Microgrids: Yesterday, today and tomorrow
This article originally appeared in the June 2015 edition of Energy Digital. Click here to read the entire issue.
The International Energy Agency (IEA) has projected that by the year 2020, developing countries will require approximately double the amount of present electrical output. The demand for energy in these regions is expected to outpace growth of conventional macrogrids in the industrialized world and result in an undeniable need for microgrids. To further support this theory, the IEA also predicts that by 2035, approximately 80 percent of the world's energy growth will be represented by developing nations.
But the recognizable need for micogrids has been a long-time coming; in fact, some industry experts consider the Manhattan Pearl Street Station, the power plant constructed by Thomas Edison in 1882, to have been one of the first microgrids in use. Aware of the benefits, Edison and team added another 57 DCs before the end of the 1880s. The evolution of the microgrid market was put on hold, however, by the eventual adoption of state-regulated electricity services.
The role of microgrids today
Microgrids are widely used in the existing electrical landscape, with three primary markets serving as proof of the great opportunity for growth within the marketplace overall:
1. Communities: Rural communities within developing countries are often without electricity. Not only will these areas benefit by connecting to a complete power source, the continued advancement of each community serves to further assist with the country’s development overall. Present advancements in technology are estimated to allow for complete power to be supplied to 100 households at a time, a number that is expected to increase exponentially as technology continues to improve.
2. Telecoms towers: By using renewable energy sources including solar and wind power, microgrids are able to be self-sufficient and easily supply power to surrounding broadcasting towers, including those in remote locations. Microgrid usage also allows for telecom services to be extended and reach further into rural areas from a central location.
3. Single Buildings: Microgrids are also used as a means of support for conventional macrogrids in both commercial and residential buildings, such as hospitals universities. As a reliable source of power, microgrid usage in this capacity almost guarantees electricity will continue to be sourced to important these facilities, even acting as a complete backup source of power in times of crises.
Challenges facing development
Despite the proven value of microgrid usage, there are numerous challenges facing future development and even limiting the capabilities of those currently in existence. Some of the most notable challenges facing the development of microgrids include:
- Reliance on battery development. One of the greatest challenges of renewable energy is energy storage itself. Microgrids, which are often powered by renewable energy sources, face this same challenge as they continue to develop and result in the need for the development of batteries capable of holding excess energy. While solutions have been proposed – and some are even in development today – none have taken hold as the obvious solution. The demand for advancement has caused a sort of a “development race,” as various companies aim to create the next generation of batteries.
- State-level planning. Massive adoption of microgrids will begin at the state or regional level. The relationship status between the government and present utility providers will be of great importance. Those in positions to plan the expansion of electrical services will need to be able to see the benefit of microgrids, in addition to determining how to plan, distribute, store and maintain these new energy systems in accordance with their regulation.
- Interconnection. Microgrids work well when connected to macrogrids. However, macrogrid companies don’t typically want microgrids to be connected to the central grid for two main reasons: microgrids can cause instability on older grids, and microgrids cause the utility companies to lose business. Because of this, macrogrid companies tend to create policies and influence regulations that make it difficult for microgrids to be connected, thus inhibiting overall adoption and acceptance.
- Cost and financing. Cost of renewable energy is higher than that of fossil fuel for a number of reasons, including transmission and storage. Although these specific costs have hindered the adoption of microgrids and renewable energy overall, technological advancements are helping costs to decrease.
The future of microgrids
Microgrids will be used in a variety of settings as the landscape of electrical power continues to evolve.
Hybrid microgrids are able to generate and store electricity through a variety of different methods, including wind, solar and gas generators. This advantageous diversity means hybrid microgrids are a trend to watch and will likely be the go-to method for future builds—at least until the price of renewable energy drops, much like what’s been observed in the automobile industry and hybrid vehicles.
Advancements in community-based solar projects, crowdfunding campaigns for new technologies and increased blackouts with macrogrids are supporting the social desire for microgrids.
Society at large is also accepting of resource scarcity and the impact traditional structures have had on the climate. Another element of microgrids that is appealing to many is the decentralization of power: Microgrids backed by renewal sources of energy are disrupting the monopoly of electricity held by major corporations.
Increased corporate acceptance
Another result of social influence is the (sometimes reluctant) acceptance of microgrids by some utility companies. However, as the benefits continue to surface, many companies are updating their business models to include microgrid options. These options range from allowing connectivity with central grids to actual development.
The increased ease of providing electricity as well as the much-needed support given to macrogrids implies a bright future for microgrids within the energy industry.
As technologies overcome the present challenges and restrictions, microgrids will become increasingly prevalent in telecoms usage in addition to supporting developing countries and individual buildings that require consistent power.
Trafigura and Yara International explore clean ammonia usage
Reducing shipping emissions is a vital component of the fight against global climate change, yet Greenhouse Gas emissions from the global maritime sector are increasing - and at odds with the IMO's strategy to cut absolute emissions by at least 50% by 2050.
How more than 70,000 ships can decrease their reliance on carbon-based sources is one of transport's most pressing decarbonisation challenges.
Yara and Trafigura intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain. Under the MoU announced today, Trafigura and Yara intend to work together in the following areas:
- The supply of clean ammonia by Yara to Trafigura Group companies
- Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
- Development of new clean ammonia assets including marine fuel infrastructure and market opportunities
Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said the agreement is a good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry. "Building clean ammonia value chains is critical to facilitate the transition to zero emission fuels by enabling the hydrogen economy – not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," he said.
There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential, according to Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura.
Ammonia has a number of properties that require "further investigation," according to Wartsila. "It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process," it notes.
Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, has performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and has published a white paper on the need for a global carbon levy for shipping fuels to be introduced by International Maritime Organization.
Oslo-based Yara produces roughly 8.5 million tonnes of ammonia annually and employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity – enabling it to produce and deliver ammonia across the globe.
It recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.