Microgrids have grown to over 1.2 gigawatts (GW) in capacity, with future projections reaching 20GW by 2020 and 100GW by 2030, that is according to Andres Carvallo, CEO of CMG, a consultancy that advises on smart grids and other infrastructure.
Carvallo told attendees at the Smart Cities Week 2016 conference in Washington, D.C. last week that he believes the ability of microgrids to operate autonomously from larger grids could prove to be a major driver of Internet of Things (IoT) adoption in smart cities of the future.
“Highly instrumented microgrids can strengthen grid resilience and help minimize outages in the larger utility grid,” said Carvallo. “Microgrids are designed to enable two-way power flow and two-way dataflow that require pervasive instrumentation and connectivity on just about every device within it.”
Microgrids are small, local energy grids that can be disconnected from the larger utility grid and operate independently. They are often powered by multiple technologies that include solar PV, natural gas CHP engines, or diesel generators. A modern microgrid usually requires connectivity, sensors, energy management software, device management software, analytics and machine learning software for optimization.
Carvallo sees these characteristics making microgrids one of the most significant applications for increasing the adoption of IoT for smart cities. As these highly connected, data-rich electricity grids encourage efficiency, facilitated by the IoT, and foster greater data transfer to and from all manner of energy consuming, storing and generating technology.
Other experts, however, have been seeing things from the other way around. Suggesting that it is the IoT driving the increasing adoption of microgrids around the world. The continuing improvement of senor and data transfer technology, driven by the IoT, is in fact facilitating the development and optimization of microgrids.
“The emergence of the Internet of Things will strengthen communication channels between machines and minimize human intervention, thereby speeding up the shift to an integrated microgrid structure,” said TechVision research analyst Guhan Sriram R V. “The incorporation of predictive analysis will further bolster the reliability of the microgrid.”
Grid IoT software allows for the ideal amount of energy from the cheapest, most environmentally friendly, source to be delivered where it’s needed, when it’s needed, while minimising waste. Via an IoT enabled microgrid, energy can be shifted in split-second in order to respond to changes in demand, weather or public events, reacting much like the bigger, national grids, do.
Energy storage also plays a significant role in the continuing development of microgrids. Advancements in battery technology and the subsequent drop in battery prices have acted as major catalysts for microgrid deployment.
Energy storage allows for better load balancing, especially from intermittent generation sources like solar and other renewables. And it is these energy sources that have allowed for independence from national grids, a major driving force behind microgrid deployment.
Storage inverters, power conversion systems (PCS) and other components are also expected to experience significant competition in the coming years, further driving prices down. In fact, for a typical 30-minute duration utility-scale li-ion system, more than 60% of the total reduction in system costs between 2013 and 2019 will come from the balance-of-plant equipment, rather than from batteries alone.
“The breakdown of system costs, and the future evolution of prices, varies significantly depending on whether the system is configured to provide a high-power or high-energy application,” said Sam Wilkinson, solar supply-chain and energy storage analyst for IHS Technology, “but battery costs will continue to decline over the next five years.”
The same could be said for the cost of renewable energy. The price of solar has fallen 82% per watt in the past six years, while wind power has dropped 61% during that time, according to Lazard’s Levelized Cost of Energy Analysis. That makes them price-competitive with — or in some markets cheaper than — fossil-fuel power.
This convergence of technological, economic and environmental forces, are driving the IoT and microgrids simultaneously, then each drives the other forward.
Be it the IoT driving microgrids or vice versa, the continued expansion of each is good for the other. The current trends we see in the microgrids and the IoT, as well as energy generation and storage technologies, evoke visions of a vast network of microgrids balancing and optimising energy use in a deeply connected world.
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