Energy IQ: What you need to know about Microgrid basics

Earth view of microgrid

Whether it is through homeowners that install rooftop solar panels or businesses that invest in wind farms, more of us will access electricity through decentralized technologies than direct connection to the grid by the mid-2020s, according to Bloomberg NEF. While most of us translate this outlook to simply implementing more solar panels and wind turbines, that is only half the story. Decentralization has much more profound impacts in our society, including presenting consumers and businesses a choice. A choice to decide how to source their energy needs. Decentralized technologies help enable that consumer choice.

Microgrids are a key part of these decentralized technologies. The term Microgrid can be intimidating, because it may mean different things to different people, so let’s break it down and highlight some of the benefits.

Let’s cover four common questions and answers about living on microgrids to boost your energy IQ.

No. #1: What is a microgrid?

Microgrid basicsA microgrid is a local energy system capable of producing, (potentially storing) and distributing energy to the facilities within the network. Microgrids can be made up of several different assets, also called distributed energy resources (DERs). Commonly used DERs to generate power are solar photovoltaics (PV), wind turbines and power generators. Energy storage systems, intelligent controls and management software are other elements of the system that provide further functionality to the microgrid. Microgrids can be connected to the centralized grid or completely off-grid and self-sustaining. With the obvious need for continuous, reliable power, healthcare facilities can be good applications for grid-connected microgrids. Remote mining sites that need a lot of energy, can be great applications for off-grid microgrids. 

No. #2: What is the difference between microgrids and centralized generation?

The difference can be summed up in two words;  Proximity and resiliency.

Microgrids are near facilities they power. On the other hand, electricity, in centralized power generation, is produced in central power plants that could be hundreds to thousands of miles away from facilities being powered. This proximity of microgrids reduces losses in energy transmission and the significant cost of installing new transmission and distribution networks.

Most microgrids deliver improved energy resiliency through redundant DERs, a combination of solar PV, natural gas or diesel power generators and energy storage systems. Depending upon the microgrid design, facilities can still be powered even if any of these DERs fail. In comparison, a failure in a power plant could put businesses in the dark.

No. #3: How does a microgrid work?

Intelligent controls and management software are at the core of microgrids. Many control systems can track the energy needs of the facility and determine how to supply the needed energy. These control systems consider and evaluate factors such as cost, fuel supply, weather and energy load required to decide which DERs to utilize.

As mentioned, microgrids can be made up of many different assets, these control systems are the key element to manage dispatching the best asset based on these factors. Finally, some microgrids also feature energy storage systems to capture the energy produced at one time for use later.

No. #4: Why do we need microgrids?

Sustainability

As more businesses focus on sustainability and deploy renewable energy sources such as solar PV, microgrids come to help by integrating these renewable sources into the energy infrastructure. These renewable sources become a physical part of the microgrid and the intelligent controls manage their utilization.

Economics

Microgrids feature intelligent controls that can help businesses save money and improve economics. These systems can monitor the cost of energy from different DERs and utilities, then make choices on activating the lowest cost option. They also maximize the contribution of different sources. For example, when the wind isn’t blowing, the energy storage system can be activated to utilize the energy stored from when it was blowing to meet the load. Microgrids also help businesses participate in demand response and demand charge management programs to lower their costs.

Resiliency

Microgrids improve the resiliency of the local energy infrastructure by adding redundant DERs, which provide energy to the businesses. For a grid-tied microgrid, this means local DERs, ranging from solar PV to power generators, can continue to power the businesses and facilities during a utility outage.

Cummins involvement in microgrids

Cummins is a leading provider of diesel and natural gas power generators, digital solutions and control systems; and has partnered with businesses ranging from greenhouses to healthcare facilities in their efforts to build microgrids. Recently, Cummins’ investments in energy storage and advanced microgrid control technologies has boosted its capability to provide critical microgrid components and deliver complete microgrids tailored for each business’ unique needs.

Microgrids will continue to play a key role in our energy future. Businesses can evaluate the relevancy of microgrids per their unique needs as a part of their broader energy management strategy.

Sign up below for Energy IQ to periodically receive relevant insights and trends about energy management. To learn more about distributed generation solutions Cummins offers, visit our webpage.

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Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Energy IQ: Five insights into the future of energy for utility professionals – Part I

Electricity Lines

As our energy infrastructure gets increasingly electrified, it shines a spotlight on utilities to deliver the promise of electrification to their consumers. Utilities are up for this challenge, as the annual investment into electricity networks is forecasted to be 30% higher over the next two decades, compared to the identical annual investments over the last decade.

The International Energy Agency annually releases its World Energy Outlook with an objective of deepening our understanding of the future of energy. This report is over 800 pages and has great insights around the future of energy. In this two-part blog post, , we have summarized five insights every utility professional needs to know when it comes to the future of energy.

