The US electricity grid is nothing short of a wonder. According to the EIA, this modern feat of engineering connects the energy created by 7,300 power plants to America. In 2022, 60% of that power was generated by fossil fuel sources, with natural gas alone making up nearly 40%. A further 18% came from nuclear and almost 22% from renewables. This electricity is supplied to communities around the country through approximately 160,000 miles of high-voltage power lines. From there, millions of miles of low-voltage power lines and distribution transformers provide power to over 145 million consumers.
However, most of the infrastructure is ageing. Most power plants are over 30 years old while 70% of transmission lines and transformers are 25 years old. As a result, we lose power three times more often than we did 30 years ago, when this infrastructure was new. Further, increasing peak demand and unpredictable weather events continue to strain the grid. This in turn creates high costs for everyone involved in power distribution and consumption: commercial and industrial (C&I) entities, rural electrical cooperatives (RECs) and their members.
Updates to transmission infrastructure are underway, but these take time and are often costly. In the meantime, RECs and C&Is need a way to balance supply and demand while working with the existing grid. One way this can be achieved is through the use of microgrids, though not in the way you might think.
What is a Microgrid?
A microgrid is a small, localized energy system that has its own sources of power. These distributed energy resources (DERs) include technology like PV solar, battery storage and reciprocating engines. It’s essentially a mini-power grid that can connect to the larger grid when needed. But it can also operate on its own if there’s an outage or other disruption. Each microgrid is controlled as a single entity, which allows for efficient management of energy production, distribution, and consumption.
Microgrids are not new. Although, the classic idea of a microgrid focused on trying to remove the connection to the central grid. We don’t see that as a viable solution for RECs and C&Is. Rather than forging out on their own without the grid, they can use microgrids as a complement to the grid’s capabilities at times when they need the most support. This is called a grid-tied microgrid and there are several benefits associated with this approach.
Customized distributed solutions
If you’re an engineer who needs to design a grid-tied microgrid, you’re going to design it for the worst case scenarios, like coincidental peak (CP) events and blackouts. Ultimately the mix of technologies you choose is going to depend on your current power supply portfolio, supplier agreements, energy bill (including CP costs), and regional factors that impact your power supply. If weather events might threaten natural gas supply, a microgrid which includes propane-fueled reciprocating engines or battery storage might be beneficial. Or perhaps peak demand tends to coincide with peak solar hours, in which case PV solar would be a logical inclusion.
Microgrids can be endlessly customizable to fit each supplier’s specific needs. At Perceptive Power Infrastructure, some of the solutions that we work with include:
- PV Solar
- Battery energy storage systems (BESS)
- PV solar + BESS
- Natural gas or propane-powered reciprocating internal combustion engine (RICE) units + PV Solar
- RICE units + BESS
- Anaerobic digestion + PV Solar
Increased stability and control
Having distributed generation solutions on standby “behind” the facility can give RECs and C&Is a more secure way of operating while reducing variations in the market. This increased control over the power supply means:
- Better reliability and resilience: A microgrid which is designed for an REC’s specific power supply challenges enables them to be ready for all scenarios. A well-designed microgrid can be dispatched immediately alongside the central grid to manage peaks while also switching on in place of the grid when events challenge grid supply.
- Load factor stabilization: In 2022, utility-scale facilities generated approximately 24 trillion kWh of electricity in the United States. An additional 58 billion kWh was generated by distributed PV Solar installations. As base loads continue to increase alongside peak loads, DERs can be switched on to handle the peak load events. This relieves pressure from the grid and translates to a better overall load factor.
- Cost stabilization: Unexpected shutdowns and peak loads can be costly, especially during CP periods. Installing grid-tied microgrids can cut costs associated with peak rate pricing, CP associated tariffs and black start scenarios. It can also be installed without the need for costly updates to transmission infrastructure.
Microgrids reduce stress
This stress reduction occurs across the board. Incorporating DERs in a grid-tied microgrid is going to reduce stress on everyone: ISOs, RTMs, G&Ts and power retailers like RECs. It can also do so relatively quickly. A microgrid implementation project that is targeted, focused and well-managed can achieve goals faster than transmission infrastructure updates.
Financial stress can also be lessened through microgrids. Aside from cutting fuel and peak costs, microgrids can be owned and operated by the RECs or they can be leased from third-parties. Power purchase agreements give the flexibility of using microgrids and DERs without having to worry about maintenance.
This is where we come in.
How can PPI help you get started with microgrids?
Perceptive Power Infrastructure is a subsidiary of True Green Capital, which has over 10 years of experience in building, owning, and operating 500+ Solar Power Plants and microgrids. We have projects in more than 10 States, ranging in size from 500 KW to 10 MW. Our team consists of knowledgeable professionals who come from small towns and rural areas. Best of all, funding is already available to us. We don’t have to waste time going to market to secure capital. Instead, our team can put their decades of experience straight to work.
Our approach is based on the principle of building lasting partnerships. We do that through a transparent process with the goal of creating mutual trust. How does that look in practice? First, we take the time to get to know you, your organization and your community. If we both think that Perceptive Power Infrastructure has the right solutions, then we turn to our financial model. Using relatively simple and easy to source data like yearly load and monthly energy bills, our linear model identifies areas of improvement and the right solutions to achieve it.
At every step in the process, we keep our books open so you can trust that you’re getting the solution you need, in a timely fashion and within budget. We call this “The Perceptive Way.” By adhering to this process, we build the sort of long-term relationships that our partners need to achieve their long-term goals.
The future of stable energy
We think grid-tied microgrids and distributed generation are the logical choice to meet the electricity needs of Rural America. However, we also know that Rural America doesn’t change quickly. We know that RECs take their time when making important decisions like this – and rightly so!
Everyone can agree that transmission and distribution infrastructure in the US needs an update. As RECs and C&Is make decisions like whether to buy more poles or bury lines, maybe it’s time to also consider adding microgrids to the mix. It’s not something to be taken lightly, which is why it’s important to have a knowledgeable and trustworthy partner. If you’re looking for someone to help you achieve a more reliable, resilient, and cleaner grid while also keeping costs under control, we’d love to hear from you.