SPRING EDITION ENGINE ROOM 09 Microgrids are independently functioning forms of distributed energy generation This means that cheap sources of non-conventional and intermittent energy sources can be enabled by the introduction of advanced controls and energy storage systems. These systems can be configured to operate independently of a grid or to assist in stabilising the grid during some periods of instability. This provides an altogether more reliable and de-centralised grid that has a higher tolerance to failure. Operating costs are cheaper compared to conventional power generation Improvements in the costs and capabilities of photovoltaic (PV) systems, energy storage and telematics; coupled with advances in technology and communications integrated into hybrid microgrids are proven to reduce operating expenses all while optimising system reliability, efficiency and flexibility3 . Recent studies conducted by the University of California and the Technical University of Munich show that cost of energy could get as low as US$100 per kilowatt/hour (KWh) by as early as 2019 – down from $10,000 KWh in the 1990s4 . This sudden and significant drop in storage costs has made investment and research into other types of storage mediums difficult to justify because lithium-ion storage costs are forecast to drop even further as manufacturing capacity increases. New technologies such as metal-air, advanced lead acid and flow batteries will struggle to keep pace with the large-scale investment that is being sunk into lithium-ion production. Microgrids can deliver grid stability and energy security During outages of high energy demand or natural disasters, the frequency response of microgrids are immediate. From floods to bushfires, Australia is highly vulnerable during periods of natural disaster. Large areas of the country have been battered in recent years – and its placing extra pressure on our power networks. For example, South Australia’s 1.7 million residents were left without power following severe storms in September 2016. When three elements of critical transmission infrastructure were destroyed, the power system protected itself by shutting down. Scenarios like this adversely affect residents and businesses alike across Australia and are becoming more frequent. And microgrids provide a solution. New York City adopted a microgrid model after major blackouts sustained during Superstorm Sandy5 while Western Australia’s main grid operator have also flagged new models including microgrids6 . This is also the vision and strategy that the South Australian state government is moving towards to prevent this type of disaster happening again. Microgrids provide value to prime power diesel and gas customers Cost-effective electric power has long been a challenge for communities and industrial or commercial installations without access to a strong utility grid. Microgrids integrate renewable energy with generator sets and suit a broad range of applications including telco towers, industrial facilities, mining installations and remote communities. They reduce fuel expenses, lower utility bills, offset carbon emissions, and reduce the total cost of ownership while increasing energy efficiency – even in the most challenging environments. Digital controls and smaller-scale storage enable consistent voltage and frequency For example, in the event of a voltage dip, the energy storage can rapidly feed energy back into the system to provide stability. The Cat® Bi-Directional Power Inverter (BDP) uses a digital droop control that reacts within 100 milliseconds and can overload to 256 per cent for a short duration. This enables the BDP to support generator sets in accepting block loads without fluctuations in frequency, making it possible to deploy renewable resources in proportions far greater than a utility grid could support – up to and exceeding total system demand7 . It also enables the generation of fault currents straight from the inverter to help activate protection systems and operate a safe grid (a feature unique to the Cat® BDP).  1. Clean Energy Council, Clean Energy Australia Report 2016 2. Australian Government, Department of the Environment and Energy, Independent Review into the Future Security of the National Electricity Market released 9 June 2017 3. F Saury, C Tomlinson, Hybrid Microgrids: The Time is Now, Caterpillar North America, February 2016 4. G Parkinson, Why Australian battery storage costs may fall 40% in two years, 20 June 2016, viewed 28 August 2017 5. C Roberts, No More Blackouts: How New York Is Protecting The Power Grid, Inside Energy 11 January 2016, viewed 28 August 2017 6. J Gifford, W.A. plans Australia’s biggest solar+storage micro-grid in Onslow, Renew Economy, 3 October 2016, viewed 28 August 2017 7. Saury, Tomlinson ibid. 8. N Harmsen, Prime Minister attacks South Australia’s renewable energy policy at state Liberal Party’s AGM, ABC News 14 August 2017, viewed 28 August 2017 9. Saury, Tomlinson ibid.