McKinleyville Community Services District in California has announced it will build an integrated microgrid at the community’s Hiller Park wastewater treatment plant. The microgrid will incorporate existing diesel generation along with new solar photovoltaic and battery energy storage assets to optimize electrical grid resiliency while delivering both financial and environmental benefits to the community.

Located on the Pacific Coast in Northern California, McKinleyville is one of the fastest growing communities in the region. The McKinleyville Community Services District (MCSD) — which is responsible for delivering safe and reliable water, wastewater, parks, and recreation services to the community’s 16,900 residents — selected Ameresco to plan, design, procure, install, and commission a community microgrid at its wastewater treatment plant.

According to MCSD, this project creates a pathway for the wastewater treatment facility to reach net-zero emissions. By bringing new, clean energy sources on-site and adding battery storage, the facility will produce as much energy as it consumes and be better prepared to withstand potential utility outages in the future.

The microgrid management system will utilize existing dispatchable generation at the wastewater treatment plant to provide supplemental power and further grid resilience.

Construction of the McKinleyville microgrid is scheduled to begin in this year.

By some estimates, Pacific Gas & Electric (PG&E) is creating a $1 billion opportunity for microgrids, meaning one utility in one year could boost the worldwide market by 10%.

Not surprisingly, the California utility by its own account received a “robust” number of bids by companies that want to provide the microgrids. PG&E issued a solicitation in December for 20 microgrids, totalling more than 500 MW, to be built in 2020. The utility also has plans to build another 28 at a later date.

The volume of the responses contributed to the utility’s decision to postpone submitting project agreements to state regulators and the bankruptcy court, originally set for today, and now scheduled for the second quarter, which gives the utility with more time as it tries to work with stakeholders, according to PG&E spokesman Paul Doherty.

Despite the magnitude of the opportunity, some microgrid developers decided to sit out the bidding, concerned about its tight deadlines and the overall effectiveness of the utility’s strategy. PG&E wants the 20 microgrids built this year to help avert power outages when its forced to again de-energize lines that might spark wildfires, a situation that left nearly 1 million customers without power last fall.

Among those sitting out the bidding are New Jersey-based Scale Microgrid, whose chief operating officer and co-founder, Tim Hade, described the utility’s plan as a sledgehammer where a needle and thread is required.

Sitting out the bidding

Hade, of course, is not against microgrids being built in California. In fact, he’s gone from spending about 50% of his working hours in the state to now almost all. He’s not alone, with other microgrid companies also describing the state as a vortex of microgrid activity, with businesses, institutions, cities and even homeowners not waiting for a utilty solution, but installing microgrids on their own, as they brace for what’s expected to be a decade of public safety power shutoffs (PSPS).

Plant factories may be the technology we need to feed a growing and warming planet.

The operations, which have no access to natural sunlight and grow plants in vertical rows, are designed to be incredibly efficient. They require 95 percent less water and 99 percent less land than conventional farms, while growing leafy greens with scientific precision without pesticides. Because of their small physical footprint, vertical farms also can produce food close to the urban areas where it will be consumed, reducing the need for transportation and logistics.

The tradeoff: Indoor agriculture demands a staggering amount of energy. Lights run 16 hours a day and facilities require impressive HVAC equipment, reaching an energy intensity per square foot that surpasses datacenters. The energy load varies greatly depending on the size and type of operations, but it could be between 500 kilowatts and 15 megawatts — more than a retail box store and less than a data farm.

Schneider Electric sees an opportunity here. The international service provider has identified indoor agriculture as one of the four major drivers that will increase electricity consumption in the next decade (the others being the electrification of heat, electric vehicles and data centers).

In partnership with Scale Microgrid Solutions, Schneider is extending its energy-as-a-service model to indoor agriculture companies. Under the arrangement, Scale finances, builds and maintains an onsite microgrid and sells the energy to the offtaker — in this case, indoor farming startups.

In the last year and a half, Schneider has announced deals with Fifth Season and Bowery Farming, two vertical farming startups.

Noresco will expand a Navy microgrid at a submarine base in Groton, Connecticut, under an $83.1 million energy savings performance contract.

The main part of the project involves expanding the on-site cogeneration capacity and microgrid system at the Naval Submarine Base New London (SUBASE NLON).

During grid outages, the measures will support 100% of the power requirements for SUBASE NLON’s mission-critical piers and nuclear submarines in port, according to Noresco, a United Technologies unit.

The project includes energy conservation measures driven by new microgrid capabilities with electrical infrastructure upgrades, steam distribution system improvements, new LED lighting, and a new base-wide cybersecure energy management controls system, according to the Westborough, Massachusetts-based company.

Besides paying for the capital improvements, Noresco said it expects to spend $64 million in operations and maintenance over an 18-year performance period to be paid through energy savings.

Noresco has 34 US Navy energy savings projects, totaling more than $1 billion in guaranteed savings, according to Natasha Shah, Noresco vice president.

In 2018, Connecticut Municipal Electric Energy Cooperative (CMEEC), the Navy and FuelCell Energy broke ground on 7.4-MW fuel cell project that is designed to support the base’s microgrid.

Connecticut provided $1.1 million in bond funding for the microgrid design and gave CMEEC a $5 million grant to fund part of the microgrid project.

The cost of a microgrid is dependent on what the system includes and the capabilities it will have. If you compare microgrids being built today to microgrids that came online five years ago, you’d see an overall decrease in price and an overall increase in capability. The question we should be asking is “why does a microgrid cost what it costs?” Total price is impacted by engineering design, generating assets, labor costs, tariffs, location, and total capabilities.

