Why microgrids are big news

31st October 2024 by Craig Tropea

Collected at: https://tbtech.co/news/why-microgrids-are-big-news/

As the world continues its march towards a greener future, businesses, communities, and individuals alike are all increasingly turning towards renewable energy sources to power their operations. What is most interesting, though, is how many of them are taking the pro-active position of researching, selecting, and implementing their preferred solutions without the assistance of traditional players in the space. 

Leading the way are the big box retailers. It is, perhaps, no surprise. After all, their sprawling rooftops present vast untapped potential for solar energy generation. So much so, that a report by Environment America Research & Policy Center suggests that the rooftops of the big box stores and shopping centres in America have the potential to generate 84.4 terawatt-hours (TWh) of solar electricity each year. This is enough to power almost eight million homes. 

Impressive numbers

Retail giant Walmart has become a poster child for the movement. The retail behemoth is said to have more than 780 million combined square feet of rooftop space throughout its estate that can be used for solar energy systems, and a large proportion now is. In fact, the company currently has over 600 on and off-site projects in operation or under development and earlier this year it further committed to add 10 GW of clean energy capacity by the end of 2030. These are impressive numbers.

Since setting up its own microgrids, Walmart has become so successful at generating its own renewable energy that it now sells off the excess supply. As Vishal Kapadia, senior vice president, energy transformation at Walmart explains: “The role we play in our communities provides us with a tremendous opportunity to help people transition to clean energy in a way that also helps them save money and live better.” 

Under intense pressure

It is not just retailers such as Walmart that are seeing the benefits of running their own bespoke microgrids. Another key sector where they have become popular is data centres. Data centres are well known to be big energy consumers. In fact, they devour around 2% of the world’s electricity currently. This is only going to increase as their need for more computing power and storage is rising even higher with the emergence of artificial intelligence (AI) technologies. Because of this, data centres are under intense pressure to operate more efficiently and minimise their environmental impact. 

As energy consumption of data centres grows exponentially, adoption of locally managed microgrids is helping operators take more control of their power supply. Microgrids not only provide them with the ability to minimise the impact of regional power outages and disruptions, but helps them to transition away from traditional backup sources such as diesel generators. 

Technology advancements

The move towards microgrids is as much about regaining control as lowering costs. A microgrid can empower a business to not only control when they take energy off the grid but ensure they can push excess energy back to the grid when it provides the best returns.

Technology advancement is proving to be an important catalyst. The latest AI-backed software platforms can analyse huge amount of data in record time, so that businesses are able to forecast demand, scheduling, and position reporting effectively. Modern distributed energy resource management systems (DERMs) can also help ensure a microgrid works optimally by ensuring energy is correctly balanced throughout the grid.

Improvements to battery technology have also played a part. Modern lithium-ion batteries have far better energy density than in the past, allowing for longer-lasting batteries in smaller, lighter packages. Additionally, many new battery technologies are quickly changing the game. Lithium-Sulfur, Sodium-Ion, Ion-Air and Zinc base batteries are all currently being researched and developed in order to compete with more traditional, Lithium-ion batteries in terms of cost, sustainability, and efficiency.  

A step further

We are even seeing the theory of the microgrid go a step further, with businesses or communities often joining forces to create a Virtual Power Plant (VPP) that integrates multiple distributed energy resources and operate collectively as if it was a single, unified power plant. They are now seen everywhere from the Scottish Inner Hebrides to Adelaide in Australia. To work effectively though, VPPs need to be coordinated using advanced software platforms so that energy production, storage, and consumption is optimised in real-time.

VPPs, such as those offered by Tesla, have the same benefits as private micro grids – grid reliability, integration of renewables, cost-effectiveness, and energy efficiencies – but are often multiplied due to economies of scale. As such, I see no reason for their adoption and implementation to slow down. 

Good for all

Microgrids will be crucial to move us towards a more decentralised, renewable-based energy system and support the aging grid. The good news is that costs of set up are coming down all the time, eliminating one historic barrier and opening the process up to smaller and smaller companies. Yet, setting up a microgrid is not an uncomplicated process. Batteries can still be expensive. Plus, a business needs to have the available space to house the solar array in the first place. Weather, location, and other variables like regulation can also come into play to hamper progress. 

However, the benefits generally outweigh the risks. Becoming one’s own energy supplier can be an attractive prospect for any business and is something I’d expect to see more and more of in the future. This is a good thing. Putting solar panels on the likes of superstores and data centres is good for businesses, good for electricity customers, good for the grid, and good for the environment.