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microgrids

The power sector is witnessing significant changes. As 2019 draws to a close, GlobalData, looks at the key trends that will shape the industry in 2020, ranging from electric vehicles to corporate power purchase agreements (PPAs).

Electric vehicles

The adoption of electric vehicles (EVs) is set to continue on the steep trajectory witnessed in the last few years. The global EV fleet, which stood at over 5.1 million in 2018, is expected to reach around 130 million by 2030 as per International Energy Agency (IEA) forecasts.

Governments across the world are setting targets for deployments of EVs and these policy signals are encouraging industry stakeholders to invest across the EV supply chain. In addition, large power utilities such as EDF, E.ON and Enel in Europe have been investing in EV charging station infrastructure, and this market is witnessing consolidation – a trend that is expected to continue. Increasingly, power utilities are collaborating with EV manufacturers to boost their offerings in areas such as EV charging, vehicle-to-grid (V2G) services, energy storage and renewable energy sources. Oil majors such as Shell, BP and Total are also placing huge bets in this market through acquisitions.

Digitalization

Power utilities, which have traditionally been averse to the adoption of new technologies, are now realizing their benefits and offering heavy investment. An emerging technology trends survey conducted by GlobalData reveals that cyber security, big data, cloud computing, robotics and Internet of Things (IoT) are being seen as the top five technologies that will have the maximum impact on the sector over the next three years.

Cybersecurity is receiving the maximum attention from power companies in order to protect grids from cyber-attacks. Power utilities realize the crippling effect such attacks can have on the grid and are hence willing to invest heavily to protect against them.

With ever more data coming out of the customers’ meters, utilities are focusing on data analytics for load forecasting, generation planning, managing peaks and increasing customers’ awareness regarding energy efficiency. Big data and cloud computing are useful tools that are aiding these initiatives. Cloud models are helping utilities to lower their IT capital expenditure (capex) and offer unlimited computing and advanced analytics, while IoT is helping power companies to remotely monitor and manage their assets. Utilities are also able to conduct predictive maintenance of their assets with the assistance of IoT.

Grid-scale battery storage

Energy storage installation among end-users (renewable energy generators, grid operators and distributed generation) is projected to witness larger growth due to smart grid development. The battery energy storage system (BESS) market, which is estimated at 4.9 gigawatt (GW) in 2018, is forecast to reach 22.2GW by 2023.

The economies of energy storage in a wide range of applications, coupled with the falling cost of systems, will likely result in the rapid growth of battery energy storage solutions. Lithium-ion (Li-ion) batteries are emerging as crucial for energy storage, and the increasing growth of EVs has resulted in advancements in lithium-ion technologies and a steady decline in the prices of lithium-based batteries.

Several energy storage projects in the pipeline have been accelerated by incentive programs. The deployment is expected to grow, due to a large number of countries opting for storage utilization to support their power sector transformation. The US introduced several bills and policies related to energy storage, and the country has comprehensive incentive programs supporting battery utilization. In the meanwhile, India published a national energy storage mission, outlining the country’s ambition to become a market leader in the manufacture of batteries. Similarly, China and Germany are exploiting opportunities to capitalize on the growing market for batteries.

Microgrids

Microgrids will continue to make inroads in the power sector, driven by the need for resiliency, energy security and the electrification of remote areas. This year has seen a number of microgrid projects being announced by companies across the world. Utilities such as Duke Energy, EDF, Engie and AusNet have been involved in the development of microgrid projects, the scale of which has also been increasing with projects as large as the 100MW Armonia Microgrid Project in Palau being developed.

Policy developments have been encouraging. For example, Hawaii has become the first state to initiate microgrid tariffs. California is also following close behind, trying to enact legislation in this direction.

Corporate PPAs

Large corporates are increasingly signing PPAs with generators to meet their power needs. Most of these are signed with renewable energy generators, enabling them to increase the share of renewable energy in their total consumption. Companies such as Google, Amazon, Facebook and Microsoft have continued to sign PPAs during 2019 and this trend is expected to continue in the future due to the expansion of the data centers market increasing their power requirements.

Retailers such as Tesco and Walmart have also been involved in signing PPAs in 2019. The rise in corporate PPAs is fuelled by the withdrawal of feed-in-tariffs (FITs) and other incentives for wind and solar power coupled with the move towards auction mechanisms. Under these circumstances, corporate PPAs offer an opportunity for developers to sell their power profitably.

Source: GlobalData

Rolls-Royce has commissioned a Microgrid Validation Center for its MTU product and solution brand. Some 5 million euros have been invested in the center, which is located at the Friedrichshafen headquarters of the Rolls-Royce business unit Power Systems. Close-to-reality simulations of microgrids of various dimensions and configurations are to take place there.

Microgrids are small-scale local power networks in which various energy sources and storage systems e.g. solar cells, wind turbines, batteries, and diesel or gas-powered generator sets are integrated by means of a smart master controller. “Microgrids are indispensable to the energy turnaround because they reduce carbon emissions and use renewables in an eco-friendly way, yet still offer top levels of energy security,” said Andreas Schell, CEO of the Rolls-Royce Power Systems business unit. For many operators of on-site power networks – businesses and public utilities, as well as remote mines or large-scale farms – a microgrid is the ideal solution because it allows full or partial independence from the public grid. The green energy generated by the microgrid can also be fed into the public grid. “The microgrid has a special significance for our company,” pointed out Schell. “It’s a symbol of our evolution from engine manufacturer to provider of integrated solutions. We’ve moved far beyond the realm of the engine and now have the capabilities to supply complete system packages and cover all their operational service needs.

Rolls-Royce also runs its own microgrid at MTU Plant 1 in Friedrichshafen. This microgrid consists of photovoltaic panels with 500 kW peak power capacity installed on the roofs of the Validation Center and a neighbouring factory building, as well as gas-powered gensets, one diesel genset, and the new MTU battery container with 2 MW capacity developed in-house. “The battery container provides a resilient store of energy from renewables and is basically the center of the microgrid. The smart controller, which we also developed in-house, determines which source of energy is best to use in terms of cost at any given time so that savings are maximised,” explained Cordelia Thielitz, Vice President Microgrid division. Rolls-Royce can now generate by itself most of the power needed by MTU Plant 1 and also recovers waste heat emitted by the engines. That reduces CO2 emissions by several hundred tons per year.

These components also form an integral part of the Validation Center, where the function of microgrids individually configured to suit customer requirements can be demonstrated. Special transformers, invertors and switchgear in the new building simulate the function of other energy sources that can be integrated into a microgrid.

This enables us to configure microgrids of various dimensions, capacities and layouts for our customers and show how they will function – also in relation to the wind and sun conditions prevailing at the ultimate location,” explained Armin Fürderer, director of customized energy solutions. The Validation Center capabilities reflect the diverse portfolio of MTU microgrids, which includes battery containers with capacities ranging from 50 kWh (sufficient for 50 machine washes) to 2 MWh (roughly the yearly power requirement of a single-person household). “You can increase the capacity of your microgrid more or less as you wish, by using, for example, several battery containers, a bigger photovoltaic installation, or by adding on wind turbines and larger or extra generator sets,” explained Fürderer.

Rolls-Royce is currently setting up another proprietary microgrid at its MTU facility in Aiken (South Carolina) which will cover the plant’s electrical power demand using regenerative energy sources and make it less dependent on the public grid.

Source: Rolls Royce

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