You can’t build a microgrid without generation to support your needs, and generation is getting more affordable. BloombergNEF found that ground mounted PV now costs around $50-57/MWh — that’s an 18% decrease from 2018. The National Renewable Energy Laboratory reports system costs for a 4-hour duration battery energy storage system is approximately $389/mWh. Pricing out generation in advance helps give a starting point for anticipated costs, but anywhere from 20-80% of the total cost for a microgrid will go towards the design and construction of the system.

The cost of designing and building a microgrid goes up with the electrical complexity of the system. If you want a system that incorporates various use cases, the price tag will be significantly more than one that has fewer capabilities. One way to drive design costs down for complex systems is to work with an integrator who has microgrid experience as opposed to one who will be learning on the job. Allowing your experienced integrator the opportunity to help choose the equipment used in the design can help lower engineering costs, as the team will be able to work with products they are familiar with, limiting design or engineering flaws.

While microgrids do have a cost associated with them, the trend of microgrids as a service is on the rise giving customers more opportunities to finance systems through third parties.

The increasing number of residential, commercial, and industrial spaces is propelling the demand for a reliable, safe, continuous, and cost-effective supply of energy, stimulating microgrid technologies. Advantages of microgrid include reliability, enhanced energy efficiency, reduced consumption of electricity, security, cost-effectiveness, voltage control, and congestion relief.

The global microgrid market size will witness unprecedented growth over the years, reaching $38 billion in value by 2026. This is primarily due to investments being made by the governments to provide access to electricity in remote villages and districts. With respect to power source, the market is segmented into natural gas, diesel generators, solar PV, and CHP.

In 2017, the total net electricity generation in the EU was recorded at 3.1 million GWh and is expected to grow at a rapid rate owing to increasing developments in data centers, residential buildings, and the automobile industry.

The solar industry is witnessing favorable support from public and private entities towards encouraging the use of solar-sourced microgrids to boost renewable energy deployment. The total adoption of solar energy in the U.K. has increased from 5,488.6 MW in 2014 to nearly 13,259 MW as of June 2019. By 2023, the total solar capacity is in the country is anticipated to rise to 15,674 MW.

Evolving renewable energy applications
Fiscal benefits provided by the governments to encourage the adoption of solar power are positively influencing the market dynamics. Incentives such as, tax rebates, investment tax credits, leveraging schemes, FIT, and subsidies will considerably propel the deployment of solar power.

Various market players are investing towards R&D activities to improve the efficiency of the product and render operational flexibility. The US Department of Energy had established a photovoltaics subprogram a few years ago that supported research and development projects with an aim to reduce the manufacturing cost and improve reliability of PV technologies. The program is focusing on reaching the levelized cost of energy of $0.03 per kilowatt-hour.

Rolls-Royce, which in January acquired a majority share in the energy storage provider Qinous, aims to move from a product supplier to an energy storage solutions provider, with a focus on microgrids.

Rolls-Royce acquired a 29.9% share in the company in October 2018, then in January boosted that to a 73.1% share.

Qinous now has about 50 storage projects operating mostly in the Caribbean, Sub Saharan Africa and Germany. They are small-to-medium projects for hotel resorts, hospitals and small industrial sites, said Cordelia Thielitz, vice president of business field microgrids, Rolls-Royce.

Among Qinous microgrid projects are a community electrification effort in Australia, a diesel-hybrid system for a Caribbean island and a diesel-hybrid project for a hospital in Haiti.

Meanwhile, Rolls-Royce is working on numerous microgrids, mainly in the utility and commercial and industrial markets. They consist of solar PV, battery and diesel systems that aim to improve the impact of energy systems on the climate.

Microgrids strong in US, Europe rising
Roll-Royce sees the US — particularly California, Texas and the East Coast — as the leading microgrid markets, she said. The Caribbean region, Australia and Asia Pacific countries also hold potential.

In addition, in the wake of the European Green Deal, Rolls-Royce expects to see increasing demand in many European countries.

MTU America, a subsidiary of Rolls-Royce’s business unit Power Systems, has been involved in microgrids for many years, she noted. It provides diesel gensets and gas systems and combined heat and power (CHP) systems that support decentralized energy generation, she said.

“Due to our history we have long experience in controlling and managing and — even more — optimizing the operation of several energy generation assets,” she said. They include diesel gen sets and gas systems.

Responding to wildfire-related power outages, a California school district has hired CleanSpark to study the feasibility of building a microgrid.

CleanSpark is working with the Shoreline Unified School District north of San Francisco. If approved, the microgrid will use solar energy, energy storage and back-up generation to meet the district’s energy needs and provide back-up power to surrounding communities during emergencies, according to Salt Lake City-based technology company.

Other school districts in California also are turning to microgrids, among them the Sonoma Valley Unified School District and the Santa Barbara Unified School District, as the state grapples with what Pacific Gas & Electric has warned could be a decade-long threat of wild-fire related shutoffs.

CleanSpark expects to give the district the results of the feasibility study’s first phase in March. The study, to be conducted at CleanSpark’s expense, will see if a microgrid can be built at no net cost to the district while being financially beneficial to CleanSpark, according to a memo to the school district’s board.

“The presence of microgrids would protect our schools from power outages, planned or otherwise,” the memo said. “Additionally, we would be able to employ renewable energy in our schools, which would have clear large-scale benefit.”

Seeking 5% energy use reduction
Pacific Gas & Electric, and other investor-owned utilities in California, last year cut off power to their customers in a series of planned outages called public safety power shutoffs. The outages were instituted during times of high wildfire risk.

The Shoreline school district covers about 450 square miles in western Marin and Sonoma counties. It has five elementary schools and a high school.

CleanSpark will first focus on the feasibility of creating a microgrid for the Tomales High School. The assessment will look to see if a microgrid could reduce electricity use at the school by 5%, according to a draft agreement, which was approved by the school board. It will also see if more than half of the school’s electricity could come from onsite resources while also supplying emergency power.