The second week of Microgrid Knowledge’s annual Microgrid Conference held a seminar on the factors that bulk up the price of microgrid interventions, specifically “development and permitting delays, state regulations and utility rules, generation choices, location, [and] market rules.” Three panelists, Bruce Nordman, Research Scientist at LBNL, Manoj Sinha, CEO at Husk Power Systems, John Westerman, Director of Project Development and Engineering at Schneider Electric Microgrid Competency Center elaborate on their experiences regarding cost factors, design impacts, and making microgrids less expensive.
Led by Peter Asmus, Research Director at Guidehouse Insights, he set the stage with two studies on microgrid prices across different market segments and various locations across the globe. Frankly, the cost of microgrids depends on a wide range of factors, including size and resources involved. The first study, done by the National Renewable Energy Laboratory, assessed prices across market segments and found that microgrids at industrial and commercial sites averaged 4 million dollars per megawatt, campus and institutional microgrids cost 3.3 millions dollars per megawatt, utility microgrids cost 2.5 million dollars per megawatt, and community microgrids costs 2.1 million dollars per megawatt. The second study, led by the California Energy Commission, found numbers in the same ballpark. The global average was 3 million dollars per megawatt, the North American average was about 4 million per megawatt, and the California average was about 3.5 million per megawatt. That being said, prices have lowered, and will continue to as the market expands.
When it comes to the design process, John Westerman explained that resiliency and safety are the factors with the largest effects on cost. Solving the problems of electrical shortages and outages that last days to weeks will shrink costs in the long term. Being able to predict and manage assets during an excessive outage will minimize costs associated with repairs and obstacles. Correctly implementing safety requirements and maintenance can rack up the price quickly. Utility interconnection requirements, upgrading electrical services, and finding more sustainable and efficient solutions can contribute to high prices as well.
Reflecting on these key factors, Bruce Nordman offered his insight on how we can begin to make microgrids less expensive without compromising efficiency and effectiveness. One of the most essential solutions to this problem is implementing a more modular approach to microgrid set ups. Making elements available at stores would eliminate the lead for building permits or designers, and would make the systems more accessible, versatile and scalable for small communities. To do this, microgrid technology needs to evolve in a way that makes the components nimbler. As for the rest of the world, the standard grids we are used to seeing should accommodate microgrid technology. Hopefully, one day we’ll find ourselves in a world where microgrids have become the norm, and where modification, management, and personalization are primarily in the hands of the consumer.
As of 2015, the United Nations constructed a plan to roll out 200,000 microgrids by 2030. In order for this plan to become reality, Manoj Sinha explained the accessibility and design solutions that need to be implemented. Given his specialization in implementing microgrids across the globe, Sinha elaborated how access to power, preexisting weak grids, and policy hurdles will challenge the UN’s goal. However, designing with a “bottom-up” approach will eliminate unnecessary components and optimize design to minimize cost of equipment. Along with Sinha’s ideas, Nordman emphasized the importance of a modularity, “lego-block” approach, as well as the importance of microgrid components being preconfigured, verified, and inspected to ensure onsite work and management goes as smoothly as possible. This way, expansion can happen smoothly, quickly, and efficiently.