battery, they can save and shore up resilience. Nearly half of residential respondents expressed a concern about outages from natural disasters or storms,” Motyka said.

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It is hard to imagine an institution more critical to public health and safety than a hospital. Unfortunately, hospitals are also vulnerable to the wide range of threats — floods, hurricanes, wildfires — that can cause electric power outages. The loss of power at a hospital, however, can be particularly catastrophic. In addition to the ordinary functions performed by electrical service such as lights, communications, and heating and cooling, hospitals also need electricity for critical functions, including life support systems such as ventilators and dialysis machines, emergency room equipment, and diagnostic equipment and monitoring systems for everything from heart monitors to oxygen delivery systems. The loss of power to these critical systems could be life threatening. Hospitals also often function as a focal center for the surrounding community during emergencies by providing shelter from the elements.

Hospitals not only have a more urgent need for electrical power than many other institutions, but they also use more power. Large hospitals account for less than 1% of all commercial buildings and 2% of commercial floor space, but they consume 4.3% of the total delivered energy used, according to the U.S. Energy Information Administration. And, despite energy efficiency inroads over the last two decades through the U.S. economy, hospital energy use is not declining. Nor is the overall carbon footprint of the industry.

Hospitals have high rates of energy consumption because they are open 24 hours a day, every day of the year, serving thousands of patients, employees and visitors who all require light, heat and cooling resources. In addition, hospitals also house many energy intensive activities such as laundry, food services and refrigeration as well as medical and lab equipment, sterilization machines, computers and servers, which also need energy to run. In general, hospitals use up to 2.5 times as much energy as commercial buildings of similar size.

Hospitals house many energy intensive activities such as laundry, food services and refrigeration as well as medical and lab equipment, sterilization machines, computers and servers, which also need energy to run.

Criticality and high use mean that hospitals have to take extra care to make sure they have reliable energy supplies. Regulators require hospitals to have some form of backup power, and they have more stringent and complex requirements for backup power than most commercial institutions. In short, hospitals must identify all loads whose failure can lead to patient injury or death, i.e., essential electrical systems, and back them up with a reliable source.

At the most basic level, hospitals must be able to provide essential electrical service to equipment whose loss would result in major injury or death —in addition to the direct supply of power to that equipment. Diesel generators are a common source of backup power but, as discussed earlier, they have several potential weaknesses, including limits on how much fuel can be stored on-site, potential fuel delivery issues, and the possibility that they will not perform when needed.

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Several global technology giants are vying to capture the fast-growing microgrid market, and now the coming together of two — Hitachi and ABB — could reconfigure the landscape.

Japan-based Hitachi and Switzerland-based ABB finalized a new $11 billion joint venture last week that will become home to ABB’s Grid Edge Solutions, its arm that develops microgrids. The acquisition encompasses all of ABB’s power grids business.

It’s too early to say exactly how the venture — called Hitachi ABB Power Grids — will change what the Grid Edge Solutions division offers, but the companies intend to leverage their respective strengths. In the microgrid realm, that means pairing ABB’s automation technology with Hitachi’s digital platform.

The new entity also strengthens Grid Edge Solutions’ geographic reach and gives it greater access to Japan, home to Hitachi and the third largest economy in the world.

“We see a great opportunity for collaboration across geographies, governments, business and other stakeholders to seize this moment and drive a greener economic recovery by investing in a sustainable energy future, underpinned by modern infrastructure including power grids,” said Maxine Ghavi, senior vice president and head of the Grid Edge Solutions Business at ABB.

How business models or products may change is still unclear because of limits on the ability of the companies to collaborate before the deal closed.

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Data centers are increasing in number across the US and around the globe. They are the new industrial factory of the modern digital economy and require a massive amount of power to support their high-tech operations. Data centers are located in every state, but the largest hyperscale data centers are sited where power is the least expensive. However, low-cost power does not ensure highly reliable power, so the standard data center design includes backup power systems that can carry the facility, computing and infrastructure loads without interruption during a power outage.

