This article was first published in the Elektor magazine December issue.
At the Microgrid Forum held in Amsterdam on September 18 and 19, Bjarti Thomsen, an engineer and project developer at the Faroese Earth and Energy Directorate, explained why they opted for a microgrid.
The Faroe Islands are situated in the North Atlantic Ocean approximately halfway between Norway and Iceland. They form an autonomous administrative district within the Kingdom of Denmark. Due to their isolated location, the Faroe Islands have never been connected to the mainland power grid. Their main source of energy is imported oil. Staying warm, particularly in the winter, is an expensive proposition. The average household consumes about 1,000 gallons of oil per year at a cost of 24,000 Danish crowns (about $4,300; €3300; £2700).
The island residents, numbering roughly 50,000, decided to make the move from fossil fuels to sustainable energy. They have various reasons for this, including the anticipated economic pressure from rising oil prices, greater independence in meeting their energy needs, and reducing CO2 emissions.
The climate and the location of the Faroe Islands offer good prospects for utilizing alternative energy resources. There’s nothing to stop the wind in the middle of the ocean, and particularly in the winter months—when energy demand is greatest—there is a lot of wind. A microgrid has been established on Nólsoy, one of the eighteen Faroe Islands, to add wind to the energy mix.
Sustainable power integration
The power grid of the Faroe Islands, like most national grids, is not designed to accommodate the large-scale integration of distributed intermittent power sources. It is a centralized grid with a limited number of large power plants. The distribution network only works in one direction: from the power plants to the loads. The network manager can control the supply, but not the demand. Connecting a large number of sources supplying power on an irregular basis to a grid of this sort causes variations in the grid voltage.
By contrast, a microgrid can accommodate fluctuations in generation because it uses computer systems to manage the power balance intelligently and dynamically. Demand and supply are coordinated by shedding loads when less generating capacity is available. Based on a priority scheme, the supply of power to specific devices, such as those having their own batteries (electric cars and laptop computers, for example), is temporarily discontinued.
Another important component of a microgrid is energy storage. This acts as a buffer to handle periods when generating capacity is greater or less than demand. Energy can be stored in batteries or other facilities when the grid voltage rises, and then fed back into the grid when the voltage drops.
Dynamic network management enables a microgrid to handle a large number of distributed sources, such as wind turbines and solar panels. It uses them primarily to supply power to the loads in its own network. If excess capacity is available, it supplies power to the main grid as a single entity. In this way it acts as an intermediary between distributed energy sources and the main grid.
Microgrids do not come cheap. At present the cost per kilowatt-hour is not competitive with conventional power grids. This is why microgrids are mainly implemented in isolated locations such as islands, mining sites and isolated rural communities. Most of the people attending the forum in Amsterdam were stakeholders: investors, companies, engineers and representatives of areas where microgrids are potential option. Accordingly, a lot of attention was also given to the obstacles to cost-effective operation.
Microgrids do not scale easily. Each location is unique in terms of energy demand and available energy resources. In the case of the Faroe Islands system, the main requirement is to meet the demand for heat, and wind energy is available. By contrast, a microgrid for a mining site in the outback of Australia has to able to keep heavy machinery running using diesel generators, solar panels and wind energy. It is therefore not possible to build an optimized microgrid that can be exported to every corner of the world.
A related aspect is the lack of standardization. Microgrids rely on complex interactions between generators, storage facilities, voltage and frequency control systems and computer infrastructure. From many of the stories related by various speakers at the forum, it was apparent that each time a microgrid is developed and implemented, the parties involved in the process have to devise new solutions in order to achieve interoperability between the various systems. The forum attendees agreed that better coordination between the players in the chain would foster the development of microgrids.
It was also clear that energy storage is still a bottleneck for the large-scale implementation of intermittent energy resources. Enormous advances in battery technology with regard to quality and cost have be been made as a result of the automobile industry’s massive interest in electric vehicles. However, the cost per kilowatt-hour of energy from sustainable resources in combination with battery storage is still significantly higher than with a conventional power grid. It can be cost-effective for isolated areas without access to a power grid, such as the Faroe Islands, but for ordinary use battery storage is still too expensive.
A member of the audience raised the question of why the discussion on energy storage focuses almost entirely on batteries instead of considering other options, such as hydrogen or flywheels. No truly satisfactory answer was given.
Nevertheless, there is a genuine future for microgrids. The share of renewable energy in the mix will continue to grow due to the finite nature of fossil fuels and the resulting rise in fuel prices, as well as efforts to reduce CO2 emissions. Popular support for alternative forms of energy can also be seen from the fact that more and more people want to look after their own energy needs. At the household level this can be achieved by installing solar panels on the roof, but it can also be achieved at a larger scale by joining together to launch a wind turbine project.
To enable the utilization of distributed intermittent resources, current centralized power grids will have to be transformed into smart, dynamic 21st-century systems. Microgrids offer a means to implement this transition in a phased manner.