No. #1: Two technologies are forecasted to make the biggest gains in levelized cost of electricity (LCOE)Offshore wind technology cost

While building a new coal plant no longer offers the lowest LCOE in many regions, existing coal plants still have the lowest LCOE across most regions today. Meanwhile, there are two technologies that are making big gains to deliver lower LCOE in the next two decades: offshore wind and solar photovoltaic (PV).

Offshore wind is positioned to experience the biggest gains in lowering LCOE and is expected to be even less than solar PV in regions such as China and the European Union. Moreover, offshore wind projects already feature annual capacity factors of 40-50%, which are well above capacity factors for solar PV and approximately the same with gas-fired power plants in several regions. 

No. #2: Utility industry is getting increasingly more capital intensiveEnergy Sector investments

On average about $2 trillion dollars have been invested into energy sector each year over the last decade. This investment is expected to jump to $2.7 trillion per year over the next two decades. The majority of this uptick will be associated with increased investments in electricity networks, renewables and energy efficiency. 

Consequently, the utility industry will become more capital intensive in most regions, driven by an increased use of technologies with zero or low fuel costs, but higher upfront costs per unit of electricity produced. While there is more investment into fuels today, there will be more investments into power in the next two decades, again making the utility industry more capital intensive. 

 

Utility professionals are able to influence and make a difference in the future of energy with their decisions today, by making the right choices when it comes to technologies and fuels. A big part of making the right choices is working with insightful information. This blog post is to share insights about the future of energy, to help you in your everyday decision-making process.

 

Part II of this article will highlight the remaining three insights focused on increasing the need for flexibility, the role of regulations, and on-going energy transition. Sign up below for Energy IQ to receive Part II and other relevant insights about energy management. To learn more about distributed generation solutions Cummins Inc. offers, visit our webpage

Think your friends and colleagues would like this content? Share on LinkedIn and Facebook.

Raise Your Energy IQ

Grow professionally with energy trends and insights delivered to your inbox.

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Energy IQ : Five insights into the future of energy for independent power producers – Part I

It is forecasted that the world’s installed electrical capacity needs to grow by 80% from 2018 to 2040 to fulfill our increasing need for electricity. There are technologies such as renewables and efforts such as energy efficiency to manage this increase in demand. Meanwhile, independent power producers play a key role in bringing the actual solutions to expand the installed electrical capacity to life.

The International Energy Agency annually releases its World Energy Outlook with an objective of deepening our understanding of the future of energy. This report is over 800 pages and has great insights around the future of energy. In this two-part blog post,  we have summarized six insights every independent power producer needs to know when it comes to the future of energy.

No. #1: Electricity use grows faster than energy demandelectricity vs energy demand

Demand for energy is forecasted to grow 1% a year until 2040, while the electricity use is forecasted to grow twice as fast. While the use of electric vehicles is one of the most highlighted reason for this increased demand, there are three other more impactful drivers of this increase: industrial motors, household appliances and cooling needs. 

This increased demand for electricity will strengthen its position as the second most popular choice of energy in final consumption, challenging oil’s positions at the top. A mix of technologies will fuel this transition, where solar photovoltaic (PV) and wind will take the lead. By 2040, more of our electricity will be through renewable sources than fossil fuels.

No. #2: Demand for power infrastructure flexibility grows faster than the demand for electricity

Renewable technologies bring astonishing benefits in terms of zero carbon emissions, but also introduce the challenge of flexibility . The continually increasing share of renewables in our energy infrastructure gas fired generationstranslates into an increasing share of variable electricity generation. Meanwhile, consumers are increasingly using electricity for cooling and to fuel their cars, changing the electricity demand profile. A combination of these two results in an increased need for power system flexibility. 

As traditional power plants and interconnections continue to be the key levers to deliver flexibility, gas-fired generation grows across most regions. The expanding availability of natural gas and its relatively cheaper price fosters this growth. 

Independent power producers bring to life the solutions to address the increasing demand for energy and electricity. Insights shared in this article aim to help power producers stay current with the changes in the energy landscape, as they make investment and technology decisions.

Part II of this article will highlight three more insights focused on opportunities Africa offers for power producers, forecasted growth in energy storage solutions and how to complement the ongoing growth in solar with other technologies. Sign up below for Energy IQ to receive Part II and other relevant insights about energy management. To learn more about distributed generation solutions Cummins Inc. offers, visit our webpage. 

Think your friends and colleagues would like this content? Share on LinkedIn and Facebook.

 

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Raise Your Energy IQ

Grow professionally with energy trends and insights delivered to your inbox.

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Energy IQ : Five insights into the future of energy for facility professionals – Part I

Facility professors

Energy is an important cost element for many businesses, but limiting the role of energy in a business to financials would minimize the importance of energy to a business. Energy related decisions  impact businesses’ environmental footprint and the continuity of their operations; and facility professionals are the heart of all these, as they curate energy management strategies for their businesses.