These backup power supplies are typically large arrays of diesel generators connected in parallel strings to create maximum resiliency when coupled with battery based uninterruptible power supplies (UPS). However, diesel generators present a handful of challenges to data center operators. For example, they have high emissions, which makes environmental permitting and reporting burdensome. Additionally, they are expensive to own because of the high upfront cost and ongoing operations and maintenance costs. They also sit idle for most of the year and do not provide grid services, which makes them an expensive drag on both the balance sheet and income statement of the data center operators.

These generators are an essential component in mitigating operational risk in the data center. Still, they lack the higher level of resiliency as well as other key benefits that a microgrid system offers.

With all of this in mind, let’s take a few minutes to break some legacy paradigms around economics and the overall cost of today’s microgrid solutions.

Overcoming common economic myths surrounding microgrids
The first challenge we often hear about is that microgrids are expensive to deploy and maintain. The reality is that it depends on a variety of factors, and with innovative business models, it can be significantly cheaper than traditional alternatives.

It is crucial to consider the total cost of an outage, in dollars, lost time, reputational damage, and so on, and then compare it to the price of a resiliency microgrid system.

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Several global technology giants are vying to capture the fast-growing microgrid market, and now the coming together of two — Hitachi and ABB — could reconfigure the landscape.

Japan-based Hitachi and Switzerland-based ABB finalized a new $11 billion joint venture last week that will become home to ABB’s Grid Edge Solutions, its arm that develops microgrids. The acquisition encompasses all of ABB’s power grids business.

It’s too early to say exactly how the venture — called Hitachi ABB Power Grids — will change what the Grid Edge Solutions division offers, but the companies intend to leverage their respective strengths. In the microgrid realm, that means pairing ABB’s automation technology with Hitachi’s digital platform.

The new entity also strengthens Grid Edge Solutions’ geographic reach and gives it greater access to Japan, home to Hitachi and the third largest economy in the world.

“We see a great opportunity for collaboration across geographies, governments, business and other stakeholders to seize this moment and drive a greener economic recovery by investing in a sustainable energy future, underpinned by modern infrastructure including power grids,” said Maxine Ghavi, senior vice president and head of the Grid Edge Solutions Business at ABB.

How business models or products may change is still unclear because of limits on the ability of the companies to collaborate before the deal closed.

Kid in a candy store stage
But now, Ghavi said, they are entering the “kid-in-a-candy-store” stage as they examine technologies the two companies can bring together and begin discussions with customers about options. “As it relates to the microgrid business — the Grid Edge Solutions business — it really just means more capabilities that we can leverage and bring to our customers.”

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It’s been slow to come, but lawmakers are increasingly incorporating microgrids into climate strategies, a focal point for Democrat politicians in both chambers. The carbon-reduction roadmap released this week by the US House Select Committee on the Climate Crisis offers a case in point.

Called “Solving the Climate Crisis,” the plan seeks net-zero emissions by 2050 through a multi-decade strategy to drastically reduce emissions, heavily invest in clean energy technologies and resilient infrastructure, and prioritize environmental justice and equality.

Subtitled the Congressional Action Plan for a Clean Energy Economy and a Healthy and Just America, the report clocks in at a hefty 547 pages and is arguably the most comprehensive and earnest strategy to address climate change ever introduced by political leaders in the US.

While flashier proposals like putting a price on carbon or the blueprint for a national supergrid are already gaining a lot of attention, the report also highlights microgrid development and deployment as a key part of its energy, community, and resilience strategies.

Microgrids are noted throughout for their ability to reduce reliance and strain on the centralized grid; smoothly integrate a range of cutting-edge climate technologies; and provide resilience for critical infrastructure, communities, homes and businesses.

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A recent survey of 2,000 U.S. voters by the Civil Society Institute found that most had never heard of the term microgrid, or they had heard of it but had the wrong impression. But when microgrids were explained to them, they showed a strong predisposition to the concept.

“Once people understand microgrids, they see the importance of them in their community,” said Andrea Camp, senior project manager at the institute, a nonprofit public policy think tank.

