Remote and Island Microgrids
Relying solely on oil for electricity generation has left island and remote communities exposed to several risks and drawbacks. Oil-based electricity generation is often more expensive and subject to price volatility, which can result in the use of risky fuel hedging strategies that can lock in prices for years to come. Importing oil puts these communities at risk of supply interruption, reducing energy security.
The International Energy Agency (IEA) estimates that by 2020, developing countries will need to double electrical power output. Demand for energy, especially electricity, is growing more rapidly in these nascent economies than the rate of expansion of conventional electricity grids in the major industrialized world. All told, the developing nations will represent 80% of total growth in energy production/consumption by the year 2035. One could safely assume that the
majority of these new power supplies will be produced and distributed via remote microgrids and other related forms of DER.
The future of microgrids is bright, and increasingly powered by renewable resources. Over the next five years, GTM Research forecasts overall North American microgrid capacity to more than double. Meanwhile, the annual North American market value is expected to nearly quadruple, increasing from $225.7 million by the end of 2015 to $829 million by the end of 2020. Globally, microgrid adoption is also rapidly expanding, with fast-growing Asian markets expected to make up an increasingly larger share of overall deployments.
With the ability to cause irreparable damage and irretrievable loss of revenue in a matter of minutes, downtime is, in a word, disastrous. Electrical power outages, surges and spikes are estimated to cost more than $150 billion in annual damages to the U.S. economy. The price tag varies not only by industry, but by the scale of business operations. For a medium-size business, the exact hourly cost may be lower, yet the impact on the business can be proportionally much larger. Nailing down the cost of each hour of downtime varies widely on a number of factors, such as the nature of the business, the size of the company, and the criticality of its IT systems related to revenue generating processes. For instance, a global financial services organization may lose millions of dollars for every hour of downtime, whereas a small firm might lose only a margin of productivity.
In many municipalities, critical facilities such as police and fire stations, city hall and emergency operations centers, hospitals, and large facilities that might be used as shelters are centrally located, creating the potential for serving these facilities on a common microgrid circuit. In the event of a loss of electrical supply on the main distribution network, the microgrid circuit would isolate from the network and locally-sited generation would provide electrical service to those facilities on the microgrid circuit, indefinitely, until external electrical supply is restored.