The International Energy Agency annually releases its World Energy Outlook with an objective of deepening our understanding of the future of energy. This report is over 800 pages, and has great insights around the future of energy. In this two-part blog post, we have summarized five insights every facility professional needs to know when it comes to the future of energy.

No. #1: Electricity use grows faster than energy demand

Demand for energy is forecasted to grow 1% a year until 2040, while the electricity use is forecasted to growElectricity and Energy Demand twice as fast. While the use of electric vehicles is one of the most highlighted reasons for this increased demand, there are three other more impactful drivers of this increase: industrial motors, household appliances and cooling needs. 

This increased demand for electricity will strengthen its position as the second most popular choice of energy in final consumption, challenging oil’s positions at the top. A mix of technologies will fuel this transition, where solar photovoltaic (PV) and wind will take the lead. By 2040, more of our electricity will be through renewable sources than fossil fuels.

No. #2: Rise of electricity as a form of energy brings new challenges

The rapidly increasing need for power system flexibility is the first challenge the rise of electricity introduces. The interruptible nature of renewables is the key driver behind this increasing need for flexibility. A wide-array of technologies (including batteries) will be utilized to address this challenge, which will be covered in part two of the post.

Regulations and policies are very prominent in utility markets, and the increasing pace of advancements in connectivity and digitalization brings up a key challenge: can the regulations within utility markets allow businesses to maximize opportunities generated by these new technologies? Regulations on energy storage, flexible generation, demand response and electric vehicle-to-grid interfaces will be the ones to watch  in the upcoming years.

Facility professionals shape the future of energy for their businesses. Their energy related decisions yield outcomes in many areas including the environment, economics and reliability. Insights shared in this article are aimed to keep the facility professionals’ perspective of the future of energy fresh and current.

Part II of this article will highlight the remaining three insights focused on increasing the need for flexibility and the technologies that are forecasted to make the biggest gains in levelized cost of electricity. Sign up below for Energy IQ to receive Part II and other relevant insights about energy management. To learn more about distributed generation solutions Cummins Inc. offers, visit our webpage

Think your friends and colleagues would like this content? Share on LinkedIn and Facebook.


 

Raise Your Energy IQ

Grow professionally with energy trends and insights delivered to your inbox.

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Energy IQ : Five insights into the future of energy for energy consultants – Part I

Wind Farm

We are forecasted to experience one of the most significant transitions in the energy industry over the next two decades, as electricity challenges oil’s role as the most popular form of energy in final consumption. 

This on-going transition creates the need for businesses to re-visit their energy management strategies and capitalize on the associated opportunities. Energy consultants play the thought leadership role as businesses seek to optimize their energy management strategies during this transition.

The International Energy Agency annually releases its World Energy Outlook with an objective of deepening our understanding of the future of energy. This report is over 800 pages, and has great insights around the future of energy. In this two-part blog post, we have summarized five insights every energy consultant needs to know when it comes to the future of energy.

No. #1: Electricity use grows faster than energy demand

Demand for energy is forecasted to grow 1% a year until 2040Electricity use vs energy demand, while the electricity use is forecasted to grow twice as fast. While the use of electric vehicles is one of the most highlighted reasons for this increased demand, there are three other more impactful drivers of this increase: industrial motors, household appliances and cooling needs. 

This increased demand for electricity will strengthen its position as the second most popular choice of energy in final consumption, challenging oil’s positions at the top. A mix of technologies will fuel this transition, where solar PV and wind will take the lead. By 2040, more of our electricity will be through renewable sources than fossil fuels.

No. #2: Two technologies are forecasted to make the biggest gains in levelized cost of electricity (LCOE)

While building a new coal plant no longer offers the lOffshore wind technologyowest LCOE in many regions, existing coal plants continue to have the lowest LCOE across most regions today. Meanwhile, there are two technologies that are making big gains to deliver lower LCOE in the next two decades: offshore wind and solar (PV).

Offshore wind is positioned to experience the biggest gains in lowering LCOE and is expected to be even less than solar PV in regions such as China and the European Union. Moreover, offshore wind projects already feature annual capacity factors of 40-50%, which are well above capacity factors for solar PV and approximately the same with gas-fired power plants in several regions.

 

Energy consultants play a key role in shaping our energy future by acting as guides to their customers and partners from commercial to industrial markets. Insights shared in this article are aimed to keep the energy consultants’ perspective of the future fresh and current.

 

Part II of this article will highlight three more insights focused on increasing the need for flexibility, scalability of renewables and how subsidies for renewables compare with subsidies for fossil fuel consumption. Sign up below for Energy IQ to receive Part II and other relevant insights about energy management. To learn more about distributed generation solutions Cummins Inc. offers, visit our webpage

Think your friends and colleagues would like this content? Share on LinkedIn and Facebook.

Raise Your Energy IQ

Grow professionally with energy trends and insights delivered to your inbox.

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

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