Although microgrids have existed since the electric grid emerged over a century ago, the technology started regaining traction following Superstorm Sandy in 2012. Today, microgrids are viewed as a key component of the emerging smart grid, as well as the “smart campus” vision as defined by Siemens in their new Campus of the Future report. Navigant Research, a Guidehouse company, forecasts 10-fold growth for the microgrid industry from 2019-2028.

So, what is a microgrid, and why is this technology becoming an important part of the U.S. energy landscape?

A microgrid is a self-sufficient energy system that runs 24/7/365 and serves a discrete footprint, such as a college campus, hospital complex, business center or neighborhood. In a sense, a microgrid is the electric grid in a compact form because it generally contains the same basic elements: generators to produce energy, a means to distribute the energy, a means to control the energy supply and demand, and customers who use the power. Contemporary microgrids also often include energy storage systems, typically batteries, to help balance and optimize supply and load while providing backup supply capacity. And, microgrids have begun to incorporate electric vehicle charging stations, thus connecting the distributed electricity supply grid to a cleaner transportation fleet.

Intelligent control of your energy assets and use
But a microgrid is more than a mere grouping of energy assets. What sets a microgrid apart is its microgrid controller, the brain of the operation. This is a relatively inexpensive software-driven system that gives the microgrid the ability to undertake various beneficial functions, among them islanding from the central grid. If a power outage occurs on the grid, the controller signals the microgrid to separate from the grid to avoid the disruption. Its generation and storage systems ramp up as needed to become sole providers of power to the buildings the microgrid serves. Islanding can be designed to occur so seamlessly that those within the building are unaware that they are no longer on grid power but are being served by the microgrid controller and associated local generation assets.

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The stats don’t lie; natural disasters are on the rise and their severity is increasing. In 2019, the United States experienced 14 natural disasters, each causing damages of over $1 billion. These disasters included severe weather events, hailstorms, wildfires, flooding, tornadoes, tropical storms, hurricanes and earthquakes, all of which can threaten the reliability and stability of the electric power system.

Globally, the World Health Organisation reports that 90,000 people are killed, and close to 160 million people worldwide affected annually by tsunamis, landslides, hurricanes, floods, wildfires, heat waves and droughts.

Around the world, certain types of disasters are anticipated to increase in frequency and scale. These include:

• Wildfires: California and other US states on the West Coast and in the Mountain West are dealing with heightened and extreme droughts, dryness and wildfires.
• Hurricanes: North Carolina and other US states in the Southeast are experiencing more frequent tropical storms and hurricanes.
• Other: Countries in Asia and Africa are also suffering from extreme weather such as severe typhoons, cyclones or heat waves. Recent heat waves occurring in India and across countries in Asia are also causing a heightened awareness of the types of threats that can negatively impact the energy system.

The need for resilience

As a result of the increased severity of natural disasters, some utilities and government entities are turning to microgrids to power critical systems and facilitate the integration of distributed energy resources (DERs). Microgrids are one tool in the energy toolbox among many which can be harnessed to increase grid resilience against natural disasters.

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The U.S. higher education system ranks as the strongest in the world, besting all other countries because of its breadth of exceptional institutions and its reach to such a large percentage of the nation’s youth. Still, it faces some significant headwinds, not the least of which is the increased demand for new infrastructure in the face of leveling enrollment, heightened pressure to reduce costs and the COVID-19 pandemic.

At the same time, U.S. colleges and universities have taken the lead in fighting climate change, and setting ambitious sustainability and renewable energy goals. Now, add a new challenge: the need for reliable and resilient energy.

This paper explains how microgrids in higher education can help flip these problems into opportunities to prepare the workforce for the emerging new energy economy, while yielding low cost, reliable and clean sources of energy.

This paper is divided into three sections. The first chapter focuses on the energy challenges faced by higher education. The middle chapters explain how microgrids serve as a solution. The final chapter describes microgrids in action, serving not only as an energy solution but also as an educational tool. This paper focused on microgrids in higher education is being offered for download free of charge, courtesy of Siemens. We encourage you to share the link widely, particularly among decision-makers in higher education who are seeking more reliable, cleaner and cost-effective energy solutions.

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