Modular Microgrids: Driving the Soft Costs Away Via Standardization
As a manufacturer of battery enabled microgrid systems, we hear a consistent message from end customers that microgrid systems are too expensive to install and have too little payback. This would be systems that are behind the meter and not for utility-size renewable generation, storage and control. This issue has been at the forefront in the slow increase in adoption of microgrid systems. Solving this challenge will greatly enhance the opportunities to increase microgrid installations for end users to enhance their facility or campus resilience.
There are several ways to reduce costs in a microgrid and currently the majority of focus is in reducing battery costs. With a battery energy storage system (BESS) comprising more than 50% of a control system cost (generation excluded from this calculation), it makes sense to look at the large cost buckets. Battery prices are dropping based on changes in manufacturing and volume of purchases, but there is a bottom to this pricing under current chemistry and processes. When this will happen is a major conversation within the industry with numerous articles and studies publicly available.
However, there are hidden soft costs within microgrid systems that can be nearly eliminated. These soft costs focus on custom engineering and installation of systems. A great analogy can be seen in the nuclear energy generation space where Europe standardized on specific reactor specifications for design and implementation and the US allowed for many variations of design. The result was a stable cost of building nuclear power plants in the EU and a wide range of costs of building systems in the US. Currently, there is no standard design in the microgrid industry. Each project is considered a one-off or custom system. This approach drives costs and complexity in engineering and construction where it may not be needed.
So what is a solution? A modular and scalable battery enabled microgrid system that can act in a distributed manner appears to solve several of these issues. By standardizing and building on one unit, a microgrid can be constructed, tested and deployed with minimal special engineering and installation — a system such as depicted in Figure 1. In this instance, microgrid systems can be built to include microgrid controls, BESS and switchgear in a single ISO standard arrangement….