A microgrid is a small local energy grid that is designed to operate autonomously from the traditional grid as required. It is privately owned electricity infrastructure, usually found in large properties like shopping centres, apartment buildings, multi-tenanted commercial precincts and ‘edge of grid’ communities where consistent supply may not be guaranteed.
The traditional grid connects homes, businesses and other buildings to centralised power sources, this interconnectedness means that when part of the traditional grid fails, everyone is impacted. A microgrid helps by decentralising energy generation and storage to improve reliability.
Although microgrids operate whilst connected to the traditional grid, they can separate from the grid and operate independently using local and distributed energy generation, such as solar PV, batteries and back-up generation. In times of crisis like power outages or natural disasters, a microgrid can keep you powered up and operating independently for up to several days.
Modern microgrids allow a high degree of control, enabling the user to optimise for business requirements (be it lowest cost, highest reliability etc.). This level of control provides an opportunity to not only reduce costs but leverage the microgrid to generate additional revenue (e.g. feed-in-tariffs, peak demand reduction etc.).
While a microgrid is often considered a single site, a Virtual Power Plant (VPP) is the combination of multiple sites, technologies and assets which are integrated together using specialised software and hardware to form a virtual energy network that can be central controlled while maintaining independence.
VPPs allow grouping of small to medium generation, storage and control assets to work together and gain the benefits of shared resources and the ability to maximise value by effectively operating as a larger asset. VPPs deliver many of the same benefits to their users as Microgrids (lower cost/energy use, reduced emissions, enhanced asset control/optimisation and additional revenue generation).
Microgrids and VPPs offer a variety of benefits. Financially, microgrids can help cut costs by allowing you to be more energy-independent and a providing access to cheaper energy sources. They can also provide a source of revenue through energy on-sell or arbitrage opportunities. Where consistent supply is paramount, they increase energy reliability and can positively impact your carbon footprint by increasing your electricity usage sourced from renewables like solar.
Your microgrid will generate electricity for you to use independently from the grid, which means you’ll save on your grid energy costs.
During power outages, storms and other hazards which interfere with the traditional grid, your microgrid will keep your business or property powered up.
Microgrids help increase your usage of renewable energy onsite which means lower carbon emissions for your business.
Microgrids allow you to generate your own power, which you can on-sell and take advantage of arbitrage opportunities.
Verdia specialises in the development and delivery of complex and multi-site projects for large businesses.
We are experienced in a variety of different projects, ranging from large on-site solar installations across single and multi-site programs to advisory/consulting services for clients who need help optimising and managing their energy programs.
We start by understanding your needs, taking into account your business operations and financial requirements. We then do the groundwork to understand what is feasible, and then develop a detailed project plan, including finance options.
Once you are confident that you want to proceed, we manage procurement and project delivery, making sure your interests are protected throughout.
When the project is complete, we ensure it delivers the expected results.
No two microgrids are the same as they are custom designed to meet the end user’s needs. However, all microgrids/VPPs will include on-site energy generation (be it solar, diesel or other fuel generatorsand some form of monitoring/control/optimisation hardware and software along with standard energy connection infrastructure such as meters and grid connection. In addition to these elements it is common for Microgrids and VPPs to include storage, load management and other systems to maximise the effectiveness and benefits of the Microgrid/VPP.
Microgrids and VPPs typically require some form of on-site generation, with solar able to fill this role. This is due to it often being the most affordable, cleanest and easiest on-site generation technology available (compared to diesel, gas or wind). As solar is an intermittent source of energy it may be coupled with other generating technologies where viable or more commonly coupled to some form of energy storge (typically a battery) to optimise the use of on-site energy and maximise benefits. Together, a well-designed solar and storage solution can provide a high degree of flexibility to maximise savings, revenue generation and emissions reduction.
Yes! – Microgrids and VPPs are custom designed to meet an end user’s needs and this includes integration with existing assets and systems. Depending on what has been installed along with your system, some upgrades may be required to inverters, switchboards and control systems but the extent of these upgrades can be determined during a feasibility assessment, with additional benefits potentially outweighing the cost.
While it is possible to design a Microgrid or VPP to enable complete disconnection from the existing grid, it is rarely done outside of remote communities or locations where there is no existing grid infrastructure. There are a number of reasons for this, but it primarily comes down to cost. In order to achieve complete separation from the grid, generation and storage assets will likely need to be significantly oversized to guarantee reliable 24/7 supply. This often comes at the expense of project viability with significantly larger upfront investment and a system rarely operating at optimal capacity. Typically, a Microgrid or VPP will be designed to allow grid disconnection for shorter durations (such as during power outages).
Yes! – A well designed Microgrid or VPP solution will not only reduce your energy cost but may open up additional revenue streams as well. They do this by using intelligent controls to optimise energy use from cheaper sources (such as on-site solar generation and battery storage) during peak times and sourcing grid electricity when it is at its cheapest. On-site generation and storage also enable the end user to generate revenue through on-sell and energy arbitrage opportunities.
No – While some energy users may choose to provide the capital and assume full ownership for a microgrid system, there are other commercial models available that require no upfront investment. Microgrids can be designed, built, owned, operated and maintained under an Energy as a Service (EaaS) model where an energy service provider (such as Verdia) provides the capital to build the microgrid and assumes responsibility of its ownership, operation and maintenance for an agreed term (typically 10-20 years). Under this model the end user enters an EaaS Agreement with the energy service provider at a pre-agreed rate for the energy and services delivered by the microgrid system. Within this model there is significant flexibility to meet the end user requirements, including variables such as EaaS price/term, revenue/benefits sharing, roof/land rental, buy-out optionality, asset transfer etc. An EaaS structured Microgrid delivers the same benefits of an energy user funded microgrid without the capital cost.
Verdia can answer any questions you have and help you determine the feasibility of your project. We can design, deliver, own and operate your project and provide asset monitoring services to ensure you achieve your energy savings goals.
To find out more about the benefits of microgrid and VPP for your organisation contact Genevra Howard.